☒ | 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.) | ||||||||||
3700 West Juneau Avenue | Milwaukee | Wisconsin | 53208 | ||||||||
(Address of principal executive offices) | (Zip code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||
Common Stock Par Value $.01 PER SHARE | HOG | New York Stock Exchange |
Large Accelerated Filer | ☒ | Accelerated filer |
☐
|
||||||||
Non-accelerated filer | ☐ | Smaller reporting company |
☐
|
||||||||
Emerging growth company |
☐
|
Part I | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Part II | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
Three months ended | Nine months ended | ||||||||||||||||||||||
September 27,
2020 |
September 29,
2019 |
September 27,
2020 |
September 29,
2019 |
||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Motorcycles and Related Products | $ | 964,029 | $ | 1,068,942 | $ | 2,733,091 | $ | 3,698,583 | |||||||||||||||
Financial Services | 201,655 | 203,577 | 596,064 | 590,935 | |||||||||||||||||||
1,165,684 | 1,272,519 | 3,329,155 | 4,289,518 | ||||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Motorcycles and Related Products cost of goods sold | 676,796 | 748,878 | 2,019,310 | 2,576,342 | |||||||||||||||||||
Financial Services interest expense | 67,533 | 53,390 | 182,193 | 158,387 | |||||||||||||||||||
Financial Services provision for credit losses | 7,835 | 33,747 | 178,433 | 94,621 | |||||||||||||||||||
Selling, administrative and engineering expense | 231,721 | 309,031 | 734,057 | 885,273 | |||||||||||||||||||
Restructuring expense | 43,915 | 7,629 | 85,864 | 31,682 | |||||||||||||||||||
1,027,800 | 1,152,675 | 3,199,857 | 3,746,305 | ||||||||||||||||||||
Operating income | 137,884 | 119,844 | 129,298 | 543,213 | |||||||||||||||||||
Other income, net | 155 | 3,160 | 466 | 11,857 | |||||||||||||||||||
Investment income | 2,672 | 2,041 | 3,082 | 11,970 | |||||||||||||||||||
Interest expense | 7,783 | 7,789 | 23,307 | 23,304 | |||||||||||||||||||
Income before provision for income taxes | 132,928 | 117,256 | 109,539 | 543,736 | |||||||||||||||||||
Provision for income taxes | 12,710 | 30,693 | 11,843 | 133,597 | |||||||||||||||||||
Net income | $ | 120,218 | $ | 86,563 | $ | 97,696 | $ | 410,139 | |||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | 0.78 | $ | 0.55 | $ | 0.64 | $ | 2.59 | |||||||||||||||
Diluted | $ | 0.78 | $ | 0.55 | $ | 0.64 | $ | 2.58 | |||||||||||||||
Cash dividends per share | $ | 0.020 | $ | 0.375 | $ | 0.420 | $ | 1.125 |
Three months ended | Nine months ended | ||||||||||||||||||||||
September 27,
2020 |
September 29,
2019 |
September 27,
2020 |
September 29,
2019 |
||||||||||||||||||||
Net income | $ | 120,218 | $ | 86,563 | $ | 97,696 | $ | 410,139 | |||||||||||||||
Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
Foreign currency translation adjustments | 12,737 | (15,321) | (275) | (3,720) | |||||||||||||||||||
Derivative financial instruments | (2,101) | 6,284 | (28,255) | (6,080) | |||||||||||||||||||
Pension and postretirement benefit plans | 11,959 | 7,744 | 35,876 | 23,230 | |||||||||||||||||||
22,595 | (1,293) | 7,346 | 13,430 | ||||||||||||||||||||
Comprehensive income | $ | 142,813 | $ | 85,270 | $ | 105,042 | $ | 423,569 |
(Unaudited) | (Unaudited) | ||||||||||||||||
September 27,
2020 |
December 31,
2019 |
September 29,
2019 |
|||||||||||||||
ASSETS | |||||||||||||||||
Current assets: | |||||||||||||||||
Cash and cash equivalents | $ | 3,560,950 | $ | 833,868 | $ | 862,381 | |||||||||||
Accounts receivable, net | 232,845 | 259,334 | 307,616 | ||||||||||||||
Finance receivables, net of allowance of $74,111, $43,006, and $39,964
|
1,701,478 | 2,272,522 | 2,210,001 | ||||||||||||||
Inventories, net | 322,375 | 603,571 | 489,098 | ||||||||||||||
Restricted cash | 160,155 | 64,554 | 79,115 | ||||||||||||||
Other current assets | 178,931 | 168,974 | 140,786 | ||||||||||||||
6,156,734 | 4,202,823 | 4,088,997 | |||||||||||||||
Finance receivables, net of allowance of $334,591, $155,575, and $158,612
|
5,142,014 | 5,101,844 | 5,305,579 | ||||||||||||||
Property, plant and equipment, net | 785,165 | 847,382 | 844,446 | ||||||||||||||
Prepaid pension costs | 82,378 | 56,014 | — | ||||||||||||||
Goodwill | 64,884 | 64,160 | 63,727 | ||||||||||||||
Deferred income taxes | 137,960 | 101,204 | 132,019 | ||||||||||||||
Lease assets | 47,599 | 61,618 | 55,905 | ||||||||||||||
Other long-term assets | 115,541 | 93,114 | 85,557 | ||||||||||||||
$ | 12,532,275 | $ | 10,528,159 | $ | 10,576,230 | ||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||
Current liabilities: | |||||||||||||||||
Accounts payable | $ | 289,103 | $ | 294,380 | $ | 348,951 | |||||||||||
Accrued liabilities | 591,281 | 582,288 | 556,990 | ||||||||||||||
Short-term debt | 1,227,763 | 571,995 | 1,013,137 | ||||||||||||||
Current portion of long-term debt, net | 2,109,284 | 1,748,109 | 1,779,673 | ||||||||||||||
4,217,431 | 3,196,772 | 3,698,751 | |||||||||||||||
Long-term debt, net | 6,171,676 | 5,124,826 | 4,607,041 | ||||||||||||||
Lease liabilities | 31,225 | 44,447 | 39,408 | ||||||||||||||
Pension liabilities | 57,853 | 56,138 | 82,561 | ||||||||||||||
Postretirement healthcare liabilities | 68,379 | 72,513 | 89,032 | ||||||||||||||
Other long-term liabilities | 215,813 | 229,464 | 223,218 | ||||||||||||||
Commitments and contingencies (Note 17) | |||||||||||||||||
Shareholders’ equity: | |||||||||||||||||
Preferred stock, none issued
|
— | — | — | ||||||||||||||
Common stock | 1,835 | 1,828 | 1,827 | ||||||||||||||
Additional paid-in-capital | 1,501,410 | 1,491,004 | 1,482,669 | ||||||||||||||
Retained earnings | 2,148,462 | 2,193,997 | 2,238,313 | ||||||||||||||
Accumulated other comprehensive loss | (529,603) | (536,949) | (616,254) | ||||||||||||||
Treasury stock, at cost | (1,352,206) | (1,345,881) | (1,270,336) | ||||||||||||||
1,769,898 | 1,803,999 | 1,836,219 | |||||||||||||||
$ | 12,532,275 | $ | 10,528,159 | $ | 10,576,230 |
(Unaudited) | (Unaudited) | ||||||||||||||||
September 27,
2020 |
December 31,
2019 |
September 29,
2019 |
|||||||||||||||
Balances held by consolidated variable interest entities (Note 13): | |||||||||||||||||
Finance receivables, net - current | $ | 576,750 | $ | 291,444 | $ | 308,568 | |||||||||||
Other assets | $ | 3,129 | $ | 2,420 | $ | 1,618 | |||||||||||
Finance receivables, net - non-current | $ | 2,177,875 | $ | 1,027,179 | $ | 1,175,086 | |||||||||||
Restricted cash - current and non-current | $ | 170,925 | $ | 63,812 | $ | 78,334 | |||||||||||
Current portion of long-term debt, net | $ | 677,099 | $ | 317,607 | $ | 346,350 | |||||||||||
Long-term debt, net | $ | 1,886,594 | $ | 937,212 | $ | 1,079,278 |
Nine months ended | |||||||||||
September 27,
2020 |
September 29,
2019 |
||||||||||
Net cash provided by operating activities (Note 7) | $ | 1,135,068 | $ | 848,649 | |||||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | (92,295) | (121,161) | |||||||||
Origination of finance receivables | (2,873,259) | (3,141,626) | |||||||||
Collections on finance receivables | 2,730,166 | 2,695,918 | |||||||||
Sales and redemptions of marketable securities | — | 10,007 | |||||||||
Acquisition of business | — | (7,000) | |||||||||
Other investing activities | 334 | 12,388 | |||||||||
Net cash used by investing activities | (235,054) | (551,474) | |||||||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of medium-term notes | 1,396,602 | 546,655 | |||||||||
Repayments of medium-term notes | (1,400,000) | (1,350,000) | |||||||||
Proceeds from securitization debt | 2,064,450 | 1,021,353 | |||||||||
Repayments of securitization debt | (735,885) | (244,250) | |||||||||
Borrowings of asset-backed commercial paper | 225,187 | 177,950 | |||||||||
Repayments of asset-backed commercial paper | (236,846) | (240,008) | |||||||||
Net increase (decrease) in unsecured commercial paper | 509,978 | (120,707) | |||||||||
Net increase in credit facilities | 150,000 | — | |||||||||
Deposits | 29,992 | — | |||||||||
Dividends paid | (65,002) | (179,409) | |||||||||
Repurchase of common stock | (7,895) | (217,454) | |||||||||
Issuance of common stock under share-based plans | 96 | 2,180 | |||||||||
Net cash provided (used) by financing activities | 1,930,677 | (603,690) | |||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 6,071 | (4,110) | |||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 2,836,762 | $ | (310,625) | |||||||
Cash, cash equivalents and restricted cash: | |||||||||||
Cash, cash equivalents and restricted cash, beginning of period | $ | 905,366 | $ | 1,259,748 | |||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 2,836,762 | (310,625) | |||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 3,742,128 | $ | 949,123 | |||||||
Reconciliation of cash, cash equivalents and restricted cash on the Consolidated balance sheets to the Consolidated statements of cash flows: | |||||||||||
Cash and cash equivalents | $ | 3,560,950 | $ | 862,381 | |||||||
Restricted cash | 160,155 | 79,115 | |||||||||
Restricted cash included in Other long-term assets | 21,023 | 7,627 | |||||||||
Cash, cash equivalents and restricted cash per the Consolidated statements of cash flows | $ | 3,742,128 | $ | 949,123 |
Common Stock |
Additional
Paid-in Capital |
Retained
Earnings |
Accumulated
Other Comprehensive Loss |
Treasury
Stock |
Total | ||||||||||||||||||||||||||||||||||||
Issued
Shares |
Balance | ||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2019 | 182,816,536 | $ | 1,828 | $ | 1,491,004 | $ | 2,193,997 | $ | (536,949) | $ | (1,345,881) | $ | 1,803,999 | ||||||||||||||||||||||||||||
Net income | — | — | — | 69,695 | — | — | 69,695 | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax (Note 18) | — | — | — | — | (42,341) | — | (42,341) | ||||||||||||||||||||||||||||||||||
Dividends ($0.380 per share)
|
— | — | — | (58,817) | — | — | (58,817) | ||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (7,071) | (7,071) | ||||||||||||||||||||||||||||||||||
Share-based compensation | 585,053 | 6 | 4,137 | — | — | 604 | 4,747 | ||||||||||||||||||||||||||||||||||
Cumulative effect of change in accounting (Note 2) | — | — | — | (78,229) | — | — | (78,229) | ||||||||||||||||||||||||||||||||||
Balance, March 29, 2020 | 183,401,589 | 1,834 | 1,495,141 | 2,126,646 | (579,290) | (1,352,348) | 1,691,983 | ||||||||||||||||||||||||||||||||||
Net loss | — | — | — | (92,217) | — | — | (92,217) | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax (Note 18) | — | — | — | — | 27,092 | — | 27,092 | ||||||||||||||||||||||||||||||||||
Dividends ($0.020 per share)
|
— | — | — | (3,100) | — | — | (3,100) | ||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (85) | (85) | ||||||||||||||||||||||||||||||||||
Share-based compensation | 9,615 | — | (882) | — | — | 914 | 32 | ||||||||||||||||||||||||||||||||||
Balance, June 28, 2020 | 183,411,204 | 1,834 | 1,494,259 | 2,031,329 | (552,198) | (1,351,519) | 1,623,705 | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | 120,218 | — | — | 120,218 | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax (Note 18) | — | — | — | — | 22,595 | — | 22,595 | ||||||||||||||||||||||||||||||||||
Dividends ($0.020 per share)
|
— | — | — | (3,085) | — | — | (3,085) | ||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (739) | (739) | ||||||||||||||||||||||||||||||||||
Share-based compensation | 82,329 | 1 | 7,151 | — | — | 52 | 7,204 | ||||||||||||||||||||||||||||||||||
Balance, September 27, 2020 | 183,493,533 | $ | 1,835 | $ | 1,501,410 | $ | 2,148,462 | $ | (529,603) | $ | (1,352,206) | $ | 1,769,898 | ||||||||||||||||||||||||||||
Common Stock |
Additional
Paid-in Capital |
Retained
Earnings |
Accumulated
Other Comprehensive Loss |
Treasury
Stock |
Total | ||||||||||||||||||||||||||||||||||||
Issued
Shares |
Balance | ||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2018 | 181,931,225 | $ | 1,819 | $ | 1,459,620 | $ | 2,007,583 | $ | (629,684) | $ | (1,065,389) | $ | 1,773,949 | ||||||||||||||||||||||||||||
Net income | — | — | — | 127,945 | — | — | 127,945 | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax (Note 18) | — | — | — | — | 7,633 | — | 7,633 | ||||||||||||||||||||||||||||||||||
Dividends ($0.375 per share)
|
— | — | — | (60,859) | — | — | (60,859) | ||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (61,712) | (61,712) | ||||||||||||||||||||||||||||||||||
Share-based compensation | 702,687 | 7 | 5,961 | — | — | 4,687 | 10,655 | ||||||||||||||||||||||||||||||||||
Balance, March 31, 2019 | 182,633,912 | 1,826 | 1,465,581 | 2,074,669 | (622,051) | (1,122,414) | 1,797,611 | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | 195,631 | — | — | 195,631 | ||||||||||||||||||||||||||||||||||
Other comprehensive income, net of tax (Note 18) | — | — | — | — | 7,090 | — | 7,090 | ||||||||||||||||||||||||||||||||||
Dividends ($0.375 per share)
|
— | — | — | (59,982) | — | — | (59,982) | ||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (42,908) | (42,908) | ||||||||||||||||||||||||||||||||||
Share-based compensation | 9,338 | 1 | 9,238 | — | — | 3,960 | 13,199 | ||||||||||||||||||||||||||||||||||
Balance, June 30, 2019 | 182,643,250 | 1,827 | 1,474,819 | 2,210,318 | (614,961) | (1,161,362) | 1,910,641 | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | 86,563 | — | — | 86,563 | ||||||||||||||||||||||||||||||||||
Other comprehensive loss, net of tax (Note 18) | — | — | — | — | (1,293) | — | (1,293) | ||||||||||||||||||||||||||||||||||
Dividends ($0.375 per share)
|
— | — | — | (58,568) | — | — | (58,568) | ||||||||||||||||||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (112,834) | (112,834) | ||||||||||||||||||||||||||||||||||
Share-based compensation | 80,249 | — | 7,850 | — | — | 3,860 | 11,710 | ||||||||||||||||||||||||||||||||||
Balance, September 29, 2019 | 182,723,499 | $ | 1,827 | $ | 1,482,669 | $ | 2,238,313 | $ | (616,254) | $ | (1,270,336) | $ | 1,836,219 |
December 31,
2019 |
Effect of Adoption |
January 1,
2020 |
|||||||||||||||
ASSETS | |||||||||||||||||
Finance receivables(a)
|
$ | 7,572,947 | $ | — | $ | 7,572,947 | |||||||||||
Allowance for credit losses on finance receivables(a)
|
$ | (198,581) | $ | (100,604) | $ | (299,185) | |||||||||||
Deferred income taxes | $ | 101,204 | $ | 22,484 | $ | 123,688 | |||||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||||
Accrued liabilities | $ | 582,288 | $ | 109 | $ | 582,397 | |||||||||||
Retained earnings | $ | 2,193,997 | $ | (78,229) | $ | 2,115,768 |
Three months ended | Nine months ended | ||||||||||||||||||||||
September 27,
2020 |
September 29,
2019 |
September 27,
2020 |
September 29,
2019 |
||||||||||||||||||||
Motorcycles and Related Products Revenue: | |||||||||||||||||||||||
Motorcycles | $ | 684,344 | $ | 779,344 | $ | 2,030,447 | $ | 2,871,982 | |||||||||||||||
Parts & Accessories | 209,808 | 203,173 | 513,201 | 584,134 | |||||||||||||||||||
General Merchandise | 49,356 | 60,334 | 136,321 | 180,379 | |||||||||||||||||||
Licensing | 8,894 | 8,611 | 21,826 | 27,099 | |||||||||||||||||||
Other | 11,627 | 17,480 | 31,296 | 34,989 | |||||||||||||||||||
964,029 | 1,068,942 | 2,733,091 | 3,698,583 | ||||||||||||||||||||
Financial Services Revenue: | |||||||||||||||||||||||
Interest income | 174,464 | 175,840 | 512,726 | 502,721 | |||||||||||||||||||
Other | 27,191 | 27,737 | 83,338 | 88,214 | |||||||||||||||||||
201,655 | 203,577 | 596,064 | 590,935 | ||||||||||||||||||||
$ | 1,165,684 | $ | 1,272,519 | $ | 3,329,155 | $ | 4,289,518 |
September 27,
2020 |
September 29,
2019 |
||||||||||||||||
Balance, beginning of period | $ | 29,745 | $ | 29,055 | |||||||||||||
Balance, end of period | $ | 31,209 | $ | 32,374 |
Amount Incurred | |||||||||||||||||||||||||||||
Three months ended September 27, 2020 | Nine months ended September 27, 2020 | ||||||||||||||||||||||||||||
Motorcycles and Related Products | $ | 43.6 | $ | 84.6 | |||||||||||||||||||||||||
Financial Services | 0.3 | 1.3 | |||||||||||||||||||||||||||
$ | 43.9 | $ | 85.9 | ||||||||||||||||||||||||||
Three months ended September 27, 2020 | Nine months ended September 27, 2020 | ||||||||||||||||||||||||||||||||||||||||||||||
Employee Termination Benefits | Contract Terminations & Other | Non-Current Asset Adjustments | Total | Employee Termination Benefits | Contract Terminations & Other | Non-Current Asset Adjustments | Total | ||||||||||||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 25,298 | $ | 14,270 | $ | — | $ | 39,568 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||||||
Restructuring expense | 4,493 | 23,422 | 16,000 | 43,915 | 29,814 | 37,692 | 18,358 | 85,864 | |||||||||||||||||||||||||||||||||||||||
Utilized – cash
|
(11,940) | (5,899) | — | (17,839) | (11,940) | (5,899) | — | (17,839) | |||||||||||||||||||||||||||||||||||||||
Utilized – non cash
|
— | — | (16,000) | (16,000) | — | — | (18,358) | (18,358) | |||||||||||||||||||||||||||||||||||||||
Foreign currency changes | 166 | (54) | — | 112 | 143 | (54) | — | 89 | |||||||||||||||||||||||||||||||||||||||
Balance, end of period | $ | 18,017 | $ | 31,739 |
|
$ | — | $ | 49,756 | $ | 18,017 | $ | 31,739 | $ | — | $ | 49,756 |
Three months ended September 29, 2019 | |||||||||||||||||||||||||||||||||||
Manufacturing Optimization Plan | Reorganization Plan | ||||||||||||||||||||||||||||||||||
Employee Termination Benefits | Accelerated Depreciation | Other | Total | Employee Termination Benefits | Total | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 9,661 | $ | — | $ | 23 | $ | 9,684 | $ | 144 | $ | 9,828 | |||||||||||||||||||||||
Restructuring (benefit) expense | (1) | 719 | 6,850 | 7,568 | 61 | 7,629 | |||||||||||||||||||||||||||||
Utilized – cash
|
(6,617) | — | (6,535) | (13,152) | (205) | (13,357) | |||||||||||||||||||||||||||||
Utilized – non cash
|
(2) | (719) | (336) | (1,057) | — | (1,057) | |||||||||||||||||||||||||||||
Foreign currency changes | (26) | — | — | (26) | — | (26) | |||||||||||||||||||||||||||||
Balance, end of period | $ | 3,015 | $ | — | $ | 2 | $ | 3,017 | $ | — | $ | 3,017 | |||||||||||||||||||||||
Nine months ended September 29, 2019 | |||||||||||||||||||||||||||||||||||
Manufacturing Optimization Plan | Reorganization Plan | ||||||||||||||||||||||||||||||||||
Employee Termination Benefits | Accelerated Depreciation | Other | Total | Employee Termination Benefits | Total | ||||||||||||||||||||||||||||||
Balance, beginning of period | $ | 24,958 | $ | — | $ | 79 | $ | 25,037 | $ | 3,461 | $ | 28,498 | |||||||||||||||||||||||
Restructuring expense (benefit) | 16 | 14,684 | 17,316 | 32,016 | (334) | 31,682 | |||||||||||||||||||||||||||||
Utilized – cash
|
(21,951) | — | (16,357) | (38,308) | (3,101) | (41,409) | |||||||||||||||||||||||||||||
Utilized – non cash
|
(2) | (14,684) | (1,032) | (15,718) | — | (15,718) | |||||||||||||||||||||||||||||
Foreign currency changes | (6) | — | (4) | (10) | (26) | (36) | |||||||||||||||||||||||||||||
Balance, end of period | $ | 3,015 | $ | — | $ | 2 | $ | 3,017 | $ | — | $ | 3,017 |
Three months ended | Nine months ended | ||||||||||||||||||||||
September 27,
2020 |
September 29,
2019 |
September 27,
2020 |
September 29,
2019 |
||||||||||||||||||||
Net income | $ | 120,218 | $ | 86,563 | $ | 97,696 | $ | 410,139 | |||||||||||||||
Basic weighted-average shares outstanding | 153,252 | 156,239 | 153,153 | 158,117 | |||||||||||||||||||
Effect of dilutive securities – employee stock compensation plan
|
663 | 705 | 637 | 677 | |||||||||||||||||||
Diluted weighted-average shares outstanding | 153,915 | 156,944 | 153,790 | 158,794 | |||||||||||||||||||
Net earnings per share: | |||||||||||||||||||||||
Basic | $ | 0.78 | $ | 0.55 | $ | 0.64 | $ | 2.59 | |||||||||||||||
Diluted | $ | 0.78 | $ | 0.55 | $ | 0.64 | $ | 2.58 |
September 27,
2020 |
December 31,
2019 |
September 29,
2019 |
|||||||||||||||
Mutual funds | $ | 48,845 | $ | 52,575 | $ | 49,821 | |||||||||||
September 27,
2020 |
December 31,
2019 |
September 29,
2019 |
|||||||||||||||
Raw materials and work in process | $ | 152,740 | $ | 235,433 | $ | 189,144 | |||||||||||
Motorcycle finished goods | 125,930 | 280,306 | 206,324 | ||||||||||||||
Parts & Accessories and General Merchandise | 100,131 | 144,258 | 152,269 | ||||||||||||||
Inventory at lower of FIFO cost or net realizable value | 378,801 | 659,997 | 547,737 | ||||||||||||||
Excess of FIFO over LIFO cost | (56,426) | (56,426) | (58,639) | ||||||||||||||
$ | 322,375 | $ | 603,571 | $ | 489,098 |
Nine months ended | |||||||||||
September 27,
2020 |
September 29,
2019 |
||||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 97,696 | $ | 410,139 | |||||||
Adjustments to reconcile Net income to Net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 140,057 | 174,609 | |||||||||
Amortization of deferred loan origination costs | 52,374 | 57,303 | |||||||||
Amortization of financing origination fees | 10,628 | 7,032 | |||||||||
Provision for long-term employee benefits | 23,557 | 10,888 | |||||||||
Employee benefit plan contributions and payments | (5,456) | (11,166) | |||||||||
Stock compensation expense | 12,076 | 25,323 | |||||||||
Net change in wholesale finance receivables related to sales | 330,793 | 683 | |||||||||
Provision for credit losses | 178,433 | 94,621 | |||||||||
Deferred income taxes | (18,978) | 3,535 | |||||||||
Other, net | (9,320) | 7,839 | |||||||||
Changes in current assets and liabilities: | |||||||||||
Accounts receivable, net | 29,630 | (7,833) | |||||||||
Finance receivables – accrued interest and other
|
5,097 | (4,574) | |||||||||
Inventories, net | 273,668 | 62,870 | |||||||||
Accounts payable and accrued liabilities | (16,922) | 13,138 | |||||||||
Derivative financial instruments | (1,543) | 2,537 | |||||||||
Other | 33,278 | 1,705 | |||||||||
1,037,372 | 438,510 | ||||||||||
Net cash provided by operating activities | $ | 1,135,068 | $ | 848,649 |
September 27,
2020 |
December 31,
2019 |
September 29,
2019 |
|||||||||||||||
Retail finance receivables | $ | 6,585,298 | $ | 6,416,428 | $ | 6,642,809 | |||||||||||
Wholesale finance receivables | 666,896 | 1,156,519 | 1,071,347 | ||||||||||||||
7,252,194 | 7,572,947 | 7,714,156 | |||||||||||||||
Allowance for credit losses | (408,702) | (198,581) | (198,576) | ||||||||||||||
$ | 6,843,492 | $ | 7,374,366 | $ | 7,515,580 |
Three months ended September 27, 2020 | |||||||||||||||||
Retail | Wholesale | Total | |||||||||||||||
Balance, beginning of period | $ | 389,758 | $ | 21,257 | $ | 411,015 | |||||||||||
Provision for credit losses | 8,024 | (189) | 7,835 | ||||||||||||||
Charge-offs | (20,378) | (2,442) | (22,820) | ||||||||||||||
Recoveries | 12,672 | — | 12,672 | ||||||||||||||
Balance, end of period | $ | 390,076 | $ | 18,626 | $ | 408,702 | |||||||||||
Three months ended September 29, 2019 | |||||||||||||||||
Retail | Wholesale | Total | |||||||||||||||
Balance, beginning of period | $ | 186,722 | $ | 8,274 | $ | 194,996 | |||||||||||
Provision for credit losses | 35,071 | (1,324) | 33,747 | ||||||||||||||
Charge-offs | (41,076) | — | (41,076) | ||||||||||||||
Recoveries | 10,909 | — | 10,909 | ||||||||||||||
Balance, end of period | $ | 191,626 | $ | 6,950 | $ | 198,576 | |||||||||||
Nine months ended September 27, 2020 | |||||||||||||||||
Retail | Wholesale | Total | |||||||||||||||
Balance, beginning of period | $ | 188,501 | $ | 10,080 | $ | 198,581 | |||||||||||
Cumulative effect of change in accounting(a)
|
95,558 | 5,046 | 100,604 | ||||||||||||||
Provision for credit losses | 172,491 | 5,942 | 178,433 | ||||||||||||||
Charge-offs | (105,452) | (2,442) | (107,894) | ||||||||||||||
Recoveries | 38,978 | — | 38,978 | ||||||||||||||
Balance, end of period | $ | 390,076 | $ | 18,626 | $ | 408,702 | |||||||||||
Nine months ended September 29, 2019 | |||||||||||||||||
Retail | Wholesale | Total | |||||||||||||||
Balance, beginning of period | $ | 182,098 | $ | 7,787 | $ | 189,885 | |||||||||||
Provision for credit losses | 95,458 | (837) | 94,621 | ||||||||||||||
Charge-offs | (121,538) | — | (121,538) | ||||||||||||||
Recoveries | 35,608 | — | 35,608 | ||||||||||||||
Balance, end of period | $ | 191,626 | $ | 6,950 | $ | 198,576 |
2020 | 2019 | 2018 | 2017 | 2016 | 2015 & Prior | Total | |||||||||||||||||||||||||||||||||||
U.S. Retail: | |||||||||||||||||||||||||||||||||||||||||
Super prime | $ | 730,539 | $ | 649,174 | $ | 408,201 | $ | 196,050 | $ | 90,179 | $ | 39,749 | $ | 2,113,892 | |||||||||||||||||||||||||||
Prime | 993,429 | 877,714 | 570,851 | 336,134 | 187,067 | 101,403 | 3,066,598 | ||||||||||||||||||||||||||||||||||
Sub-prime | 387,766 | 326,537 | 196,001 | 124,312 | 82,975 | 64,537 | 1,182,128 | ||||||||||||||||||||||||||||||||||
2,111,734 | 1,853,425 | 1,175,053 | 656,496 | 360,221 | 205,689 | 6,362,618 | |||||||||||||||||||||||||||||||||||
Canadian Retail: | |||||||||||||||||||||||||||||||||||||||||
Super prime | 48,974 | 51,939 | 31,351 | 16,013 | 6,526 | 2,723 | 157,526 | ||||||||||||||||||||||||||||||||||
Prime | 17,053 | 14,681 | 10,630 | 7,285 | 3,555 | 2,489 | 55,693 | ||||||||||||||||||||||||||||||||||
Sub-prime | 2,790 | 2,630 | 1,706 | 1,171 | 685 | 479 | 9,461 | ||||||||||||||||||||||||||||||||||
68,817 | 69,250 | 43,687 | 24,469 | 10,766 | 5,691 | 222,680 | |||||||||||||||||||||||||||||||||||
$ | 2,180,551 | $ | 1,922,675 | $ | 1,218,740 | $ | 680,965 | $ | 370,987 | $ | 211,380 | $ | 6,585,298 |
December 31,
2019 |
September 29,
2019 |
|||||||||||||
Prime | $ | 5,278,093 | $ | 5,454,920 | ||||||||||
Sub-prime | 1,138,335 | 1,187,889 | ||||||||||||
$ | 6,416,428 | $ | 6,642,809 |
2020 | 2019 | 2018 | 2017 | 2016 | 2015 & Prior | Total | |||||||||||||||||||||||||||||||||||
Non-Performing | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||||||
Doubtful | — | — | 14 | — | — | — | 14 | ||||||||||||||||||||||||||||||||||
Substandard | 277 | 238 | — | — | — | — | 515 | ||||||||||||||||||||||||||||||||||
Special Mention | 2,316 | 1,213 | 160 | — | — | 1,139 | 4,828 | ||||||||||||||||||||||||||||||||||
Medium Risk | 1,283 | 448 | 33 | — | — | — | 1,764 | ||||||||||||||||||||||||||||||||||
Low Risk | 505,328 | 118,466 | 18,602 | 8,551 | 5,525 | 3,303 | 659,775 | ||||||||||||||||||||||||||||||||||
$ | 509,204 | $ | 120,365 | $ | 18,809 | $ | 8,551 | $ | 5,525 | $ | 4,442 | $ | 666,896 |
December 31,
2019 |
September 29,
2019 |
|||||||||||||
Doubtful | $ | 11,664 | $ | 4,964 | ||||||||||
Substandard | 6,122 | 752 | ||||||||||||
Special Mention | 16,125 | 14,813 | ||||||||||||
Medium Risk | 16,800 | 11,544 | ||||||||||||
Low Risk | 1,105,808 | 1,039,274 | ||||||||||||
$ | 1,156,519 | $ | 1,071,347 |
September 27, 2020 | |||||||||||||||||||||||||||||||||||
Current |
31-60 Days
Past Due |
61-90 Days
Past Due |
Greater than
90 Days Past Due |
Total
Past Due |
Total | ||||||||||||||||||||||||||||||
Retail finance receivables | $ | 6,434,642 | $ | 96,243 | $ | 31,467 | $ | 22,946 | $ | 150,656 | $ | 6,585,298 | |||||||||||||||||||||||
Wholesale finance receivables | 666,335 | 244 | 3 | 314 | 561 | 666,896 | |||||||||||||||||||||||||||||
$ | 7,100,977 | $ | 96,487 | $ | 31,470 | $ | 23,260 | $ | 151,217 | $ | 7,252,194 | ||||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||||||||||||||
Current |
31-60 Days
Past Due |
61-90 Days
Past Due |
Greater than
90 Days Past Due |
Total
Past Due |
Total | ||||||||||||||||||||||||||||||
Retail finance receivables | $ | 6,171,930 | $ | 142,479 | $ | 53,995 | $ | 48,024 | $ | 244,498 | $ | 6,416,428 | |||||||||||||||||||||||
Wholesale finance receivables | 1,152,416 | 1,145 | 384 | 2,574 | 4,103 | 1,156,519 | |||||||||||||||||||||||||||||
$ | 7,324,346 | $ | 143,624 | $ | 54,379 | $ | 50,598 | $ | 248,601 | $ | 7,572,947 | ||||||||||||||||||||||||
September 29, 2019 | |||||||||||||||||||||||||||||||||||
Current |
31-60 Days
Past Due |
61-90 Days
Past Due |
Greater than
90 Days Past Due |
Total
Past Due |
Total | ||||||||||||||||||||||||||||||
Retail finance receivables | $ | 6,425,097 | $ | 134,074 | $ | 48,033 | $ | 35,605 | $ | 217,712 | $ | 6,642,809 | |||||||||||||||||||||||
Wholesale finance receivables | 1,068,510 | 615 | 209 | 2,013 | 2,837 | 1,071,347 | |||||||||||||||||||||||||||||
$ | 7,493,607 | $ | 134,689 | $ | 48,242 | $ | 37,618 | $ | 220,549 | $ | 7,714,156 |
December 31, 2019 | |||||||||||||||||
Retail | Wholesale | Total | |||||||||||||||
Allowance for credit losses, ending balance: | |||||||||||||||||
Individually evaluated for impairment | $ | — | $ | 2,100 | $ | 2,100 | |||||||||||
Collectively evaluated for impairment | 188,501 | 7,980 | 196,481 | ||||||||||||||
$ | 188,501 | $ | 10,080 | $ | 198,581 | ||||||||||||
Finance receivables, ending balance: | |||||||||||||||||
Individually evaluated for impairment | $ | — | $ | 4,601 | $ | 4,601 | |||||||||||
Collectively evaluated for impairment | 6,416,428 | 1,151,918 | 7,568,346 | ||||||||||||||
$ | 6,416,428 | $ | 1,156,519 | $ | 7,572,947 | ||||||||||||
September 29, 2019 | |||||||||||||||||
Retail | Wholesale | Total | |||||||||||||||
Allowance for credit losses, ending balance: | |||||||||||||||||
Individually evaluated for impairment | $ | — | $ | — | $ | — | |||||||||||
Collectively evaluated for impairment | 191,626 | 6,950 | 198,576 | ||||||||||||||
$ | 191,626 | $ | 6,950 | $ | 198,576 | ||||||||||||
Finance receivables, ending balance: | |||||||||||||||||
Individually evaluated for impairment | $ | — | $ | — | $ | — | |||||||||||
Collectively evaluated for impairment | 6,642,809 | 1,071,347 | 7,714,156 | ||||||||||||||
$ | 6,642,809 | $ | 1,071,347 | $ | 7,714,156 |
Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Interest Income Recognized | |||||||||||||||||||||||||
Wholesale: | |||||||||||||||||||||||||||||
No related allowance recorded | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||
Related allowance recorded | 4,994 | 4,601 | 2,100 | 4,976 | — | ||||||||||||||||||||||||
$ | 4,994 | $ | 4,601 | $ | 2,100 | $ | 4,976 | $ | — |
Derivative Financial Instruments
Designated as Cash Flow Hedging Instruments |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
September 27, 2020 | December 31, 2019 | September 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Notional
Value |
Other Current Assets | Accrued Liabilities |
Notional
Value |
Other Current Assets | Accrued Liabilities |
Notional
Value |
Other Current Assets | Accrued Liabilities | |||||||||||||||||||||||||||||||||||||||||||||
Foreign currency contracts | $ | 352,933 | $ | 2,334 | $ | 6,132 | $ | 434,321 | $ | 3,505 | $ | 3,661 | $ | 441,131 | $ | 11,459 | $ | 790 | |||||||||||||||||||||||||||||||||||
Commodity contracts | 801 | 95 | — | 616 | — | 80 | 744 | — | 56 | ||||||||||||||||||||||||||||||||||||||||||||
Cross-currency swaps | 1,367,460 | 57,787 | 292 | 660,780 | 8,326 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Interest rate swap | 450,000 | — | 6,184 | 900,000 | — | 9,181 | 900,000 | — | 11,164 | ||||||||||||||||||||||||||||||||||||||||||||
$ | 2,171,194 | $ | 60,216 | $ | 12,608 | $ | 1,995,717 | $ | 11,831 | $ | 12,922 | $ | 1,341,875 | $ | 11,459 | $ | 12,010 | ||||||||||||||||||||||||||||||||||||
Derivative Financial Instruments
Not Designated as Hedging Instruments |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
September 27, 2020 | December 31, 2019 | September 29, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Notional
Value |
Other Current Assets | Accrued Liabilities |
Notional
Value |
Other Current Assets | Accrued Liabilities |
Notional
Value |
Other Current Assets | Accrued Liabilities | |||||||||||||||||||||||||||||||||||||||||||||
Foreign currency contracts | $ | 284,991 | $ | 342 | $ | 574 | $ | 220,139 | $ | 721 | $ | 865 | $ | 193,959 | $ | 278 | $ | 219 | |||||||||||||||||||||||||||||||||||
Commodity contracts | 6,854 | 231 | 215 | 8,270 | 95 | 147 | 9,485 | 230 | 360 | ||||||||||||||||||||||||||||||||||||||||||||
Interest rate caps | 1,124,260 | 60 | — | 375,980 | 2 | — | 427,530 | 4 | — | ||||||||||||||||||||||||||||||||||||||||||||
$ | 1,416,105 | $ | 633 | $ | 789 | $ | 604,389 | $ | 818 | $ | 1,012 | $ | 630,974 | $ | 512 | $ | 579 |
Gain/(Loss)
Recognized in OCI |
Gain/(Loss)
Reclassified from AOCL into Income |
||||||||||||||||||||||||||||||||||||||||||||||
Three months ended | Nine months ended | Three months ended | Nine months ended | ||||||||||||||||||||||||||||||||||||||||||||
September 27,
2020 |
September 29,
2019 |
September 27,
2020 |
September 29,
2019 |
September 27,
2020 |
September 29,
2019 |
September 27,
2020 |
September 29,
2019 |
||||||||||||||||||||||||||||||||||||||||
Foreign currency contracts | $ | (6,587) | $ | 13,135 | $ | 6,250 | $ | 14,422 | $ | 3,027 | $ | 5,826 | $ | 11,732 | $ | 15,947 | |||||||||||||||||||||||||||||||
Commodity contracts | 131 | (15) | (26) | (55) | (12) | (28) | (201) | (45) | |||||||||||||||||||||||||||||||||||||||
Cross-currency swaps | 63,182 | — | 49,168 | — | 59,625 | — | 83,634 | — | |||||||||||||||||||||||||||||||||||||||
Treasury rate lock contracts | — | — | — | — | (124) | (124) | (370) | (369) | |||||||||||||||||||||||||||||||||||||||
Interest rate swap | (994) | (708) | (7,503) | (9,569) | (3,931) | (1,463) | (10,500) | (2,899) | |||||||||||||||||||||||||||||||||||||||
$ | 55,732 | $ | 12,412 | $ | 47,889 | $ | 4,798 | $ | 58,585 | $ | 4,211 | $ | 84,295 | $ | 12,634 |
Motorcycles
cost of goods sold |
Selling, administrative &
engineering expense |
Interest expense | Financial Services interest expense | ||||||||||||||||||||
Three months ended September 27, 2020 | |||||||||||||||||||||||
Line item on the Consolidated statements of operations in which the effects of cash flow hedges are recorded | $ | 676,796 | $ | 231,721 | $ | 7,783 | $ | 67,533 | |||||||||||||||
Gain/(loss) reclassified from AOCL into income: | |||||||||||||||||||||||
Foreign currency contracts | $ | 3,027 | $ | — | $ | — | $ | — | |||||||||||||||
Commodity contracts | $ | (12) | $ | — | $ | — | $ | — | |||||||||||||||
Cross-currency swaps | $ | — | $ | 59,625 | $ | — | $ | — | |||||||||||||||
Treasury rate lock contracts | $ | — | $ | — | $ | (91) | $ | (33) | |||||||||||||||
Interest rate swap | $ | — | $ | — | $ | — | $ | (3,931) | |||||||||||||||
Three months ended September 29, 2019 | |||||||||||||||||||||||
Line item on the Consolidated statements of operations in which the effects of cash flow hedges are recorded | $ | 748,878 | $ | 309,031 | $ | 7,789 | $ | 53,390 | |||||||||||||||
Gain/(loss) reclassified from AOCL into income: | |||||||||||||||||||||||
Foreign currency contracts | $ | 5,826 | $ | — | $ | — | $ | — | |||||||||||||||
Commodity contracts | $ | (28) | $ | — | $ | — | $ | — | |||||||||||||||
Treasury rate lock contracts | $ | — | $ | — | $ | (91) | $ | (33) | |||||||||||||||
Interest rate swap | $ | — | $ | — | $ | — | $ | (1,463) | |||||||||||||||
Motorcycles
cost of goods sold |
Selling, administrative &
engineering expense |
Interest expense | Financial Services interest expense | ||||||||||||||||||||
Nine months ended September 27, 2020 | |||||||||||||||||||||||
Line item on the Consolidated statements of operations in which the effects of cash flow hedges are recorded | $ | 2,019,310 | $ | 734,057 | $ | 23,307 | $ | 182,193 | |||||||||||||||
Gain/(loss) reclassified from AOCL into income: | |||||||||||||||||||||||
Foreign currency contracts | $ | 11,732 | $ | — | $ | — | $ | — | |||||||||||||||
Commodity contracts | $ | (201) | $ | — | $ | — | $ | — | |||||||||||||||
Cross-currency swaps | $ | — | $ | 83,634 | $ | — | $ | — | |||||||||||||||
Treasury rate lock contracts | $ | — | $ | — | $ | (272) | $ | (98) | |||||||||||||||
Interest rate swap | $ | — | $ | — | $ | — | $ | (10,500) | |||||||||||||||
Nine months ended September 29, 2019 | |||||||||||||||||||||||
Line item on the Consolidated statements of operations in which the effects of cash flow hedges are recorded | $ | 2,576,342 | $ | 885,273 | $ | 23,304 | $ | 158,387 | |||||||||||||||
Gain/(loss) reclassified from AOCL into income: | |||||||||||||||||||||||
Foreign currency contracts | $ | 15,947 | $ | — | $ | — | $ | — | |||||||||||||||
Commodity contracts | $ | (45) | $ | — | $ | — | $ | — | |||||||||||||||
Treasury rate lock contracts | $ | — | $ | — | $ | (272) | $ | (97) | |||||||||||||||
Interest rate swap | $ | — | $ | — | $ | — | $ | (2,899) |
Amount of Gain/(Loss)
Recognized in Income |
|||||||||||||||||||||||
Three months ended | Nine months ended | ||||||||||||||||||||||
September 27,
2020 |
September 29,
2019 |
September 27,
2020 |
September 29,
2019 |
||||||||||||||||||||
Foreign currency contracts | $ | (3,569) | $ | 1,719 | $ | (1,897) | $ | 1,602 | |||||||||||||||
Commodity contracts | 134 | (15) | (859) | (8) | |||||||||||||||||||
Interest rate caps | 92 | (1) | 519 | (142) | |||||||||||||||||||
$ | (3,343) | $ | 1,703 | $ | (2,237) | $ | 1,452 |
September 27,
2020 |
December 31,
2019 |
September 29,
2019 |
|||||||||||||||
Lease assets | $ | 47,599 | $ | 61,618 | $ | 55,905 | |||||||||||
Accrued liabilities | $ | 17,704 | $ | 19,013 | $ | 18,421 | |||||||||||
Lease liabilities | 31,225 | 44,447 | 39,408 | ||||||||||||||
$ | 48,929 | $ | 63,460 | $ | 57,829 |
Operating Leases | |||||
2020 | $ | 5,090 | |||
2021 | 18,024 | ||||
2022 | 12,808 | ||||
2023 | 6,369 | ||||
2024 | 4,443 | ||||
Thereafter | 4,927 | ||||
Future lease payments | 51,661 | ||||
Present value discount | (2,732) | ||||
Lease liabilities | $ | 48,929 |
Three months ended | Nine months ended | ||||||||||||||||||||||
September 27,
2020 |
September 29,
2019 |
September 27,
2020 |
September 29,
2019 |
||||||||||||||||||||
Cash outflows for amounts included in the measurement of lease liabilities | $ | 5,274 | $ | 6,073 | $ | 15,893 | $ | 15,944 | |||||||||||||||
ROU assets obtained in exchange for lease obligations, net of modifications
|
$ | (1,327) | $ | 6,724 | $ | 327 | $ | 10,986 |
September 27,
2020 |
December 31,
2019 |
September 29,
2019 |
|||||||||||||||
Weighted-average remaining lease term (in years) | 3.92 | 4.68 | 4.23 | ||||||||||||||
Weighted-average discount rate | 3.1 | % | 2.1 | % | 3.3 | % |
September 27,
2020 |
December 31,
2019 |
September 29,
2019 |
|||||||||||||||
Unsecured commercial paper | $ | 1,077,763 | $ | 571,995 | $ | 1,013,137 | |||||||||||
364-day credit facility borrowings | 150,000 | — | — | ||||||||||||||
$ | 1,227,763 | $ | 571,995 | $ | 1,013,137 |
September 27,
2020 |
December 31,
2019 |
September 29,
2019 |
||||||||||||||||||
Secured debt: | ||||||||||||||||||||
Asset-backed Canadian commercial paper conduit facility | $ | 127,500 | $ | 114,693 | $ | 128,368 | ||||||||||||||
Asset-backed U.S. commercial paper conduit facilities | 467,338 | 490,427 | 552,757 | |||||||||||||||||
Asset-backed securitization debt | 2,106,258 | 766,965 | 875,966 | |||||||||||||||||
Unamortized discounts and debt issuance costs | (9,903) | (2,573) | (3,095) | |||||||||||||||||
2,691,193 | 1,369,512 | 1,553,996 | ||||||||||||||||||
Unsecured notes (at par value): | ||||||||||||||||||||
Medium-term notes: | ||||||||||||||||||||
Due in 2020, issued February 2015 | 2.15 | % | — | 600,000 | 600,000 | |||||||||||||||
Due in 2020, issued May 2018 |
LIBOR + 0.50%
|
— | 450,000 | 450,000 | ||||||||||||||||
Due in 2020, issued March 2017 | 2.40 | % | — | 350,000 | 350,000 | |||||||||||||||
Due in 2021, issued January 2016 | 2.85 | % | 600,000 | 600,000 | 600,000 | |||||||||||||||
Due in 2021, issued November 2018 |
LIBOR + 0.94%
|
450,000 | 450,000 | 450,000 | ||||||||||||||||
Due in 2021, issued May 2018 | 3.55 | % | 350,000 | 350,000 | 350,000 | |||||||||||||||
Due in 2022, issued February 2019 | 4.05 | % | 550,000 | 550,000 | 550,000 | |||||||||||||||
Due in 2022, issued June 2017 | 2.55 | % | 400,000 | 400,000 | 400,000 | |||||||||||||||
Due in 2023, issued February 2018 | 3.35 | % | 350,000 | 350,000 | 350,000 | |||||||||||||||
Due in 2023, issued May 2020(a)
|
4.94 | % | 760,890 | — | — | |||||||||||||||
Due in 2024, issued November 2019(b)
|
3.14 | % | 702,360 | 672,936 | — | |||||||||||||||
Due in 2025, issued June 2020 | 3.35 | % | 700,000 | — | — | |||||||||||||||
Unamortized discounts and debt issuance costs | (17,289) | (12,809) | (10,409) | |||||||||||||||||
4,845,961 | 4,760,127 | 4,089,591 | ||||||||||||||||||
September 27,
2020 |
December 31,
2019 |
September 29,
2019 |
||||||||||||||||||
Senior notes: | ||||||||||||||||||||
Due in 2025, issued July 2015 | 3.50 | % | 450,000 | 450,000 | 450,000 | |||||||||||||||
Due in 2045, issued July 2015 | 4.625 | % | 300,000 | 300,000 | 300,000 | |||||||||||||||
Unamortized discounts and debt issuance costs | (6,194) | (6,704) | (6,873) | |||||||||||||||||
743,806 | 743,296 | 743,127 | ||||||||||||||||||
5,589,767 | 5,503,423 | 4,832,718 | ||||||||||||||||||
Long-term debt | 8,280,960 | 6,872,935 | 6,386,714 | |||||||||||||||||
Current portion of long-term debt, net | (2,109,284) | (1,748,109) | (1,779,673) | |||||||||||||||||
Long-term debt, net | $ | 6,171,676 | $ | 5,124,826 | $ | 4,607,041 |
September 27, 2020 | |||||||||||||||||||||||||||||||||||
Finance receivables | Allowance for credit losses | Restricted cash | Other assets | Total assets | Asset-backed debt | ||||||||||||||||||||||||||||||
On-balance sheet assets and liabilities: | |||||||||||||||||||||||||||||||||||
Consolidated VIEs: | |||||||||||||||||||||||||||||||||||
Asset-backed securitizations | $ | 2,422,841 | $ | (143,775) | $ | 138,276 | $ | 1,923 | $ | 2,419,265 | $ | 2,096,355 | |||||||||||||||||||||||
Asset-backed U.S. commercial paper conduit facilities | 505,507 | (29,948) | 32,649 | 1,206 | 509,414 | 467,338 | |||||||||||||||||||||||||||||
Unconsolidated VIEs: | |||||||||||||||||||||||||||||||||||
Asset-backed Canadian commercial paper conduit facility | 219,466 | (6,878) | 10,253 | 142 | 222,983 | 127,500 | |||||||||||||||||||||||||||||
$ | 3,147,814 | $ | (180,601) | $ | 181,178 | $ | 3,271 | $ | 3,151,662 | $ | 2,691,193 | ||||||||||||||||||||||||
December 31, 2019 | |||||||||||||||||||||||||||||||||||
Finance receivables | Allowance for credit losses | Restricted cash | Other assets | Total assets | Asset-backed debt | ||||||||||||||||||||||||||||||
On-balance sheet assets and liabilities: | |||||||||||||||||||||||||||||||||||
Consolidated VIEs: | |||||||||||||||||||||||||||||||||||
Asset-backed securitizations | $ | 826,047 | $ | (24,935) | $ | 36,037 | $ | 778 | $ | 837,927 | $ | 764,392 | |||||||||||||||||||||||
Asset-backed U.S. commercial paper conduit facilities | 533,587 | (16,076) | 27,775 | 1,642 | 546,928 | 490,427 | |||||||||||||||||||||||||||||
Unconsolidated VIEs: | |||||||||||||||||||||||||||||||||||
Asset-backed Canadian commercial paper conduit facility | 232,699 | (2,786) | 7,686 | 296 | 237,895 | 114,693 | |||||||||||||||||||||||||||||
$ | 1,592,333 | $ | (43,797) | $ | 71,498 | $ | 2,716 | $ | 1,622,750 | $ | 1,369,512 | ||||||||||||||||||||||||
September 29, 2019 | |||||||||||||||||||||||||||||||||||
Finance receivables | Allowance for credit losses | Restricted cash | Other assets | Total assets | Asset-backed debt | ||||||||||||||||||||||||||||||
On-balance sheet assets and liabilities: | |||||||||||||||||||||||||||||||||||
Consolidated VIEs: | |||||||||||||||||||||||||||||||||||
Asset-backed securitizations | $ | 929,773 | $ | (27,517) | $ | 45,096 | $ | 469 | $ | 947,821 | $ | 872,871 | |||||||||||||||||||||||
Asset-backed U.S. commercial paper conduit facilities | 599,099 | (17,701) | 33,238 | 1,149 | 615,785 | 552,757 | |||||||||||||||||||||||||||||
Unconsolidated VIEs: | |||||||||||||||||||||||||||||||||||
Asset-backed Canadian commercial paper conduit facility | 242,244 | (3,182) | 8,408 | 258 | 247,728 | 128,368 | |||||||||||||||||||||||||||||
$ | 1,771,116 | $ | (48,400) | $ | 86,742 | $ | 1,876 | $ | 1,811,334 | $ | 1,553,996 |
2020 | 2019 | ||||||||||||||||||||||||||||||||||
Transfers | Proceeds | Proceeds, net | Transfers | Proceeds | Proceeds, net | ||||||||||||||||||||||||||||||
First quarter | $ | 580,200 | $ | 525,000 | $ | 522,700 | $ | — | $ | — | $ | — | |||||||||||||||||||||||
Second quarter | 1,840,500 | 1,550,200 | $ | 1,541,800 | 1,120,000 | 1,025,000 | 1,021,300 | ||||||||||||||||||||||||||||
Third quarter | — | — | — | — | — | — | |||||||||||||||||||||||||||||
$ | 2,420,700 | $ | 2,075,200 | $ | 2,064,500 | $ | 1,120,000 | $ | 1,025,000 | $ | 1,021,300 |
2020 | 2019 | ||||||||||||||||||||||
Transfers | Proceeds | Transfers | Proceeds | ||||||||||||||||||||
First quarter | $ | 195,300 | $ | 163,600 | $ | — | $ | — | |||||||||||||||
Second quarter | — | — | — | — | |||||||||||||||||||
Third quarter | — | — | 174,400 | 154,600 | |||||||||||||||||||
$ | 195,300 | $ | 163,600 | $ | 174,400 | $ | 154,600 |
2020 | 2019 | ||||||||||||||||||||||
Transfers | Proceeds | Transfers | Proceeds | ||||||||||||||||||||
First quarter | $ | 77,900 | $ | 61,600 | $ | — | $ | — | |||||||||||||||
Second quarter | — | — | 28,200 | 23,400 | |||||||||||||||||||
Third quarter | — | — | — | — | |||||||||||||||||||
$ | 77,900 | $ | 61,600 | $ | 28,200 | $ | 23,400 |
September 27,
2020 |
December 31,
2019 |
September 29,
2019 |
|||||||||||||||
On-balance sheet retail motorcycle finance receivables | $ | 6,423,104 | $ | 6,274,551 | $ | 6,500,938 | |||||||||||
Off-balance sheet retail motorcycle finance receivables | — | 35,197 | 43,938 | ||||||||||||||
$ | 6,423,104 | $ | 6,309,748 | $ | 6,544,876 |
September 27,
2020 |
December 31,
2019 |
September 29,
2019 |
|||||||||||||||
On-balance sheet retail motorcycle finance receivables | $ | 150,656 | $ | 244,498 | $ | 217,712 | |||||||||||
Off-balance sheet retail motorcycle finance receivables | — | 885 | 954 | ||||||||||||||
$ | 150,656 | $ | 245,383 | $ | 218,666 |
Three months ended | Nine months ended | ||||||||||||||||||||||
September 27,
2020 |
September 29,
2019 |
September 27,
2020 |
September 29,
2019 |
||||||||||||||||||||
On-balance sheet retail motorcycle finance receivables | $ | 7,706 | $ | 30,167 | $ | 66,474 | $ | 85,930 | |||||||||||||||
Off-balance sheet retail motorcycle finance receivables | — | (18) | 13 | 375 | |||||||||||||||||||
$ | 7,706 | $ | 30,149 | $ | 66,487 | $ | 86,305 |
September 27, 2020 | |||||||||||||||||||||||
Balance | Level 1 | Level 2 | |||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Cash equivalents | $ | 3,250,891 | $ | 3,150,891 | $ | 100,000 | |||||||||||||||||
Marketable securities | 48,845 | 48,845 | — | ||||||||||||||||||||
Derivative financial instruments | 60,849 | — | 60,849 | ||||||||||||||||||||
$ | 3,360,585 | $ | 3,199,736 | $ | 160,849 | ||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Derivative financial instruments | $ | 13,397 | $ | — | $ | 13,397 |
December 31, 2019 | |||||||||||||||||||||||
Balance | Level 1 | Level 2 | |||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Cash equivalents | $ | 624,832 | $ | 459,885 | $ | 164,947 | |||||||||||||||||
Marketable securities | 52,575 | 52,575 | — | ||||||||||||||||||||
Derivative financial instruments | 12,649 | — | 12,649 | ||||||||||||||||||||
$ | 690,056 | $ | 512,460 | $ | 177,596 | ||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Derivative financial instruments | $ | 13,934 | $ | — | $ | 13,934 | |||||||||||||||||
September 29, 2019 | |||||||||||||||||||||||
Balance | Level 1 | Level 2 | |||||||||||||||||||||
Assets: | |||||||||||||||||||||||
Cash equivalents | $ | 624,789 | $ | 496,900 | $ | 127,889 | |||||||||||||||||
Marketable securities | 49,821 | 49,821 | — | ||||||||||||||||||||
Derivative financial instruments | 11,971 | — | 11,971 | ||||||||||||||||||||
$ | 686,581 | $ | 546,721 | $ | 139,860 | ||||||||||||||||||
Liabilities: | |||||||||||||||||||||||
Derivative financial instruments | $ | 12,589 | $ | — | $ | 12,589 |
September 27, 2020 | December 31, 2019 | September 29, 2019 | |||||||||||||||||||||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||||||||||||||||||||||
Assets: | |||||||||||||||||||||||||||||||||||
Finance receivables, net | $ | 6,954,661 | $ | 6,843,492 | $ | 7,419,627 | $ | 7,374,366 | $ | 7,561,797 | $ | 7,515,580 | |||||||||||||||||||||||
Liabilities: | |||||||||||||||||||||||||||||||||||
Deposits | $ | 29,999 | $ | 29,999 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||
Debt: | |||||||||||||||||||||||||||||||||||
Unsecured commercial paper | $ | 1,077,763 | $ | 1,077,763 | $ | 571,995 | $ | 571,995 | $ | 1,013,137 | $ | 1,013,137 | |||||||||||||||||||||||
364-day credit facility borrowings | $ | 150,000 | $ | 150,000 | $ | — | $ | — | $ | — | $ | — | |||||||||||||||||||||||
Asset-backed U.S. commercial paper conduit facilities | $ | 467,338 | $ | 467,338 | $ | 490,427 | $ | 490,427 | $ | 552,757 | $ | 552,757 | |||||||||||||||||||||||
Asset-backed Canadian commercial paper conduit facility | $ | 127,500 | $ | 127,500 | $ | 114,693 | $ | 114,693 | $ | 128,368 | $ | 128,368 | |||||||||||||||||||||||
Asset-backed securitization debt | $ | 2,123,715 | $ | 2,096,355 | $ | 768,094 | $ | 764,392 | $ | 877,423 | $ | 872,871 | |||||||||||||||||||||||
Medium-term notes | $ | 4,895,006 | $ | 4,845,961 | $ | 4,816,153 | $ | 4,760,127 | $ | 4,138,941 | $ | 4,089,591 | |||||||||||||||||||||||
Senior notes | $ | 798,411 | $ | 743,806 | $ | 774,949 | $ | 743,296 | $ | 773,434 | $ | 743,127 |
Three months ended | Nine months ended | ||||||||||||||||||||||
September 27,
2020 |
September 29,
2019 |
September 27,
2020 |
September 29,
2019 |
||||||||||||||||||||
Balance, beginning of period | $ | 83,513 | $ | 108,804 | $ | 89,793 | $ | 131,740 | |||||||||||||||
Warranties issued during the period | 8,564 | 12,988 | 25,821 | 41,955 | |||||||||||||||||||
Settlements made during the period | (12,886) | (26,906) | (37,780) | (73,291) | |||||||||||||||||||
Recalls and changes to pre-existing warranty liabilities | 239 | 1,990 | 1,596 | (3,528) | |||||||||||||||||||
Balance, end of period | $ | 79,430 | $ | 96,876 | $ | 79,430 | $ | 96,876 |
Three months ended | Nine months ended | ||||||||||||||||||||||
September 27,
2020 |
September 29,
2019 |
September 27,
2020 |
September 29,
2019 |
||||||||||||||||||||
Pension and SERPA Benefits: | |||||||||||||||||||||||
Service cost | $ | 6,806 | $ | 6,072 | $ | 20,418 | $ | 19,336 | |||||||||||||||
Interest cost | 19,112 | 21,371 | 57,335 | 64,113 | |||||||||||||||||||
Expected return on plan assets | (33,764) | (35,581) | (101,292) | (106,743) | |||||||||||||||||||
Amortization of unrecognized: | |||||||||||||||||||||||
Prior service credit | (272) | (483) | (816) | (1,449) | |||||||||||||||||||
Net loss | 16,372 | 11,128 | 49,116 | 33,384 | |||||||||||||||||||
Settlement loss | — | 1,500 | — | 1,500 | |||||||||||||||||||
Net periodic benefit cost | $ | 8,254 | $ | 4,007 | $ | 24,761 | $ | 10,141 | |||||||||||||||
Postretirement Healthcare Benefits: | |||||||||||||||||||||||
Service cost | $ | 1,202 | $ | 1,040 | $ | 3,605 | $ | 3,409 | |||||||||||||||
Interest cost | 2,336 | 2,938 | 7,008 | 8,814 | |||||||||||||||||||
Expected return on plan assets | (3,467) | (3,507) | (10,401) | (10,521) | |||||||||||||||||||
Amortization of unrecognized: | |||||||||||||||||||||||
Prior service credit | (595) | (595) | (1,785) | (1,785) | |||||||||||||||||||
Net loss | 123 | 69 | 369 | 207 | |||||||||||||||||||
Special retirement benefit cost | — | — | — | 1,583 | |||||||||||||||||||
Curtailment gain | — | — | — | (960) | |||||||||||||||||||
Net periodic benefit cost | $ | (401) | $ | (55) | $ | (1,204) | $ | 747 |
Three months ended September 27, 2020 | |||||||||||||||||||||||||||||
Foreign currency translation adjustments | Derivative financial instruments | Pension and postretirement benefit plans | Total | ||||||||||||||||||||||||||
Balance, beginning of period | $ | (53,825) | $ | (40,740) | $ | (457,633) | $ | (552,198) | |||||||||||||||||||||
Other comprehensive income, before reclassifications | 13,331 | 55,732 | — | 69,063 | |||||||||||||||||||||||||
Income tax expense | (594) | (12,299) | — | (12,893) | |||||||||||||||||||||||||
12,737 | 43,433 | — | 56,170 | ||||||||||||||||||||||||||
Reclassifications: | |||||||||||||||||||||||||||||
Net gains on derivative financial instruments | — | (58,585) | — | (58,585) | |||||||||||||||||||||||||
Prior service credits(a)
|
— | — | (867) | (867) | |||||||||||||||||||||||||
Actuarial losses(a)
|
— | — | 16,495 | 16,495 | |||||||||||||||||||||||||
Reclassifications before tax | — | (58,585) | 15,628 | (42,957) | |||||||||||||||||||||||||
Income tax benefit (expense) | — | 13,051 | (3,669) | 9,382 | |||||||||||||||||||||||||
— | (45,534) | 11,959 | (33,575) | ||||||||||||||||||||||||||
Other comprehensive income (loss) | 12,737 | (2,101) | 11,959 | 22,595 | |||||||||||||||||||||||||
Balance, end of period | $ | (41,088) | $ | (42,841) | $ | (445,674) | $ | (529,603) | |||||||||||||||||||||
Three months ended September 29, 2019 | |||||||||||||||||||||||||||||
Foreign currency translation adjustments | Derivative financial instruments | Pension and postretirement benefit plans | Total | ||||||||||||||||||||||||||
Balance, beginning of period | $ | (38,007) | $ | (10,579) | $ | (566,375) | $ | (614,961) | |||||||||||||||||||||
Other comprehensive (loss) income, before reclassifications | (15,451) | 12,412 | — | (3,039) | |||||||||||||||||||||||||
Income tax benefit (expense) | 130 | (2,923) | — | (2,793) | |||||||||||||||||||||||||
(15,321) | 9,489 | — | (5,832) | ||||||||||||||||||||||||||
Reclassifications: | |||||||||||||||||||||||||||||
Net gains on derivative financial instruments | — | (4,211) | — | (4,211) | |||||||||||||||||||||||||
Prior service credits(a)
|
— | — | (1,078) | (1,078) | |||||||||||||||||||||||||
Actuarial losses(a)
|
— | — | 11,197 | 11,197 | |||||||||||||||||||||||||
Reclassifications before tax | — | (4,211) | 10,119 | 5,908 | |||||||||||||||||||||||||
Income tax benefit (expense) | — | 1,006 | (2,375) | (1,369) | |||||||||||||||||||||||||
— | (3,205) | 7,744 | 4,539 | ||||||||||||||||||||||||||
Other comprehensive (loss) income | (15,321) | 6,284 | 7,744 | (1,293) | |||||||||||||||||||||||||
Balance, end of period | $ | (53,328) | $ | (4,295) | $ | (558,631) | $ | (616,254) |
Nine months ended September 27, 2020 | |||||||||||||||||||||||||||||
Foreign currency translation adjustments | Derivative financial instruments | Pension and postretirement benefit plans | Total | ||||||||||||||||||||||||||
Balance, beginning of period | $ | (40,813) | $ | (14,586) | $ | (481,550) | $ | (536,949) | |||||||||||||||||||||
Other comprehensive (loss) income, before reclassifications | (434) | 47,889 | — | 47,455 | |||||||||||||||||||||||||
Income tax benefit (expense) | 159 | (10,718) | — | (10,559) | |||||||||||||||||||||||||
(275) | 37,171 | — | 36,896 | ||||||||||||||||||||||||||
Reclassifications: | |||||||||||||||||||||||||||||
Net gains on derivative financial instruments | — | (84,295) | — | (84,295) | |||||||||||||||||||||||||
Prior service credits(a)
|
— | — | (2,601) | (2,601) | |||||||||||||||||||||||||
Actuarial losses(a)
|
— | — | 49,485 | 49,485 | |||||||||||||||||||||||||
Reclassifications before tax | — | (84,295) | 46,884 | (37,411) | |||||||||||||||||||||||||
Income tax benefit (expense) | — | 18,869 | (11,008) | 7,861 | |||||||||||||||||||||||||
— | (65,426) | 35,876 | (29,550) | ||||||||||||||||||||||||||
Other comprehensive (loss) income | (275) | (28,255) | 35,876 | 7,346 | |||||||||||||||||||||||||
Balance, end of period | $ | (41,088) | $ | (42,841) | $ | (445,674) | $ | (529,603) | |||||||||||||||||||||
Nine months ended September 29, 2019 | |||||||||||||||||||||||||||||
Foreign currency translation adjustments | Derivative financial instruments | Pension and postretirement benefit plans | Total | ||||||||||||||||||||||||||
Balance, beginning of period | $ | (49,608) | $ | 1,785 | $ | (581,861) | $ | (629,684) | |||||||||||||||||||||
Other comprehensive (loss) income, before reclassifications | (3,693) | 4,798 | — | 1,105 | |||||||||||||||||||||||||
Income tax expense | (27) | (1,247) | — | (1,274) | |||||||||||||||||||||||||
(3,720) | 3,551 | — | (169) | ||||||||||||||||||||||||||
Reclassifications: | |||||||||||||||||||||||||||||
Net gains on derivative financial instruments | — | (12,634) | — | (12,634) | |||||||||||||||||||||||||
Prior service credits(a)
|
— | — | (3,234) | (3,234) | |||||||||||||||||||||||||
Actuarial losses(a)
|
— | — | 33,591 | 33,591 | |||||||||||||||||||||||||
Reclassifications before tax | — | (12,634) | 30,357 | 17,723 | |||||||||||||||||||||||||
Income tax benefit (expense) | — | 3,003 | (7,127) | (4,124) | |||||||||||||||||||||||||
— | (9,631) | 23,230 | 13,599 | ||||||||||||||||||||||||||
Other comprehensive (loss) income | (3,720) | (6,080) | 23,230 | 13,430 | |||||||||||||||||||||||||
Balance, end of period | $ | (53,328) | $ | (4,295) | $ | (558,631) | $ | (616,254) |
Three months ended | Nine months ended | ||||||||||||||||||||||
September 27,
2020 |
September 29,
2019 |
September 27,
2020 |
September 29,
2019 |
||||||||||||||||||||
Motorcycles and Related Products: | |||||||||||||||||||||||
Motorcycles revenue | $ | 964,029 | $ | 1,068,942 | $ | 2,733,091 | $ | 3,698,583 | |||||||||||||||
Gross profit | 287,233 | 320,064 | 713,781 | 1,122,241 | |||||||||||||||||||
Selling, administrative and engineering expense | 196,912 | 265,464 | 618,912 | 754,479 | |||||||||||||||||||
Restructuring expense | 43,581 | 7,629 | 84,586 | 31,682 | |||||||||||||||||||
Operating income | 46,740 | 46,971 | 10,283 | 336,080 | |||||||||||||||||||
Financial Services: | |||||||||||||||||||||||
Financial Services revenue | 201,655 | 203,577 | 596,064 | 590,935 | |||||||||||||||||||
Financial Services expense | 110,177 | 130,704 | 475,771 | 383,802 | |||||||||||||||||||
Restructuring expense | 334 | — | 1,278 | — | |||||||||||||||||||
Operating income | 91,144 | 72,873 | 119,015 | 207,133 | |||||||||||||||||||
Operating income | $ | 137,884 | $ | 119,844 | $ | 129,298 | $ | 543,213 |
Three months ended September 27, 2020 | |||||||||||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Motorcycles and Related Products | $ | 969,399 | $ | — | $ | (5,370) | $ | 964,029 | |||||||||||||||
Financial Services | — | 200,448 | 1,207 | 201,655 | |||||||||||||||||||
969,399 | 200,448 | (4,163) | 1,165,684 | ||||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Motorcycles and Related Products cost of goods sold | 676,796 | — | — | 676,796 | |||||||||||||||||||
Financial Services interest expense | — | 67,533 | — | 67,533 | |||||||||||||||||||
Financial Services provision for credit losses | — | 7,835 | — | 7,835 | |||||||||||||||||||
Selling, administrative and engineering expense | 199,829 | 35,774 | (3,882) | 231,721 | |||||||||||||||||||
Restructuring expense | 43,581 | 334 | — | 43,915 | |||||||||||||||||||
920,206 | 111,476 | (3,882) | 1,027,800 | ||||||||||||||||||||
Operating income | 49,193 | 88,972 | (281) | 137,884 | |||||||||||||||||||
Other income, net | 155 | — | — | 155 | |||||||||||||||||||
Investment income | 2,672 | — | — | 2,672 | |||||||||||||||||||
Interest expense | 7,783 | — | — | 7,783 | |||||||||||||||||||
Income before income taxes | 44,237 | 88,972 | (281) | 132,928 | |||||||||||||||||||
Income tax (benefit) provision | (6,347) | 19,057 | — | 12,710 | |||||||||||||||||||
Net income | $ | 50,584 | $ | 69,915 | $ | (281) | $ | 120,218 | |||||||||||||||
Nine months ended September 27, 2020 | |||||||||||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Motorcycles and Related Products | $ | 2,743,562 | $ | — | $ | (10,471) | $ | 2,733,091 | |||||||||||||||
Financial Services | — | 591,206 | 4,858 | 596,064 | |||||||||||||||||||
2,743,562 | 591,206 | (5,613) | 3,329,155 | ||||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Motorcycles and Related Products cost of goods sold | 2,019,310 | — | — | 2,019,310 | |||||||||||||||||||
Financial Services interest expense | — | 182,193 | — | 182,193 | |||||||||||||||||||
Financial Services provision for credit losses | — | 178,433 | — | 178,433 | |||||||||||||||||||
Selling, administrative and engineering expense | 627,874 | 111,903 | (5,720) | 734,057 | |||||||||||||||||||
Restructuring expense | 84,586 | 1,278 | — | 85,864 | |||||||||||||||||||
2,731,770 | 473,807 | (5,720) | 3,199,857 | ||||||||||||||||||||
Operating income | 11,792 | 117,399 | 107 | 129,298 | |||||||||||||||||||
Other income, net | 466 | — | — | 466 | |||||||||||||||||||
Investment income | 103,082 | — | (100,000) | 3,082 | |||||||||||||||||||
Interest expense | 23,307 | — | 23,307 | ||||||||||||||||||||
Income before income taxes | 92,033 | 117,399 | (99,893) | 109,539 | |||||||||||||||||||
Income tax (benefit) provision | (14,014) | 25,857 | — | 11,843 | |||||||||||||||||||
Net income | $ | 106,047 | $ | 91,542 | $ | (99,893) | $ | 97,696 |
Three months ended September 29, 2019 | |||||||||||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Motorcycles and Related Products | $ | 1,074,397 | $ | — | $ | (5,455) | $ | 1,068,942 | |||||||||||||||
Financial Services | — | 201,308 | 2,269 | 203,577 | |||||||||||||||||||
1,074,397 | 201,308 | (3,186) | 1,272,519 | ||||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Motorcycles and Related Products cost of goods sold | 748,878 | — | — | 748,878 | |||||||||||||||||||
Financial Services interest expense | — | 53,390 | — | 53,390 | |||||||||||||||||||
Financial Services provision for credit losses | — | 33,747 | — | 33,747 | |||||||||||||||||||
Selling, administrative and engineering expense | 269,080 | 42,996 | (3,045) | 309,031 | |||||||||||||||||||
Restructuring expense | 7,629 | — | — | 7,629 | |||||||||||||||||||
1,025,587 | 130,133 | (3,045) | 1,152,675 | ||||||||||||||||||||
Operating income | 48,810 | 71,175 | (141) | 119,844 | |||||||||||||||||||
Other income, net | 3,160 | — | — | 3,160 | |||||||||||||||||||
Investment income | 52,041 | — | (50,000) | 2,041 | |||||||||||||||||||
Interest expense | 7,789 | — | — | 7,789 | |||||||||||||||||||
Income before provision for income taxes | 96,222 | 71,175 | (50,141) | 117,256 | |||||||||||||||||||
Provision for income taxes | 13,517 | 17,176 | — | 30,693 | |||||||||||||||||||
Net income | $ | 82,705 | $ | 53,999 | $ | (50,141) | $ | 86,563 | |||||||||||||||
Nine months ended September 29, 2019 | |||||||||||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Motorcycles and Related Products | $ | 3,714,091 | $ | — | $ | (15,508) | $ | 3,698,583 | |||||||||||||||
Financial Services | — | 584,258 | 6,677 | 590,935 | |||||||||||||||||||
3,714,091 | 584,258 | (8,831) | 4,289,518 | ||||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Motorcycles and Related Products cost of goods sold | 2,576,342 | — | — | 2,576,342 | |||||||||||||||||||
Financial Services interest expense | — | 158,387 | — | 158,387 | |||||||||||||||||||
Financial Services provision for credit losses | — | 94,621 | — | 94,621 | |||||||||||||||||||
Selling, administrative and engineering expense | 764,848 | 129,170 | (8,745) | 885,273 | |||||||||||||||||||
Restructuring expense | 31,682 | — | — | 31,682 | |||||||||||||||||||
3,372,872 | 382,178 | (8,745) | 3,746,305 | ||||||||||||||||||||
Operating income | 341,219 | 202,080 | (86) | 543,213 | |||||||||||||||||||
Other income, net | 11,857 | — | — | 11,857 | |||||||||||||||||||
Investment income | 151,970 | — | (140,000) | 11,970 | |||||||||||||||||||
Interest expense | 23,304 | — | — | 23,304 | |||||||||||||||||||
Income before provision for income taxes | 481,742 | 202,080 | (140,086) | 543,736 | |||||||||||||||||||
Provision for income taxes | 85,422 | 48,175 | — | 133,597 | |||||||||||||||||||
Net income | $ | 396,320 | $ | 153,905 | $ | (140,086) | $ | 410,139 |
September 27, 2020 | |||||||||||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||||||||||
ASSETS | |||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||
Cash and cash equivalents | $ | 733,704 | $ | 2,827,246 | $ | — | $ | 3,560,950 | |||||||||||||||
Accounts receivable, net | 473,530 | — | (240,685) | 232,845 | |||||||||||||||||||
Finance receivables, net | — | 1,701,478 | — | 1,701,478 | |||||||||||||||||||
Inventories, net | 322,375 | — | — | 322,375 | |||||||||||||||||||
Restricted cash | — | 160,155 | — | 160,155 | |||||||||||||||||||
Other current assets | 81,551 | 102,156 | (4,776) | 178,931 | |||||||||||||||||||
1,611,160 | 4,791,035 | (245,461) | 6,156,734 | ||||||||||||||||||||
Finance receivables, net | — | 5,142,014 | — | 5,142,014 | |||||||||||||||||||
Property, plant and equipment, net | 736,589 | 48,576 | — | 785,165 | |||||||||||||||||||
Prepaid pension costs | 82,378 | — | — | 82,378 | |||||||||||||||||||
Goodwill | 64,884 | — | — | 64,884 | |||||||||||||||||||
Deferred income taxes | 46,676 | 92,318 | (1,034) | 137,960 | |||||||||||||||||||
Lease assets | 42,639 | 4,960 | — | 47,599 | |||||||||||||||||||
Other long-term assets | 176,873 | 32,853 | (94,185) | 115,541 | |||||||||||||||||||
$ | 2,761,199 | $ | 10,111,756 | $ | (340,680) | $ | 12,532,275 | ||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||
Accounts payable | $ | 265,263 | $ | 264,525 | $ | (240,685) | $ | 289,103 | |||||||||||||||
Accrued liabilities | 424,391 | 170,830 | (3,940) | 591,281 | |||||||||||||||||||
Short-term debt | — | 1,227,763 | — | 1,227,763 | |||||||||||||||||||
Current portion of long-term debt, net | — | 2,109,284 | — | 2,109,284 | |||||||||||||||||||
689,654 | 3,772,402 | (244,625) | 4,217,431 | ||||||||||||||||||||
Long-term debt, net | 743,806 | 5,427,870 | — | 6,171,676 | |||||||||||||||||||
Lease liabilities | 26,951 | 4,274 | — | 31,225 | |||||||||||||||||||
Pension liabilities | 57,853 | — | — | 57,853 | |||||||||||||||||||
Postretirement healthcare liabilities | 68,379 | — | — | 68,379 | |||||||||||||||||||
Other long-term liabilities | 168,037 | 45,256 | 2,520 | 215,813 | |||||||||||||||||||
Commitments and contingencies (Note 17) | |||||||||||||||||||||||
Shareholders’ equity | 1,006,519 | 861,954 | (98,575) | 1,769,898 | |||||||||||||||||||
$ | 2,761,199 | $ | 10,111,756 | $ | (340,680) | $ | 12,532,275 |
December 31, 2019 | |||||||||||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||||||||||
ASSETS | |||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||
Cash and cash equivalents | $ | 470,649 | $ | 363,219 | $ | — | $ | 833,868 | |||||||||||||||
Accounts receivable, net | 369,717 | — | (110,383) | 259,334 | |||||||||||||||||||
Finance receivables, net | — | 2,272,522 | — | 2,272,522 | |||||||||||||||||||
Inventories, net | 603,571 | — | — | 603,571 | |||||||||||||||||||
Restricted cash | — | 64,554 | — | 64,554 | |||||||||||||||||||
Other current assets | 110,145 | 59,665 | (836) | 168,974 | |||||||||||||||||||
1,554,082 | 2,759,960 | (111,219) | 4,202,823 | ||||||||||||||||||||
Finance receivables, net | — | 5,101,844 | — | 5,101,844 | |||||||||||||||||||
Property, plant and equipment, net | 794,131 | 53,251 | — | 847,382 | |||||||||||||||||||
Prepaid pension costs | 56,014 | — | — | 56,014 | |||||||||||||||||||
Goodwill | 64,160 | — | — | 64,160 | |||||||||||||||||||
Deferred income taxes | 62,768 | 39,882 | (1,446) | 101,204 | |||||||||||||||||||
Lease assets | 55,722 | 5,896 | — | 61,618 | |||||||||||||||||||
Other long-term assets | 166,972 | 19,211 | (93,069) | 93,114 | |||||||||||||||||||
$ | 2,753,849 | $ | 7,980,044 | $ | (205,734) | $ | 10,528,159 | ||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||
Accounts payable | $ | 266,710 | $ | 138,053 | $ | (110,383) | $ | 294,380 | |||||||||||||||
Accrued liabilities | 463,491 | 119,186 | (389) | 582,288 | |||||||||||||||||||
Short-term debt | — | 571,995 | — | 571,995 | |||||||||||||||||||
Current portion of long-term debt, net | — | 1,748,109 | — | 1,748,109 | |||||||||||||||||||
730,201 | 2,577,343 | (110,772) | 3,196,772 | ||||||||||||||||||||
Long-term debt, net | 743,296 | 4,381,530 | — | 5,124,826 | |||||||||||||||||||
Lease liabilities | 38,783 | 5,664 | — | 44,447 | |||||||||||||||||||
Pension liabilities | 56,138 | — | — | 56,138 | |||||||||||||||||||
Postretirement healthcare liabilities | 72,513 | — | — | 72,513 | |||||||||||||||||||
Other long-term liabilities | 186,252 | 40,609 | 2,603 | 229,464 | |||||||||||||||||||
Commitments and contingencies (Note 17) | |||||||||||||||||||||||
Shareholders’ equity | 926,666 | 974,898 | (97,565) | 1,803,999 | |||||||||||||||||||
$ | 2,753,849 | $ | 7,980,044 | $ | (205,734) | $ | 10,528,159 |
September 29, 2019 | |||||||||||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||||||||||
ASSETS | |||||||||||||||||||||||
Current assets: | |||||||||||||||||||||||
Cash and cash equivalents | $ | 482,106 | $ | 380,275 | $ | — | $ | 862,381 | |||||||||||||||
Accounts receivable, net | 635,997 | — | (328,381) | 307,616 | |||||||||||||||||||
Finance receivables, net | — | 2,210,001 | — | 2,210,001 | |||||||||||||||||||
Inventories, net | 489,098 | — | — | 489,098 | |||||||||||||||||||
Restricted cash | — | 79,115 | — | 79,115 | |||||||||||||||||||
Other current assets | 109,724 | 46,013 | (14,951) | 140,786 | |||||||||||||||||||
1,716,925 | 2,715,404 | (343,332) | 4,088,997 | ||||||||||||||||||||
Finance receivables, net | — | 5,305,579 | — | 5,305,579 | |||||||||||||||||||
Property, plant and equipment, net | 791,107 | 53,339 | — | 844,446 | |||||||||||||||||||
Goodwill | 63,727 | — | — | 63,727 | |||||||||||||||||||
Deferred income taxes | 92,921 | 40,411 | (1,313) | 132,019 | |||||||||||||||||||
Lease assets | 49,706 | 6,199 | — | 55,905 | |||||||||||||||||||
Other long-term assets | 157,341 | 20,401 | (92,185) | 85,557 | |||||||||||||||||||
$ | 2,871,727 | $ | 8,141,333 | $ | (436,830) | $ | 10,576,230 | ||||||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||||||||||
Current liabilities: | |||||||||||||||||||||||
Accounts payable | $ | 314,843 | $ | 362,489 | $ | (328,381) | $ | 348,951 | |||||||||||||||
Accrued liabilities | 462,644 | 108,719 | (14,373) | 556,990 | |||||||||||||||||||
Short-term debt | — | 1,013,137 | — | 1,013,137 | |||||||||||||||||||
Current portion of long-term debt, net | — | 1,779,673 | — | 1,779,673 | |||||||||||||||||||
777,487 | 3,264,018 | (342,754) | 3,698,751 | ||||||||||||||||||||
Long-term debt, net | 743,127 | 3,863,914 | — | 4,607,041 | |||||||||||||||||||
Lease liabilities | 33,296 | 6,112 | — | 39,408 | |||||||||||||||||||
Pension liabilities | 82,561 | — | — | 82,561 | |||||||||||||||||||
Postretirement healthcare liabilities | 89,032 | — | — | 89,032 | |||||||||||||||||||
Other long-term liabilities | 180,103 | 40,261 | 2,854 | 223,218 | |||||||||||||||||||
Commitments and contingencies (Note 17) | |||||||||||||||||||||||
Shareholders’ equity | 966,121 | 967,028 | (96,930) | 1,836,219 | |||||||||||||||||||
$ | 2,871,727 | $ | 8,141,333 | $ | (436,830) | $ | 10,576,230 |
Nine months ended September 27, 2020 | |||||||||||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||||
Net income | $ | 106,047 | $ | 91,542 | $ | (99,893) | $ | 97,696 | |||||||||||||||
Adjustments to reconcile Net income to Net cash provided by operating activities: | |||||||||||||||||||||||
Depreciation and amortization | 133,679 | 6,378 | — | 140,057 | |||||||||||||||||||
Amortization of deferred loan origination costs | — | 52,374 | — | 52,374 | |||||||||||||||||||
Amortization of financing origination fees | 510 | 10,118 | — | 10,628 | |||||||||||||||||||
Provision for long-term employee benefits | 23,557 | — | — | 23,557 | |||||||||||||||||||
Employee benefit plan contributions and payments | (5,456) | — | — | (5,456) | |||||||||||||||||||
Stock compensation expense | 10,959 | 1,117 | — | 12,076 | |||||||||||||||||||
Net change in wholesale finance receivables related to sales | — | — | 330,793 | 330,793 | |||||||||||||||||||
Provision for credit losses | — | 178,433 | — | 178,433 | |||||||||||||||||||
Deferred income taxes | 6,171 | (24,737) | (412) | (18,978) | |||||||||||||||||||
Other, net | (13,628) | 4,416 | (108) | (9,320) | |||||||||||||||||||
Changes in current assets and liabilities: | |||||||||||||||||||||||
Accounts receivable, net | (100,672) | — | 130,302 | 29,630 | |||||||||||||||||||
Finance receivables - accrued interest and other | — | 5,097 | — | 5,097 | |||||||||||||||||||
Inventories, net | 273,668 | — | — | 273,668 | |||||||||||||||||||
Accounts payable and accrued liabilities | (38,815) | 154,121 | (132,228) | (16,922) | |||||||||||||||||||
Derivative financial instruments | (1,584) | 41 | — | (1,543) | |||||||||||||||||||
Other | 26,704 | 2,634 | 3,940 | 33,278 | |||||||||||||||||||
315,093 | 389,992 | 332,287 | 1,037,372 | ||||||||||||||||||||
Net cash provided by operating activities | 421,140 | 481,534 | 232,394 | 1,135,068 | |||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||
Capital expenditures | (90,592) | (1,703) | — | (92,295) | |||||||||||||||||||
Origination of finance receivables | — | (4,697,675) | 1,824,416 | (2,873,259) | |||||||||||||||||||
Collections on finance receivables | — | 4,886,976 | (2,156,810) | 2,730,166 | |||||||||||||||||||
Other investing activities | 334 | — | — | 334 | |||||||||||||||||||
Net cash (used) provided by investing activities | (90,258) | 187,598 | (332,394) | (235,054) | |||||||||||||||||||
Nine months ended September 27, 2020 | |||||||||||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||
Proceeds from issuance of medium-term notes | — | 1,396,602 | — | 1,396,602 | |||||||||||||||||||
Repayments of medium-term notes | — | (1,400,000) | — | (1,400,000) | |||||||||||||||||||
Proceeds from securitization debt | — | 2,064,450 | — | 2,064,450 | |||||||||||||||||||
Repayments of securitization debt | — | (735,885) | — | (735,885) | |||||||||||||||||||
Borrowings of asset-backed commercial paper | — | 225,187 | — | 225,187 | |||||||||||||||||||
Repayments of asset-backed commercial paper | — | (236,846) | — | (236,846) | |||||||||||||||||||
Net increase in unsecured commercial paper | — | 509,978 | — | 509,978 | |||||||||||||||||||
Net increase in credit facilities | — | 150,000 | — | 150,000 | |||||||||||||||||||
Deposits | — | 29,992 | — | 29,992 | |||||||||||||||||||
Dividends paid | (65,002) | (100,000) | 100,000 | (65,002) | |||||||||||||||||||
Repurchase of common stock | (7,895) | — | — | (7,895) | |||||||||||||||||||
Issuance of common stock under share-based plans | 96 | — | — | 96 | |||||||||||||||||||
Net cash (used) provided by financing activities | (72,801) | 1,903,478 | 100,000 | 1,930,677 | |||||||||||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 4,974 | 1,097 | — | 6,071 | |||||||||||||||||||
Net increase in cash, cash equivalents and restricted cash | $ | 263,055 | $ | 2,573,707 | $ | — | $ | 2,836,762 | |||||||||||||||
Cash, cash equivalents and restricted cash: | |||||||||||||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | $ | 470,649 | $ | 434,717 | $ | — | $ | 905,366 | |||||||||||||||
Net increase in cash, cash equivalents and restricted cash | 263,055 | 2,573,707 | — | 2,836,762 | |||||||||||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 733,704 | $ | 3,008,424 | $ | — | $ | 3,742,128 |
Nine months ended September 29, 2019 | |||||||||||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||||||||||
Cash flows from operating activities: | |||||||||||||||||||||||
Net income | $ | 396,320 | $ | 153,905 | $ | (140,086) | $ | 410,139 | |||||||||||||||
Adjustments to reconcile Net income to Net cash provided by operating activities: | |||||||||||||||||||||||
Depreciation and amortization | 168,013 | 6,596 | — | 174,609 | |||||||||||||||||||
Amortization of deferred loan origination costs | — | 57,303 | — | 57,303 | |||||||||||||||||||
Amortization of financing origination fees | 503 | 6,529 | — | 7,032 | |||||||||||||||||||
Provision for long-term employee benefits | 10,888 | — | — | 10,888 | |||||||||||||||||||
Employee benefit plan contributions and payments | (11,166) | — | — | (11,166) | |||||||||||||||||||
Stock compensation expense | 22,869 | 2,454 | — | 25,323 | |||||||||||||||||||
Net change in wholesale finance receivables related to sales | — | — | 683 | 683 | |||||||||||||||||||
Provision for credit losses | — | 94,621 | — | 94,621 | |||||||||||||||||||
Deferred income taxes | 5,514 | (1,765) | (214) | 3,535 | |||||||||||||||||||
Other, net | 9,126 | (1,372) | 85 | 7,839 | |||||||||||||||||||
Changes in current assets and liabilities: | |||||||||||||||||||||||
Accounts receivable, net | (216,961) | — | 209,128 | (7,833) | |||||||||||||||||||
Finance receivables - accrued interest and other | — | (4,574) | — | (4,574) | |||||||||||||||||||
Inventories, net | 62,870 | — | — | 62,870 | |||||||||||||||||||
Accounts payable and accrued liabilities | 8,729 | 207,971 | (203,562) | 13,138 | |||||||||||||||||||
Derivative financial instruments | 2,443 | 94 | — | 2,537 | |||||||||||||||||||
Other | (19,516) | 12,144 | 9,077 | 1,705 | |||||||||||||||||||
43,312 | 380,001 | 15,197 | 438,510 | ||||||||||||||||||||
Net cash provided by operating activities | 439,632 | 533,906 | (124,889) | 848,649 | |||||||||||||||||||
Cash flows from investing activities: | |||||||||||||||||||||||
Capital expenditures | (118,182) | (2,979) | — | (121,161) | |||||||||||||||||||
Origination of finance receivables | — | (5,757,384) | 2,615,758 | (3,141,626) | |||||||||||||||||||
Collections on finance receivables | — | 5,326,787 | (2,630,869) | 2,695,918 | |||||||||||||||||||
Sales and redemptions of marketable securities | 10,007 | — | — | 10,007 | |||||||||||||||||||
Acquisition of business | (7,000) | — | — | (7,000) | |||||||||||||||||||
Other investing activities | 12,388 | — | — | 12,388 | |||||||||||||||||||
Net cash used by investing activities | (102,787) | (433,576) | (15,111) | (551,474) | |||||||||||||||||||
Nine months ended September 29, 2019 | |||||||||||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||||||||||
Cash flows from financing activities: | |||||||||||||||||||||||
Proceeds from issuance of medium-term notes | — | 546,655 | — | 546,655 | |||||||||||||||||||
Repayments of medium-term notes | — | (1,350,000) | — | (1,350,000) | |||||||||||||||||||
Proceeds from securitization debt | — | 1,021,353 | — | 1,021,353 | |||||||||||||||||||
Repayments of securitization debt | — | (244,250) | — | (244,250) | |||||||||||||||||||
Borrowings of asset-backed commercial paper | — | 177,950 | — | 177,950 | |||||||||||||||||||
Repayments of asset-backed commercial paper | — | (240,008) | — | (240,008) | |||||||||||||||||||
Net decrease in unsecured commercial paper | — | (120,707) | — | (120,707) | |||||||||||||||||||
Dividends paid | (179,409) | (140,000) | 140,000 | (179,409) | |||||||||||||||||||
Repurchase of common stock | (217,454) | — | — | (217,454) | |||||||||||||||||||
Issuance of common stock under share-based plans | 2,180 | — | — | 2,180 | |||||||||||||||||||
Net cash used by financing activities | (394,683) | (349,007) | 140,000 | (603,690) | |||||||||||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (4,604) | 494 | — | (4,110) | |||||||||||||||||||
Net decrease in cash, cash equivalents and restricted cash | $ | (62,442) | $ | (248,183) | $ | — | $ | (310,625) | |||||||||||||||
Cash, cash equivalents and restricted cash: | |||||||||||||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | $ | 544,548 | $ | 715,200 | $ | — | $ | 1,259,748 | |||||||||||||||
Net decrease in cash, cash equivalents and restricted cash | (62,442) | (248,183) | — | (310,625) | |||||||||||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 482,106 | $ | 467,017 | $ | — | $ | 949,123 |
Three months ended | |||||||||||||||||||||||
(in thousands, except earnings per share) |
September 27,
2020 |
September 29,
2019 |
(Decrease)
Increase |
% Change | |||||||||||||||||||
Operating income from Motorcycles and Related Products | $ | 46,740 | $ | 46,971 | $ | (231) | (0.5) | % | |||||||||||||||
Operating income from Financial Services | 91,144 | 72,873 | 18,271 | 25.1 | |||||||||||||||||||
Operating income | 137,884 | 119,844 | 18,040 | 15.1 | |||||||||||||||||||
Other income, net | 155 | 3,160 | (3,005) | (95.1) | |||||||||||||||||||
Investment income | 2,672 | 2,041 | 631 | 30.9 | |||||||||||||||||||
Interest expense | 7,783 | 7,789 | (6) | (0.1) | |||||||||||||||||||
Income before income taxes | 132,928 | 117,256 | 15,672 | 13.4 | |||||||||||||||||||
Provision for income taxes | 12,710 | 30,693 | (17,983) | (58.6) | |||||||||||||||||||
Net income | $ | 120,218 | $ | 86,563 | $ | 33,655 | 38.9 | % | |||||||||||||||
Diluted earnings per share | $ | 0.78 | $ | 0.55 | $ | 0.23 | 41.8 | % |
Three months ended | |||||||||||||||||||||||
September 30,
2020 |
September 30,
2019 |
(Decrease)
Increase |
%
Change |
||||||||||||||||||||
United States | 31,304 | 34,903 | (3,599) | (10.3) | % | ||||||||||||||||||
Canada | 1,915 | 2,560 | (645) | (25.2) | |||||||||||||||||||
Total North America
|
33,219 | 37,463 | (4,244) | (11.3) | |||||||||||||||||||
Europe(b)
|
9,742 | 9,018 | 724 | 8.0 | |||||||||||||||||||
EMEA - Other | 1,442 | 1,465 | (23) | (1.6) | |||||||||||||||||||
Total EMEA
|
11,184 | 10,483 | 701 | 6.7 | |||||||||||||||||||
Asia Pacific(c)
|
4,444 | 4,889 | (445) | (9.1) | |||||||||||||||||||
Asia Pacific - Other | 3,187 | 3,189 | (2) | (0.1) | |||||||||||||||||||
Total Asia Pacific
|
7,631 | 8,078 | (447) | (5.5) | |||||||||||||||||||
Latin America | 1,768 | 2,498 | (730) | (29.2) | |||||||||||||||||||
Worldwide retail sales | 53,802 | 58,522 | (4,720) | (8.1) | % |
Three months ended | |||||||||||||||||||||||||||||||||||
September 27, 2020 | September 29, 2019 | Unit | Unit | ||||||||||||||||||||||||||||||||
Units | Mix % | Units | Mix % |
(Decrease)
Increase |
% Change | ||||||||||||||||||||||||||||||
U.S. motorcycle shipments | 25,284 | 58.8 | % | 25,572 | 55.8 | % | (288) | (1.1) | % | ||||||||||||||||||||||||||
Worldwide motorcycle shipments: | |||||||||||||||||||||||||||||||||||
Touring motorcycle units | 16,505 | 38.4 | % | 19,905 | 43.4 | % | (3,400) | (17.1) | % | ||||||||||||||||||||||||||
Cruiser motorcycle units(a)
|
15,500 | 36.1 | % | 16,225 | 35.4 | % | (725) | (4.5) | % | ||||||||||||||||||||||||||
Sportster® / Street motorcycle units
|
10,978 | 25.5 | % | 9,707 | 21.2 | % | 1,271 | 13.1 | % | ||||||||||||||||||||||||||
42,983 | 100.0 | % | 45,837 | 100.0 | % | (2,854) | (6.2) | % |
Three months ended | |||||||||||||||||||||||
September 27, 2020 | September 29, 2019 |
(Decrease)
Increase |
%
Change |
||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Motorcycles
|
$ | 684,344 | $ | 779,344 | $ | (95,000) | (12.2) | % | |||||||||||||||
Parts & Accessories
|
209,808 | 203,173 | 6,635 | 3.3 | |||||||||||||||||||
General Merchandise
|
49,356 | 60,334 | (10,978) | (18.2) | |||||||||||||||||||
Licensing
|
8,894 | 8,611 | 283 | 3.3 | |||||||||||||||||||
Other
|
11,627 | 17,480 | (5,853) | (33.5) | |||||||||||||||||||
964,029 | 1,068,942 | (104,913) | (9.8) | ||||||||||||||||||||
Cost of goods sold | 676,796 | 748,878 | (72,082) | (9.6) | |||||||||||||||||||
Gross profit | 287,233 | 320,064 | (32,831) | (10.3) | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling & administrative expense
|
149,780 | 212,633 | (62,853) | (29.6) | |||||||||||||||||||
Engineering expense
|
47,132 | 52,831 | (5,699) | (10.8) | |||||||||||||||||||
Restructuring expense
|
43,581 | 7,629 | 35,952 | 471.3 | |||||||||||||||||||
240,493 | 273,093 | (32,600) | (11.9) | ||||||||||||||||||||
Operating income | $ | 46,740 | $ | 46,971 | $ | (231) | (0.5) | % | |||||||||||||||
Operating margin | 4.8 | % | 4.4 | % | 0.5 | pts. |
Net
Revenue |
Cost of
Goods Sold |
Gross
Profit |
|||||||||||||||
Three months ended September 29, 2019 | $ | 1,068.9 | $ | 748.9 | $ | 320.0 | |||||||||||
Volume | (62.6) | (44.8) | (17.8) | ||||||||||||||
Price and incentives | 8.5 | — | 8.5 | ||||||||||||||
Foreign currency exchange rates and hedging | 3.9 | 9.4 | (5.5) | ||||||||||||||
Shipment mix | (54.7) | (15.8) | (38.9) | ||||||||||||||
Raw material prices | — | (3.7) | 3.7 | ||||||||||||||
Manufacturing and other costs | — | (17.2) | 17.2 | ||||||||||||||
(104.9) | (72.1) | (32.8) | |||||||||||||||
Three months ended September 27, 2020 | $ | 964.0 | $ | 676.8 | $ | 287.2 |
Three months ended | |||||||||||||||||||||||
September 27, 2020 | September 29, 2019 |
(Decrease)
Increase |
%
Change |
||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Interest income | $ | 174,464 | $ | 175,840 | $ | (1,376) | (0.8) | % | |||||||||||||||
Other income | 27,191 | 27,737 | (546) | (2.0) | |||||||||||||||||||
201,655 | 203,577 | (1,922) | (0.9) | ||||||||||||||||||||
Expenses: | |||||||||||||||||||||||
Interest expense | 67,533 | 53,390 | 14,143 | 26.5 | |||||||||||||||||||
Provision for credit losses | 7,835 | 33,747 | (25,912) | (76.8) | |||||||||||||||||||
Operating expense | 34,809 | 43,567 | (8,758) | (20.1) | |||||||||||||||||||
Restructuring expense | 334 | — | 334 | 100.0 | |||||||||||||||||||
110,511 | 130,704 | (20,193) | (15.4) | ||||||||||||||||||||
Operating income | $ | 91,144 | $ | 72,873 | $ | 18,271 | 25.1 | % |
Three months ended | |||||||||||
September 27,
2020 |
September 29,
2019 |
||||||||||
Balance, beginning of period | $ | 411,015 | $ | 194,996 | |||||||
Provision for credit losses | 7,835 | 33,747 | |||||||||
Charge-offs, net of recoveries | (10,148) | (30,167) | |||||||||
Balance, end of period | $ | 408,702 | $ | 198,576 |
Nine months ended | |||||||||||||||||||||||
(in thousands, except earnings per share) |
September 27,
2020 |
September 29,
2019 |
(Decrease)
Increase |
%
Change |
|||||||||||||||||||
Operating income from Motorcycles and Related Products | $ | 10,283 | $ | 336,080 | $ | (325,797) | (96.9) | % | |||||||||||||||
Operating income from Financial Services | 119,015 | 207,133 | (88,118) | (42.5) | |||||||||||||||||||
Operating income | 129,298 | 543,213 | (413,915) | (76.2) | |||||||||||||||||||
Other income, net | 466 | 11,857 | (11,391) | (96.1) | |||||||||||||||||||
Investment income | 3,082 | 11,970 | (8,888) | (74.3) | |||||||||||||||||||
Interest expense | 23,307 | 23,304 | 3 | — | |||||||||||||||||||
Income before income taxes | 109,539 | 543,736 | (434,197) | (79.9) | |||||||||||||||||||
Provision for income taxes | 11,843 | 133,597 | (121,754) | (91.1) | |||||||||||||||||||
Net income | $ | 97,696 | $ | 410,139 | $ | (312,443) | (76.2) | % | |||||||||||||||
Diluted earnings per share | $ | 0.64 | $ | 2.58 | $ | (1.94) | (75.2) | % |
Nine months ended | |||||||||||||||||||||||
September 30,
2020 |
September 30,
2019 |
Decrease | % Change | ||||||||||||||||||||
United States | 86,376 | 105,756 | (19,380) | (18.3) | % | ||||||||||||||||||
Canada | 5,668 | 7,787 | (2,119) | (27.2) | |||||||||||||||||||
Total North America | 92,044 | 113,543 | (21,499) | (18.9) | |||||||||||||||||||
Europe(b)
|
26,014 | 31,997 | (5,983) | (18.7) | |||||||||||||||||||
EMEA – Other
|
3,864 | 4,902 | (1,038) | (21.2) | |||||||||||||||||||
Total EMEA | 29,878 | 36,899 | (7,021) | (19.0) | |||||||||||||||||||
Asia Pacific(c)
|
12,517 | 13,219 | (702) | (5.3) | |||||||||||||||||||
Asia Pacific – Other
|
7,754 | 8,603 | (849) | (9.9) | |||||||||||||||||||
Total Asia Pacific | 20,271 | 21,822 | (1,551) | (7.1) | |||||||||||||||||||
Latin America | 4,760 | 7,255 | (2,495) | (34.4) | |||||||||||||||||||
Worldwide retail sales | 146,953 | 179,519 | (32,566) | (18.1) | % |
Nine months ended | |||||||||||||||||||||||
September 30,
2020 |
September 30,
2019 |
Decrease |
%
Change |
||||||||||||||||||||
United States(b)
|
201,822 | 213,876 | (12,054) | (5.6) | % | ||||||||||||||||||
Europe(c)
|
349,993 | 360,320 | (10,327) | (2.9) | % |
Nine months ended | |||||||||||||||||||||||||||||||||||
September 27, 2020 | September 29, 2019 | Unit | Unit | ||||||||||||||||||||||||||||||||
Units | Mix % | Units | Mix % | Decrease | % Change | ||||||||||||||||||||||||||||||
U.S. motorcycle shipments | 69,359 | 55.8 | % | 101,481 | 58.5 | % | (32,122) | (31.7) | % | ||||||||||||||||||||||||||
Worldwide motorcycle shipments: | |||||||||||||||||||||||||||||||||||
Touring motorcycle units | 47,811 | 38.5 | % | 75,871 | 43.7 | % | (28,060) | (37.0) | % | ||||||||||||||||||||||||||
Cruiser motorcycle units(a)
|
47,505 | 38.2 | % | 59,367 | 34.2 | % | (11,862) | (20.0) | |||||||||||||||||||||||||||
Sportster® / Street motorcycle units
|
29,009 | 23.3 | % | 38,247 | 22.1 | % | (9,238) | (24.2) | |||||||||||||||||||||||||||
124,325 | 100.0 | % | 173,485 | 100.0 | % | (49,160) | (28.3) | % |
Nine months ended | |||||||||||||||||||||||
September 27, 2020 | September 29, 2019 |
(Decrease)
Increase |
%
Change |
||||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Motorcycles
|
$ | 2,030,447 | $ | 2,871,982 | $ | (841,535) | (29.3) | % | |||||||||||||||
Parts & Accessories
|
513,201 | 584,134 | (70,933) | (12.1) | |||||||||||||||||||
General Merchandise
|
136,321 | 180,379 | (44,058) | (24.4) | |||||||||||||||||||
Licensing
|
21,826 | 27,099 | (5,273) | (19.5) | |||||||||||||||||||
Other
|
31,296 | 34,989 | (3,693) | (10.6) | |||||||||||||||||||
2,733,091 | 3,698,583 | (965,492) | (26.1) | ||||||||||||||||||||
Cost of goods sold | 2,019,310 | 2,576,342 | (557,032) | (21.6) | |||||||||||||||||||
Gross profit | 713,781 | 1,122,241 | (408,460) | (36.4) | |||||||||||||||||||
Operating expenses: | |||||||||||||||||||||||
Selling & administrative expense
|
477,286 | 598,102 | (120,816) | (20.2) | |||||||||||||||||||
Engineering expense
|
141,626 | 156,377 | (14,751) | (9.4) | |||||||||||||||||||
Restructuring expense
|
84,586 | 31,682 | 52,904 | 167.0 | |||||||||||||||||||
703,498 | 786,161 | (82,663) | (10.5) | ||||||||||||||||||||
Operating income | $ | 10,283 | $ | 336,080 | $ | (325,797) | (96.9) | % | |||||||||||||||
Operating margin | 0.4 | % | 9.1 | % | (8.7) | pts. |
Net
Revenue |
Cost of
Goods Sold |
Gross
Profit |
|||||||||||||||
Nine months ended September 29, 2019 | $ | 3,698.5 | $ | 2,576.3 | $ | 1,122.2 | |||||||||||
Volume | (944.0) | (613.7) | (330.3) | ||||||||||||||
Price and incentives | 44.3 | 7.2 | 37.1 | ||||||||||||||
Foreign currency exchange rates and hedging | (17.1) | 14.7 | (31.8) | ||||||||||||||
Shipment mix | (48.6) | 10.0 | (58.6) | ||||||||||||||
Raw material prices | — | (7.5) | 7.5 | ||||||||||||||
Manufacturing and other costs | — | 32.3 | (32.3) | ||||||||||||||
(965.4) | (557.0) | (408.4) | |||||||||||||||
Nine months ended September 27, 2020 | $ | 2,733.1 | $ | 2,019.3 | $ | 713.8 |
Nine months ended | |||||||||||
September 27,
2020 |
September 29,
2019 |
||||||||||
Balance, beginning of period | $ | 198,581 | $ | 189,885 | |||||||
Cumulative effect of change in accounting(a)
|
100,604 | — | |||||||||
Provision for credit losses | 178,433 | 94,621 | |||||||||
Charge-offs, net of recoveries | (68,916) | (85,930) | |||||||||
Balance, end of period | $ | 408,702 | $ | 198,576 |
2020 | 2021-2022 | 2023-2024 | Thereafter | Total | |||||||||||||||||||||||||
Debt: | |||||||||||||||||||||||||||||
Principal payments on debt | $ | 1,270,429 | $ | 3,965,831 | $ | 2,855,849 | $ | 1,450,000 | $ | 9,542,109 | |||||||||||||||||||
Interest payments on debt | 62,395 | 398,843 | 198,584 | 319,945 | 979,767 | ||||||||||||||||||||||||
$ | 1,332,824 | $ | 4,364,674 | $ | 3,054,433 | $ | 1,769,945 | $ | 10,521,876 |
September 27, 2020 | |||||
Cash and cash equivalents | $ | 3,560,950 | |||
Availability under credit and conduit facilities: | |||||
Credit facilities | 537,237 | ||||
Asset-backed U.S. commercial paper conduit facilities(a)
|
600,000 | ||||
Asset-backed Canadian commercial paper conduit facility(a)
|
36,908 | ||||
$ | 4,735,095 |
Short-Term | Long-Term | Outlook | |||||||||||||||
Moody’s | P3 | Baa3 | Stable | ||||||||||||||
Standard & Poor’s | A2 | BBB | Negative | ||||||||||||||
Fitch | F2 | A- | Negative |
Nine months ended | |||||||||||
September 27, 2020 | September 29, 2019 | ||||||||||
Net cash provided by operating activities | $ | 1,135,068 | $ | 848,649 | |||||||
Net cash used by investing activities | (235,054) | (551,474) | |||||||||
Net cash provided (used) by financing activities | 1,930,677 | (603,690) | |||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 6,071 | (4,110) | |||||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | $ | 2,836,762 | $ | (310,625) |
September 27,
2020 |
September 29,
2019 |
||||||||||
Unsecured commercial paper | $ | 1,077,763 | $ | 1,013,137 | |||||||
364-day credit facility borrowings | 150,000 | — | |||||||||
Asset-backed Canadian commercial paper conduit facility | 127,500 | 128,368 | |||||||||
Asset-backed U.S. commercial paper conduit facilities | 467,338 | 552,757 | |||||||||
Asset-backed securitization debt, net | 2,096,355 | 872,871 | |||||||||
Medium-term notes, net | 4,845,961 | 4,089,591 | |||||||||
Senior notes, net | 743,806 | 743,127 | |||||||||
$ | 9,508,723 | $ | 7,399,851 |
Principal Amount | Rate | Issue Date | Maturity Date | |||||||||||||||||
$600,000 | 2.85% | January 2016 | January 2021 | |||||||||||||||||
$450,000 | LIBOR + 0.94% | November 2018 | March 2021 | |||||||||||||||||
$350,000 | 3.55% | May 2018 | May 2021 | |||||||||||||||||
$550,000 | 4.05% | February 2019 | February 2022 | |||||||||||||||||
$400,000 | 2.55% | June 2017 | June 2022 | |||||||||||||||||
$350,000 | 3.35% | February 2018 | February 2023 | |||||||||||||||||
$760,890(a)
|
4.94% | May 2020 | May 2023 | |||||||||||||||||
$702,360(b)
|
3.14% | November 2019 | November 2024 | |||||||||||||||||
$700,000 | 3.35% | June 2020 | June 2025 |
2020 | 2019 | ||||||||||||||||||||||
Transfers | Proceeds | Transfers | Proceeds | ||||||||||||||||||||
First quarter | $ | 77,900 | $ | 61,600 | $ | — | $ | — | |||||||||||||||
Second quarter | — | — | 28,200 | 23,400 | |||||||||||||||||||
Third quarter | — | — | — | — | |||||||||||||||||||
$ | 77,900 | $ | 61,600 | $ | 28,200 | $ | 23,400 |
2020 | 2019 | ||||||||||||||||||||||
Transfers | Proceeds | Transfers | Proceeds | ||||||||||||||||||||
First quarter | $ | 195,300 | $ | 163,600 | $ | — | $ | — | |||||||||||||||
Second quarter | — | — | — | — | |||||||||||||||||||
Third quarter | — | — | 174,400 | 154,600 | |||||||||||||||||||
$ | 195,300 | $ | 163,600 | $ | 174,400 | $ | 154,600 |
2020 | 2019 | ||||||||||||||||||||||||||||||||||
Transfers | Proceeds | Proceeds, net | Transfers | Proceeds | Proceeds, net | ||||||||||||||||||||||||||||||
First quarter | $ | 580,200 | $ | 525,000 | $ | 522,700 | $ | — | $ | — | $ | — | |||||||||||||||||||||||
Second quarter | 1,840,500 | 1,550,200 | 1,541,800 | 1,120,000 | 1,025,000 | 1,021,300 | |||||||||||||||||||||||||||||
Third quarter | — | — | — | — | — | — | |||||||||||||||||||||||||||||
$ | 2,420,700 | $ | 2,075,200 | $ | 2,064,500 | $ | 1,120,000 | $ | 1,025,000 | $ | 1,021,300 |
2020 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 |
||||||||||||||||||||||
June 29 to August 2 | 7,541 | $ | 28 | 7,541 | 18,246,721 | |||||||||||||||||||||
August 3 to August 30 | 20,069 | $ | 26 | 20,069 | 18,246,721 | |||||||||||||||||||||
August 31 to September 27 | — | $ | — | — | 18,246,721 | |||||||||||||||||||||
27,610 | $ | — | 27,610 |
Exhibit No. | Description | |||||||
Form of Transition Agreement between the Registrant and each of Messrs. Zeitz, Krause, Niketh, and Root and Ms. Giuffre | ||||||||
Settlement and General Release Agreement between the Registrant and Ms. Kumbier dated August 14, 2020 | ||||||||
Chief Executive Officer Certification pursuant to Rule 13a-14(a) | ||||||||
Chief Financial Officer Certification pursuant to Rule 13a-14(a) | ||||||||
Written Statement of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. §1350 | ||||||||
101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |||||||
101.SCH | XBRL Taxonomy Extension Schema Document | |||||||
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | |||||||
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | |||||||
101.LAB | XBRL Taxonomy Extension Label Linkbase Document | |||||||
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | |||||||
104 | Cover Page Interactive Data File - formatted in Inline XBRL and contained in Exhibit 101 |
HARLEY-DAVIDSON, INC. | |||||
Date: November 5, 2020 | /s/ Gina Goetter | ||||
Gina Goetter | |||||
Chief Financial Officer | |||||
(Principal financial officer) |
Date: November 5, 2020 | /s/ Mark R. Kornetzke | ||||
Mark R. Kornetzke | |||||
Chief Accounting Officer | |||||
(Principal accounting officer) |
Date: November 5, 2020 | /s/ Jochen Zeitz | ||||
Jochen Zeitz | |||||
President and Chief Executive Officer |
Date: November 5, 2020 | /s/ Gina Goetter | ||||
Gina Goetter | |||||
Chief Financial Officer |
Date: November 5, 2020 | /s/ Jochen Zeitz | ||||
Jochen Zeitz | |||||
President and Chief Executive Officer | |||||
|
/s/ Gina Goetter | ||||
Gina Goetter | |||||
Chief Financial Officer |