ANNUAL 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 |
HOG |
Large accelerated filer | Accelerated filer | Emerging growth company | ☐ | |||||||
Non-accelerated filer | Smaller reporting company | |||||||||
Page | ||
Part I | ||
Item 1. | ||
Item 1A. | ||
Item 1B. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Part II | ||
Item 5. | ||
Item 6. | ||
Item 7. | ||
Item 7A. | ||
Item 8. | ||
Item 9. | ||
Item 9A. | ||
Part III | ||
Item 10. | ||
Item 11. | ||
Item 12. | ||
Item 13. | ||
Item 14. | ||
Part IV | ||
Item 15. | ||
Item 16. | ||
• | Deliver superior return on invested capital for HDMC that falls within the top quartile of the S&P® 500 |
2017 | 2016 | 2015 | 2019 | 2018 | 2017 | ||||||||||||
Motorcycles | 77.8 | % | 78.2 | % | 77.8 | % | 77.4 | % | 78.1 | % | 76.6 | % | |||||
Parts & Accessories | 16.4 | % | 16.0 | % | 16.2 | % | 15.6 | % | 15.2 | % | 16.3 | % | |||||
General Merchandise | 5.3 | % | 5.4 | % | 5.5 | % | 5.2 | % | 4.9 | % | 5.3 | % | |||||
Other | 0.5 | % | 0.4 | % | 0.5 | % | |||||||||||
Licensing | 0.8 | % | 0.8 | % | 0.8 | % | |||||||||||
Other products and services | 1.0 | % | 1.0 | % | 1.0 | % | |||||||||||
100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % |
2017 | 2016 | 2015 | |||||||
Total new motorcycle registrations | 288.8 | 311.7 | 328.8 | ||||||
Harley-Davidson new registrations | 146.5 | 159.5 | 165.1 | ||||||
50.7 | % | 51.2 | % | 50.2 | % |
2019 | 2018 | 2017 | ||||||
Industry new motorcycle registrations | 252,842 | 263,750 | 288,802 | |||||
Harley-Davidson new motorcycle registrations | 124,040 | 131,064 | 146,493 | |||||
Harley-Davidson U.S. market share | 49.1 | % | 49.7 | % | 50.7 | % |
(a) | Data includes on-road 601+cc |
(b) | U.S. industry data is derived from information provided by the Motorcycle Industry |
2017 | 2016 | 2015 | |||||||
Total new motorcycle registrations | 390.6 | 391.9 | 351.8 | ||||||
Harley-Davidson new registrations | 38.1 | 42.3 | 37.0 | ||||||
9.8 | % | 10.8 | % | 10.5 | % |
2019 | 2018 | 2017 | ||||||
Industry new motorcycle registrations | 425,998 | 397,669 | 390,619 | |||||
Harley-Davidson new motorcycle registrations | 37,813 | 40,930 | 38,115 | |||||
Harley-Davidson European market share | 8.9 | % | 10.3 | % | 9.8 | % |
(a) | Data includes on-road 601+cc models. On-road 601+cc models include dual purpose models, three-wheeled |
(b) | Europe industry data includes retail sales in Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. Industry retail motorcycle registration data is derived from information provided by the Association des Constructeurs Europeens de Motocycles, |
United States | Canada | Latin America | EMEA | Asia Pacific | Total | |||||||||||||
Dealerships | 698 | 68 | 58 | 398 | 276 | 1,498 |
U.S. | Canada | EMEA | Asia Pacific | Latin America | Total | ||||||||||||
Independent dealership points | 698 | 69 | 423 | 313 | 66 | 1,569 |
• | The Company may not be able to successfully execute its short-term and long-term business plans and strategies. There is no assurance that the Company will be able to execute its business plans and strategies, including the elements of the More Roads plan for growth that the Company disclosed on July 30, 2018 and updated September 24, 2019, and strengthen its existing business while enabling growth. The Company’s ability to meet the objectives, milestones, outlooks, and goals in the More Roads plan depends upon, among other factors, the Company’s ability to: (i) realize expectations concerning market demand for electric, middleweight, and small-displacement models, which may depend in part on the building of necessary infrastructure, (ii) develop and introduce products on a timely basis that the market accepts, that enable the Company to generate desired sales levels and that provide the desired financial returns, (iii) successfully carry out its global manufacturing and assembly operations, (iv) manage risks that arise through expanding international manufacturing, operations and sales, (v) effectively implement changes relating to its dealers and distribution methods, (vi) accurately analyze, predict and react to changing market conditions, (vii) perform in a manner that enables the Company to benefit from market opportunities while competing against existing and new competitors, (viii) reduce other costs to offset costs of the More Roads plan and redirect capital without adversely affecting its existing operations, and (ix) avoid adverse impacts to its operations and/or demand for its products that may result from widespread infectious disease, in particular as it relates to its small displacement plans in Asia. Without limitation, the Company sees 2020 as the pivotal year in the transformation of the Company under the More Roads plan, and the Company faces challenges, risks and uncertainties in executing the plan. As a result, the Company may not realize its expectation of significant growth in 2021 or its goals for 2022 under the plan. The Company also may not be able to achieve the 2027 objectives under the Company's long-term strategy to build the next generation of Harley-Davidson riders globally. |
• | The Company’s strategy to grow ridership may not be successful. The Company has been successful in marketing its products in large part by promoting the experience of Harley-Davidson motorcycling. To sustain and grow the business over the long-term, the Company must grow the sport of motorcycling and continue to be successful selling products and promoting the experience of motorcycling to new customers, including new riders, competitive riders and those who have motorcycle licenses but do not currently ride. The Company’s efforts toward expanding to 4 million total Harley-Davidson riders in the U.S. through 2027 and growing ridership internationally may not be successful, and achieving such growth in ridership may still not adequately meet the desired result of driving unit sales growth. Further, growing ridership in the U.S. may be challenging because the motorcycle market in the U.S. has been stagnant or declining, and the Company expects those conditions to continue. Failure to successfully drive demand for the Company's products may have a material adverse effect on the Company's business and results of operations. |
• | The Company’s ability to remain competitive is dependent upon its capability to develop and successfully introduce new, innovative and compliant products. The motorcycle market continues to change in terms of styling preferences and advances in new technologies, and at the same time, it is subject to increasing regulations related to safety and emissions. The Company must continue to distinguish its products from its competitors’ products with unique styling and new technologies that consumers desire. The Company may not be able to achieve its goal of introducing 100 new, high-impact motorcycle models between 2017 and 2027, and introducing those models may still not lead to the desired result of driving unit sales growth. As the Company incorporates new and different features and technology into its products, the Company must protect its intellectual property from imitators and ensure its products do not infringe the intellectual property of other companies. In addition, these new products must comply with applicable regulations worldwide and satisfy the potential demand for products that produce lower emissions and achieve better fuel economy. The Company must make product advancements to respond to changing consumer preferences and market demands. The Company must also be able to design and manufacture these products and deliver them to a global marketplace in an efficient and timely manner and at prices that are attractive to customers. There can be no assurances that the Company will be successful in these endeavors or that existing and prospective customers will like or want the Company’s new products. |
• | Changes in general economic and business conditions, tightening of credit and retail markets, political events or other factors may adversely impact independent dealers’ retail sales. The motorcycle industry is impacted by general economic conditions over which motorcycle manufacturers have little control. These factors can weaken the retail environment and lead to weaker demand for discretionary purchases such as motorcycles. Weakened economic conditions in certain business sectors and geographic areas can also result in reduced demand for the Company's products. Tightening of credit can limit the availability of funds from financial institutions and other lenders and sources of capital which could adversely affect the ability of retail consumers to obtain loans for the purchase of |
• | Increased supply of and/or declining prices for used motorcycles and excess supply of new motorcycles may adversely impact retail sales of new motorcycles by the Company’s independent dealers. The Company has observed that when the supply of used motorcycles increases or the prices for used Harley-Davidson motorcycles decline, there can be reduced demand among retail purchasers for new Harley-Davidson motorcycles (at or near manufacturer’s suggested retail prices). Further, the Company and its independent dealers can and do take actions that influence the markets for new and used Harley-Davidson motorcycles. For example, introduction of new motorcycle models with significantly different functionality, technology or other customer satisfiers can result in increased supply of used motorcycles, which could result in declining prices for used motorcycles and prior model-year new motorcycles. Also, while the Company has taken steps designed to balance production volumes for its new motorcycles with demand, those steps may not be effective, or the Company’s competitors could choose to supply new motorcycles to the market in excess of demand at reduced prices which could also have the effect of reducing demand for new Harley-Davidson motorcycles (at or near manufacturer’s suggested retail prices). Ultimately, reduced demand among retail purchasers for new Harley-Davidson motorcycles leads to reduced shipments by the Company. |
• | The financial services operations are exposed to credit risk on its retail and wholesale finance receivables. Credit risk is the risk of loss arising from a failure by a customer, including the Company's independent dealers, to meet the terms of any contract with the Company’s financial services operations. Credit losses are influenced by general business and economic conditions, including unemployment rates, bankruptcy filings and other factors that negatively affect household incomes, as well as contract terms and customer credit profiles. Credit losses are also influenced by the markets for new and used motorcycles, and the Company and its independent dealers can and do take actions that impact those markets. For example, the introduction of new models by the Company that represent significant upgrades on previous models may result in increased supply or decreased demand in the market for used Harley-Davidson branded motorcycles, including those motorcycles that serve as collateral or security for credit that HDFS has extended. This in turn could adversely impact the prices at which repossessed motorcycles may be sold, which may lead to increased credit losses for HDFS. Negative changes in general business, economic or market factors may have an additional adverse impact on the Company’s financial services credit losses and future earnings. The Company believes HDFS' retail credit losses may continue to increase over time due to changing consumer credit behavior, HDFS' efforts to increase prudently structured loan approvals to sub-prime borrowers, and new financing programs that may result in different loan performance than our existing programs. |
• | The motorcycle industry has become increasingly competitive. Many of the Company’s competitors are more diversified than the Company, and they may compete in all segments of the motorcycle market, other powersports markets and/or the automotive market. Also, the Company’s manufacturer’s suggested retail price for its motorcycles is generally higher than its competitors, and as price becomes a more important factor for consumers in the markets in which the Company competes, the Company may be at a competitive disadvantage. Furthermore, many competitors headquartered outside the U.S. experience a financial benefit from a strengthening in the U.S. dollar relative to their home currency that can enable them to reduce prices to U.S. consumers. In addition, the Company’s financial services operations face competition from various banks, insurance companies and other financial institutions that may have access to additional sources of capital at more competitive rates and terms, particularly for borrowers in higher credit tiers. The Company's responses to these competitive pressures, or its failure to adequately address and respond to these competitive pressures, may have a material adverse effect on the Company’s business and results of operations. |
• | Expanding international sales and operations subjects the Company to risks that may have a material adverse effect on its business. Expanding international sales and operations is a part of the Company’s long-term business strategy, particularly in light of the U.S. market conditions. There is no assurance that the Company will accomplish this international expansion. Further, to support that strategy, the Company must increase its presence outside the U.S., including additional employees and investment in business infrastructure and operations. International operations and sales are subject to various risks, including political and economic instability, local labor market conditions, the imposition of foreign tariffs and other trade barriers, the impact of foreign government laws and regulations and U.S. laws and regulations that apply to international operations, the effects of income and withholding taxes, governmental expropriation and differences in business practices. The Company may incur increased costs and experience delays or disruptions in product deliveries and payments in connection with international operations and sales that could cause loss of revenues and earnings. Unfavorable changes in the political, regulatory and business climate could have a material adverse effect on the Company’s net sales, financial condition, profitability and cash flows. This includes, for example, the uncertainty related to the impact of United Kingdom’s withdrawal from the European Union (EU) |
• | Changes in trade policies, including the imposition of tariffs, their enforcement and downstream consequences, may continue to have a material adverse impact on our business, results of operations and outlook. Tariffs and/or other developments with respect to trade policies, trade agreements and government regulations could have a material adverse impact on the Company's business, financial condition and results of operations. Recent tariffs imposed by the EU and China resulted in material increases to the Company’s operating costs in 2018 and 2019. In 2018, the EU placed a 25% incremental tariff (31% total tariff) on motorcycles imported into the EU from the U.S., which is scheduled to increase to a 50% incremental tariff (56% total tariff) effective June 1, 2021. In addition, the U.S. government has imposed increased tariffs on imports from China (Section 301 tariffs), which has resulted in higher costs for components and products sourced from China. |
• | The Company may not be able to successfully execute its manufacturing strategy. The Company’s manufacturing strategy is designed to continuously improve product quality and increase productivity, while reducing costs and increasing flexibility to respond to ongoing changes in the marketplace. Based on the Company’s strategy, the Company may, from time to time, open, close, expand, contract or restructure one or more of its manufacturing facilities. The Company believes flexible manufacturing, including flexible supply chains and flexible labor agreements, is a key element to enable improvements in the Company’s ability to respond to customers in a cost effective manner(1). To execute this strategy, the Company must be successful in its implementation of facility changes and in its continuous improvement efforts, all of which are dependent on the involvement of management, production employees and suppliers. Any inability to achieve these objectives could adversely impact the profitability of the Company’s products and its ability to deliver the right product at the right time to the customer. |
• | The Company must prevent and detect issues with its products, components purchased from suppliers and its suppliers’ manufacturing processes to reduce recall campaigns, warranty costs, litigation, product liability claims, delays in new model launches and regulatory investigations. The Company must also complete any recall campaigns within cost expectations. The Company must continually improve and adhere to product development and manufacturing processes and ensure that its suppliers and their sub-tier suppliers adhere to product development and manufacturing processes, to ensure high quality products are sold to retail customers. If product designs or manufacturing processes are defective, the Company could experience delays in new model launches, field actions such as product programs and product recalls, inquiries or investigations from regulatory agencies, and warranty claims and product liability claims, which may involve purported class actions. While the Company uses reasonable methods to estimate the cost of warranty, recall and product liabilities and appropriately reflects those in its financial statements, there is a risk the actual costs could exceed estimates and result in damages that are not covered by insurance. Further, selling products with poor quality, the announcement of recalls and the filing of product liability claims (whether or not successful), may also adversely affect the Company’s reputation and brand strength. |
• | A cybersecurity breach may adversely affect the Company’s reputation, revenue and earnings. The Company and certain of its third-party service providers and vendors receive, store and transmit digital personal information in connection with the Company’s human resources operations, financial services operations, e-commerce, the Harley Owners Group, dealer management, mobile applications, planned connected vehicle services offerings and other aspects of its business. The Company’s information systems, and those of its third-party service providers and vendors, are vulnerable to continually evolving cybersecurity risks. The Company's plan to offer connected vehicle services will heighten these risks. Unauthorized parties have attempted to and may attempt in the future to gain access to these systems or the information the Company and its third-party service providers and vendors maintain and use through fraud or other means of deceiving our employees and third-party service providers and vendors. Hardware, software or applications the Company develops or obtains from third-parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security and/or the Company’s operations. The methods used to obtain unauthorized access, disable or degrade service or sabotage systems are constantly evolving and may be difficult to anticipate or detect. The Company has implemented and regularly reviews and updates processes and procedures to protect against unauthorized access to or use of secured data and to prevent data loss. However, the ever-evolving threats mean the Company and third-party service providers and vendors must continually evaluate and adapt systems and processes, and there is no guarantee that they will be adequate to safeguard against all data security breaches or misuses of data. The Company has experienced information security attacks, but to date they have not materially compromised the Company’s computing environment or resulted in a material impact on the Company’s business or operations or the release of confidential information about employees, customers, dealers, suppliers or other third parties. Any future significant compromise or breach of the Company’s data security, whether external or internal, or misuse of customer, employee, dealer, supplier or Company data could result in disruption to the Company’s operations, significant costs, lost sales, fines and lawsuits and/or damage to the Company’s reputation. In addition, as the regulatory environment related to information security, data collection and use, and privacy becomes increasingly rigorous with new and evolving requirements, compliance could also result in the Company being required to incur additional costs. |
• | The Company is exposed to market risk from changes in foreign currency exchange rates, commodity prices and interest rates. The Company sells its products internationally and in most markets those sales are made in the foreign country’s local currency. As a result, a weakening in those foreign currencies relative to the U.S. dollar can adversely affect the Company's revenue margin, and cause volatility in results of operations. Furthermore, many competitors headquartered outside the U.S. experience a financial benefit from a strengthening in the U.S. dollar relative to their home currency that can enable them to reduce prices to U.S. consumers. The Company is also subject to risks associated with changes in prices of commodities. Earnings from the Company’s financial services business are affected by changes in interest rates. Although the Company uses derivative financial instruments to some extent to attempt to manage a portion of its exposure to foreign currency exchange rates, commodity prices, and interest rate risks, the Company does not attempt to manage its entire expected exposure, and these derivative financial instruments generally do not extend beyond one year and may expose the Company to credit risk in the event of counterparty default to the derivative financial instruments. There can be no assurance that in the future the Company will successfully manage these risks. |
• | The Company’s success depends upon the continued strength of the Harley-Davidson brand. The Company believes that the Harley-Davidson brand has significantly contributed to the success of its business and that maintaining and enhancing the brand is critical to expanding its customer base. Failure to protect the brand from infringers or to grow the value of the Harley-Davidson brand may have a material adverse effect on the Company’s business and results of operations. |
• | The Company relies on third-party suppliers to obtain raw materials and provide component parts for use in the manufacture of its motorcycles. The Company may experience supply problems relating to raw materials and components such as unfavorable pricing, poor quality or untimely delivery. In certain circumstances, the Company relies on a single supplier to provide the entire requirement of a specific part, and a change in this established supply relationship may cause disruption in the Company’s production schedule. In addition, the price and availability of raw materials and component parts from suppliers can be adversely affected by factors outside of the Company’s control such as the supply of a necessary raw material, natural disasters or widespread infectious disease. Further, the Company's suppliers may experience difficulty in funding their day-to-day cash flow needs because of tightening credit caused by financial market disruption. In addition, adverse economic conditions and related pressure on select suppliers due to difficulties in the global manufacturing arena could adversely affect their ability to supply the Company. Changes in laws and policies relating to trade and taxation may also adversely impact the Company's foreign suppliers. These supplier risks may have a material adverse effect on the Company’s business and results of operations. |
• | The Company’s operations are dependent upon attracting and retaining skilled employees, including skilled labor, executive officers and other senior leaders. The Company’s future success depends on its continuing ability to identify, hire, develop, motivate, retain and promote skilled personnel for all areas of its organization and to effectively execute reorganization actions within expected costs and realize the expected benefits of those actions. The Company’s current and future total compensation arrangements, which include benefits and incentive awards, may not be successful in attracting new employees and retaining and motivating the Company’s existing employees. In addition, the Company must cultivate and sustain a work environment where employees are engaged and energized in their jobs to maximize their performance, and the Company must effectively execute reorganization actions. If the Company does not succeed in attracting new personnel, retaining existing personnel, implementing effective succession plans and motivating and engaging personnel, including executive officers, the Company may be unable to develop and distribute products and services and effectively execute its plans and strategies. |
• | The Company primarily sells its products at wholesale and must rely on a network of independent dealers to manage the retail distribution of its products. The Company depends on the capability of its independent dealers to develop and implement effective retail sales plans to create demand among retail purchasers for the motorcycles and related products and services that the dealers purchase from the Company. If the Company’s independent dealers are not successful in these endeavors, then the Company will be unable to maintain or grow its revenues and meet its financial expectations. Further, independent dealers may experience difficulty in funding their day-to-day cash flow needs and paying their obligations resulting from adverse business conditions, such as weakened retail sales and tightened credit. If independent dealers are unsuccessful, they may exit or be forced to exit the business or, in some cases, the Company may seek to terminate relationships with certain independent dealerships. As a result, the Company could face additional adverse consequences related to the termination of independent dealer relationships. Additionally, liquidating a former independent dealer’s inventory of new and used motorcycles can add downward pressure on new and used motorcycle prices. Further, the unplanned loss of any of the Company’s independent dealers may lead to inadequate market coverage for retail sales of new motorcycles and for servicing previously sold motorcycles, create negative impressions of the Company with its retail customers, and adversely impact the Company’s ability to collect wholesale receivables that are associated with that independent dealer. |
• | The financial services operations are highly dependent on accessing capital markets to fund operations at competitive interest rates, the Company’s access to capital and its cost of capital are highly dependent upon its credit ratings, and any negative credit rating actions will adversely affect its earnings and results of operations. Liquidity is essential to the Company’s financial services business. Disruptions in financial markets may cause lenders and institutional investors to reduce or cease to loan money to borrowers, including financial institutions. The Company’s financial services operations may be negatively affected by difficulty in raising capital in the long-term and short-term capital markets. These negative consequences may in turn adversely affect the Company’s business and results of operations in various ways, including through higher costs of capital and reduced funds available through its financial services operations to provide loans to independent dealers and their retail customers. Additionally, the ability of the Company and its financial services operations to access unsecured capital markets is influenced by their short-term and long-term credit ratings. If the Company’s credit ratings are downgraded or its ratings outlook is negatively changed, then the Company’s cost of borrowing could increase, which may result in reduced earnings and reduced interest margins, and the Company’s access to capital may be disrupted or impaired. |
• | The Company must invest in and successfully implement new information systems and technology. The Company is continually modifying and enhancing its systems and technology to increase productivity and efficiency and to mitigate failure risks from older/aged technologies currently in its portfolio. The Company has several large, strategic information system projects in process. As new systems and technologies (and related strategies) are implemented, the Company could experience unanticipated difficulties resulting in unexpected costs and adverse impacts to its manufacturing and other business processes. When implemented, the systems and technology may not provide the benefits anticipated and could add costs and complications to ongoing operations. Also, older technologies may fail, which may have a material adverse effect on the Company’s business and results of operations. In the case of the Company's planned electronic vehicle services offering, these risks are heightened because these services are dependent on (i) the successful implementation of complex third-party cloud solutions, (ii) the ability of a rider's motorcycle and mobile application to successfully connect to each other and (iii) the support of cellular carriers. |
• | The Company must comply with governmental laws and regulations that are subject to change and involve significant costs. The Company’s sales and operations in areas outside the U.S. may be subject to foreign laws, regulations and the legal systems of foreign courts or tribunals. These laws and policies governing operations of foreign-based companies may result in increased costs or restrictions on the ability of the Company to sell its products in certain countries. U.S. laws and policies affecting foreign trade and taxation may also adversely affect the Company's international sales operations. |
• | Weather may impact retail sales by the Company's independent dealers. The Company has observed that abnormally cold and/or wet conditions in a region, including impacts from hurricanes or unusual storms, could have the effect of reducing demand or changing the timing for purchases of new Harley-Davidson motorcycles. Reduced demand for new Harley-Davidson motorcycles ultimately leads to reduced shipments by the Company. |
• | The Company’s Motorcycles segment is dependent upon unionized labor. A substantial portion of the hourly production employees working in the Motorcycles segment are represented by unions and covered by collective bargaining agreements. HDMC is currently a party to three collective bargaining agreements with local affiliates of the International Association of Machinists and Aerospace Workers and the United Steelworkers of America. Current collective bargaining agreements with hourly employees in Wisconsin will expire in 2024, and the agreement with employees in Pennsylvania will expire in 2022. There is no certainty that the Company will be successful in negotiating new agreements with these unions that extend beyond the current expiration dates or that these new agreements will be on terms that will allow the Company to be competitive. The Company's decisions regarding opening, closing, expanding, contracting or restructuring its facilities may require changes to existing or new bargaining agreements. Failure to renew agreements when they expire or to establish new collective bargaining agreements on terms acceptable to the Company and the unions could result in the relocation of production facilities, work stoppages or other labor disruptions which may have a material adverse effect on the Company’s business and results of operations. |
• | The ability of the Company to expand international sales may be impacted by existing or new laws and regulations that impose motorcycle licensing restrictions and limit access to roads and highways. Expanding international sales is a part of the Company’s long-term business strategy. A number of countries have tiered motorcycle licensing requirements that limit the ability of new and younger riders to obtain licenses to operate the Company’s motorcycles, and many countries are considering the implementation of such requirements. These requirements only allow new and/or younger riders to operate smaller displacement motorcycles for certain periods of time. Riders typically are only permitted to obtain a license to ride larger displacement motorcycles upon reaching certain ages and/or having been licensed to ride smaller displacement motorcycles for a certain period of time, and only after passing additional tests and paying additional fees. These requirements pose obstacles to large displacement motorcycle ownership. Other countries have laws and regulations that prohibit motorcycles from being operated on certain roads and highways. These types of laws and regulations could adversely impact the Company’s plans to expand international sales. |
• | The Company is and may in the future become subject to legal proceedings and commercial or contractual disputes. The uncertainty associated with substantial unresolved claims and lawsuits may harm the Company’s business, financial condition, reputation and brand. The defense of the lawsuits may result in the expenditures of significant financial resources and the diversion of management’s time and attention away from business operations. In addition, although the Company is unable to determine the amount, if any, that it may be required to pay in connection with the resolution of the lawsuits by settlement or otherwise, any such payment may have a material adverse effect on the Company’s business and results of operations. Refer to Item 3. Legal Proceedings in this Form 10-K and in the other periodic reports that the Company files with the SEC for additional detail regarding lawsuits and other claims against the Company. |
• | The Company, its suppliers and its independent dealers must successfully accommodate a seasonal retail motorcycle sales pattern. The Company records the wholesale sale of a motorcycle when it is shipped to the Company’s independent dealers. The Company's flexible production capability allows it to more closely correlate motorcycle production and wholesale shipments with the retail selling season. Any difficulties in executing flexible production could result in lost production or sales. The Company, its suppliers and its independent dealers must be able to successfully manage changes in production rates, inventory levels and other business processes associated with flexible production. Failure by the Company, its suppliers or its independent dealers to make such adjustments may have a material adverse effect on the Company’s business and results of operations. |
• | The Company incurs substantial costs with respect to employee pension and healthcare benefits. The Company’s cash funding requirements and its estimates of liabilities and expenses for pensions and healthcare benefits for both active and retired employees are based on several factors that are outside the Company’s control. These factors include funding requirements of the Pension Protection Act of 2006, the rate used to discount the future estimated liabilities, the rate of return on plan assets, current and projected healthcare costs, healthcare reform or legislation, retirement age and mortality. Changes in these factors can impact the expense, liabilities and cash requirements associated with these benefits which could have a material adverse effect on future results of operations, liquidity or shareholders’ equity. In addition, costs associated with these benefits put the Company under significant cost pressure as compared to its competitors that may not bear the costs of similar benefit plans. Furthermore, costs associated with complying with the Patient Protection and Affordable Care Act may produce additional cost pressure on the Company and its health care plans. |
• | The Company must maintain stakeholder confidence in its corporate governance practices and operating ethics. The Company believes it has a history of good corporate governance and operating ethics. The Company has a Code of Business Conduct that defines how employees interact with various Company stakeholders and addresses issues such as confidentiality, conflict of interest and fair dealing. Failure to maintain its reputation for good corporate governance and strong operating ethics may have a material adverse effect on the Company’s business and results of operations. |
• | The Company’s operations may be affected by greenhouse emissions and climate change and related regulations. Climate change is receiving increasing attention worldwide. Many scientists, legislators and others attribute climate change to increased levels of greenhouse gases, including carbon dioxide, which has led to significant legislative and regulatory efforts to limit greenhouse gas emissions. The U.S. Congress has previously considered and may in the future implement restrictions on greenhouse gas emissions. In addition, several U.S. states, including states where the Company has manufacturing facilities, have previously considered and may in the future implement greenhouse gas registration and reduction programs. Energy security and availability and its related costs affect all aspects of the Company’s manufacturing operations in the U.S., including the Company’s supply chain. The Company’s manufacturing facilities use energy, including electricity and natural gas, and certain of the Company’s facilities emit amounts of greenhouse gas that may be affected by these legislative and regulatory efforts. Greenhouse gas regulation could increase the price of the electricity the Company purchases, increase costs for use of natural gas, potentially restrict access to or the use of natural gas, require the Company to purchase allowances to offset the Company’s own emissions or result in an overall increase in costs of raw materials, any one of which could increase the Company’s costs, reduce competitiveness in a global economy or otherwise negatively affect the Company’s business, operations or financial results. Many of the Company’s suppliers face similar circumstances. Physical risks to the Company’s business operations as identified by the Intergovernmental Panel on Climate Change and other expert bodies include scenarios such as sea level rise, extreme weather conditions and resource shortages. Extreme weather may disrupt the production and supply of component parts or other items such as natural gas, a fuel necessary for the manufacture of motorcycles and their components. Supply disruptions would raise market rates and jeopardize the continuity of motorcycle production. |
• | Regulations related to materials that the Company purchases to use in its products could cause the Company to incur additional expenses and may have other adverse consequences. Laws or regulations impacting the Company's supply chain, such as the UK Modern Slavery Act, could affect the sourcing and availability of some of the raw materials that the Company uses in the manufacturing of its products. The Company's supply chain is complex, and if it is not able to fully understand its supply chain, then the Company may face reputational challenges with customers, investors or others and other adverse consequences. For example, many countries in which the Company distributes its products are beginning to introduce regulations that require knowledge and disclosure of virtually all materials and chemicals in the Company’s products. Accordingly, the Company could incur significant costs related to the process of complying with these laws, including potential difficulty or added costs in satisfying the disclosure requirements. |
• | The Company relies on third parties to perform certain operating and administrative functions for the Company. Similar to suppliers of raw materials and components, the Company may experience problems with outsourced services, such as unfavorable pricing, untimely delivery of services, or poor quality. Also, these suppliers may experience adverse economic conditions due to difficulties in the global economy that could lead to difficulties supporting the Company's operations. In light of the amount and types of functions that the Company has outsourced, these service provider risks may have a material adverse effect on the Company's business and results of operations. |
Type of Facility | Location | ||||||
Motorcycle and Related Products: | |||||||
Corporate | Milwaukee, WI | ||||||
Product development center | |||||||
Owned | |||||||
Manufacturing | Menomonee Falls, WI | ||||||
Owned | |||||||
Manufacturing | Tomahawk, WI | Owned | |||||
Manufacturing | York, PA | ||||||
Manufacturing(d) | Rayong, Thailand | Owned | |||||
Manufacturing | |||||||
Manaus, Brazil | |||||||
Manufacturing | Bawal, India | ||||||
Financial Services: | |||||||
Wholesale and retail operations office | Leased | ||||||
Retail operations office | Carson City, NV | Owned |
Motorcycle powertrain |
Motorcycle parts fabrication, painting and assembly |
Assembly of select models for the Brazilian |
Assembly of select models for the Indian market and production of |
2017 | Low | High | 2016 | Low | High | |||||||||||||
First quarter | $ | 54.75 | $ | 63.40 | First quarter | $ | 36.36 | $ | 49.99 | |||||||||
Second quarter | $ | 51.61 | $ | 62.95 | Second quarter | $ | 42.99 | $ | 52.00 | |||||||||
Third quarter | $ | 45.53 | $ | 56.55 | Third quarter | $ | 41.63 | $ | 57.33 | |||||||||
Fourth quarter | $ | 44.52 | $ | 52.30 | Fourth quarter | $ | 48.55 | $ | 62.35 |
2017 | 2016 | 2015 | ||||||||||
First quarter | $ | 0.365 | $ | 0.350 | $ | 0.310 | ||||||
Second quarter | 0.365 | 0.350 | 0.310 | |||||||||
Third quarter | 0.365 | 0.350 | 0.310 | |||||||||
Fourth quarter | 0.365 | 0.350 | 0.310 | |||||||||
Total | $ | 1.460 | $ | 1.400 | $ | 1.240 |
2017 Fiscal Month | Total Number of Shares Purchased | 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 | |||||||||
September 25 to October 29 | 635 | $ | 49 | 635 | 10,594,144 | ||||||||
October 30 to November 26 | 731 | $ | 49 | 731 | 10,594,144 | ||||||||
November 27 to December 31 | 619 | $ | 49 | 619 | 10,594,144 | ||||||||
Total | 1,985 | $ | 49 | 1,985 |
2019 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 | ||||||||
September 30 to November 3 | 569,959 | $ | 35 | 569,959 | 9,851,678 | |||||||
November 4 to December 1 | 438,496 | $ | 36 | 438,496 | 9,414,221 | |||||||
December 2 to December 31 | 1,167,849 | $ | 37 | 1,167,849 | 8,246,721 | |||||||
2,176,304 | $ | 36 | 2,176,304 |
(a) | Includes discretionary share repurchases and shares of common stock that employees surrendered to satisfy withholding taxes in connection with the vesting of restricted stock units |
2012 ($) | 2013 ($) | 2014 ($) | 2015 ($) | 2016 ($) | 2017 ($) | |||||||||||||
Harley-Davidson, Inc. | 100 | 144 | 139 | 98 | 130 | 116 | ||||||||||||
Standard & Poor’s MidCap 400 Index | 100 | 132 | 142 | 137 | 165 | 192 | ||||||||||||
Standard & Poor’s 500 Index | 100 | 132 | 151 | 153 | 171 | 208 |
2014 | 2015 | 2016 | 2017 | 2018 | 2019 | ||||||||||||||||||
Harley-Davidson, Inc. | $ | 100 | $ | 70 | $ | 93 | $ | 84 | $ | 58 | $ | 66 | |||||||||||
S&P’s MidCap 400 Index | $ | 100 | $ | 96 | $ | 116 | $ | 135 | $ | 120 | $ | 152 | |||||||||||
S&P’s 500 Index | $ | 100 | $ | 101 | $ | 113 | $ | 138 | $ | 132 | $ | 174 |
(in thousands, except per share amounts) | 2019 | 2018 | 2017 | 2016 | 2015 | ||||||||||||||
Revenue: | |||||||||||||||||||
Motorcycles and Related Products | $ | 4,572,678 | $ | 4,968,646 | $ | 4,915,027 | $ | 5,271,376 | $ | 5,308,744 | |||||||||
Financial Services | 789,111 | 748,229 | 732,197 | 725,082 | 686,658 | ||||||||||||||
$ | 5,361,789 | $ | 5,716,875 | $ | 5,647,224 | $ | 5,996,458 | $ | 5,995,402 | ||||||||||
Net income | $ | 423,635 | $ | 531,451 | $ | 521,759 | $ | 692,164 | $ | 752,207 | |||||||||
Weighted-average shares: | |||||||||||||||||||
Basic | 157,054 | 165,672 | 171,995 | 179,676 | 202,681 | ||||||||||||||
Diluted | 157,804 | 166,504 | 172,932 | 180,535 | 203,686 | ||||||||||||||
Earnings per share: | |||||||||||||||||||
Basic | $ | 2.70 | $ | 3.21 | $ | 3.03 | $ | 3.85 | $ | 3.71 | |||||||||
Diluted | $ | 2.68 | $ | 3.19 | $ | 3.02 | $ | 3.83 | $ | 3.69 | |||||||||
Dividends paid per share | $ | 1.50 | $ | 1.48 | $ | 1.46 | $ | 1.40 | $ | 1.24 | |||||||||
Assets(a)(c) | $ | 10,528,159 | $ | 10,665,664 | $ | 9,972,672 | $ | 9,890,240 | $ | 9,972,977 | |||||||||
Debt(a) | $ | 7,444,930 | $ | 7,599,276 | $ | 6,988,009 | $ | 6,807,567 | $ | 6,872,198 | |||||||||
Lease obligations(c) | $ | 63,460 | $ | — | $ | — | $ | — | $ | — | |||||||||
Shareholders' equity(b) | $ | 1,803,999 | $ | 1,773,949 | $ | 1,844,277 | $ | 1,920,158 | $ | 1,839,654 |
(In thousands, except per share amounts) | 2017 | 2016 | 2015 | 2014 | 2013 | |||||||||||||||
Statement of income data: | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||
Motorcycles & Related Products | $ | 4,915,027 | $ | 5,271,376 | $ | 5,308,744 | $ | 5,567,681 | $ | 5,258,290 | ||||||||||
Financial Services | 732,197 | 725,082 | 686,658 | 660,827 | 641,582 | |||||||||||||||
Total revenue | $ | 5,647,224 | $ | 5,996,458 | $ | 5,995,402 | $ | 6,228,508 | $ | 5,899,872 | ||||||||||
Net income | $ | 521,759 | $ | 692,164 | $ | 752,207 | $ | 844,611 | $ | 733,993 | ||||||||||
Weighted-average common shares: | ||||||||||||||||||||
Basic | 171,995 | 179,676 | 202,681 | 216,305 | 222,475 | |||||||||||||||
Diluted | 172,932 | 180,535 | 203,686 | 217,706 | 224,071 | |||||||||||||||
Earnings per common share: | ||||||||||||||||||||
Basic | $ | 3.03 | $ | 3.85 | $ | 3.71 | $ | 3.90 | $ | 3.30 | ||||||||||
Diluted | $ | 3.02 | $ | 3.83 | $ | 3.69 | $ | 3.88 | $ | 3.28 | ||||||||||
Dividends paid per common share | $ | 1.46 | $ | 1.40 | $ | 1.24 | $ | 1.10 | $ | 0.84 | ||||||||||
Balance sheet data: | ||||||||||||||||||||
Total assets(a) | $ | 9,972,672 | $ | 9,890,240 | $ | 9,972,977 | $ | 9,515,870 | $ | 9,394,765 | ||||||||||
Total debt(a) | $ | 6,988,009 | $ | 6,807,567 | $ | 6,872,198 | $ | 5,492,402 | $ | 5,248,895 | ||||||||||
Total equity | $ | 1,844,277 | $ | 1,920,158 | $ | 1,839,654 | $ | 2,909,286 | $ | 3,009,486 |
(a) | The Company adopted |
(b) | The Company adopted ASU No. 2014-09 on January 1, 2018. Upon adoption, the Company recorded a net increase to the opening balance of Retained earnings of $6.0 million, net of income taxes, to recognize the cumulative effect of the adoption. |
(c) | The Company adopted ASU No. 2016-02 on January 1, 2019. Upon adoption, the Company recorded Lease assets and related lease liabilities related to the Company's leasing arrangements totaling approximately $60 million. |
• | Its model year 2020 and 2021 motorcycles, including the Pan America™ and Harley-Davidson® Bronx™ middleweight models in late 2020 |
(in millions) | 2018 | 2019 | 2020 | Total | |||
Cost related to temporary inefficiencies | $ 20 - $ 25 | $15 - $20 | n/a | $ 35 - $ 45 | |||
Restructuring expenses | $100 - $115 | $35 - $40 | n/a | $135 - $155 | |||
$120 - $140 | $50 - $60 | $170 - $200 | |||||
% cash | 70% | 75% | 70% | ||||
2018 | 2019 | 2020 | Annual On-going | ||||
Annual cash savings | - | $25 - $30 | $45 - $50 | $65 - $75 |
2018 Actual | 2019 Actual | 2020 Estimated | Total | ||||||||||||
Manufacturing Optimization Plan: | |||||||||||||||
Costs related to temporary inefficiencies | $ | 12.9 | $ | 10.3 | $ | — | $ | 23.2 | |||||||
Restructuring expenses | 89.5 | 32.7 | — | 122.2 | |||||||||||
$ | 102.4 | $ | 43.0 | $ | — | $ | 145.4 | ||||||||
Approximate cash expenditures | 60% | ||||||||||||||
Reorganization Plan: | |||||||||||||||
Restructuring expenses (benefits) | $ | 3.9 | $ | (0.3 | ) | $ | — | $ | 3.6 | ||||||
Approximate cash expenditures | 100 | % | |||||||||||||
2019 Actual | 2020 Estimated | Annual Ongoing Estimated | |||||||||||||
Annual cash savings: | |||||||||||||||
Manufacturing Optimization Plan | $32.2 | $50 - $60 | $65 - $75 | ||||||||||||
Reorganization Plan | $ 7.0 | $7 | $7 |
(in thousands, except earnings per share) | 2017 | 2016 | (Decrease) Increase | % Change | 2019 | 2018 | (Decrease) Increase | % Change | |||||||||||||||||||||
Operating income from Motorcycles & Related Products | $ | 615,958 | $ | 773,406 | $ | (157,448 | ) | (20.4 | )% | ||||||||||||||||||||
Operating income from Motorcycles and Related Products | $ | 289,620 | $ | 422,363 | $ | (132,743 | ) | (31.4 | )% | ||||||||||||||||||||
Operating income from Financial Services | 275,305 | 275,530 | (225 | ) | (0.1 | ) | 265,988 | 291,160 | (25,172 | ) | (8.6 | ) | |||||||||||||||||
Operating income | 891,263 | 1,048,936 | (157,673 | ) | (15.0 | ) | 555,608 | 713,523 | (157,915 | ) | (22.1 | ) | |||||||||||||||||
Other income (expense), net | 16,514 | 3,039 | 13,475 | 443.4 | |||||||||||||||||||||||||
Investment income | 3,580 | 4,645 | (1,065 | ) | (22.9 | ) | 16,371 | 951 | 15,420 | NM | |||||||||||||||||||
Interest expense | 31,004 | 29,670 | 1,334 | 4.5 | 31,078 | 30,884 | 194 | 0.6 | |||||||||||||||||||||
Income before income taxes | 863,839 | 1,023,911 | (160,072 | ) | (15.6 | ) | |||||||||||||||||||||||
Income before provision for income taxes | 557,415 | 686,629 | (129,214 | ) | (18.8 | ) | |||||||||||||||||||||||
Provision for income taxes | 342,080 | 331,747 | 10,333 | 3.1 | 133,780 | 155,178 | (21,398 | ) | (13.8 | ) | |||||||||||||||||||
Net income | $ | 521,759 | $ | 692,164 | $ | (170,405 | ) | (24.6 | )% | $ | 423,635 | $ | 531,451 | $ | (107,816 | ) | (20.3 | )% | |||||||||||
Diluted earnings per share | $ | 3.02 | $ | 3.83 | $ | (0.81 | ) | (21.1 | )% | $ | 2.68 | $ | 3.19 | $ | (0.51 | ) | (16.0 | )% |
2019 | 2018 | (Decrease) Increase | % Change | ||||||||
United States | 125,960 | 132,868 | (6,908 | ) | (5.2 | )% | |||||
Europe(b) | 38,441 | 41,179 | (2,738 | ) | (6.6 | ) | |||||
EMEA - Other | 5,645 | 5,423 | 222 | 4.1 | |||||||
Total EMEA | 44,086 | 46,602 | (2,516 | ) | (5.4 | ) | |||||
Asia Pacific(c) | 17,753 | 18,429 | (676 | ) | (3.7 | ) | |||||
Asia Pacific - Other | 11,760 | 10,295 | 1,465 | 14.2 | |||||||
Total Asia Pacific | 29,513 | 28,724 | 789 | 2.7 | |||||||
Latin America | 9,768 | 10,167 | (399 | ) | (3.9 | ) | |||||
Canada | 8,946 | 9,690 | (744 | ) | (7.7 | ) | |||||
Total international retail sales | 92,313 | 95,183 | (2,870 | ) | (3.0 | ) | |||||
Total worldwide retail sales | 218,273 | 228,051 | (9,778 | ) | (4.3 | )% |
2017 | 2016 | Decrease | % Change | |||||||||
United States | 147,972 | 161,658 | (13,686 | ) | (8.5 | )% | ||||||
Europe(b) | 39,773 | 39,942 | (169 | ) | (0.4 | ) | ||||||
EMEA - Other | 5,162 | 5,896 | (734 | ) | (12.4 | ) | ||||||
Total EMEA | 44,935 | 45,838 | (903 | ) | (2.0 | ) | ||||||
Japan | 9,506 | 10,279 | (773 | ) | (7.5 | ) | ||||||
Asia Pacific - Other | 20,842 | 22,610 | (1,768 | ) | (7.8 | ) | ||||||
Total Asia Pacific | 30,348 | 32,889 | (2,541 | ) | (7.7 | ) | ||||||
Latin America | 9,452 | 9,701 | (249 | ) | (2.6 | ) | ||||||
Canada | 10,081 | 10,203 | (122 | ) | (1.2 | ) | ||||||
Total International Retail Sales | 94,816 | 98,631 | (3,815 | ) | (3.9 | ) | ||||||
Total Worldwide Retail Sales | 242,788 | 260,289 | (17,501 | ) | (6.7 | )% |
(a) | Data source for retail sales figures shown above is new sales warranty and registration information provided by Harley-Davidson dealers and compiled by the Company. The Company must rely on information that its independent dealers supply concerning new retail sales, and the Company does not regularly verify the information that its independent dealers supply. This information is subject to revision. |
(b) |
(c) | Asia Pacific data includes Japan, Australia, New Zealand and Korea |
2017 | 2016 | Decrease | % Change | 2019 | 2018 | (Decrease) Increase | % Change | ||||||||||||||||
United States(b) | 288,802 | 311,710 | (22,908 | ) | (7.3 | )% | 252,842 | 263,750 | (10,908 | ) | (4.1 | )% | |||||||||||
Europe(c) | 390,619 | 391,936 | (1,317 | ) | (0.3 | )% | 425,998 | 397,669 | 28,329 | 7.1 | % |
(a) | Data includes on-road |
(b) | United States industry data is derived from information provided by Motorcycle Industry |
(c) | Europe data includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. Industry retail motorcycle registration data includes 601+cc models derived from information provided by Association des Constructeurs Europeens de Motocycles, |
2017 | 2016 | Unit | Unit | |||||||||||||||
Units | Mix % | Units | Mix % | Decrease | % Change | |||||||||||||
United States | 144,893 | 60.0 | % | 161,839 | 61.7 | % | (16,946 | ) | (10.5 | )% | ||||||||
International | 96,605 | 40.0 | % | 100,382 | 38.3 | % | (3,777 | ) | (3.8 | ) | ||||||||
Harley-Davidson motorcycle units | 241,498 | 100.0 | % | 262,221 | 100.0 | % | (20,723 | ) | (7.9 | )% | ||||||||
Touring motorcycle units | 99,745 | 41.3 | % | 107,410 | 41.0 | % | (7,665 | ) | (7.1 | )% | ||||||||
Cruiser motorcycle units | 87,344 | 36.2 | % | 93,422 | 35.6 | % | (6,078 | ) | (6.5 | ) | ||||||||
Sportster® / Street motorcycle units | 54,409 | 22.5 | % | 61,389 | 23.4 | % | (6,980 | ) | (11.4 | ) | ||||||||
Harley-Davidson motorcycle units | 241,498 | 100.0 | % | 262,221 | 100.0 | % | (20,723 | ) | (7.9 | )% |
2017 | 2016 | (Decrease) Increase | % Change | ||||||||||||
Revenue: | |||||||||||||||
Motorcycles | $ | 3,825,206 | $ | 4,122,113 | $ | (296,907 | ) | (7.2 | )% | ||||||
Parts & Accessories | 804,363 | 842,637 | (38,274 | ) | (4.5 | ) | |||||||||
General Merchandise | 262,776 | 284,583 | (21,807 | ) | (7.7 | ) | |||||||||
Other | 22,682 | 22,043 | 639 | 2.9 | |||||||||||
Total revenue | 4,915,027 | 5,271,376 | (356,349 | ) | (6.8 | ) | |||||||||
Cost of goods sold | 3,261,683 | 3,419,710 | (158,027 | ) | (4.6 | ) | |||||||||
Gross profit | 1,653,344 | 1,851,666 | (198,322 | ) | (10.7 | ) | |||||||||
Selling & administrative expense | 866,083 | 907,059 | (40,976 | ) | (4.5 | ) | |||||||||
Engineering expense | 171,303 | 171,201 | 102 | 0.1 | |||||||||||
Operating expense | 1,037,386 | 1,078,260 | (40,874 | ) | (3.8 | ) | |||||||||
Operating income from Motorcycles | $ | 615,958 | $ | 773,406 | $ | (157,448 | ) | (20.4 | )% |
Net Revenue | Cost of Goods Sold | Gross Profit | ||||||||||
2016 | $ | 5,272 | $ | 3,420 | $ | 1,852 | ||||||
Volume | (435 | ) | (264 | ) | (171 | ) | ||||||
Price, net of related costs | 120 | 59 | 61 | |||||||||
Foreign currency exchange rates and hedging | 13 | (3 | ) | 16 | ||||||||
Shipment mix | (55 | ) | (18 | ) | (37 | ) | ||||||
Raw material prices | — | 17 | (17 | ) | ||||||||
Manufacturing and other costs | — | 51 | (51 | ) | ||||||||
Total | (357 | ) | (158 | ) | (199 | ) | ||||||
2017 | $ | 4,915 | $ | 3,262 | $ | 1,653 |
2017 | 2016 | Increase (Decrease) | % Change | ||||||||||||
Interest income | $ | 633,113 | $ | 628,432 | $ | 4,681 | 0.7 | % | |||||||
Other income | 97,151 | 85,788 | 11,363 | 13.2 | |||||||||||
Securitization and servicing income | 1,933 | 10,862 | (8,929 | ) | (82.2 | ) | |||||||||
Financial services revenue | 732,197 | 725,082 | 7,115 | 1.0 | |||||||||||
Interest expense | 180,193 | 173,756 | 6,437 | 3.7 | |||||||||||
Provision for credit losses | 132,444 | 136,617 | (4,173 | ) | (3.1 | ) | |||||||||
Operating expenses | 144,255 | 139,179 | 5,076 | 3.6 | |||||||||||
Financial Services expense | 456,892 | 449,552 | 7,340 | 1.6 | |||||||||||
Operating income from Financial Services | $ | 275,305 | $ | 275,530 | $ | (225 | ) | (0.1 | )% |
2017 | 2016 | |||||||
Balance, beginning of period | $ | 173,343 | $ | 147,178 | ||||
Provision for credit losses | 132,444 | 136,617 | ||||||
Charge-offs, net of recoveries | (113,316 | ) | (107,161 | ) | ||||
Other (a) | — | (3,291 | ) | |||||
Balance, end of period | $ | 192,471 | $ | 173,343 |
(in thousands, except earnings per share) | 2016 | 2015 | (Decrease) Increase | % Change | |||||||||||
Operating income from Motorcycles & Related Products | $ | 773,406 | $ | 875,490 | $ | (102,084 | ) | (11.7 | )% | ||||||
Operating income from Financial Services | 275,530 | 280,205 | (4,675 | ) | (1.7 | ) | |||||||||
Operating income | 1,048,936 | 1,155,695 | (106,759 | ) | (9.2 | ) | |||||||||
Investment income | 4,645 | 6,585 | (1,940 | ) | (29.5 | ) | |||||||||
Interest expense | 29,670 | 12,117 | 17,553 | 144.9 | |||||||||||
Income before income taxes | 1,023,911 | 1,150,163 | (126,252 | ) | (11.0 | ) | |||||||||
Provision for income taxes | 331,747 | 397,956 | (66,209 | ) | (16.6 | ) | |||||||||
Net income | $ | 692,164 | $ | 752,207 | $ | (60,043 | ) | (8.0 | )% | ||||||
Diluted earnings per share | $ | 3.83 | $ | 3.69 | $ | 0.14 | 3.8 | % |
2016 | 2015 | (Decrease) Increase | % Change | |||||||||
United States | 161,658 | 168,240 | (6,582 | ) | (3.9 | )% | ||||||
Europe(b) | 39,942 | 36,894 | 3,048 | 8.3 | ||||||||
EMEA - Other | 5,896 | 6,393 | (497 | ) | (7.8 | ) | ||||||
Total EMEA | 45,838 | 43,287 | 2,551 | 5.9 | ||||||||
Japan | 10,279 | 9,700 | 579 | 6.0 | ||||||||
Asia Pacific - Other | 22,610 | 22,558 | 52 | 0.2 | ||||||||
Total Asia Pacific | 32,889 | 32,258 | 631 | 2.0 | ||||||||
Latin America | 9,701 | 11,173 | (1,472 | ) | (13.2 | ) | ||||||
Canada | 10,203 | 9,669 | 534 | 5.5 | ||||||||
Total International Retail Sales | 98,631 | 96,387 | 2,244 | 2.3 | ||||||||
Total Worldwide Retail Sales | 260,289 | 264,627 | (4,338 | ) | (1.6 | )% |
2016 | 2015 | (Decrease) Increase | % Change | |||||||||
United States(b) | 311,710 | 328,818 | (17,108 | ) | (5.2 | )% | ||||||
Europe(c) | 391,936 | 351,773 | 40,163 | 11.4 | % |
2016 | 2015 | Unit | Unit | 2019 | 2018 | Unit | Unit | ||||||||||||||||||||||||||||
Units | Mix % | Units | Mix % | (Decrease) Increase | % Change | Units | Mix % | Units | Mix % | Decrease | % Change | ||||||||||||||||||||||||
Motorcycle Units: | |||||||||||||||||||||||||||||||||||
United States | 161,839 | 61.7 | % | 170,688 | 64.1 | % | (8,849 | ) | (5.2 | )% | 124,326 | 58.1 | % | 132,433 | 57.9 | % | (8,107 | ) | (6.1 | )% | |||||||||||||||
International | 100,382 | 38.3 | % | 95,694 | 35.9 | % | 4,688 | 4.9 | 89,613 | 41.9 | % | 96,232 | 42.1 | % | (6,619 | ) | (6.9 | ) | |||||||||||||||||
Harley-Davidson motorcycle units | 262,221 | 100.0 | % | 266,382 | 100.0 | % | (4,161 | ) | (1.6 | )% | |||||||||||||||||||||||||
213,939 | 100.0 | % | 228,665 | 100.0 | % | (14,726 | ) | (6.4 | )% | ||||||||||||||||||||||||||
Motorcycle Units: | |||||||||||||||||||||||||||||||||||
Touring motorcycle units | 107,410 | 41.0 | % | 114,768 | 43.1 | % | (7,358 | ) | (6.4 | )% | 91,018 | 42.5 | % | 101,942 | 44.6 | % | (10,924 | ) | (10.7 | )% | |||||||||||||||
Cruiser motorcycle units | 93,422 | 35.6 | % | 89,207 | 33.5 | % | 4,215 | 4.7 | |||||||||||||||||||||||||||
Cruiser motorcycle units(a) | 76,052 | 35.6 | % | 78,529 | 34.3 | % | (2,477 | ) | (3.2 | ) | |||||||||||||||||||||||||
Sportster® / Street motorcycle units | 61,389 | 23.4 | % | 62,407 | 23.4 | % | (1,018 | ) | (1.6 | ) | 46,869 | 21.9 | % | 48,194 | 21.1 | % | (1,325 | ) | (2.7 | ) | |||||||||||||||
Harley-Davidson motorcycle units | 262,221 | 100.0 | % | 266,382 | 100.0 | % | (4,161 | ) | (1.6 | )% | |||||||||||||||||||||||||
213,939 | 100.0 | % | 228,665 | 100.0 | % | (14,726 | ) | (6.4 | )% |
(a) | Includes Softail®, CVOTM,and LiveWireTM |
2016 | 2015 | (Decrease) Increase | % Change | 2019 | 2018 | (Decrease) Increase | % Change | ||||||||||||||||||||||
Revenue: | |||||||||||||||||||||||||||||
Motorcycles | $ | 4,122,113 | $ | 4,127,739 | $ | (5,626 | ) | (0.1 | )% | $ | 3,538,269 | $ | 3,882,963 | $ | (344,694 | ) | (8.9 | )% | |||||||||||
Parts & Accessories | 842,637 | 862,645 | (20,008 | ) | (2.3 | ) | 713,400 | 754,663 | (41,263 | ) | (5.5 | ) | |||||||||||||||||
General Merchandise | 284,583 | 292,310 | (7,727 | ) | (2.6 | ) | 237,566 | 241,964 | (4,398 | ) | (1.8 | ) | |||||||||||||||||
Licensing | 35,917 | 38,676 | (2,759 | ) | (7.1 | ) | |||||||||||||||||||||||
Other | 22,043 | 26,050 | (4,007 | ) | (15.4 | ) | 47,526 | 50,380 | (2,854 | ) | (5.7 | ) | |||||||||||||||||
Total revenue | 5,271,376 | 5,308,744 | (37,368 | ) | (0.7 | ) | |||||||||||||||||||||||
4,572,678 | 4,968,646 | (395,968 | ) | (8.0 | ) | ||||||||||||||||||||||||
Cost of goods sold | 3,419,710 | 3,356,284 | 63,426 | 1.9 | 3,229,798 | 3,351,796 | (121,998 | ) | (3.6 | ) | |||||||||||||||||||
Gross profit | 1,851,666 | 1,952,460 | (100,794 | ) | (5.2 | ) | 1,342,880 | 1,616,850 | (273,970 | ) | (16.9 | ) | |||||||||||||||||
Operating expenses: | |||||||||||||||||||||||||||||
Selling & administrative expense | 907,059 | 916,669 | (9,610 | ) | (1.0 | ) | 808,415 | 914,900 | (106,485 | ) | (11.6 | ) | |||||||||||||||||
Engineering expense | 171,201 | 160,301 | 10,900 | 6.8 | 212,492 | 186,186 | 26,306 | 14.1 | |||||||||||||||||||||
Operating expense | 1,078,260 | 1,076,970 | 1,290 | 0.1 | |||||||||||||||||||||||||
Operating income from Motorcycles | $ | 773,406 | $ | 875,490 | $ | (102,084 | ) | (11.7 | )% | ||||||||||||||||||||
Restructuring expense | 32,353 | 93,401 | (61,048 | ) | (65.4 | ) | |||||||||||||||||||||||
1,053,260 | 1,194,487 | (141,227 | ) | (11.8 | ) | ||||||||||||||||||||||||
Operating income | $ | 289,620 | $ | 422,363 | $ | (132,743 | ) | (31.4 | )% | ||||||||||||||||||||
Operating margin | 6.3 | % | 8.5 | % | (2.2 | ) | pts. |
Net Revenue | Cost of Goods Sold | Gross Profit | Revenue | Cost of Goods Sold | Gross Profit | ||||||||||||||||||
2015 | $ | 5,309 | $ | 3,357 | $ | 1,952 | |||||||||||||||||
2018 | $ | 4,969 | $ | 3,352 | $ | 1,617 | |||||||||||||||||
Volume | (109 | ) | (62 | ) | (47 | ) | (307 | ) | (202 | ) | (105 | ) | |||||||||||
Price, net of related costs | 93 | 39 | 54 | 67 | 34 | 33 | |||||||||||||||||
Foreign currency exchange rates and hedging | (3 | ) | 45 | (48 | ) | (67 | ) | (40 | ) | (26 | ) | ||||||||||||
Shipment mix | (18 | ) | (5 | ) | (13 | ) | (89 | ) | (8 | ) | (82 | ) | |||||||||||
Raw material prices | — | (18 | ) | 18 | — | (1 | ) | 1 | |||||||||||||||
Manufacturing and other costs | — | 64 | (64 | ) | — | 95 | (95 | ) | |||||||||||||||
Total | (37 | ) | 63 | (100 | ) | ||||||||||||||||||
2016 | $ | 5,272 | $ | 3,420 | $ | 1,852 | |||||||||||||||||
(396 | ) | (122 | ) | (274 | ) | ||||||||||||||||||
2019 | $ | 4,573 | $ | 3,230 | $ | 1,343 |
2016 | 2015 | Increase (Decrease) | % Change | 2019 | 2018 | Increase (Decrease) | % Change | ||||||||||||||||||||||
Interest income | $ | 628,432 | $ | 605,770 | $ | 22,662 | 3.7 | % | $ | 678,205 | $ | 645,985 | $ | 32,220 | 5.0 | % | |||||||||||||
Other income | 85,788 | 80,888 | 4,900 | 6.1 | 110,307 | 101,108 | 9,199 | 9.1 | |||||||||||||||||||||
Securitization and servicing income | 10,862 | — | 10,862 | — | 599 | 1,136 | (537 | ) | (47.3 | ) | |||||||||||||||||||
Financial services revenue | 725,082 | 686,658 | 38,424 | 5.6 | |||||||||||||||||||||||||
Financial Services revenue | 789,111 | 748,229 | 40,882 | 5.5 | |||||||||||||||||||||||||
Interest expense | 173,756 | 161,983 | 11,773 | 7.3 | 210,438 | 193,187 | 17,251 | 8.9 | |||||||||||||||||||||
Provision for credit losses | 136,617 | 101,345 | 35,272 | 34.8 | 134,536 | 106,870 | 27,666 | 25.9 | |||||||||||||||||||||
Operating expense | 139,179 | 143,125 | (3,946 | ) | (2.8 | ) | |||||||||||||||||||||||
Financial Services expense | 449,552 | 406,453 | 43,099 | 10.6 | |||||||||||||||||||||||||
Operating expenses | 178,149 | 157,012 | 21,137 | 13.5 | |||||||||||||||||||||||||
Financial Services expenses | 523,123 | 457,069 | 66,054 | 14.5 | |||||||||||||||||||||||||
Operating income from Financial Services | $ | 275,530 | $ | 280,205 | $ | (4,675 | ) | (1.7 | )% | $ | 265,988 | $ | 291,160 | $ | (25,172 | ) | (8.6 | )% |
2016 | 2015 | |||||||
Balance, beginning of period | $ | 147,178 | $ | 127,364 | ||||
Provision for credit losses | 136,617 | 101,345 | ||||||
Charge-offs, net of recoveries | (107,161 | ) | (81,531 | ) | ||||
Other (a) | (3,291 | ) | — | |||||
Balance, end of period | $ | 173,343 | $ | 147,178 |
2019 | 2018 | ||||||
Balance, beginning of period | $ | 189,885 | $ | 192,471 | |||
Provision for credit losses | 134,536 | 106,870 | |||||
Charge-offs, net of recoveries | (125,840 | ) | (109,456 | ) | |||
Balance, end of period | $ | 198,581 | $ | 189,885 |
Amounts based on current assumptions | Impact of a 1% decrease in the discount rate | Impact of a 1% decrease in the expected return on assets | Impact of a 1% increase in the healthcare cost trend rate | Amounts based on current assumptions | Impact of a 1% decrease in the discount rate | Impact of a 1% decrease in the expected return on assets | Impact of a 1% increase in the healthcare cost trend rate | ||||||||||||||||||||||||
2017 Net periodic benefit costs | |||||||||||||||||||||||||||||||
2019 Net periodic benefit cost: | |||||||||||||||||||||||||||||||
Pension and SERPA | $ | 20,286 | $ | 27,460 | $ | 19,507 | n/a | $ | 11,149 | $ | 32,638 | n/a | $ | 20,054 | |||||||||||||||||
Postretirement healthcare | $ | 9,615 | $ | 1,162 | $ | 1,741 | $ | 1,687 | $ | 68 | $ | (540 | ) | $ | 587 | $ | 1,938 | ||||||||||||||
2017 Benefit obligations | |||||||||||||||||||||||||||||||
2019 Benefit obligations: | |||||||||||||||||||||||||||||||
Pension and SERPA | $ | 2,201,021 | $ | 358,953 | n/a | n/a | $ | 2,212,012 | $ | 363,249 | n/a | n/a | |||||||||||||||||||
Postretirement healthcare | $ | 338,488 | $ | 31,824 | n/a | $ | 11,984 | $ | 293,505 | $ | 25,816 | $ | 8,768 | n/a |
2018 | 2019-2020 | 2021-2022 | Thereafter | Total | ||||||||||||||||
Principal payments on debt | $ | 2,405,569 | $ | 2,693,007 | $ | 1,159,715 | $ | 750,000 | $ | 7,008,291 | ||||||||||
Interest payments on debt | 160,265 | 182,093 | 79,803 | 366,375 | 788,536 | |||||||||||||||
Operating lease payments | 15,074 | 23,826 | 14,715 | 8,379 | 61,994 | |||||||||||||||
$ | 2,580,908 | $ | 2,898,926 | $ | 1,254,233 | $ | 1,124,754 | $ | 7,858,821 |
2020 | 2021-2022 | 2023-2024 | Thereafter | Total | |||||||||||||||
Debt: | |||||||||||||||||||
Principal | $ | 2,326,688 | $ | 3,102,410 | $ | 1,287,918 | $ | 750,000 | $ | 7,467,016 | |||||||||
Interest | 187,544 | 199,978 | 102,435 | 307,125 | 797,082 | ||||||||||||||
Leases | 20,755 | 31,240 | 11,177 | 4,589 | 67,761 | ||||||||||||||
$ | 2,534,987 | $ | 3,333,628 | $ | 1,401,530 | $ | 1,061,714 | $ | 8,331,859 |
December 31, 2017 | ||||
Cash and cash equivalents | $ | 687,521 | ||
Credit facilities (a) | 291,518 | |||
Asset-backed U.S. commercial paper conduit facilities (a) | 620,543 | |||
Asset-backed Canadian commercial paper conduit facility (a) | 491 | |||
Total availability under credit and conduit facilities | 912,552 | |||
Total | $ | 1,600,073 |
Cash and cash equivalents | $ | 833,868 | |
Availability under credit and conduit facilities: | |||
Credit facilities | 1,168,005 | ||
Asset-backed U.S. commercial paper conduit facilities(a) | 600,000 | ||
Asset-backed Canadian commercial paper conduit facility(a) | 54,318 | ||
1,822,323 | |||
$ | 2,656,191 |
(a) | Includes facilities expiring in the next twelve months |
2017 | 2016 | 2015 | 2019 | 2018 | |||||||||||||||
Net cash provided by operating activities | $ | 1,005,061 | $ | 1,174,339 | $ | 1,100,118 | $ | 868,272 | $ | 1,205,921 | |||||||||
Net cash used by investing activities | (562,468 | ) | (392,731 | ) | (915,848 | ) | (508,126 | ) | (662,269 | ) | |||||||||
Net cash used by financing activities | (541,803 | ) | (734,390 | ) | (354,064 | ) | (712,223 | ) | (14,763 | ) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 26,747 | (9,443 | ) | (14,677 | ) | ||||||||||||||
Net (decrease) increase in cash and cash equivalents | $ | (72,463 | ) | $ | 37,775 | $ | (184,471 | ) | |||||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (2,305 | ) | (15,351 | ) | |||||||||||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | $ | (354,382 | ) | $ | 513,538 |
2017 | 2016 | 2015 | 2019 | 2018 | |||||||||||||||
Unsecured commercial paper | $ | 1,273,482 | $ | 1,055,708 | $ | 1,201,380 | $ | 571,995 | $ | 1,135,810 | |||||||||
Asset-backed Canadian commercial paper conduit facility | 174,779 | 149,338 | 153,839 | 114,693 | 155,951 | ||||||||||||||
Asset-backed U.S. commercial paper conduit facilities | 279,457 | — | — | 490,427 | 582,717 | ||||||||||||||
Asset-backed securitization debt, net | 764,392 | 95,167 | |||||||||||||||||
Medium-term notes, net | 4,165,706 | 4,064,940 | 3,316,949 | 4,760,127 | 4,887,007 | ||||||||||||||
Senior unsecured notes, net | 741,961 | 741,306 | 740,653 | ||||||||||||||||
Asset-backed securitization debt, net | 352,624 | 796,275 | 1,459,377 | ||||||||||||||||
Total debt | $ | 6,988,009 | $ | 6,807,567 | $ | 6,872,198 | |||||||||||||
Senior notes, net | 743,296 | 742,624 | |||||||||||||||||
$ | 7,444,930 | $ | 7,599,276 |
Short-Term | Long-Term | Outlook | ||||
Moody’s | P2 | Stable | ||||
Standard & Poor’s | A2 | Negative | ||||
Fitch | F1 | A |
Principal Amount | Rate | Issue Date | Maturity Date | Rate | Issue Date | Maturity Date | ||||||
$877,488 | 6.80% | May 2008 | June 2018 | |||||||||
$600,000 | 2.25% | January 2016 | January 2019 | 2.15% | February 2015 | February 2020 | ||||||
$150,000 | Floating-rate(a) | March 2017 | March 2019 | |||||||||
$600,000 | 2.40% | September 2014 | September 2019 | |||||||||
$600,000 | 2.15% | February 2015 | February 2020 | |||||||||
$450,000 | LIBOR + 0.50% | May 2018 | May 2020 | |||||||||
$350,000 | 2.40% | March 2017 | June 2020 | 2.40% | March 2017 | June 2020 | ||||||
$600,000 | 2.85% | January 2016 | January 2021 | 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 | 2.55% | June 2017 | June 2022 | ||||||
$350,000 | 3.35% | February 2018 | February 2023 | |||||||||
$672,936(a) | 3.14% | November 2019 | November 2024 |
(a) | Euro denominated €600.0 million par value remeasured to U.S. dollar at December 31, 2019 |
2019 | 2018 | ||||||||||||||
Transfers | Proceeds | Transfers | Proceeds | ||||||||||||
First quarter | $ | — | $ | — | $ | 7,600 | $ | 6,200 | |||||||
Second quarter | 28,200 | 23,400 | 38,900 | 32,200 | |||||||||||
Third quarter | — | — | — | — | |||||||||||
Fourth quarter | — | — | 39,000 | 32,200 | |||||||||||
$ | 28,200 | $ | 23,400 | $ | 85,500 | $ | 70,600 |
2019 | 2018 | ||||||||||||||
Transfers | Proceeds | Transfers | Proceeds | ||||||||||||
First quarter | $ | — | $ | — | $ | 32,900 | $ | 29,300 | |||||||
Second quarter | — | — | 59,100 | 53,300 | |||||||||||
Third quarter | 174,400 | 154,600 | — | — | |||||||||||
Fourth quarter | — | — | 400,200 | 356,800 | |||||||||||
$ | 174,400 | $ | 154,600 | $ | 492,200 | $ | 439,400 |
Page | |
Allowance for Credit Losses - Retail Finance Receivables | |
Description of the Matter | The Company’s retail receivable portfolio totaled $6.4 billion as of December 31, 2019, and the associated allowance for credit losses (ACL) was $188.5 million. As discussed in Note 7 to the consolidated financial statements, management utilizes a loss forecast model to estimate losses of its retail receivable portfolio. The loss forecast model utilizes a variety of assumptions including, but not limited to, historical loss trends, known and inherent risk in the portfolio, the value of the underlying collateral, recovery rates and current economic conditions including items such as unemployment rates. Management applies judgment in determining appropriate parameters and assumptions when estimating incurred losses, including the assessment of historical loss experience, the percentage of borrowers that are expected to default, and the valuation of collateral. Auditing management’s estimate of the ACL for retail finance receivables involved a high degree of judgment in evaluating management’s assumptions. |
How We Addressed the Matter in Our Audit | We tested certain of the Company’s controls over the ACL process, which included, among others, management’s review and approval of the model used to calculate the ACL, management’s validation of data inputs as well as their review and approval of subjective model inputs. We also tested the Company’s controls over the computational accuracy of the output of the model. To test the ACL, our audit procedures included, among others, assessing the appropriateness of the significant assumptions and parameters in the ACL model by evaluating whether historical data utilized within the model was representative of current circumstances, including giving consideration to current economic conditions and recent losses incurred in the portfolio. In performing this evaluation, we also considered any adjustments management made to historical data in response to current trends. Lastly, we tested the completeness and accuracy of data from underlying informational systems used in the model. |
Product Recall Liability | |
Description of the Matter | The Company’s liability for product recalls, which represents a loss contingency, was $36.4 million as of December 31, 2019. As discussed in Note 14 to the consolidated financial statements, the Company records the estimated recall cost when the liability is both probable and estimable. The accrued cost of a recall is based on an estimate of the cost to repair each affected motorcycle and the number of motorcycles expected to be repaired based on historical data concerning the percentage of affected customers that take advantage of recall offers. Management applies judgment in determining when to initiate voluntary product recall campaigns. Management also applies judgment in determining assumptions that are in part based on historical experience when estimating the expected costs to repair the motorcycle and the percentage of customers expected to participate in the recall. Auditing the completeness and valuation of the product recall liability involved a high degree of subjectivity in evaluating management’s assumptions. |
How We Addressed the Matter in Our Audit | We tested certain of the Company’s controls over the product recall liability process, which included, among others, management’s review of claims and identification of claims trends, and development of the assumptions and inputs used to estimate the cost of the product recall, including the motorcycle population subject to the product recall, the cost per motorcycle to repair, and the estimated customer participation percentage. We also tested controls over the completeness of the recalls accrued and the accuracy of the liability calculation. To test the product recall liability, our audit procedures included among others, assessing the appropriateness of the significant assumptions in the product recall calculation by evaluating whether the historical data was representative of current circumstances, including giving consideration to the nature of the current recalls as compared to prior recalls as well as the actual customer participation to-date activity for the identified recalls and the related actual repair costs incurred to-date. In performing the evaluation, we also considered any adjustments management made to historical data in response to current trends, as applicable. We performed sensitivity analyses to assess the impact of possible changes to inputs and assumptions. We reviewed third-party product recall announcements and tested the completeness and accuracy of motorcycle population and repair cost data from underlying systems used in the calculation. Lastly, we performed a lookback analysis of retro rate adjustments, which would be indicative of product performance concerns not captured in the form of a product recall. |
2017 | 2016 | 2015 | 2019 | 2018 | 2017 | ||||||||||||||||||
Revenue: | |||||||||||||||||||||||
Motorcycles and Related Products | $ | 4,915,027 | $ | 5,271,376 | $ | 5,308,744 | $ | 4,572,678 | $ | 4,968,646 | $ | 4,915,027 | |||||||||||
Financial Services | 732,197 | 725,082 | 686,658 | 789,111 | 748,229 | 732,197 | |||||||||||||||||
Total revenue | 5,647,224 | 5,996,458 | 5,995,402 | ||||||||||||||||||||
5,361,789 | 5,716,875 | 5,647,224 | |||||||||||||||||||||
Costs and expenses: | |||||||||||||||||||||||
Motorcycles and Related Products cost of goods sold | 3,261,683 | 3,419,710 | 3,356,284 | 3,229,798 | 3,351,796 | 3,272,330 | |||||||||||||||||
Financial Services interest expense | 180,193 | 173,756 | 161,983 | 210,438 | 193,187 | 180,193 | |||||||||||||||||
Financial Services provision for credit losses | 132,444 | 136,617 | 101,345 | 134,536 | 106,870 | 132,444 | |||||||||||||||||
Selling, administrative and engineering expense | 1,181,641 | 1,217,439 | 1,220,095 | 1,199,056 | 1,258,098 | 1,180,176 | |||||||||||||||||
Total costs and expenses | 4,755,961 | 4,947,522 | 4,839,707 | ||||||||||||||||||||
Restructuring expense | 32,353 | 93,401 | — | ||||||||||||||||||||
4,806,181 | 5,003,352 | 4,765,143 | |||||||||||||||||||||
Operating income | 891,263 | 1,048,936 | 1,155,695 | 555,608 | 713,523 | 882,081 | |||||||||||||||||
Other income (expense), net | 16,514 | 3,039 | 9,182 | ||||||||||||||||||||
Investment income | 3,580 | 4,645 | 6,585 | 16,371 | 951 | 3,580 | |||||||||||||||||
Interest expense | 31,004 | 29,670 | 12,117 | 31,078 | 30,884 | 31,004 | |||||||||||||||||
Income before provision for income taxes | 863,839 | 1,023,911 | 1,150,163 | 557,415 | 686,629 | 863,839 | |||||||||||||||||
Provision for income taxes | 342,080 | 331,747 | 397,956 | 133,780 | 155,178 | 342,080 | |||||||||||||||||
Net income | $ | 521,759 | $ | 692,164 | $ | 752,207 | $ | 423,635 | $ | 531,451 | $ | 521,759 | |||||||||||
Earnings per common share: | |||||||||||||||||||||||
Earnings per share: | |||||||||||||||||||||||
Basic | $ | 3.03 | $ | 3.85 | $ | 3.71 | $ | 2.70 | $ | 3.21 | $ | 3.03 | |||||||||||
Diluted | $ | 3.02 | $ | 3.83 | $ | 3.69 | $ | 2.68 | $ | 3.19 | $ | 3.02 | |||||||||||
Cash dividends per common share | $ | 1.46 | $ | 1.40 | $ | 1.24 | $ | 1.50 | $ | 1.48 | $ | 1.46 |
2017 | 2016 | 2015 | ||||||||||
Net income | $ | 521,759 | $ | 692,164 | $ | 752,207 | ||||||
Other comprehensive income (loss), net of tax: | ||||||||||||
Foreign currency translation adjustments | 46,280 | (9,288 | ) | (55,362 | ) | |||||||
Derivative financial instruments | (29,778 | ) | 6,638 | (13,156 | ) | |||||||
Marketable securities | 1,194 | (100 | ) | (394 | ) | |||||||
Pension and postretirement benefit plans | 47,636 | 52,574 | (31,350 | ) | ||||||||
Total other comprehensive income (loss), net of tax | 65,332 | 49,824 | (100,262 | ) | ||||||||
Comprehensive income | $ | 587,091 | $ | 741,988 | $ | 651,945 |
2017 | 2016 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 687,521 | $ | 759,984 | ||||
Marketable securities | — | 5,519 | ||||||
Accounts receivable, net | 329,986 | 285,106 | ||||||
Finance receivables, net | 2,105,662 | 2,076,261 | ||||||
Inventories | 538,202 | 499,917 | ||||||
Restricted cash | 47,518 | 52,574 | ||||||
Other current assets | 175,853 | 174,491 | ||||||
Total current assets | 3,884,742 | 3,853,852 | ||||||
Finance receivables, net | 4,859,424 | 4,759,197 | ||||||
Property, plant and equipment, net | 967,781 | 981,593 | ||||||
Prepaid pension costs | 19,816 | — | ||||||
Goodwill | 55,947 | 53,391 | ||||||
Deferred income taxes | 109,073 | 167,729 | ||||||
Other long-term assets | 75,889 | 74,478 | ||||||
$ | 9,972,672 | $ | 9,890,240 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 227,597 | $ | 235,318 | ||||
Accrued liabilities | 529,822 | 486,652 | ||||||
Short-term debt | 1,273,482 | 1,055,708 | ||||||
Current portion of long-term debt, net | 1,127,269 | 1,084,884 | ||||||
Total current liabilities | 3,158,170 | 2,862,562 | ||||||
Long-term debt, net | 4,587,258 | 4,666,975 | ||||||
Pension liability | 54,606 | 84,442 | ||||||
Postretirement healthcare liability | 118,753 | 173,267 | ||||||
Other long-term liabilities | 209,608 | 182,836 | ||||||
Commitments and contingencies (Note 14) | ||||||||
Shareholders’ equity: | ||||||||
Preferred stock, none issued | — | — | ||||||
Common stock, 181,286,547 and 180,595,054 shares issued, respectively | 1,813 | 1,806 | ||||||
Additional paid-in-capital | 1,422,808 | 1,381,862 | ||||||
Retained earnings | 1,607,570 | 1,337,673 | ||||||
Accumulated other comprehensive loss | (500,049 | ) | (565,381 | ) | ||||
Treasury stock (13,195,731 and 4,647,345 shares, respectively), at cost | (687,865 | ) | (235,802 | ) | ||||
Total shareholders’ equity | 1,844,277 | 1,920,158 | ||||||
$ | 9,972,672 | $ | 9,890,240 |
2017 | 2016 | |||||||
Balances held by consolidated variable interest entities (Note 10) | ||||||||
Current finance receivables, net | $ | 194,813 | $ | 225,289 | ||||
Other assets | $ | 2,148 | $ | 2,781 | ||||
Non-current finance receivables, net | $ | 521,940 | $ | 643,047 | ||||
Restricted cash - current and non-current | $ | 48,706 | $ | 57,057 | ||||
Current portion of long-term debt, net | $ | 209,247 | $ | 241,396 | ||||
Long-term debt, net | $ | 422,834 | $ | 554,879 |
2019 | 2018 | 2017 | |||||||||
Net income | $ | 423,635 | $ | 531,451 | $ | 521,759 | |||||
Other comprehensive income (loss), net of tax: | |||||||||||
Foreign currency translation adjustments | 8,795 | (25,010 | ) | 46,280 | |||||||
Marketable securities | — | — | 1,194 | ||||||||
Derivative financial instruments | (16,371 | ) | 20,009 | (29,778 | ) | ||||||
Pension and postretirement benefit plans | 100,311 | (16,286 | ) | 47,636 | |||||||
92,735 | (21,287 | ) | 65,332 | ||||||||
Comprehensive income | $ | 516,370 | $ | 510,164 | $ | 587,091 |
2017 | 2016 | 2015 | ||||||||||
Net cash provided by operating activities (Note 2) | $ | 1,005,061 | $ | 1,174,339 | $ | 1,100,118 | ||||||
Cash flows from investing activities: | ||||||||||||
Capital expenditures | (206,294 | ) | (256,263 | ) | (259,974 | ) | ||||||
Origination of finance receivables | (3,591,948 | ) | (3,664,495 | ) | (3,751,830 | ) | ||||||
Collections on finance receivables | 3,228,311 | 3,175,031 | 3,136,885 | |||||||||
Proceeds from finance receivables sold | — | 312,571 | — | |||||||||
Sales and redemptions of marketable securities | 6,916 | 40,014 | 11,507 | |||||||||
Acquisition of business | — | — | (59,910 | ) | ||||||||
Other | 547 | 411 | 7,474 | |||||||||
Net cash used by investing activities | (562,468 | ) | (392,731 | ) | (915,848 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from issuance of medium-term notes | 893,668 | 1,193,396 | 595,386 | |||||||||
Repayments of medium-term notes | (800,000 | ) | (451,336 | ) | (610,331 | ) | ||||||
Proceeds from issuance of senior unsecured notes | — | — | 740,385 | |||||||||
Proceeds from securitization debt | — | — | 1,195,668 | |||||||||
Repayments of securitization debt | (444,671 | ) | (665,400 | ) | (1,008,135 | ) | ||||||
Borrowings of asset-backed commercial paper | 469,932 | 62,396 | 87,442 | |||||||||
Repayments of asset-backed commercial paper | (176,227 | ) | (71,500 | ) | (72,727 | ) | ||||||
Net increase (decrease) in credit facilities and unsecured commercial paper | 212,809 | (145,812 | ) | 469,473 | ||||||||
Net change in restricted cash | 8,458 | 43,495 | 11,410 | |||||||||
Dividends paid | (251,862 | ) | (252,321 | ) | (249,262 | ) | ||||||
Purchase of common stock for treasury | (465,263 | ) | (465,341 | ) | (1,537,020 | ) | ||||||
Excess tax benefits from share-based payments | — | 2,251 | 3,468 | |||||||||
Issuance of common stock under employee stock option plans | 11,353 | 15,782 | 20,179 | |||||||||
Net cash used by financing activities | (541,803 | ) | (734,390 | ) | (354,064 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | 26,747 | (9,443 | ) | (14,677 | ) | |||||||
Net (decrease) increase in cash and cash equivalents | $ | (72,463 | ) | $ | 37,775 | $ | (184,471 | ) | ||||
Cash and cash equivalents: | ||||||||||||
Cash and cash equivalents—beginning of period | $ | 759,984 | $ | 722,209 | $ | 906,680 | ||||||
Net (decrease) increase in cash and cash equivalents | (72,463 | ) | 37,775 | (184,471 | ) | |||||||
Cash and cash equivalents—end of period | $ | 687,521 | $ | 759,984 | $ | 722,209 |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Balance | Total | ||||||||||||||||||||||
Issued Shares | Balance | ||||||||||||||||||||||||||
Balance December 31, 2014 | 344,174,653 | $ | 3,442 | $ | 1,265,257 | $ | 8,459,040 | $ | (514,943 | ) | $ | (6,303,510 | ) | $ | 2,909,286 | ||||||||||||
Net income | — | — | — | 752,207 | — | — | 752,207 | ||||||||||||||||||||
Total other comprehensive loss, net of tax (Note 8) | — | — | — | — | (100,262 | ) | — | (100,262 | ) | ||||||||||||||||||
Dividends | — | — | — | (249,262 | ) | — | — | (249,262 | ) | ||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (1,537,020 | ) | (1,537,020 | ) | ||||||||||||||||||
Share-based compensation and 401(k) match made with Treasury shares | — | — | 39,457 | — | — | 1,394 | 40,851 | ||||||||||||||||||||
Issuance of nonvested stock | 162,193 | 2 | (2 | ) | — | — | — | — | |||||||||||||||||||
Exercise of stock options | 518,858 | 5 | 20,174 | — | — | — | 20,179 | ||||||||||||||||||||
Tax benefit of equity awards | — | — | 3,675 | — | — | — | 3,675 | ||||||||||||||||||||
Balance December 31, 2015 | 344,855,704 | $ | 3,449 | $ | 1,328,561 | $ | 8,961,985 | $ | (615,205 | ) | $ | (7,839,136 | ) | $ | 1,839,654 | ||||||||||||
Net income | — | — | — | 692,164 | — | — | 692,164 | ||||||||||||||||||||
Total other comprehensive income, net of tax (Note 8) | — | — | — | — | 49,824 | — | 49,824 | ||||||||||||||||||||
Dividends | — | — | — | (252,321 | ) | — | — | (252,321 | ) | ||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (465,341 | ) | (465,341 | ) | ||||||||||||||||||
Share-based compensation and 401(k) match made with Treasury shares | — | — | 36,956 | — | — | 2,870 | 39,826 | ||||||||||||||||||||
Issuance of nonvested stock | 272,479 | 2 | (2 | ) | — | — | — | — | |||||||||||||||||||
Exercise of stock options | 466,871 | 5 | 15,777 | — | — | — | 15,782 | ||||||||||||||||||||
Tax benefit of equity awards | — | — | 570 | — | — | — | 570 | ||||||||||||||||||||
Retirement of treasury stock | (165,000,000 | ) | (1,650 | ) | — | (8,064,155 | ) | — | 8,065,805 | — | |||||||||||||||||
Balance December 31, 2016 | 180,595,054 | $ | 1,806 | $ | 1,381,862 | $ | 1,337,673 | $ | (565,381 | ) | $ | (235,802 | ) | $ | 1,920,158 | ||||||||||||
Net income | — | — | — | 521,759 | — | — | 521,759 | ||||||||||||||||||||
Total other comprehensive income, net of tax (Note 8) | — | — | — | — | 65,332 | — | 65,332 | ||||||||||||||||||||
Dividends | — | — | — | (251,862 | ) | — | — | (251,862 | ) | ||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (465,263 | ) | (465,263 | ) | ||||||||||||||||||
Share-based compensation and 401(k) match made with Treasury shares | — | — | 29,600 | — | — | 13,200 | 42,800 | ||||||||||||||||||||
Issuance of nonvested stock | 408,950 | 4 | (4 | ) | — | — | — | — | |||||||||||||||||||
Exercise of stock options | 282,543 | 3 | 11,350 | — | — | — | 11,353 | ||||||||||||||||||||
Balance December 31, 2017 | 181,286,547 | $ | 1,813 | $ | 1,422,808 | $ | 1,607,570 | $ | (500,049 | ) | $ | (687,865 | ) | $ | 1,844,277 |
2019 | 2018 | ||||||
ASSETS | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 833,868 | $ | 1,203,766 | |||
Marketable securities | — | 10,007 | |||||
Accounts receivable, net | 259,334 | 306,474 | |||||
Finance receivables, net | 2,272,522 | 2,214,424 | |||||
Inventories, net | 603,571 | 556,128 | |||||
Restricted cash | 64,554 | 49,275 | |||||
Other current assets | 168,974 | 144,368 | |||||
4,202,823 | 4,484,442 | ||||||
Finance receivables, net | 5,101,844 | 5,007,507 | |||||
Property, plant and equipment, net | 847,382 | 904,132 | |||||
Prepaid pension costs | 56,014 | — | |||||
Goodwill | 64,160 | 55,048 | |||||
Deferred income taxes | 101,204 | 141,464 | |||||
Lease assets | 61,618 | — | |||||
Other long-term assets | 93,114 | 73,071 | |||||
$ | 10,528,159 | $ | 10,665,664 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 294,380 | $ | 284,861 | |||
Accrued liabilities | 582,288 | 601,130 | |||||
Short-term debt | 571,995 | 1,135,810 | |||||
Current portion of long-term debt, net | 1,748,109 | 1,575,799 | |||||
3,196,772 | 3,597,600 | ||||||
Long-term debt, net | 5,124,826 | 4,887,667 | |||||
Lease liabilities | 44,447 | — | |||||
Pension liabilities | 56,138 | 107,776 | |||||
Postretirement healthcare liabilities | 72,513 | 94,453 | |||||
Deferred income taxes | 8,135 | — | |||||
Other long-term liabilities | 221,329 | 204,219 | |||||
Commitments and contingencies (Note 16) | |||||||
Shareholders’ equity: | |||||||
Preferred stock, none issued | — | — | |||||
Common stock (Note 5) | 1,828 | 1,819 | |||||
Additional paid-in-capital | 1,491,004 | 1,459,620 | |||||
Retained earnings | 2,193,997 | 2,007,583 | |||||
Accumulated other comprehensive loss | (536,949 | ) | (629,684 | ) | |||
Treasury stock, at cost (Note 5) | (1,345,881 | ) | (1,065,389 | ) | |||
1,803,999 | 1,773,949 | ||||||
$ | 10,528,159 | $ | 10,665,664 |
2019 | 2018 | ||||||
Balances held by consolidated variable interest entities (Note 12) | |||||||
Finance receivables, net - current | $ | 291,444 | $ | 175,043 | |||
Other assets | $ | 2,420 | $ | 1,563 | |||
Finance receivables, net - non-current | $ | 1,027,179 | $ | 591,839 | |||
Restricted cash - current and non-current | $ | 63,812 | $ | 47,203 | |||
Current portion of long-term debt, net | $ | 317,607 | $ | 189,693 | |||
Long-term debt, net | $ | 937,212 | $ | 488,191 |
2019 | 2018 | 2017 | |||||||||
Net cash provided by operating activities (Note 6) | $ | 868,272 | $ | 1,205,921 | $ | 1,005,061 | |||||
Cash flows from investing activities: | |||||||||||
Capital expenditures | (181,440 | ) | (213,516 | ) | (206,294 | ) | |||||
Origination of finance receivables | (3,847,322 | ) | (3,752,817 | ) | (3,591,948 | ) | |||||
Collections on finance receivables | 3,499,717 | 3,325,669 | 3,228,311 | ||||||||
Purchases of marketable securities | — | (10,007 | ) | — | |||||||
Sales and redemptions of marketable securities | 10,007 | — | 6,916 | ||||||||
Acquisition of business | (7,000 | ) | — | — | |||||||
Other investing activities | 17,912 | (11,598 | ) | 547 | |||||||
Net cash used by investing activities | (508,126 | ) | (662,269 | ) | (562,468 | ) | |||||
Cash flows from financing activities: | |||||||||||
Proceeds from issuance of medium-term notes | 1,203,236 | 1,591,828 | 893,668 | ||||||||
Repayments of medium-term notes | (1,350,000 | ) | (877,488 | ) | (800,000 | ) | |||||
Proceeds from securitization debt | 1,021,453 | — | — | ||||||||
Repayments of securitization debt | (353,251 | ) | (257,869 | ) | (444,671 | ) | |||||
Borrowings of asset-backed commercial paper | 177,950 | 509,742 | 469,932 | ||||||||
Repayments of asset-backed commercial paper | (318,006 | ) | (212,729 | ) | (176,227 | ) | |||||
Net (decrease) increase in credit facilities and unsecured commercial paper | (563,453 | ) | (135,356 | ) | 212,809 | ||||||
Dividends paid | (237,221 | ) | (245,810 | ) | (251,862 | ) | |||||
Repurchase of common stock | (296,520 | ) | (390,606 | ) | (465,263 | ) | |||||
Issuance of common stock under employee stock option plans | 3,589 | 3,525 | 11,353 | ||||||||
Net cash used by financing activities | (712,223 | ) | (14,763 | ) | (550,261 | ) | |||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (2,305 | ) | (15,351 | ) | 26,747 | ||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | $ | (354,382 | ) | $ | 513,538 | $ | (80,921 | ) | |||
Cash, cash equivalents and restricted cash: | |||||||||||
Cash, cash equivalents and restricted cash, beginning of period | $ | 1,259,748 | $ | 746,210 | $ | 827,131 | |||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (354,382 | ) | 513,538 | (80,921 | ) | ||||||
Cash, cash equivalents and restricted cash, end of period | $ | 905,366 | $ | 1,259,748 | $ | 746,210 | |||||
Reconciliation of cash, cash equivalents and restricted cash on the Consolidated balance sheets to the Consolidated statements of cash flows: | |||||||||||
Cash and cash equivalents | $ | 833,868 | $ | 1,203,766 | $ | 687,521 | |||||
Restricted cash | 64,554 | 49,275 | 47,518 | ||||||||
Restricted cash included in Other long-term assets | 6,944 | 6,707 | 11,171 | ||||||||
Cash, cash equivalents and restricted cash per the Consolidated statements of cash flows | $ | 905,366 | $ | 1,259,748 | $ | 746,210 |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Total | |||||||||||||||||||||
Issued Shares | Balance | |||||||||||||||||||||||||
Balance, December 31, 2016 | 180,595,054 | $ | 1,806 | $ | 1,381,862 | $ | 1,337,673 | $ | (565,381 | ) | $ | (235,802 | ) | $ | 1,920,158 | |||||||||||
Net income | — | — | — | 521,759 | — | — | 521,759 | |||||||||||||||||||
Other comprehensive income, net of tax (Note 18) | — | — | — | — | 65,332 | — | 65,332 | |||||||||||||||||||
Dividends | — | — | — | (251,862 | ) | — | — | (251,862 | ) | |||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (465,263 | ) | (465,263 | ) | |||||||||||||||||
Share-based compensation | — | — | 29,600 | — | — | 13,200 | 42,800 | |||||||||||||||||||
Issuance of nonvested stock | 408,950 | 4 | (4 | ) | — | — | — | — | ||||||||||||||||||
Exercise of stock options | 282,543 | 3 | 11,350 | — | — | — | 11,353 | |||||||||||||||||||
Balance, December 31, 2017 | 181,286,547 | 1,813 | 1,422,808 | 1,607,570 | (500,049 | ) | (687,865 | ) | 1,844,277 | |||||||||||||||||
Net income | — | — | — | 531,451 | — | — | 531,451 | |||||||||||||||||||
Other comprehensive loss, net of tax (Note 18) | — | — | — | — | (21,287 | ) | — | (21,287 | ) | |||||||||||||||||
Dividends | — | — | — | (245,810 | ) | — | — | (245,810 | ) | |||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (390,606 | ) | (390,606 | ) | |||||||||||||||||
Share-based compensation | — | — | 33,293 | — | — | 13,082 | 46,375 | |||||||||||||||||||
Issuance of nonvested stock | 485,005 | 4 | (4 | ) | — | — | — | — | ||||||||||||||||||
Exercise of stock options | 159,673 | 2 | 3,523 | — | — | — | 3,525 | |||||||||||||||||||
Cumulative effect of change in accounting | — | — | — | 6,024 | — | — | 6,024 | |||||||||||||||||||
Reclassification of certain tax effects | — | — | — | 108,348 | (108,348 | ) | — | — | ||||||||||||||||||
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 | — | — | — | 423,635 | — | — | 423,635 | |||||||||||||||||||
Other comprehensive income, net of tax (Note 18) | — | — | — | — | 92,735 | — | 92,735 | |||||||||||||||||||
Dividends | — | — | — | (237,221 | ) | — | — | (237,221 | ) | |||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (296,520 | ) | (296,520 | ) | |||||||||||||||||
Share-based compensation | — | — | 27,804 | — | — | 16,028 | 43,832 | |||||||||||||||||||
Issuance of nonvested stock | 715,579 | 7 | (7 | ) | — | — | — | — | ||||||||||||||||||
Exercise of stock options | 169,732 | 2 | 3,587 | — | — | — | 3,589 | |||||||||||||||||||
Balance, December 31, 2019 | 182,816,536 | $ | 1,828 | $ | 1,491,004 | $ | 2,193,997 | $ | (536,949 | ) | $ | (1,345,881 | ) | $ | 1,803,999 |
2017 | 2016 | |||||||
Available-for-sale securities: corporate bonds | $ | — | $ | 5,519 | ||||
Trading securities: mutual funds | 48,006 | 38,119 | ||||||
Total marketable securities | $ | 48,006 | $ | 43,638 |
2017 | 2016 | 2015 | ||||||||||
Balance, beginning of period | $ | 79,482 | $ | 74,217 | $ | 69,250 | ||||||
Warranties issued during the period | 57,834 | 60,215 | 59,259 | |||||||||
Settlements made during the period | (82,554 | ) | (99,298 | ) | (96,529 | ) | ||||||
Recalls and changes to pre-existing warranty liabilities | 39,438 | 44,348 | 42,237 | |||||||||
Balance, end of period | $ | 94,200 | $ | 79,482 | $ | 74,217 |
2019 | 2018 | ||||||
Motorcycles and Related Products Revenue: | |||||||
Motorcycles | $ | 3,538,269 | $ | 3,882,963 | |||
Parts & accessories | 713,400 | 754,663 | |||||
General merchandise | 237,566 | 241,964 | |||||
Licensing | 35,917 | 38,676 | |||||
Other | 47,526 | 50,380 | |||||
4,572,678 | 4,968,646 | ||||||
Financial Services Revenue: | |||||||
Interest income | 678,205 | 645,985 | |||||
Securitization and servicing fee income | 599 | 1,136 | |||||
Other income | 110,307 | 101,108 | |||||
789,111 | 748,229 | ||||||
$ | 5,361,789 | $ | 5,716,875 |
2019 | 2018 | ||||||
Balance, beginning of period | $ | 29,055 | $ | 23,441 | |||
Balance, end of period | 29,745 | 29,055 |
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 | 15 | 14,684 | 17,971 | 32,670 | (317 | ) | 32,353 | ||||||||||||||||
Utilized - cash | (24,102 | ) | — | (16,950 | ) | (41,052 | ) | (3,118 | ) | (44,170 | ) | ||||||||||||
Utilized - non cash | — | (14,684 | ) | (1,094 | ) | (15,778 | ) | — | (15,778 | ) | |||||||||||||
Foreign currency changes | (6 | ) | — | (4 | ) | (10 | ) | (26 | ) | (36 | ) | ||||||||||||
Balance, end of period | $ | 865 | $ | — | $ | 2 | $ | 867 | $ | — | $ | 867 |
2018 | |||||||||||||||||||||||
Manufacturing Optimization Plan | Reorganization Plan | ||||||||||||||||||||||
Employee Termination Benefits | Accelerated Depreciation | Other | Total | Employee Termination Benefits | Total | ||||||||||||||||||
Balance, beginning of period | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | |||||||||||
Restructuring expense | 38,666 | 34,654 | 16,182 | 89,502 | 3,899 | 93,401 | |||||||||||||||||
Utilized - cash | (13,060 | ) | — | (16,095 | ) | (29,155 | ) | (444 | ) | (29,599 | ) | ||||||||||||
Utilized - non cash | — | (34,654 | ) | — | (34,654 | ) | — | (34,654 | ) | ||||||||||||||
Foreign currency changes | (648 | ) | — | (8 | ) | (656 | ) | 6 | (650 | ) | |||||||||||||
Balance, end of period | $ | 24,958 | $ | — | $ | 79 | $ | 25,037 | $ | 3,461 | $ | 28,498 |
2019 | 2018 | 2017 | |||||||||
Current: | |||||||||||
Federal | $ | 82,484 | $ | 136,202 | $ | 245,189 | |||||
State | 6,421 | 23,134 | 24,898 | ||||||||
Foreign | 23,328 | 29,823 | 21,138 | ||||||||
112,233 | 189,159 | 291,225 | |||||||||
Deferred: | |||||||||||
Federal | 18,760 | (23,181 | ) | 47,046 | |||||||
State | 402 | (6,787 | ) | 2,688 | |||||||
Foreign | 2,385 | (4,013 | ) | 1,121 | |||||||
21,547 | (33,981 | ) | 50,855 | ||||||||
$ | 133,780 | $ | 155,178 | $ | 342,080 |
2019 | 2018 | 2017 | |||||||||
Domestic | $ | 465,798 | $ | 593,099 | $ | 788,878 | |||||
Foreign | 91,617 | 93,530 | 74,961 | ||||||||
$ | 557,415 | $ | 686,629 | $ | 863,839 |
2019 | 2018 | 2017 | ||||||
Provision at statutory rate | 21.0 | % | 21.0 | % | 35.0 | % | ||
State taxes, net of federal benefit | 2.5 | 2.6 | 1.9 | |||||
Foreign rate differential | 0.3 | 0.4 | (0.8 | ) | ||||
Domestic manufacturing deduction | — | — | (2.2 | ) | ||||
Foreign derived intangible income | (0.6 | ) | (1.2 | ) | — | |||
Research and development credit | (1.5 | ) | (1.1 | ) | (0.7 | ) | ||
Unrecognized tax benefits including interest and penalties | 0.1 | (0.6 | ) | 2.3 | ||||
Valuation allowance adjustments | 1.4 | 0.1 | (0.1 | ) | ||||
State credits | (0.8 | ) | — | — | ||||
Deferred tax balance remeasurement for rate change | — | (1.2 | ) | 5.5 | ||||
Territorial tax | — | 1.4 | (0.1 | ) | ||||
Global intangible low-taxed income | 0.2 | 0.4 | — | |||||
Adjustments for previously accrued taxes | (0.3 | ) | (1.0 | ) | (1.2 | ) | ||
Rate differential on intercompany transfers | — | 0.9 | — | |||||
Executive compensation limitation | 0.5 | 0.5 | — | |||||
Other foreign inclusions | 0.8 | — | — | |||||
Other | 0.4 | 0.4 | — | |||||
Provision for income taxes | 24.0 | % | 22.6 | % | 39.6 | % |
2019 | 2018 | ||||||
Deferred income tax assets: | |||||||
Accruals not yet tax deductible | $ | 95,746 | $ | 108,284 | |||
Pension and postretirement healthcare plan obligations | 17,685 | 48,347 | |||||
Stock compensation | 11,867 | 13,295 | |||||
Net operating loss carryforward | 45,279 | 34,842 | |||||
Valuation allowance | (29,024 | ) | (21,868 | ) | |||
Other, net | 64,833 | 43,870 | |||||
206,386 | 226,770 | ||||||
Deferred income tax liabilities: | |||||||
Depreciation, tax in excess of book | (83,477 | ) | (79,326 | ) | |||
Other | (29,840 | ) | (5,980 | ) | |||
(113,317 | ) | (85,306 | ) | ||||
$ | 93,069 | $ | 141,464 |
Year of Expiration | 2019 | |||
2031 | $ | 256,956 | ||
2033 | 166 | |||
2034 | 1,915 | |||
2038 | 4,460 | |||
2039 | 9,922 | |||
$ | 273,419 |
2019 | 2018 | ||||||
Unrecognized tax benefits, beginning of period | $ | 61,411 | $ | 72,230 | |||
Increase in unrecognized tax benefits for tax positions taken in a prior period | 1,067 | 940 | |||||
Decrease in unrecognized tax benefits for tax positions taken in a prior period | (5,608 | ) | (9,783 | ) | |||
Increase in unrecognized tax benefits for tax positions taken in the current period | 4,576 | 3,355 | |||||
Statute lapses | (325 | ) | — | ||||
Settlements with taxing authorities | (1,009 | ) | (5,331 | ) | |||
Unrecognized tax benefits, end of period | $ | 60,112 | $ | 61,411 |
2019 | 2018 | ||||
Common stock shares: | |||||
Authorized | 800,000,000 | 800,000,000 | |||
Issued | 182,816,536 | 181,931,225 | |||
Outstanding | 152,468,442 | 159,657,947 | |||
Treasury stock shares | 30,348,094 | 22,273,278 |
2019 | 2018 | 2017 | |||||||||
Net income | $ | 423,635 | $ | 531,451 | $ | 521,759 | |||||
Basic weighted-average shares outstanding | 157,054 | 165,672 | 171,995 | ||||||||
Effect of dilutive securities – employee stock compensation plan | 750 | 832 | 937 | ||||||||
Diluted weighted-average shares outstanding | 157,804 | 166,504 | 172,932 | ||||||||
Earnings per share: | |||||||||||
Basic | $ | 2.70 | $ | 3.21 | $ | 3.03 | |||||
Diluted | $ | 2.68 | $ | 3.19 | $ | 3.02 |
2019 | 2018 | ||||||
Debt securities | $ | — | $ | 10,007 | |||
Mutual funds | 52,575 | 44,243 | |||||
$ | 52,575 | $ | 54,250 |
2017 | 2016 | |||||||
Raw materials and work in process | $ | 161,664 | $ | 140,639 | ||||
Motorcycle finished goods | 289,530 | 285,281 | ||||||
Parts and accessories and general merchandise | 139,363 | 122,264 | ||||||
Inventory at lower of FIFO cost or net realizable value | 590,557 | 548,184 | ||||||
Excess of FIFO over LIFO cost | (52,355 | ) | (48,267 | ) | ||||
Total inventories, net | $ | 538,202 | $ | 499,917 |
2019 | 2018 | ||||||
Raw materials and work in process | $ | 235,433 | $ | 177,110 | |||
Motorcycle finished goods | 280,306 | 301,630 | |||||
Parts & accessories and general merchandise | 144,258 | 136,027 | |||||
Inventory at lower of FIFO cost or net realizable value | 659,997 | 614,767 | |||||
Excess of FIFO over LIFO cost | (56,426 | ) | (58,639 | ) | |||
$ | 603,571 | $ | 556,128 |
2019 | 2018 | ||||||
Land and related improvements | $ | 75,798 | $ | 73,025 | |||
Buildings and related improvements | 507,178 | 483,965 | |||||
Machinery and equipment | 1,609,582 | 1,740,405 | |||||
Software | 750,978 | 733,180 | |||||
Construction in progress | 148,805 | 205,786 | |||||
3,092,341 | 3,236,361 | ||||||
Accumulated depreciation | (2,244,959 | ) | (2,332,229 | ) | |||
$ | 847,382 | $ | 904,132 |
2017 | 2016 | |||||||
Land and related improvements | $ | 70,256 | $ | 65,533 | ||||
Buildings and related improvements | 464,454 | 464,200 | ||||||
Machinery and equipment | 1,890,126 | 1,887,269 | ||||||
Software | 660,090 | 630,114 | ||||||
Construction in progress | 200,396 | 214,409 | ||||||
3,285,322 | 3,261,525 | |||||||
Accumulated depreciation | (2,317,541 | ) | (2,279,932 | ) | ||||
Total property, plant and equipment, net | $ | 967,781 | $ | 981,593 |
2019 | 2018 | ||||||
Payroll, employee benefits and related expenses | $ | 113,621 | $ | 125,056 | |||
Sales incentive programs | 73,354 | 57,525 | |||||
Warranty and recalls | 57,068 | 103,074 | |||||
Accrued interest | 49,213 | 47,977 | |||||
Tax-related accruals | 29,871 | 43,083 | |||||
Leases | 19,013 | — | |||||
Fair value of derivative financial instruments | 13,934 | 5,316 | |||||
Restructuring | 867 | 28,498 | |||||
Other | 225,347 | 190,601 | |||||
$ | 582,288 | $ | 601,130 |
2017 | 2016 | |||||||
Payroll, employee benefits and related expenses | $ | 124,093 | $ | 148,221 | ||||
Warranty and recalls | 75,089 | 57,698 | ||||||
Sales incentive programs | 48,309 | 43,218 | ||||||
Tax-related accruals | 25,944 | 26,140 | ||||||
Fair value of derivative financial instruments | 21,308 | 142 | ||||||
Accrued interest | 40,347 | 42,788 | ||||||
Other | 194,732 | 168,445 | ||||||
Total accrued liabilities | $ | 529,822 | $ | 486,652 |
2019 | 2018 | 2017 | |||||||||
Cash flows from operating activities: | |||||||||||
Net income | $ | 423,635 | $ | 531,451 | $ | 521,759 | |||||
Adjustments to reconcile Net income to Net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 232,537 | 264,863 | 222,188 | ||||||||
Amortization of deferred loan origination costs | 76,326 | 81,315 | 82,911 | ||||||||
Amortization of financing origination fees | 9,823 | 8,367 | 8,045 | ||||||||
Provision for long-term employee benefits | 13,344 | 36,481 | 29,900 | ||||||||
Employee benefit plan contributions and payments | (13,256 | ) | (10,544 | ) | (63,277 | ) | |||||
Stock compensation expense | 33,733 | 35,539 | 32,491 | ||||||||
Net change in wholesale finance receivables related to sales | (5,822 | ) | (56,538 | ) | 35,172 | ||||||
Provision for credit losses | 134,536 | 106,870 | 132,444 | ||||||||
Deferred income taxes | 21,547 | (33,981 | ) | 50,855 | |||||||
Other, net | 298 | 37,554 | 8,559 | ||||||||
Changes in current assets and liabilities: | |||||||||||
Accounts receivable, net | 44,902 | 9,143 | (18,149 | ) | |||||||
Finance receivables – accrued interest and other | (11,119 | ) | 773 | (1,313 | ) | ||||||
Inventories, net | (47,576 | ) | (31,059 | ) | (20,584 | ) | |||||
Accounts payable and accrued liabilities | (18,462 | ) | 196,192 | 10,128 | |||||||
Derivative financial instruments | 1,936 | 473 | 1,866 | ||||||||
Other | (28,110 | ) | 29,022 | (27,934 | ) | ||||||
444,637 | 674,470 | 483,302 | |||||||||
Net cash provided by operating activities | $ | 868,272 | $ | 1,205,921 | $ | 1,005,061 |
2019 | 2018 | 2017 | |||||||||
Interest | $ | 229,678 | $ | 207,484 | $ | 204,866 | |||||
Income taxes | $ | 149,828 | $ | 149,436 | $ | 300,133 |
2017 | 2016 | 2015 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 521,759 | $ | 692,164 | $ | 752,207 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization of intangibles | 222,188 | 209,555 | 198,074 | |||||||||
Amortization of deferred loan origination costs | 82,911 | 86,681 | 93,546 | |||||||||
Amortization of financing origination fees | 8,045 | 9,252 | 9,975 | |||||||||
Provision for long-term employee benefits | 29,900 | 38,273 | 60,824 | |||||||||
Employee benefit plan contributions and payments | (63,277 | ) | (55,809 | ) | (28,490 | ) | ||||||
Stock compensation expense | 32,491 | 32,336 | 29,433 | |||||||||
Net change in wholesale finance receivables related to sales | 35,172 | (3,233 | ) | (113,970 | ) | |||||||
Provision for credit losses | 132,444 | 136,617 | 101,345 | |||||||||
Gain on off-balance sheet asset-backed securitization | — | (9,269 | ) | — | ||||||||
Loss on debt extinguishment | — | 118 | 1,099 | |||||||||
Deferred income taxes | 50,855 | (165 | ) | (16,484 | ) | |||||||
Other, net | 8,559 | (6,907 | ) | 20,913 | ||||||||
Changes in current assets and liabilities: | ||||||||||||
Accounts receivable, net | (18,149 | ) | (45,934 | ) | (13,665 | ) | ||||||
Finance receivables – accrued interest and other | (1,313 | ) | (1,489 | ) | (3,046 | ) | ||||||
Inventories | (20,584 | ) | 85,072 | (155,222 | ) | |||||||
Accounts payable and accrued liabilities | 10,128 | 38,237 | 138,823 | |||||||||
Derivative instruments | 1,866 | (3,413 | ) | (5,615 | ) | |||||||
Other | (27,934 | ) | (27,747 | ) | 30,371 | |||||||
Total adjustments | 483,302 | 482,175 | 347,911 | |||||||||
Net cash provided by operating activities | $ | 1,005,061 | $ | 1,174,339 | $ | 1,100,118 |
2017 | 2016 | 2015 | ||||||||||
Interest | $ | 204,866 | $ | 185,804 | $ | 148,654 | ||||||
Income taxes | $ | 300,113 | $ | 356,553 | $ | 371,547 |
2017 | 2016 | 2015 | ||||||||||
Balance, beginning of period | $ | 53,391 | $ | 54,182 | $ | 27,752 | ||||||
Business acquisitions | — | — | 28,567 | |||||||||
Currency translation | 2,556 | (791 | ) | (2,137 | ) | |||||||
Balance, end of period | $ | 55,947 | $ | 53,391 | $ | 54,182 |
2017 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Estimated useful life (years) | |||||||||||
Intangible assets other than goodwill | ||||||||||||||
Reacquired distribution rights | $ | 13,933 | $ | (13,933 | ) | $ | — | 2 | ||||||
Customer relationships | 7,860 | (950 | ) | 6,910 | 20 | |||||||||
Total other intangible assets | $ | 21,793 | $ | (14,883 | ) | $ | 6,910 |
2016 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Estimated useful life (years) | |||||||||||
Intangible assets other than goodwill | ||||||||||||||
Reacquired distribution rights | $ | 12,928 | $ | (9,157 | ) | $ | 3,771 | 2 | ||||||
Customer relationships | 7,293 | (517 | ) | 6,776 | 20 | |||||||||
Total other intangible assets | $ | 20,221 | $ | (9,674 | ) | $ | 10,547 |
Estimated Amortization | ||||
2018 | $ | 384 | ||
2019 | 384 | |||
2020 | 384 | |||
2021 | 384 | |||
2022 | 384 | |||
Thereafter | 4,990 | |||
Total | $ | 6,910 |
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
Wholesale | ||||||||||||||||||||
United States | $ | 939,621 | $ | 961,150 | $ | 965,379 | $ | 903,380 | $ | 800,491 | ||||||||||
Canada | 77,336 | 65,440 | 58,481 | 48,941 | 44,721 | |||||||||||||||
Total wholesale | 1,016,957 | 1,026,590 | 1,023,860 | 952,321 | 845,212 | |||||||||||||||
Retail | ||||||||||||||||||||
United States | 5,901,002 | 5,769,410 | 5,803,071 | 5,398,006 | 5,051,245 | |||||||||||||||
Canada | 239,598 | 212,801 | 188,400 | 209,918 | 213,799 | |||||||||||||||
Total retail | 6,140,600 | 5,982,211 | 5,991,471 | 5,607,924 | 5,265,044 | |||||||||||||||
7,157,557 | 7,008,801 | 7,015,331 | 6,560,245 | 6,110,256 | ||||||||||||||||
Allowance for credit losses | (192,471 | ) | (173,343 | ) | (147,178 | ) | (127,364 | ) | (110,693 | ) | ||||||||||
Total finance receivables, net | $ | 6,965,086 | $ | 6,835,458 | $ | 6,868,153 | $ | 6,432,881 | $ | 5,999,563 |
2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||
Retail finance receivables: | |||||||||||||||||||
United States | $ | 6,180,236 | $ | 6,103,378 | $ | 5,901,002 | $ | 5,769,410 | $ | 5,803,071 | |||||||||
Canada | 236,192 | 224,823 | 239,598 | 212,801 | 188,400 | ||||||||||||||
6,416,428 | 6,328,201 | 6,140,600 | 5,982,211 | 5,991,471 | |||||||||||||||
Wholesale finance receivables: | |||||||||||||||||||
United States | 1,067,880 | 1,007,956 | 939,621 | 961,150 | 965,379 | ||||||||||||||
Canada | 88,639 | 75,659 | 77,336 | 65,440 | 58,481 | ||||||||||||||
1,156,519 | 1,083,615 | 1,016,957 | 1,026,590 | 1,023,860 | |||||||||||||||
7,572,947 | 7,411,816 | 7,157,557 | 7,008,801 | 7,015,331 | |||||||||||||||
Allowance for credit losses | (198,581 | ) | (189,885 | ) | (192,471 | ) | (173,343 | ) | (147,178 | ) | |||||||||
$ | 7,374,366 | $ | 7,221,931 | $ | 6,965,086 | $ | 6,835,458 | $ | 6,868,153 |
United States | Canada | Total | |||||||||
2020 | $ | 2,177,277 | $ | 138,251 | $ | 2,315,528 | |||||
2021 | 1,188,915 | 52,390 | 1,241,305 | ||||||||
2022 | 1,329,148 | 56,629 | 1,385,777 | ||||||||
2023 | 1,486,564 | 61,211 | 1,547,775 | ||||||||
2024 | 1,061,450 | 16,350 | 1,077,800 | ||||||||
Thereafter | 4,762 | — | 4,762 | ||||||||
$ | 7,248,116 | $ | 324,831 | $ | 7,572,947 |
United States | Canada | Total | ||||||||||
2018 | $ | 2,018,646 | $ | 126,345 | $ | 2,144,991 | ||||||
2019 | 1,160,372 | 51,764 | 1,212,136 | |||||||||
2020 | 1,251,444 | 56,173 | 1,307,617 | |||||||||
2021 | 1,250,821 | 60,957 | 1,311,778 | |||||||||
2022 | 1,144,281 | 21,695 | 1,165,976 | |||||||||
Thereafter | 15,059 | — | 15,059 | |||||||||
Total | $ | 6,840,623 | $ | 316,934 | $ | 7,157,557 |
2019 | |||||||||||
Retail | Wholesale | Total | |||||||||
Balance, beginning of period | $ | 182,098 | $ | 7,787 | $ | 189,885 | |||||
Provision for credit losses | 132,243 | 2,293 | 134,536 | ||||||||
Charge-offs | (173,358 | ) | — | (173,358 | ) | ||||||
Recoveries | 47,518 | — | 47,518 | ||||||||
Balance, end of period | $ | 188,501 | $ | 10,080 | $ | 198,581 |
2018 | |||||||||||
Retail | Wholesale | Total | |||||||||
Balance, beginning of period | $ | 186,254 | $ | 6,217 | $ | 192,471 | |||||
Provision for credit losses | 105,292 | 1,578 | 106,870 | ||||||||
Charge-offs | (154,433 | ) | (8 | ) | (154,441 | ) | |||||
Recoveries | 44,985 | — | 44,985 | ||||||||
Balance, end of period | $ | 182,098 | $ | 7,787 | $ | 189,885 |
2017 | |||||||||||
Retail | Wholesale | Total | |||||||||
Balance, beginning of period | $ | 166,810 | $ | 6,533 | $ | 173,343 | |||||
Provision for credit losses | 132,760 | (316 | ) | 132,444 | |||||||
Charge-offs | (160,972 | ) | — | (160,972 | ) | ||||||
Recoveries | 47,656 | — | 47,656 | ||||||||
Balance, end of period | $ | 186,254 | $ | 6,217 | $ | 192,471 |
2016 | ||||||||||||
Retail | Wholesale | Total | ||||||||||
Balance, beginning of period | $ | 139,320 | $ | 7,858 | $ | 147,178 | ||||||
Provision for credit losses | 137,942 | (1,325 | ) | 136,617 | ||||||||
Charge-offs | (148,566 | ) | — | (148,566 | ) | |||||||
Recoveries | 41,405 | — | 41,405 | |||||||||
Other (a) | (3,291 | ) | — | (3,291 | ) | |||||||
Balance, end of period | $ | 166,810 | $ | 6,533 | $ | 173,343 |
2015 | ||||||||||||
Retail | Wholesale | Total | ||||||||||
Balance, beginning of period | $ | 122,025 | $ | 5,339 | $ | 127,364 | ||||||
Provision for credit losses | 98,826 | 2,519 | 101,345 | |||||||||
Charge-offs | (123,911 | ) | — | (123,911 | ) | |||||||
Recoveries | 42,380 | — | 42,380 | |||||||||
Balance, end of period | $ | 139,320 | $ | 7,858 | $ | 147,178 |
2017 | ||||||||||||
Retail | Wholesale | Total | ||||||||||
Allowance for credit losses, ending balance: | ||||||||||||
Individually evaluated for impairment | $ | — | $ | — | $ | — | ||||||
Collectively evaluated for impairment | 186,254 | 6,217 | 192,471 | |||||||||
Total allowance for credit losses | $ | 186,254 | $ | 6,217 | $ | 192,471 | ||||||
Finance receivables, ending balance: | ||||||||||||
Individually evaluated for impairment | $ | — | $ | — | $ | — | ||||||
Collectively evaluated for impairment | 6,140,600 | 1,016,957 | 7,157,557 | |||||||||
Total finance receivables | $ | 6,140,600 | $ | 1,016,957 | $ | 7,157,557 | ||||||
2016 | ||||||||||||
Retail | Wholesale | Total | ||||||||||
Allowance for credit losses, ending balance: | ||||||||||||
Individually evaluated for impairment | $ | — | $ | — | $ | — | ||||||
Collectively evaluated for impairment | 166,810 | 6,533 | 173,343 | |||||||||
Total allowance for credit losses | $ | 166,810 | $ | 6,533 | $ | 173,343 | ||||||
Finance receivables, ending balance: | ||||||||||||
Individually evaluated for impairment | $ | — | $ | — | $ | — | ||||||
Collectively evaluated for impairment | 5,982,211 | 1,026,590 | 7,008,801 | |||||||||
Total finance receivables | $ | 5,982,211 | $ | 1,026,590 | $ | 7,008,801 |
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 | ||||||
2018 | |||||||||||
Retail | Wholesale | Total | |||||||||
Allowance for credit losses, ending balance: | |||||||||||
Individually evaluated for impairment | $ | — | $ | — | $ | — | |||||
Collectively evaluated for impairment | 182,098 | 7,787 | 189,885 | ||||||||
$ | 182,098 | $ | 7,787 | $ | 189,885 | ||||||
Finance receivables, ending balance: | |||||||||||
Individually evaluated for impairment | $ | — | $ | — | $ | — | |||||
Collectively evaluated for impairment | 6,328,201 | 1,083,615 | 7,411,816 | ||||||||
$ | 6,328,201 | $ | 1,083,615 | $ | 7,411,816 |
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 | $ | — |
2019 | |||||||||||||||||||||||
Current | 31-60 Days Past Due | 61-90 Days Past Due | Greater than 90 Days Past Due | Total Past Due | Total Finance Receivables | ||||||||||||||||||
Retail finance receivables | $ | 6,171,930 | $ | 142,479 | $ | 53,995 | $ | 48,024 | $ | 244,498 | $ | 6,416,428 | |||||||||||
Wholesale financial 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 |
2017 | ||||||||||||||||||||||||
Current | 31-60 Days Past Due | 61-90 Days Past Due | Greater than 90 Days Past Due | Total Past Due | Total Finance Receivables | |||||||||||||||||||
Retail | $ | 5,913,473 | $ | 139,629 | $ | 47,539 | $ | 39,959 | $ | 227,127 | $ | 6,140,600 | ||||||||||||
Wholesale | 1,016,000 | 595 | 245 | 117 | 957 | 1,016,957 | ||||||||||||||||||
Total | $ | 6,929,473 | $ | 140,224 | $ | 47,784 | $ | 40,076 | $ | 228,084 | $ | 7,157,557 |
2018 | |||||||||||||||||||||||
Current | 31-60 Days Past Due | 61-90 Days Past Due | Greater than 90 Days Past Due | Total Past Due | Total Finance Receivables | ||||||||||||||||||
Retail finance receivables | $ | 6,100,186 | $ | 136,945 | $ | 49,825 | $ | 41,245 | $ | 228,015 | $ | 6,328,201 | |||||||||||
Wholesale financial receivables | 1,081,729 | 522 | 273 | 1,091 | 1,886 | 1,083,615 | |||||||||||||||||
$ | 7,181,915 | $ | 137,467 | $ | 50,098 | $ | 42,336 | $ | 229,901 | $ | 7,411,816 |
2016 | ||||||||||||||||||||||||
Current | 31-60 Days Past Due | 61-90 Days Past Due | Greater than 90 Days Past Due | Total Past Due | Total Finance Receivables | |||||||||||||||||||
Retail | $ | 5,760,818 | $ | 131,302 | $ | 49,642 | $ | 40,449 | $ | 221,393 | $ | 5,982,211 | ||||||||||||
Wholesale | 1,024,995 | 1,000 | 319 | 276 | 1,595 | 1,026,590 | ||||||||||||||||||
Total | $ | 6,785,813 | $ | 132,302 | $ | 49,961 | $ | 40,725 | $ | 222,988 | $ | 7,008,801 |
2019 | 2018 | 2017 | 2016 | 2015 | |||||||||||||||
United States | $ | 47,138 | $ | 41,285 | $ | 39,051 | $ | 39,399 | $ | 31,677 | |||||||||
Canada | 888 | 1,051 | 1,025 | 1,326 | 1,192 | ||||||||||||||
$ | 48,026 | $ | 42,336 | $ | 40,076 | $ | 40,725 | $ | 32,869 |
2017 | 2016 | 2015 | 2014 | 2013 | ||||||||||||||||
United States | $ | 39,051 | $ | 39,399 | $ | 31,677 | $ | 27,800 | $ | 23,770 | ||||||||||
Canada | 1,025 | 1,326 | 1,192 | 1,118 | 1,031 | |||||||||||||||
Total | $ | 40,076 | $ | 40,725 | $ | 32,869 | $ | 28,918 | $ | 24,801 |
2019 | 2018 | ||||||
Prime | $ | 5,278,093 | $ | 5,183,754 | |||
Sub-prime | 1,138,335 | 1,144,447 | |||||
$ | 6,416,428 | $ | 6,328,201 |
2017 | 2016 | |||||||
Prime | $ | 4,966,193 | $ | 4,768,420 | ||||
Sub-prime | 1,174,407 | 1,213,791 | ||||||
Total | $ | 6,140,600 | $ | 5,982,211 |
2019 | 2018 | ||||||
Doubtful | $ | 11,664 | $ | 2,210 | |||
Substandard | 6,122 | 9,660 | |||||
Special Mention | 16,125 | 10,299 | |||||
Medium Risk | 16,800 | 25,802 | |||||
Low Risk | 1,105,808 | 1,035,644 | |||||
$ | 1,156,519 | $ | 1,083,615 |
2017 | 2016 | |||||||
Doubtful | $ | 688 | $ | 1,333 | ||||
Substandard | 3,837 | 1,773 | ||||||
Special Mention | 26,866 | 30,152 | ||||||
Medium Risk | 9,917 | 14,620 | ||||||
Low Risk | 975,649 | 978,712 | ||||||
Total | $ | 1,016,957 | $ | 1,026,590 |
2019 | 2018 | 2017 | |||||||||
Balance, beginning of period | $ | 55,048 | $ | 55,947 | $ | 53,391 | |||||
Acquisitions | 9,520 | — | — | ||||||||
Currency translation | (408 | ) | (899 | ) | 2,556 | ||||||
Balance, end of period | $ | 64,160 | $ | 55,048 | $ | 55,947 |
2019 | 2018 | 2017 | |||||||||
Gross carrying amount | $ | 12,837 | $ | 7,234 | $ | 7,860 | |||||
Accumulated amortization | (2,240 | ) | (1,236 | ) | (950 | ) | |||||
$ | 10,597 | $ | 5,998 | $ | 6,910 |
2020 | $ | 1,061 | |
2021 | 1,061 | ||
2022 | 1,061 | ||
2023 | 1,061 | ||
2024 | 820 | ||
Thereafter | 5,533 | ||
$ | 10,597 |
2017 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Cash equivalents | $ | 488,432 | $ | 358,500 | $ | 129,932 | $ | — | ||||||||
Marketable securities | 48,006 | 48,006 | — | — | ||||||||||||
Derivatives | 1,769 | — | 1,769 | — | ||||||||||||
Total | $ | 538,207 | $ | 406,506 | $ | 131,701 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Derivatives | $ | 21,308 | $ | — | $ | 21,308 | $ | — |
2016 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Cash equivalents | $ | 531,519 | $ | 426,266 | $ | 105,253 | $ | — | ||||||||
Marketable securities | 43,638 | 38,119 | 5,519 | — | ||||||||||||
Derivatives | 29,034 | — | 29,034 | — | ||||||||||||
Total | $ | 604,191 | $ | 464,385 | $ | 139,806 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Derivatives | $ | 142 | $ | — | $ | 142 | $ | — |
2017 | 2016 | |||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | |||||||||||||
Assets: | ||||||||||||||||
Finance receivables, net | $ | 7,021,549 | $ | 6,965,086 | $ | 6,921,037 | $ | 6,835,458 | ||||||||
Liabilities: | ||||||||||||||||
Unsecured commercial paper | $ | 1,273,482 | $ | 1,273,482 | $ | 1,055,708 | $ | 1,055,708 | ||||||||
Asset-backed U.S. commercial paper conduit facilities | $ | 279,457 | $ | 279,457 | $ | — | $ | — | ||||||||
Asset-backed Canadian commercial paper conduit facility | $ | 174,779 | $ | 174,779 | $ | 149,338 | $ | 149,338 | ||||||||
Medium-term notes | $ | 4,189,092 | $ | 4,165,706 | $ | 4,139,462 | $ | 4,064,940 | ||||||||
Senior unsecured notes | $ | 784,433 | $ | 741,961 | $ | 744,552 | $ | 741,306 | ||||||||
Asset-backed securitization debt | $ | 351,767 | $ | 352,624 | $ | 797,688 | $ | 796,275 |
2017 | 2016 | ||||||||||||||||||||||||
Derivatives Designated As Hedging Instruments Under ASC Topic 815 | Notional Value | Asset Fair Value(a) | Liability Fair Value(b) | Notional Value | Asset Fair Value(a) | Liability Fair Value(b) | |||||||||||||||||||
Foreign currency contracts(c) | $ | 675,724 | $ | 1,388 | $ | 21,239 | $ | 554,551 | $ | 28,528 | $ | 142 | |||||||||||||
Commodities contracts(c) | 915 | — | 69 | 992 | 177 | — | |||||||||||||||||||
Total | $ | 676,639 | $ | 1,388 | $ | 21,308 | $ | 555,543 | $ | 28,705 | $ | 142 | |||||||||||||
2017 | 2016 | ||||||||||||||||||||||||
Derivatives Not Designated As Hedging Instruments Under ASC Topic 815 | Notional Value | Asset Fair Value(a) | Liability Fair Value(b) | Notional Value | Asset Fair Value(a) | Liability Fair Value(b) | |||||||||||||||||||
Commodities contracts | $ | 4,532 | $ | 381 | $ | — | $ | 5,025 | $ | 329 | $ | — | |||||||||||||
Total | $ | 4,532 | $ | 381 | $ | — | $ | 5,025 | $ | 329 | $ | — |
Derivative Financial Instruments Designated as Cash Flow Hedging Instruments | ||||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||
Notional Value | Other Current Assets | Accrued Liabilities | Notional Value | Other Current Assets | Accrued Liabilities | |||||||||||||||||||
Foreign currency contracts | $ | 434,321 | $ | 3,505 | $ | 3,661 | $ | 442,976 | $ | 15,071 | $ | 313 | ||||||||||||
Commodity contracts | 616 | — | 80 | 827 | — | 46 | ||||||||||||||||||
Cross-currency swap | 660,780 | 8,326 | — | — | — | — | ||||||||||||||||||
Interest rate swaps | 900,000 | — | 9,181 | 900,000 | — | 4,494 | ||||||||||||||||||
$ | 1,995,717 | $ | 11,831 | $ | 12,922 | $ | 1,343,803 | $ | 15,071 | $ | 4,853 | |||||||||||||
Derivative Financial Instruments Not Designated as Hedging Instruments | ||||||||||||||||||||||||
2019 | 2018 | |||||||||||||||||||||||
Notional Value | Other Current Assets | Accrued Liabilities | Notional Value | Other Current Assets | Accrued Liabilities | |||||||||||||||||||
Foreign currency contracts | $ | 220,139 | $ | 721 | $ | 865 | $ | — | $ | — | $ | — | ||||||||||||
Commodity contracts | 8,270 | 95 | 147 | 5,239 | — | 463 | ||||||||||||||||||
Interest rate cap | 375,980 | 2 | — | — | — | — | ||||||||||||||||||
$ | 604,389 | $ | 818 | $ | 1,012 | $ | 5,239 | $ | — | $ | 463 |
Amount of Gain/(Loss) Recognized in OCI, before tax | ||||||||||||
Cash Flow Hedges | 2017 | 2016 | 2015 | |||||||||
Foreign currency contracts | $ | (53,964 | ) | $ | 28,099 | $ | 45,810 | |||||
Commodities contracts | (246 | ) | 77 | (421 | ) | |||||||
Treasury rate locks | (719 | ) | — | (7,381 | ) | |||||||
Total | $ | (54,929 | ) | $ | 28,176 | $ | 38,008 |
Gain/(Loss) Recognized in OCI | Gain/(Loss) Reclassified from AOCL into Income | ||||||||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||
Foreign currency contracts | $ | 8,235 | $ | 41,657 | $ | (53,964 | ) | $ | 21,433 | $ | 11,492 | $ | (7,202 | ) | |||||||||
Commodity contracts | (103 | ) | 34 | (246 | ) | (70 | ) | 24 | — | ||||||||||||||
Cross-currency swap | 8,326 | — | — | 12,156 | — | — | |||||||||||||||||
Treasury rate locks | — | 41 | (719 | ) | (492 | ) | (498 | ) | (442 | ) | |||||||||||||
Interest rate swaps | (9,981 | ) | (6,046 | ) | — | (5,295 | ) | (1,552 | ) | — | |||||||||||||
$ | 6,477 | $ | 35,686 | $ | (54,929 | ) | $ | 27,732 | $ | 9,466 | $ | (7,644 | ) |
Amount of Gain/(Loss) Reclassified from AOCL into Income | |||||||||||||||||
Cash Flow Hedges | 2017 | 2016 | 2015 | Expected to be Reclassified Over the Next Twelve Months | |||||||||||||
Foreign currency contracts(a) | $ | (7,202 | ) | $ | 18,253 | $ | 59,730 | $ | (20,178 | ) | |||||||
Commodities contracts(a) | — | (258 | ) | (677 | ) | (69 | ) | ||||||||||
Treasury rate locks(b) | (442 | ) | (362 | ) | (151 | ) | (506 | ) | |||||||||
Total | $ | (7,644 | ) | $ | 17,633 | $ | 58,902 | $ | (20,753 | ) |
Motorcycles cost of goods sold | Selling, administrative & engineering expense | Interest expense | Financial Services interest expense | ||||||||||||
2019 | |||||||||||||||
Line item on the Consolidated statements of income in which the effects of cash flow hedges are recorded | $ | 3,229,798 | $ | 1,199,056 | $ | 31,078 | $ | 210,438 | |||||||
Gain/(loss) reclassified from AOCL into income: | |||||||||||||||
Foreign currency contracts | $ | 21,433 | $ | — | $ | — | $ | — | |||||||
Commodity contracts | $ | (70 | ) | $ | — | $ | — | $ | — | ||||||
Cross-currency swap | $ | — | $ | 12,156 | $ | — | $ | — | |||||||
Treasury rate locks | $ | — | $ | — | $ | (362 | ) | $ | (130 | ) | |||||
Interest rate swaps | $ | — | $ | — | $ | — | $ | (5,295 | ) | ||||||
2018 | |||||||||||||||
Line item on the Consolidated statements of income in which the effects of cash flow hedges are recorded | $ | 3,351,796 | $ | 1,258,098 | $ | 30,884 | $ | 193,187 | |||||||
Gain/(loss) reclassified from AOCL into income: | |||||||||||||||
Foreign currency contracts | $ | 11,492 | $ | — | $ | — | $ | — | |||||||
Commodity contracts | $ | 24 | $ | — | $ | — | $ | — | |||||||
Treasury rate locks | $ | — | $ | — | $ | (362 | ) | $ | (136 | ) | |||||
Interest rate swaps | $ | — | $ | — | $ | — | $ | (1,552 | ) | ||||||
2017 | |||||||||||||||
Line item on the Consolidated statements of income in which the effects of cash flow hedges are recorded | $ | 3,272,330 | $ | 1,180,176 | $ | 31,004 | $ | 180,193 | |||||||
Gain/(loss) reclassified from AOCL into income: | |||||||||||||||
Foreign currency contracts | $ | (7,202 | ) | $ | — | $ | — | $ | — | ||||||
Treasury rate locks | $ | — | $ | — | $ | (362 | ) | $ | (80 | ) |
Amount of Gain/(Loss) Recognized in Income | |||||||||||
2019 | 2018 | 2017 | |||||||||
Foreign currency contracts | $ | 191 | $ | — | $ | — | |||||
Commodity contracts | 17 | (430 | ) | 503 | |||||||
Interest rate cap | (143 | ) | — | — | |||||||
$ | 65 | $ | (430 | ) | $ | 503 |
Amount of Gain/(Loss) Recognized in Income on Derivative | ||||||||||||
Derivatives not Designated as Hedges | 2017 | 2016 | 2015 | |||||||||
Commodities contracts(a) | $ | 503 | $ | 167 | $ | (648 | ) | |||||
Total | $ | 503 | $ | 167 | $ | (648 | ) |
2019 | |||
Lease assets | $ | 61,618 | |
Accrued liabilities | $ | 19,013 | |
Lease liabilities | 44,447 | ||
$ | 63,460 |
2020 | $ | 20,755 | |
2021 | 17,972 | ||
2022 | 13,268 | ||
2023 | 6,590 | ||
2024 | 4,587 | ||
Thereafter | 4,589 | ||
Future lease payments | 67,761 | ||
Present value discount | (4,301 | ) | |
Lease liability | $ | 63,460 |
2019 | |||
Cash outflows for amounts included in the measurement of lease liabilities | $ | 21,491 | |
Right-of-use assets obtained in exchange for lease obligations | $ | 21,759 |
Weighted-average remaining lease term (in years) | 4.68 | |
Weighted-average discount rate | 2.1 | % |
2017 | ||||||||||||||||||||
Foreign currency translation adjustments | Marketable securities | Derivative financial instruments | Pension and postretirement benefit plans | Total | ||||||||||||||||
Balance, beginning of period | $ | (68,132 | ) | $ | (1,194 | ) | $ | 12,524 | $ | (508,579 | ) | $ | (565,381 | ) | ||||||
Other comprehensive income (loss) before reclassifications | 52,145 | 1,896 | (54,929 | ) | 24,321 | 23,433 | ||||||||||||||
Income tax | (5,865 | ) | (702 | ) | 20,338 | (5,711 | ) | 8,060 | ||||||||||||
Net other comprehensive income (loss) before reclassifications | 46,280 | 1,194 | (34,591 | ) | 18,610 | 31,493 | ||||||||||||||
Reclassifications: | ||||||||||||||||||||
Realized (gains) losses - foreign currency contracts(a) | — | — | 7,202 | — | 7,202 | |||||||||||||||
Realized (gains) losses - treasury rate locks(b) | — | — | 442 | — | 442 | |||||||||||||||
Prior service credits(c) | — | — | — | (1,153 | ) | (1,153 | ) | |||||||||||||
Actuarial losses(c) | — | — | — | 47,254 | 47,254 | |||||||||||||||
Total before tax | — | — | 7,644 | 46,101 | 53,745 | |||||||||||||||
Income tax benefit | — | — | (2,831 | ) | (17,075 | ) | (19,906 | ) | ||||||||||||
Net reclassifications | — | — | 4,813 | 29,026 | 33,839 | |||||||||||||||
Other comprehensive income (loss) | 46,280 | 1,194 | (29,778 | ) | 47,636 | 65,332 | ||||||||||||||
Balance, end of period | $ | (21,852 | ) | $ | — | $ | (17,254 | ) | $ | (460,943 | ) | $ | (500,049 | ) |
2016 | ||||||||||||||||||||
Foreign currency translation adjustments | Marketable securities | Derivative financial instruments | Pension and postretirement benefit plans | Total | ||||||||||||||||
Balance, beginning of period | $ | (58,844 | ) | $ | (1,094 | ) | $ | 5,886 | $ | (561,153 | ) | $ | (615,205 | ) | ||||||
Other comprehensive (loss) income before reclassifications | (7,591 | ) | (159 | ) | 28,176 | 33,937 | 54,363 | |||||||||||||
Income tax | (1,697 | ) | 59 | (10,436 | ) | (12,570 | ) | (24,644 | ) | |||||||||||
Net other comprehensive (loss) income before reclassifications | (9,288 | ) | (100 | ) | 17,740 | 21,367 | 29,719 | |||||||||||||
Reclassifications: | ||||||||||||||||||||
Realized (gains) losses - foreign currency contracts(a) | — | — | (18,253 | ) | — | (18,253 | ) | |||||||||||||
Realized (gains) losses - commodities contracts(a) | — | — | 258 | — | 258 | |||||||||||||||
Realized (gains) losses - treasury rate lock(b) | — | — | 362 | — | 362 | |||||||||||||||
Prior service credits(c) | — | — | — | (1,784 | ) | (1,784 | ) | |||||||||||||
Actuarial losses(c) | — | — | — | 49,888 | 49,888 | |||||||||||||||
Curtailment and settlement losses(c) | — | — | — | 1,463 | 1,463 | |||||||||||||||
Total before tax | — | — | (17,633 | ) | 49,567 | 31,934 | ||||||||||||||
Income tax expense (benefit) | — | — | 6,531 | (18,360 | ) | (11,829 | ) | |||||||||||||
Net reclassifications | — | — | (11,102 | ) | 31,207 | 20,105 | ||||||||||||||
Other comprehensive (loss) income | (9,288 | ) | (100 | ) | 6,638 | 52,574 | 49,824 | |||||||||||||
Balance, end of period | $ | (68,132 | ) | $ | (1,194 | ) | $ | 12,524 | $ | (508,579 | ) | $ | (565,381 | ) |
2015 | ||||||||||||||||||||
Foreign currency translation adjustments | Marketable securities | Derivative financial instruments | Pension and postretirement benefit plans | Total | ||||||||||||||||
Balance, beginning of period | $ | (3,482 | ) | $ | (700 | ) | $ | 19,042 | $ | (529,803 | ) | $ | (514,943 | ) | ||||||
Other comprehensive (loss) income before reclassifications | (48,309 | ) | (626 | ) | 38,008 | (106,059 | ) | (116,986 | ) | |||||||||||
Income tax | (7,053 | ) | 232 | (14,079 | ) | 39,284 | 18,384 | |||||||||||||
Net other comprehensive (loss) income before reclassifications | (55,362 | ) | (394 | ) | 23,929 | (66,775 | ) | (98,602 | ) | |||||||||||
Reclassifications: | ||||||||||||||||||||
Realized (gains) losses - foreign currency contracts(a) | — | — | (59,730 | ) | — | (59,730 | ) | |||||||||||||
Realized (gains) losses - commodities contracts(a) | — | — | 677 | — | 677 | |||||||||||||||
Realized (gains) losses - treasury rate lock(b) | — | — | 151 | — | 151 | |||||||||||||||
Prior service credits(c) | — | — | — | (2,782 | ) | (2,782 | ) | |||||||||||||
Actuarial losses(c) | — | — | — | 58,680 | 58,680 | |||||||||||||||
Curtailment and settlement losses(c) | — | — | — | 368 | 368 | |||||||||||||||
Total before tax | — | — | (58,902 | ) | 56,266 | (2,636 | ) | |||||||||||||
Income tax expense (benefit) | — | — | 21,817 | (20,841 | ) | 976 | ||||||||||||||
Net reclassifications | — | — | (37,085 | ) | 35,425 | (1,660 | ) | |||||||||||||
Other comprehensive loss | (55,362 | ) | (394 | ) | (13,156 | ) | (31,350 | ) | (100,262 | ) | ||||||||||
Balance, end of period | $ | (58,844 | ) | $ | (1,094 | ) | $ | 5,886 | $ | (561,153 | ) | $ | (615,205 | ) |
2019 | 2018 | ||||||
Unsecured commercial paper | $ | 571,995 | $ | 1,135,810 |
2017 | 2016 | |||||||
Unsecured commercial paper | $ | 1,273,482 | $ | 1,055,708 | ||||
Total short-term debt | $ | 1,273,482 | $ | 1,055,708 |
2019 | 2018 | |||||||||
Secured debt: | ||||||||||
Asset-backed Canadian commercial paper conduit facility | $ | 114,693 | $ | 155,951 | ||||||
Asset-backed U.S. commercial paper conduit facilities | 490,427 | 582,717 | ||||||||
Asset-backed securitization debt | 766,965 | 95,216 | ||||||||
Unamortized discounts and debt issuance costs | (2,573 | ) | (49 | ) | ||||||
1,369,512 | 833,835 |
2017 | 2016 | |||||||
Secured debt (Note 10) | ||||||||
Asset-backed Canadian commercial paper conduit facility | $ | 174,779 | $ | 149,338 | ||||
Asset-backed U.S. commercial paper conduit facilities | 279,457 | — | ||||||
Asset-backed securitization debt | 353,085 | 797,755 | ||||||
Less: unamortized discount and debt issuance costs | (461 | ) | (1,480 | ) | ||||
Total secured debt | 806,860 | 945,613 | ||||||
Unsecured notes (at par value) | ||||||||
2.70% Medium-term notes due in 2017, issued January 2012 | — | 400,000 | ||||||
1.55% Medium-term notes due in 2017, issued November 2014 | — | 400,000 | ||||||
6.80% Medium-term notes due in 2018, issued May 2008 | 877,488 | 877,488 | ||||||
2.25% Medium-term notes due in 2019, issued January 2016 | 600,000 | 600,000 | ||||||
Floating-rate Medium-term notes due in 2019, issued March 2017(a) | 150,000 | — | ||||||
2.40% Medium-term notes due in 2019, issued September 2014 | 600,000 | 600,000 | ||||||
2.15% Medium-term notes due in 2020, issued February 2015 | 600,000 | 600,000 | ||||||
2.40% Medium-term notes due in 2020, issued March 2017 | 350,000 | — | ||||||
2.85% Medium-term notes due in 2021, issued January 2016 | 600,000 | 600,000 | ||||||
2.55% Medium-term notes due in 2022, issued June 2017 | 400,000 | — | ||||||
3.50% Senior unsecured notes due in 2025, issued July 2015 | 450,000 | 450,000 | ||||||
4.625% Senior unsecured notes due in 2045, issued July 2015 | 300,000 | 300,000 | ||||||
Less: unamortized discount and debt issuance costs | (19,821 | ) | (21,242 | ) | ||||
Gross long-term debt | 5,714,527 | 5,751,859 | ||||||
Less: current portion of long-term debt, net of unamortized discount and issuance costs | (1,127,269 | ) | (1,084,884 | ) | ||||
Total long-term debt | $ | 4,587,258 | $ | 4,666,975 |
2019 | 2018 | |||||||||
Unsecured notes (at par value): | ||||||||||
Medium-term notes: | ||||||||||
Due in 2019, issued January 2016 | 2.25 | % | — | 600,000 | ||||||
Due in 2019, issued March 2017 | LIBOR + 0.35% | — | 150,000 | |||||||
Due in 2019, issued September 2014 | 2.40 | % | — | 600,000 | ||||||
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 | ||||||
Due in 2021, issued in November 2018 | LIBOR + 0.94% | 450,000 | 450,000 | |||||||
Due in 2021, issued May 2018 | 3.55 | % | 350,000 | 350,000 | ||||||
Due in 2022, issued February 2019 | 4.05 | % | 550,000 | — | ||||||
Due in 2022, issued June 2017 | 2.55 | % | 400,000 | 400,000 | ||||||
Due in 2023, issued February 2018 | 3.35 | % | 350,000 | 350,000 | ||||||
Due in 2024, issued November 2019(a) | 3.14 | % | 672,936 | — | ||||||
Unamortized discounts and debt issuance costs | (12,809 | ) | (12,993 | ) | ||||||
4,760,127 | 4,887,007 | |||||||||
Senior notes: | ||||||||||
Due in 2025, issued July 2015 | 3.50 | % | 450,000 | 450,000 | ||||||
Due in 2045, issued July 2015 | 4.625 | % | 300,000 | 300,000 | ||||||
Unamortized discounts and debt issuance costs | (6,704 | ) | (7,376 | ) | ||||||
743,296 | 742,624 | |||||||||
5,503,423 | 5,629,631 | |||||||||
Long-term debt | 6,872,935 | 6,463,466 | ||||||||
Current portion of long-term debt, net | (1,748,109 | ) | (1,575,799 | ) | ||||||
Long-term debt, net | $ | 5,124,826 | $ | 4,887,667 |
(a) | Euro denominated €600.0 million par value remeasured to U.S. dollar at December 31, 2019 |
2020 | $ | 2,326,688 | |
2021 | 1,751,129 | ||
2022 | 1,351,281 | ||
2023 | 614,982 | ||
2024 | 672,936 | ||
Thereafter | 750,000 | ||
$ | 7,467,016 |
2018 | $ | 2,405,569 | ||
2019 | 1,594,518 | |||
2020 | 1,098,489 | |||
2021 | 721,705 | |||
2022 | 438,010 | |||
Thereafter | 750,000 | |||
Total | $ | 7,008,291 |
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 | |||||||||||
2018 | |||||||||||||||||||||||
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 | $ | 158,718 | $ | (4,691 | ) | $ | 17,191 | $ | 329 | $ | 171,547 | $ | 95,167 | ||||||||||
Asset-backed U.S. commercial paper conduit facilities | 631,588 | (18,733 | ) | 30,012 | 1,234 | 644,101 | 582,717 | ||||||||||||||||
Unconsolidated VIEs: | |||||||||||||||||||||||
Asset-backed Canadian commercial paper conduit facility | 181,774 | (3,130 | ) | 8,779 | 343 | 187,766 | 155,951 | ||||||||||||||||
$ | 972,080 | $ | (26,554 | ) | $ | 55,982 | $ | 1,906 | $ | 1,003,414 | $ | 833,835 |
2017 | |||||||||||||||||||||||
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 | $ | 439,301 | $ | (13,686 | ) | $ | 34,919 | $ | 1,260 | $ | 461,794 | $ | 352,624 | ||||||||||
Asset-backed U.S. commercial paper conduit facilities | 300,530 | (9,392 | ) | 13,787 | 888 | 305,813 | 279,457 | ||||||||||||||||
Unconsolidated VIEs | |||||||||||||||||||||||
Asset-backed Canadian commercial paper conduit facility | 203,691 | (3,746 | ) | 9,983 | 470 | 210,398 | 174,779 | ||||||||||||||||
Total on-balance sheet assets and liabilities | $ | 943,522 | $ | (26,824 | ) | $ | 58,689 | $ | 2,618 | $ | 978,005 | $ | 806,860 | ||||||||||
2016 | |||||||||||||||||||||||
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 | $ | 893,804 | $ | (25,468 | ) | $ | 57,057 | $ | 2,452 | $ | 927,845 | $ | 796,275 | ||||||||||
Asset-backed U.S. commercial paper conduit facilities | — | — | — | 329 | 329 | — | |||||||||||||||||
Unconsolidated VIEs | |||||||||||||||||||||||
Asset-backed Canadian commercial paper conduit facility | 165,719 | (3,573 | ) | 10,090 | 426 | 172,662 | 149,338 | ||||||||||||||||
Total on-balance sheet assets and liabilities | $ | 1,059,523 | $ | (29,041 | ) | $ | 67,147 | $ | 3,207 | $ | 1,100,836 | $ | 945,613 |
Issue Date | Principal Amount at Date of Issuance | Weighted-Average Rate at Date of Issuance | Contractual Maturity Date | |||
June 2019 | $525,000 | 2.37% | July 2020 - November 2026 | |||
May 2019 | $500,000 | 3.05% | July 2026 |
Issue Date | Principal Amount at Date of Issuance | Weighted-Average Rate at Date of Issuance | Contractual Maturity Date | |||
May 2015 | $500,000 | 0.88% | May 2016 - December 2022 | |||
January 2015 | $700,000 | 0.89% | February 2016 - August 2022 | |||
April 2014 | $850,000 | 0.66% | April 2015 - October 2021 |
Issue Date | Principal Amount at Date of Issuance | Weighted-Average Rate at Date of Issuance | Contractual Maturity Date | |||
May 2015 | $500,000 | 0.88% | May 2016 - December 2022 | |||
January 2015 | $700,000 | 0.89% | February 2016 - August 2022 |
Issue Date | Principal Amount at Date of Issuance | Weighted-Average Rate at Date of Issuance | Contractual Maturity Date | ||||
April 2013 | $650,000 | 0.57% | May 2014 - December 2020 |
2019 | 2018 | ||||||||||||||
Transfers | Proceeds | Transfers | Proceeds | ||||||||||||
First quarter | $ | — | $ | — | $ | 32,900 | $ | 29,300 | |||||||
Second quarter | — | — | 59,100 | 53,300 | |||||||||||
Third quarter | 174,400 | 154,600 | — | — | |||||||||||
Fourth quarter | — | — | 400,200 | 356,800 | |||||||||||
$ | 174,400 | $ | 154,600 | $ | 492,200 | $ | 439,400 |
2019 | 2018 | ||||||||||||||
Transfers | Proceeds | Transfers | Proceeds | ||||||||||||
First quarter | $ | — | $ | — | $ | 7,600 | $ | 6,200 | |||||||
Second quarter | 28,200 | 23,400 | 38,900 | 32,200 | |||||||||||
Third quarter | — | — | — | — | |||||||||||
Fourth quarter | — | — | 39,000 | 32,200 | |||||||||||
$ | 28,200 | $ | 23,400 | $ | 85,500 | $ | 70,600 |
2017 | 2016 | 2019 | 2018 | |||||||||||
On-balance sheet retail motorcycle finance receivables | $ | 5,993,185 | $ | 5,839,467 | $ | 6,274,551 | $ | 6,185,350 | ||||||
Off-balance sheet retail motorcycle finance receivables | 146,425 | 236,706 | 35,197 | 79,613 | ||||||||||
Total serviced retail motorcycle finance receivables | $ | 6,139,610 | $ | 6,076,173 | ||||||||||
$ | 6,309,748 | $ | 6,264,963 |
Amount 30 days or more past due: | Amount 30 days or more past due | |||||||||||||
2017 | 2016 | 2019 | 2018 | |||||||||||
On-balance sheet retail motorcycle finance receivables | $ | 227,127 | $ | 221,393 | $ | 244,498 | $ | 228,015 | ||||||
Off-balance sheet retail motorcycle finance receivables | 2,106 | 1,858 | 885 | 1,658 | ||||||||||
Total serviced retail motorcycle finance receivables | $ | 229,233 | $ | 223,251 | ||||||||||
$ | 245,383 | $ | 229,673 |
2019 | 2018 | ||||||
On-balance sheet retail motorcycle finance receivables | $ | 125,840 | $ | 109,448 | |||
Off-balance sheet retail motorcycle finance receivables | 458 | 907 | |||||
$ | 126,298 | $ | 110,355 |
2017 | 2016 | ||||||
On-balance sheet retail motorcycle finance receivables | $ | 113,316 | $ | 107,161 | |||
Off-balance sheet retail motorcycle finance receivables | 1,191 | 820 | |||||
Total serviced retail motorcycle finance receivables | $ | 114,507 | $ | 107,981 |
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 | |||||
2018 | |||||||||||
Balance | Level 1 | Level 2 | |||||||||
Assets: | |||||||||||
Cash equivalents | $ | 998,601 | $ | 728,800 | $ | 269,801 | |||||
Marketable securities | 54,250 | 44,243 | 10,007 | ||||||||
Derivative financial instruments | 15,071 | — | 15,071 | ||||||||
$ | 1,067,922 | $ | 773,043 | $ | 294,879 | ||||||
Liabilities: | |||||||||||
Derivative financial instruments | $ | 5,316 | $ | — | $ | 5,316 |
2017 | 2016 | 2015 | ||||||||||
Current: | ||||||||||||
Federal | $ | 245,189 | $ | 284,489 | $ | 363,803 | ||||||
State | 24,898 | 28,406 | 37,811 | |||||||||
Foreign | 21,138 | 19,017 | 12,826 | |||||||||
291,225 | 331,912 | 414,440 | ||||||||||
Deferred: | ||||||||||||
Federal | 47,046 | (4,250 | ) | (15,474 | ) | |||||||
State | 2,688 | 7,038 | (2,264 | ) | ||||||||
Foreign | 1,121 | (2,953 | ) | 1,254 | ||||||||
50,855 | (165 | ) | (16,484 | ) | ||||||||
Total | $ | 342,080 | $ | 331,747 | $ | 397,956 |
2019 | 2018 | ||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | ||||||||||||
Assets: | |||||||||||||||
Finance receivables, net | $ | 7,419,627 | $ | 7,374,366 | $ | 7,304,334 | $ | 7,221,931 | |||||||
Liabilities: | |||||||||||||||
Debt: | |||||||||||||||
Unsecured commercial paper | $ | 571,995 | $ | 571,995 | $ | 1,135,810 | $ | 1,135,810 | |||||||
Asset-backed U.S. commercial paper conduit facilities | $ | 490,427 | $ | 490,427 | $ | 582,717 | $ | 582,717 | |||||||
Asset-backed Canadian commercial paper conduit facility | $ | 114,693 | $ | 114,693 | $ | 155,951 | $ | 155,951 | |||||||
Medium-term notes | $ | 4,816,153 | $ | 4,760,127 | $ | 4,829,671 | $ | 4,887,007 | |||||||
Senior notes | $ | 774,949 | $ | 743,296 | $ | 707,198 | $ | 742,624 | |||||||
Asset-backed securitization debt | $ | 768,094 | $ | 764,392 | $ | 94,974 | $ | 95,167 |
2017 | 2016 | 2015 | ||||||||||
Domestic | $ | 788,878 | $ | 954,138 | $ | 1,101,427 | ||||||
Foreign | 74,961 | 69,773 | 48,736 | |||||||||
Total | $ | 863,839 | $ | 1,023,911 | $ | 1,150,163 |
2017 | 2016 | 2015 | |||||||
Provision at statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | |||
State taxes, net of federal benefit | 1.9 | 1.8 | 1.8 | ||||||
Foreign rate differential | (0.8 | ) | (0.6 | ) | (0.4 | ) | |||
Domestic manufacturing deduction | (2.2 | ) | (2.1 | ) | (2.1 | ) | |||
Research and development credit | (0.7 | ) | (0.4 | ) | (0.4 | ) | |||
Unrecognized tax benefits including interest and penalties | 2.3 | (1.3 | ) | 1.1 | |||||
Valuation allowance adjustments | (0.1 | ) | 0.1 | (0.1 | ) | ||||
Deferred remeasurement for rate change | 5.5 | — | — | ||||||
Tax reform territorial tax | (0.1 | ) | — | — | |||||
Adjustments for previously accrued taxes | (1.2 | ) | 0.2 | (0.1 | ) | ||||
Other | — | (0.3 | ) | (0.2 | ) | ||||
Provision for income taxes | 39.6 | % | 32.4 | % | 34.6 | % |
2017 | 2016 | |||||||
Deferred tax assets: | ||||||||
Accruals not yet tax deductible | $ | 92,158 | $ | 141,961 | ||||
Pension and postretirement benefit plan obligations | 37,357 | 88,741 | ||||||
Stock compensation | 12,669 | 19,051 | ||||||
Net operating loss carryforward | 33,171 | 33,587 | ||||||
Valuation allowance | (21,561 | ) | (30,953 | ) | ||||
Other, net | 52,422 | 56,903 | ||||||
206,216 | 309,290 | |||||||
Deferred tax liabilities: | ||||||||
Depreciation, tax in excess of book | (88,989 | ) | (139,268 | ) | ||||
Other | (8,154 | ) | (2,293 | ) | ||||
(97,143 | ) | (141,561 | ) | |||||
Total | $ | 109,073 | $ | 167,729 |
2019 | 2018 | 2017 | |||||||||
Balance, beginning of period | $ | 131,740 | $ | 94,200 | $ | 79,482 | |||||
Warranties issued during the period | 50,470 | 53,367 | 57,834 | ||||||||
Settlements made during the period | (90,404 | ) | (79,300 | ) | (82,554 | ) | |||||
Recalls and changes to pre-existing warranty liabilities | (2,013 | ) | 63,473 | 39,438 | |||||||
Balance, end of period | $ | 89,793 | $ | 131,740 | $ | 94,200 |
2017 | 2016 | |||||||
Unrecognized tax benefits, beginning of period | $ | 55,539 | $ | 73,100 | ||||
Increase in unrecognized tax benefits for tax positions taken in a prior period | 9,513 | 2,828 | ||||||
Decrease in unrecognized tax benefits for tax positions taken in a prior period | (3,749 | ) | (21,061 | ) | ||||
Increase in unrecognized tax benefits for tax positions taken in the current period | 13,779 | 7,402 | ||||||
Statute lapses | — | (1,907 | ) | |||||
Settlements with taxing authorities | (2,852 | ) | (4,823 | ) | ||||
Unrecognized tax benefits, end of period | $ | 72,230 | $ | 55,539 |
Pension and SERPA Benefits | Postretirement Healthcare Benefits | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Change in benefit obligation: | |||||||||||||||
Benefit obligation, beginning of period | $ | 1,984,708 | $ | 2,201,021 | $ | 286,574 | $ | 338,488 | |||||||
Service cost | 25,408 | 32,340 | 4,449 | 7,180 | |||||||||||
Interest cost | 85,483 | 82,778 | 11,753 | 11,556 | |||||||||||
Actuarial losses (gains) | 236,719 | (213,583 | ) | 9,590 | (42,039 | ) | |||||||||
Plan participant contributions | — | — | 1,999 | 2,492 | |||||||||||
Plan amendments | 8,371 | (12,926 | ) | — | (4,710 | ) | |||||||||
Special early retirement benefits | 1,583 | — | — | — | |||||||||||
Benefits paid | (126,079 | ) | (106,280 | ) | (20,860 | ) | (23,448 | ) | |||||||
Net curtailments and settlements | (4,181 | ) | 1,358 | — | (2,945 | ) | |||||||||
Benefit obligation, end of period | 2,212,012 | 1,984,708 | 293,505 | 286,574 | |||||||||||
Change in plan assets: | |||||||||||||||
Fair value of plan assets, beginning of period | 1,874,618 | 2,162,885 | 190,357 | 217,537 | |||||||||||
Return on plan assets | 459,388 | (185,468 | ) | 41,717 | (13,287 | ) | |||||||||
Plan participant contributions | — | — | 1,999 | 2,492 | |||||||||||
Benefits paid | (124,784 | ) | (102,799 | ) | (13,081 | ) | (16,385 | ) | |||||||
Fair value of plan assets, end of period | 2,209,222 | 1,874,618 | 220,992 | 190,357 | |||||||||||
Funded status of the plan | $ | (2,790 | ) | $ | (110,090 | ) | $ | (72,513 | ) | $ | (96,217 | ) | |||
Funded status as recognized on the Consolidated balance sheets: | |||||||||||||||
Prepaid pension costs | $ | 56,014 | $ | — | $ | — | $ | — | |||||||
Accrued liabilities | (2,666 | ) | (2,314 | ) | — | (1,764 | ) | ||||||||
Pension liabilities | (56,138 | ) | (107,776 | ) | — | — | |||||||||
Postretirement healthcare liabilities | — | — | (72,513 | ) | (94,453 | ) | |||||||||
$ | (2,790 | ) | $ | (110,090 | ) | $ | (72,513 | ) | $ | (96,217 | ) | ||||
Amounts included in Accumulated other comprehensive loss, net of tax: | |||||||||||||||
Prior service credits | $ | (6,489 | ) | $ | (14,371 | ) | $ | (7,559 | ) | $ | (9,381 | ) | |||
Actuarial losses (gains) | 496,919 | 593,608 | (1,321 | ) | 12,005 | ||||||||||
$ | 490,430 | $ | 579,237 | $ | (8,880 | ) | $ | 2,624 |
Pension and SERPA Benefits | Postretirement Healthcare Benefits | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Change in benefit obligation: | ||||||||||||||||
Benefit obligation, beginning of period | $ | 1,986,435 | $ | 2,009,000 | $ | 346,431 | $ | 354,739 | ||||||||
Service cost | 31,584 | 33,437 | 7,500 | 7,478 | ||||||||||||
Interest cost | 85,076 | 90,827 | 13,648 | 14,814 | ||||||||||||
Actuarial losses (gains) | 195,444 | 13,481 | (8,408 | ) | (4,647 | ) | ||||||||||
Plan participant contributions | — | — | 2,525 | 2,669 | ||||||||||||
Plan amendments | (13,227 | ) | — | — | — | |||||||||||
Benefits paid | (84,291 | ) | (160,310 | ) | (23,208 | ) | (28,622 | ) | ||||||||
Benefit obligation, end of period | 2,201,021 | 1,986,435 | 338,488 | 346,431 | ||||||||||||
Change in plan assets: | ||||||||||||||||
Fair value of plan assets, beginning of period | 1,899,889 | 1,841,967 | 170,092 | 156,765 | ||||||||||||
Actual return on plan assets | 320,144 | 188,376 | 32,445 | 13,327 | ||||||||||||
Company contributions | 25,000 | 25,000 | 15,000 | — | ||||||||||||
Plan participant contributions | — | — | 2,525 | 2,669 | ||||||||||||
Benefits paid | (82,148 | ) | (155,454 | ) | (2,525 | ) | (2,669 | ) | ||||||||
Fair value of plan assets, end of period | 2,162,885 | 1,899,889 | 217,537 | 170,092 | ||||||||||||
Funded status of the plans, December 31 | $ | (38,136 | ) | $ | (86,546 | ) | $ | (120,951 | ) | $ | (176,339 | ) | ||||
Amounts recognized in the Consolidated Balance Sheets, December 31: | ||||||||||||||||
Prepaid benefit costs (long-term assets) | $ | 19,816 | $ | — | $ | — | $ | — | ||||||||
Accrued benefit liability (current liabilities) | (3,346 | ) | (2,104 | ) | (2,198 | ) | (3,072 | ) | ||||||||
Accrued benefit liability (long-term liabilities) | (54,606 | ) | (84,442 | ) | (118,753 | ) | (173,267 | ) | ||||||||
Net amount recognized | $ | (38,136 | ) | $ | (86,546 | ) | $ | (120,951 | ) | $ | (176,339 | ) |
2017 | 2016 | 2019 | 2018 | ||||||||||||
Plans with PBOs in excess of fair value of plan assets: | |||||||||||||||
Plans with PBO in excess of fair value of plan assets: | |||||||||||||||
PBO | $ | 58.0 | $ | 1,986.4 | $ | 58,804 | $ | 1,984,708 | |||||||
Fair value of plan assets | $ | — | $ | 1,899.9 | $ | — | $ | 1,874,618 | |||||||
�� | |||||||||||||||
Plans with ABOs in excess of fair value of plan assets: | |||||||||||||||
PBO | $ | 58.0 | $ | 52.3 | |||||||||||
Plans with ABO in excess of fair value of plan assets: | |||||||||||||||
ABO | $ | 42.1 | $ | 38.4 | $ | 44,232 | $ | 40,085 | |||||||
Fair value of plan assets | $ | — | $ | — | $ | — | $ | — |
Pension and SERPA Benefits | Postretirement Healthcare Benefits | ||||||||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||||||||
Service cost | $ | 25,408 | $ | 32,340 | $ | 31,584 | $ | 4,449 | $ | 7,180 | $ | 7,500 | |||||||||||
Interest cost | 85,483 | 82,778 | 85,076 | 11,753 | 11,556 | 13,648 | |||||||||||||||||
Expected return on plan assets | (142,323 | ) | (147,671 | ) | (141,385 | ) | (14,030 | ) | (14,161 | ) | (12,623 | ) | |||||||||||
Amortization of unrecognized: | |||||||||||||||||||||||
Prior service (credit) cost | (1,930 | ) | (420 | ) | 1,018 | (2,381 | ) | (1,842 | ) | (2,171 | ) | ||||||||||||
Net loss | 44,511 | 64,773 | 43,993 | 277 | 1,817 | 3,261 | |||||||||||||||||
Special early retirement benefits | 1,583 | — | — | — | — | — | |||||||||||||||||
Curtailment loss (gain) | — | 1,017 | — | (960 | ) | (886 | ) | — | |||||||||||||||
Settlement loss | 1,503 | — | — | — | — | — | |||||||||||||||||
Net periodic benefit cost | $ | 14,235 | $ | 32,817 | $ | 20,286 | $ | (892 | ) | $ | 3,664 | $ | 9,615 |
Pension and SERPA Benefits | Postretirement Healthcare Benefits | |||||||||||||||||||||||
2017 | 2016 | 2015 | 2017 | 2016 | 2015 | |||||||||||||||||||
Service cost | $ | 31,584 | $ | 33,437 | $ | 40,039 | $ | 7,500 | $ | 7,478 | $ | 8,259 | ||||||||||||
Interest cost | 85,076 | 90,827 | 87,345 | 13,648 | 14,814 | 14,166 | ||||||||||||||||||
Special early retirement benefits | — | — | 10,563 | — | — | 622 | ||||||||||||||||||
Expected return on plan assets | (141,385 | ) | (145,781 | ) | (144,929 | ) | (12,623 | ) | (12,069 | ) | (11,506 | ) | ||||||||||||
Amortization of unrecognized: | ||||||||||||||||||||||||
Prior service cost (credit) | 1,018 | 1,019 | 435 | (2,171 | ) | (2,803 | ) | (3,217 | ) | |||||||||||||||
Net loss | 43,993 | 46,351 | 54,709 | 3,261 | 3,537 | 3,971 | ||||||||||||||||||
Settlement loss | — | 1,463 | 368 | — | — | — | ||||||||||||||||||
Net periodic benefit cost | $ | 20,286 | $ | 27,316 | $ | 48,530 | $ | 9,615 | $ | 10,957 | $ | 12,295 |
Pension and SERPA Benefits | Postretirement Healthcare Benefits | Total | ||||||||||
Prior service credit | $ | (4,136 | ) | $ | (5,871 | ) | $ | (10,007 | ) | |||
Net actuarial loss | 450,754 | 20,196 | 470,950 | |||||||||
Total | $ | 446,618 | $ | 14,325 | $ | 460,943 |
Pension and SERPA Benefits | Postretirement Healthcare Benefits | Total | ||||||||||
Prior service credit | $ | (329 | ) | $ | (1,409 | ) | $ | (1,738 | ) | |||
Net actuarial loss | 45,364 | 1,391 | 46,755 | |||||||||
Total | $ | 45,035 | $ | (18 | ) | $ | 45,017 |
Pension and SERPA Benefits | Postretirement Healthcare Benefits | ||||||||||||||||
2019 | 2018 | 2017 | 2019 | 2018 | 2017 | ||||||||||||
Assumptions for benefit obligations: | |||||||||||||||||
Discount rate | 3.49 | % | 4.38 | % | 3.71 | % | 3.26 | % | 4.23 | % | 3.52 | % | |||||
Rate of compensation increase | 3.39 | % | 3.38 | % | 3.43 | % | n/a | n/a | n/a | ||||||||
Assumptions for net periodic benefit cost: | |||||||||||||||||
Discount rate | 4.38 | % | 3.71 | % | 4.30 | % | 4.23 | % | 3.52 | % | 4.03 | % | |||||
Expected return on plan assets | 7.10 | % | 7.25 | % | 7.25 | % | 7.25 | % | 7.25 | % | 7.25 | % | |||||
Rate of compensation increase | 3.38 | % | 3.43 | % | 3.50 | % | n/a | n/a | n/a |
Pension and SERPA Benefits | Postretirement Healthcare Benefits | |||||||||||||||||
2017 | 2016 | 2015 | 2017 | 2016 | 2015 | |||||||||||||
Assumptions for benefit obligations: | ||||||||||||||||||
Discount rate | 3.71 | % | 4.30 | % | 4.53 | % | 3.52 | % | 4.03 | % | 4.29 | % | ||||||
Rate of compensation | 3.43 | % | 3.50 | % | 3.50 | % | n/a | n/a | n/a | |||||||||
Assumptions for net periodic benefit cost: | ||||||||||||||||||
Discount rate | 4.30 | % | 4.53 | % | 4.21 | % | 4.03 | % | 4.29 | % | 3.99 | % | ||||||
Expected return on plan assets | 7.25 | % | 7.50 | % | 7.75 | % | 7.25 | % | 7.50 | % | 7.70 | % | ||||||
Rate of compensation increase | 3.50 | % | 3.50 | % | 4.00 | % | n/a | n/a | n/a |
Balance | Level 1 | Level 2 | |||||||||
Cash and cash equivalents | $ | 35,463 | $ | — | $ | 35,463 | |||||
Equity holdings: | |||||||||||
U.S. companies | 728,892 | 707,276 | 21,616 | ||||||||
Foreign companies | 79,707 | 77,275 | 2,432 | ||||||||
Harley-Davidson common stock | 47,365 | 47,365 | — | ||||||||
Pooled equity funds | 377,301 | 377,301 | — | ||||||||
Other | 72 | 72 | — | ||||||||
1,233,337 | 1,209,289 | 24,048 | |||||||||
Fixed-income holdings: | |||||||||||
U.S. Treasuries | 67,234 | 67,234 | — | ||||||||
Federal agencies | 15,434 | — | 15,434 | ||||||||
Corporate bonds | 583,475 | — | 583,475 | ||||||||
Pooled fixed income funds | 142,134 | 48,674 | 93,460 | ||||||||
Foreign bonds | 103,439 | — | 103,439 | ||||||||
Municipal bonds | 12,339 | — | 12,339 | ||||||||
924,055 | 115,908 | 808,147 | |||||||||
Plan assets subject to fair value leveling | 2,192,855 | $ | 1,325,197 | $ | 867,658 | ||||||
Plan assets measured at net asset value: | |||||||||||
Limited partnership interests | 4,118 | ||||||||||
Real estate investment trusts | 12,249 | ||||||||||
16,367 | |||||||||||
$ | 2,209,222 |
Balance as of December 31, 2017 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | ||||||||||
Cash and cash equivalents | $ | 51,082 | $ | 1,057 | $ | 50,025 | ||||||
Equity holdings: | ||||||||||||
U.S. companies | 722,527 | 705,111 | 17,416 | |||||||||
Foreign companies | 78,765 | 78,765 | — | |||||||||
Harley-Davidson common stock | 64,800 | 64,800 | — | |||||||||
Pooled equity funds | 416,881 | 416,881 | — | |||||||||
Other | 119 | 119 | — | |||||||||
Total equity holdings | 1,283,092 | 1,265,676 | 17,416 | |||||||||
Fixed-income holdings: | ||||||||||||
U.S. Treasuries | 39,866 | 39,866 | — | |||||||||
Federal agencies | 29,188 | — | 29,188 | |||||||||
Corporate bonds | 462,563 | — | 462,563 | |||||||||
Pooled fixed income funds | 189,361 | 61,875 | 127,486 | |||||||||
Foreign bonds | 81,732 | — | 81,732 | |||||||||
Municipal bonds | 11,800 | — | 11,800 | |||||||||
Total fixed-income holdings | 814,510 | 101,741 | 712,769 | |||||||||
Total assets in the fair value hierarchy | 2,148,684 | $ | 1,368,474 | $ | 780,210 | |||||||
Assets measured at net asset value as a practical expedient: | ||||||||||||
Limited partnership interests | 9,099 | |||||||||||
Real estate investment trust | 5,102 | |||||||||||
Total pension plan assets | $ | 2,162,885 |
Balance | Level 1 | Level 2 | |||||||||
Cash and cash equivalents | $ | 2,458 | $ | — | $ | 2,458 | |||||
Equity holdings: | |||||||||||
U.S. companies | 104,399 | 104,399 | — | ||||||||
Foreign companies | 22,422 | 21,744 | 678 | ||||||||
Pooled equity funds | 25,029 | 25,029 | — | ||||||||
Other | 7 | 7 | — | ||||||||
151,857 | 151,179 | 678 | |||||||||
Fixed-income holdings: | |||||||||||
U.S. Treasuries | 5,782 | 5,782 | — | ||||||||
Federal agencies | 7,986 | — | 7,986 | ||||||||
Corporate bonds | 8,425 | — | 8,425 | ||||||||
Pooled fixed income funds | 36,720 | 36,720 | — | ||||||||
Foreign bonds | 672 | — | 672 | ||||||||
Municipal bonds | 454 | — | 454 | ||||||||
60,039 | 42,502 | 17,537 | |||||||||
Plan assets subject to fair value leveling | 214,354 | $ | 193,681 | $ | 20,673 | ||||||
Plan assets measured at net asset value: | |||||||||||
Real estate investment trusts | 6,638 | ||||||||||
$ | 220,992 |
Balance as of December 31, 2017 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | ||||||||||
Cash and cash equivalents | $ | 19,317 | $ | — | $ | 19,317 | ||||||
Equity holdings: | ||||||||||||
U.S. companies | 101,720 | 101,720 | — | |||||||||
Foreign companies | 19,498 | 19,495 | 3 | |||||||||
Pooled equity funds | 23,563 | 23,563 | — | |||||||||
Other | 14 | 14 | — | |||||||||
Total equity holdings | 144,795 | 144,792 | 3 | |||||||||
Fixed-income holdings: | ||||||||||||
U.S. Treasuries | 6,803 | 6,803 | — | |||||||||
Federal agencies | 5,060 | — | 5,060 | |||||||||
Corporate bonds | 6,756 | — | 6,756 | |||||||||
Pooled fixed income funds | 27,461 | 27,461 | — | |||||||||
Foreign bonds | 311 | — | 311 | |||||||||
Municipal bonds | 284 | — | 284 | |||||||||
Total fixed-income holdings | 46,675 | 34,264 | 12,411 | |||||||||
Total assets in the fair value hierarchy | 210,787 | $ | 179,056 | $ | 31,731 | |||||||
Assets measured at net asset value as a practical expedient: | ||||||||||||
Real estate investment trust | 6,750 | |||||||||||
Total postretirement healthcare plan assets | $ | 217,537 |
Balance | Level 1 | Level 2 | |||||||||
Cash and cash equivalents | $ | 40,984 | $ | — | $ | 40,984 | |||||
Equity holdings: | |||||||||||
U.S. companies | 636,308 | 621,459 | 14,849 | ||||||||
Foreign companies | 66,143 | 66,143 | — | ||||||||
Harley-Davidson common stock | 43,455 | 43,455 | — | ||||||||
Pooled equity funds | 330,476 | 330,476 | — | ||||||||
Other | 85 | 85 | — | ||||||||
1,076,467 | 1,061,618 | 14,849 | |||||||||
Fixed-income holdings: | |||||||||||
U.S. Treasuries | 45,102 | 45,102 | — | ||||||||
Federal agencies | 27,811 | — | 27,811 | ||||||||
Corporate bonds | 434,070 | — | 434,070 | ||||||||
Pooled fixed income funds | 140,630 | 42,400 | 98,230 | ||||||||
Foreign bonds | 83,852 | 266 | 83,586 | ||||||||
Municipal bonds | 9,276 | — | 9,276 | ||||||||
740,741 | 87,768 | 652,973 | |||||||||
Plan assets subject to fair value leveling | 1,858,192 | $ | 1,149,386 | $ | 708,806 | ||||||
Plan assets measured at net asset value: | |||||||||||
Limited partnership interests | 5,918 | ||||||||||
Real estate investment trust | 10,508 | ||||||||||
16,426 | |||||||||||
$ | 1,874,618 |
Balance as of December 31, 2016 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | ||||||||||
Cash and cash equivalents | $ | 84,548 | $ | 1,284 | $ | 83,264 | ||||||
Equity holdings: | ||||||||||||
U.S. companies | 603,568 | 586,302 | 17,266 | |||||||||
Foreign companies | 50,256 | 50,256 | — | |||||||||
Harley-Davidson common stock | 74,301 | 74,301 | — | |||||||||
Pooled equity funds | 316,225 | 316,225 | — | |||||||||
Other | 105 | 105 | — | |||||||||
Total equity holdings | 1,044,455 | 1,027,189 | 17,266 | |||||||||
Fixed-income holdings: | ||||||||||||
U.S. Treasuries | 41,089 | 41,089 | — | |||||||||
Federal agencies | 36,210 | — | 36,210 | |||||||||
Corporate bonds | 418,522 | — | 418,522 | |||||||||
Pooled fixed income funds | 170,741 | 57,543 | 113,198 | |||||||||
Foreign bonds | 69,871 | — | 69,871 | |||||||||
Municipal bonds | 12,509 | — | 12,509 | |||||||||
Total fixed-income holdings | 748,942 | 98,632 | 650,310 | |||||||||
Total assets in the fair value hierarchy | 1,877,945 | $ | 1,127,105 | $ | 750,840 | |||||||
Assets measured at net asset value as a practical expedient: | ||||||||||||
Limited partnership interests | 9,321 | |||||||||||
Real estate investment trust | 12,623 | |||||||||||
Total pension plan assets | $ | 1,899,889 |
Balance | Level 1 | Level 2 | |||||||||
Cash and cash equivalents | $ | 5,276 | $ | — | $ | 5,276 | |||||
Equity holdings: | |||||||||||
U.S. companies | 86,975 | 86,949 | 26 | ||||||||
Foreign companies | 16,342 | 16,342 | — | ||||||||
Pooled equity funds | 20,747 | 20,747 | — | ||||||||
Other | 9 | 9 | — | ||||||||
124,073 | 124,047 | 26 | |||||||||
Fixed-income holdings: | |||||||||||
U.S. Treasuries | 8,707 | 8,707 | — | ||||||||
Federal agencies | 5,445 | — | 5,445 | ||||||||
Corporate bonds | 6,590 | — | 6,590 | ||||||||
Pooled fixed income funds | 33,959 | 33,959 | — | ||||||||
Foreign bonds | 538 | — | 538 | ||||||||
Municipal bonds | 272 | — | 272 | ||||||||
55,511 | 42,666 | 12,845 | |||||||||
Plan assets subject to fair value leveling | 184,860 | $ | 166,713 | $ | 18,147 | ||||||
Plan assets measured at net asset value: | |||||||||||
Real estate investment trust | 5,497 | ||||||||||
$ | 190,357 |
Balance as of December 31, 2016 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | ||||||||||
Cash and cash equivalents | $ | 4,442 | $ | 1,180 | $ | 3,262 | ||||||
Equity holdings: | ||||||||||||
U.S. companies | 84,643 | 84,643 | — | |||||||||
Foreign companies | 14,190 | 13,995 | 195 | |||||||||
Pooled equity funds | 19,132 | 19,132 | — | |||||||||
Other | 9 | 9 | — | |||||||||
Total equity holdings | 117,974 | 117,779 | 195 | |||||||||
Fixed-income holdings: | ||||||||||||
U.S. Treasuries | 12,262 | 12,262 | — | |||||||||
Federal agencies | 7,364 | — | 7,364 | |||||||||
Corporate bonds | 11,750 | — | 11,750 | |||||||||
Pooled fixed income funds | 9,690 | — | 9,690 | |||||||||
Foreign bonds | 633 | — | 633 | |||||||||
Municipal bonds | 459 | — | 459 | |||||||||
Total fixed-income holdings | 42,158 | 12,262 | 29,896 | |||||||||
Total assets in the fair value hierarchy | 164,574 | $ | 131,221 | $ | 33,353 | |||||||
Assets measured at net asset value as a practical expedient: | ||||||||||||
Real estate investment trust | 5,518 | |||||||||||
Total postretirement healthcare plan assets | $ | 170,092 |
2019 | 2018 | ||||
Healthcare cost trend rate for next year | 7.25 | % | 6.75 | % | |
Rate to which the cost trend rate is assumed to decline (the ultimate rate) | 5.00 | % | 5.00 | % | |
Year that the rate reaches the ultimate trend rate | 2029 | 2026 |
2017 | 2016 | |||||
Healthcare cost trend rate for next year | 7.00 | % | 7.25 | % | ||
Rate to which the cost trend rate is assumed to decline (the ultimate rate) | 5.00 | % | 5.00 | % | ||
Year that the rate reaches the ultimate trend rate | 2026 | 2021 |
One Percent Increase | One Percent Decrease | |||||||
Total of service and interest cost components in 2017 | $ | 648 | $ | (623 | ) | |||
Accumulated benefit obligation as of December 31, 2017 | $ | 11,984 | $ | (10,940 | ) |
Pension Benefits | SERPA Benefits | Postretirement Healthcare Benefits | |||||||||
2020 | $ | 97,227 | $ | 2,666 | $ | 23,328 | |||||
2021 | $ | 98,376 | $ | 3,000 | $ | 23,501 | |||||
2022 | $ | 101,566 | $ | 3,309 | $ | 23,625 | |||||
2023 | $ | 104,864 | $ | 4,176 | $ | 23,307 | |||||
2024 | $ | 108,436 | $ | 4,401 | $ | 22,902 | |||||
2025-2028 | $ | 590,687 | $ | 29,048 | $ | 109,195 |
Pension Benefits | SERPA Benefits | Postretirement Healthcare Benefits | ||||||||||
2018 | $ | 90,510 | $ | 3,346 | $ | 28,446 | ||||||
2019 | $ | 92,694 | $ | 2,325 | $ | 28,309 | ||||||
2020 | $ | 95,930 | $ | 2,843 | $ | 27,351 | ||||||
2021 | $ | 98,109 | $ | 3,294 | $ | 26,175 | ||||||
2022 | $ | 102,258 | $ | 3,528 | $ | 25,096 | ||||||
2023-2027 | $ | 574,745 | $ | 27,719 | $ | 120,438 |
2018 | $ | 15,074 | ||
2019 | 14,225 | |||
2020 | 9,601 | |||
2021 | 8,523 | |||
2022 | 6,192 | |||
Thereafter | 8,379 | |||
Total operating lease payments | $ | 61,994 |
Shares Repurchased | Authorization Remaining at December 31, 2017 | |||||||||||
Board of Directors’ Authorization | 2017 | 2016 | 2015 | |||||||||
1997 Authorization | — | — | 0.9 | — | ||||||||
2007 Authorization | — | — | 0.9 | — | ||||||||
2014 Authorization | — | — | 20.0 | — | ||||||||
2015 Authorization | — | 9.0 | 6.0 | — | ||||||||
2016 Authorization | 8.7 | 0.7 | — | 10.6 | ||||||||
Total | 8.7 | 9.7 | 27.8 | 10.6 |
Shares & Units | Weighted-Average Fair Value Per Share | |||||
Nonvested, beginning of period | 1,894 | $ | 48 | |||
Granted | 1,149 | $ | 37 | |||
Vested | (717 | ) | $ | 46 | ||
Forfeited | (315 | ) | $ | 41 | ||
Nonvested, end of period | 2,011 | $ | 43 |
Shares / Units | Grant Date Fair Value Per Share | ||||||
Nonvested, beginning of period | 1,371 | $ | 46 | ||||
Granted | 730 | $ | 56 | ||||
Vested | (408 | ) | $ | 51 | |||
Forfeited | (92 | ) | $ | 50 | |||
Nonvested, end of period | 1,601 | $ | 49 |
Units | Weighted-Average Fair Value Per Share | |||||
Nonvested, beginning of period | 105 | $ | 39 | |||
Granted | 94 | $ | 38 | |||
Vested | (48 | ) | $ | 37 | ||
Forfeited | (24 | ) | $ | 35 | ||
Nonvested, end of period | 127 | $ | 38 |
Units | Weighted-Average Grant Date Fair Value Per Share | ||||||
Nonvested, beginning of period | 124 | $ | 54 | ||||
Granted | 56 | $ | 52 | ||||
Vested | (49 | ) | $ | 60 | |||
Forfeited | (30 | ) | $ | 59 | |||
Nonvested, end of period | 101 | $ | 53 |
Options | Weighted- Average Price | ||||||
Options outstanding, beginning of period | 1,878 | $ | 49 | ||||
Options exercised | (282 | ) | $ | 40 | |||
Options forfeited | (192 | ) | $ | 68 | |||
Options outstanding, end of period | 1,404 | $ | 48 | ||||
Exercisable, end of period | 1,309 | $ | 47 |
2017 | 2016 | 2015 | ||||||||||
Exercised | $ | 4,051 | $ | 9,595 | $ | 9,890 | ||||||
Outstanding | $ | 11,711 | $ | 22,383 | $ | 16,605 | ||||||
Exercisable | $ | 11,711 | $ | 22,383 | $ | 16,605 |
Price Range | Weighted-Average Contractual Life | Options | Weighted-Average Exercise Price | ||||||
$10.01 to $20 | 1.2 | 151 | $ | 13 | |||||
$20.01 to $30 | 2.1 | 145 | $ | 24 | |||||
$30.01 to $40 | 0.1 | 37 | $ | 39 | |||||
$40.01 to $50 | 3.6 | 239 | $ | 44 | |||||
$50.01 to $60 | 4.6 | 193 | $ | 52 | |||||
$60.01 to $70 | 5.2 | 639 | $ | 63 | |||||
Options outstanding | 4.0 | 1,404 | $ | 48 | |||||
Options exercisable | 3.7 | 1,309 | $ | 47 |
2017 | 2016 | |||||
Expected average term (in years) | 5.7 | 5.2 - 5.7 | ||||
Expected volatility | 28% - 31% | 28% - 31% | ||||
Expected dividend yield | 2.9 | % | 2.4 | % | ||
Risk-free interest rate | 1.3% - 2.5% | 0.5% - 2.6% |
Options | Weighted-Average Exercise Price | |||||
Outstanding, beginning of period | 1,055 | $ | 50 | |||
Exercised | (168 | ) | $ | 21 | ||
Forfeited | (71 | ) | $ | 54 | ||
Outstanding, end of period | 816 | $ | 56 | |||
Exercisable, end of period | 816 | $ | 56 |
SARs | Weighted-Average Price | ||||||
Outstanding, beginning of period | 75 | $ | 37 | ||||
Granted | — | $ | — | ||||
Exercised | (32 | ) | $ | 31 | |||
Forfeited | (16 | ) | $ | 62 | |||
Outstanding, end of period | 27 | $ | 30 | ||||
Exercisable, end of period | 27 | $ | 30 |
2019 | 2018 | 2017 | |||||||||
Exercised | $ | 2,614 | $ | 3,855 | $ | 4,051 | |||||
Outstanding | $ | 52 | $ | 2,366 | $ | 11,711 | |||||
Exercisable | $ | 52 | $ | 2,366 | $ | 11,711 |
Price Range | Weighted-Average Contractual Life | Options | Weighted-Average Exercise Price | ||||||
$20.01 to $30 | 0.5 | 4 | $ | 24 | |||||
$40.01 to $50 | 1.6 | 207 | $ | 44 | |||||
$50.01 to $60 | 2.9 | 157 | $ | 52 | |||||
$60.01 to $70 | 4.3 | 448 | $ | 63 | |||||
Options outstanding | 3.0 | 816 | $ | 56 | |||||
Options exercisable | 3.0 | 816 | $ | 56 |
2019 | |||||||||||||||||||
Foreign currency translation adjustments | Marketable securities | Derivative financial instruments | Pension and postretirement benefit plans | Total | |||||||||||||||
Balance, beginning of period | $ | (49,608 | ) | $ | — | $ | 1,785 | $ | (581,861 | ) | $ | (629,684 | ) | ||||||
Other comprehensive income, before reclassifications | 9,229 | — | 6,477 | 90,071 | 105,777 | ||||||||||||||
Income tax expense | (434 | ) | — | (1,541 | ) | (21,149 | ) | (23,124 | ) | ||||||||||
8,795 | — | 4,936 | 68,922 | 82,653 | |||||||||||||||
Reclassifications: | |||||||||||||||||||
Net gain on derivative instruments | — | — | (27,732 | ) | — | (27,732 | ) | ||||||||||||
Prior service credits(a) | — | — | — | (4,311 | ) | (4,311 | ) | ||||||||||||
Actuarial losses(a) | — | — | — | 44,788 | 44,788 | ||||||||||||||
Curtailment and settlement losses(a) | — | — | — | 543 | 543 | ||||||||||||||
Reclassifications before tax | — | — | (27,732 | ) | 41,020 | 13,288 | |||||||||||||
Income tax benefit (expense) | — | — | 6,425 | (9,631 | ) | (3,206 | ) | ||||||||||||
— | — | (21,307 | ) | 31,389 | 10,082 | ||||||||||||||
Other comprehensive income (loss) | 8,795 | — | (16,371 | ) | 100,311 | 92,735 | |||||||||||||
Balance, end of period | $ | (40,813 | ) | $ | — | $ | (14,586 | ) | $ | (481,550 | ) | $ | (536,949 | ) |
2018 | |||||||||||||||||||
Foreign currency translation adjustments | Marketable securities | Derivative financial instruments | Pension and postretirement benefit plans | Total | |||||||||||||||
Balance, beginning of period | $ | (21,852 | ) | $ | — | $ | (17,254 | ) | $ | (460,943 | ) | $ | (500,049 | ) | |||||
Other comprehensive (loss) income, before reclassifications | (28,212 | ) | — | 35,686 | (84,725 | ) | (77,251 | ) | |||||||||||
Income tax benefit (expense) | 3,202 | — | (8,455 | ) | 19,893 | 14,640 | |||||||||||||
(25,010 | ) | — | 27,231 | (64,832 | ) | (62,611 | ) | ||||||||||||
Reclassifications: | |||||||||||||||||||
Net gain on derivative instruments | — | — | (9,466 | ) | — | (9,466 | ) | ||||||||||||
Prior service credits(a) | — | — | — | (2,262 | ) | (2,262 | ) | ||||||||||||
Actuarial losses(a) | — | — | — | 66,590 | 66,590 | ||||||||||||||
Curtailment and settlement gains(a) | — | — | — | (886 | ) | (886 | ) | ||||||||||||
Reclassifications before tax | — | — | (9,466 | ) | 63,442 | 53,976 | |||||||||||||
Income tax benefit (expense) | — | — | 2,244 | (14,896 | ) | (12,652 | ) | ||||||||||||
— | — | (7,222 | ) | 48,546 | 41,324 | ||||||||||||||
Other comprehensive (loss) income | (25,010 | ) | — | 20,009 | (16,286 | ) | (21,287 | ) | |||||||||||
Reclassification of certain tax effects | (2,746 | ) | — | (970 | ) | (104,632 | ) | (108,348 | ) | ||||||||||
Balance, end of period | $ | (49,608 | ) | $ | — | $ | 1,785 | $ | (581,861 | ) | $ | (629,684 | ) |
2017 | 2016 | 2015 | ||||||||||
Numerator: | ||||||||||||
Income used in computing basic and diluted earnings per share | $ | 521,759 | $ | 692,164 | $ | 752,207 | ||||||
Denominator: | ||||||||||||
Denominator for basic earnings per share-weighted-average common shares | 171,995 | 179,676 | 202,681 | |||||||||
Effect of dilutive securities – employee stock compensation plan | 937 | 859 | 1,005 | |||||||||
Denominator for diluted earnings per share- adjusted weighted-average shares outstanding | 172,932 | 180,535 | 203,686 | |||||||||
Earnings per common share: | ||||||||||||
Basic | $ | 3.03 | $ | 3.85 | $ | 3.71 | ||||||
Diluted | $ | 3.02 | $ | 3.83 | $ | 3.69 |
2017 | |||||||||||||||||||
Foreign currency translation adjustments | Marketable securities | Derivative financial instruments | Pension and postretirement benefit plans | Total | |||||||||||||||
Balance, beginning of period | $ | (68,132 | ) | $ | (1,194 | ) | $ | 12,524 | $ | (508,579 | ) | $ | (565,381 | ) | |||||
Other comprehensive income (loss), before reclassifications | 52,145 | 1,896 | (54,929 | ) | 24,321 | 23,433 | |||||||||||||
Income tax (expense) benefit | (5,865 | ) | (702 | ) | 20,338 | (5,711 | ) | 8,060 | |||||||||||
46,280 | 1,194 | (34,591 | ) | 18,610 | 31,493 | ||||||||||||||
Reclassifications: | |||||||||||||||||||
Net loss on derivative instruments | — | — | 7,644 | — | 7,644 | ||||||||||||||
Prior service credits(a) | — | — | — | (1,153 | ) | (1,153 | ) | ||||||||||||
Actuarial losses(a) | — | — | — | 47,254 | 47,254 | ||||||||||||||
Reclassifications before tax | — | — | 7,644 | 46,101 | 53,745 | ||||||||||||||
Income tax expense | — | — | (2,831 | ) | (17,075 | ) | (19,906 | ) | |||||||||||
— | — | 4,813 | 29,026 | 33,839 | |||||||||||||||
Other comprehensive income (loss) | 46,280 | 1,194 | (29,778 | ) | 47,636 | 65,332 | |||||||||||||
Balance, end of period | $ | (21,852 | ) | $ | — | $ | (17,254 | ) | $ | (460,943 | ) | $ | (500,049 | ) |
(a) | Amounts reclassified are included in the computation of net periodic benefit cost, discussed further in Note 15. |
2019 | 2018 | 2017 | |||||||||
Motorcycles and Related Products: | |||||||||||
Motorcycles revenue | $ | 4,572,678 | $ | 4,968,646 | $ | 4,915,027 | |||||
Gross profit | 1,342,880 | 1,616,850 | 1,642,697 | ||||||||
Selling, administrative and engineering expense | 1,020,907 | 1,101,086 | 1,035,921 | ||||||||
Restructuring expense | 32,353 | 93,401 | — | ||||||||
Operating income | 289,620 | 422,363 | 606,776 | ||||||||
Financial Services: | |||||||||||
Financial Services revenue | 789,111 | 748,229 | 732,197 | ||||||||
Financial Services expense | 523,123 | 457,069 | 456,892 | ||||||||
Operating income | 265,988 | 291,160 | 275,305 | ||||||||
Operating income | $ | 555,608 | $ | 713,523 | $ | 882,081 |
2017 | 2016 | 2015 | ||||||||||
Motorcycles net revenue | $ | 4,915,027 | $ | 5,271,376 | $ | 5,308,744 | ||||||
Gross profit | 1,653,344 | 1,851,666 | 1,952,460 | |||||||||
Selling, administrative and engineering expense | 1,037,386 | 1,078,260 | 1,076,970 | |||||||||
Operating income from Motorcycles | 615,958 | 773,406 | 875,490 | |||||||||
Financial Services revenue | 732,197 | 725,082 | 686,658 | |||||||||
Financial Services expense | 456,892 | 449,552 | 406,453 | |||||||||
Operating income from Financial Services | 275,305 | 275,530 | 280,205 | |||||||||
Operating income | $ | 891,263 | $ | 1,048,936 | $ | 1,155,695 |
Motorcycles | Financial Services | Consolidated | |||||||||
2019: | |||||||||||
Assets | $ | 2,548,115 | $ | 7,980,044 | $ | 10,528,159 | |||||
Depreciation and amortization | $ | 223,656 | $ | 8,881 | $ | 232,537 | |||||
Capital expenditures | $ | 176,264 | $ | 5,176 | $ | 181,440 | |||||
2018: | |||||||||||
Assets | $ | 2,562,931 | $ | 8,102,733 | $ | 10,665,664 | |||||
Depreciation and amortization | $ | 260,707 | $ | 4,156 | $ | 264,863 | |||||
Capital expenditures | $ | 197,905 | $ | 15,611 | $ | 213,516 | |||||
2017: | |||||||||||
Assets | $ | 2,449,603 | $ | 7,523,069 | $ | 9,972,672 | |||||
Depreciation and amortization | $ | 215,639 | $ | 6,549 | $ | 222,188 | |||||
Capital expenditures | $ | 193,204 | $ | 13,090 | $ | 206,294 |
Motorcycles | Financial Services | Consolidated | ||||||||||
2017 | ||||||||||||
Total assets | $ | 2,449,603 | $ | 7,523,069 | $ | 9,972,672 | ||||||
Depreciation and amortization | $ | 215,639 | $ | 6,549 | $ | 222,188 | ||||||
Capital expenditures | $ | 193,204 | $ | 13,090 | $ | 206,294 | ||||||
2016 | ||||||||||||
Total assets | $ | 2,490,450 | $ | 7,399,790 | $ | 9,890,240 | ||||||
Depreciation and amortization | $ | 202,122 | $ | 7,433 | $ | 209,555 | ||||||
Capital expenditures | $ | 245,316 | $ | 10,947 | $ | 256,263 | ||||||
2015 | ||||||||||||
Total assets | $ | 2,522,249 | $ | 7,450,728 | $ | 9,972,977 | ||||||
Depreciation and amortization | $ | 188,926 | $ | 9,148 | $ | 198,074 | ||||||
Capital expenditures | $ | 249,772 | $ | 10,202 | $ | 259,974 |
2019 | 2018 | 2017 | |||||||||
Motorcycles revenue(a): | |||||||||||
United States | $ | 2,971,223 | $ | 3,159,049 | $ | 3,215,513 | |||||
EMEA | 743,385 | 893,589 | 790,725 | ||||||||
Canada | 210,381 | 230,211 | 232,883 | ||||||||
Japan | 156,644 | 161,370 | 180,938 | ||||||||
Australia and New Zealand | 117,525 | 147,561 | 168,670 | ||||||||
Other countries | 373,520 | 376,866 | 326,298 | ||||||||
$ | 4,572,678 | $ | 4,968,646 | $ | 4,915,027 | ||||||
Financial Services revenue(a): | |||||||||||
United States | $ | 754,535 | $ | 712,898 | $ | 698,383 | |||||
Canada | 22,799 | 23,120 | 22,580 | ||||||||
Europe | 8,435 | 8,411 | 6,845 | ||||||||
Other countries | 3,342 | 3,800 | 4,389 | ||||||||
$ | 789,111 | $ | 748,229 | $ | 732,197 | ||||||
Long-lived assets(b): | |||||||||||
United States | $ | 757,594 | $ | 838,446 | $ | 912,032 | |||||
International: | |||||||||||
Thailand | 78,651 | 50,331 | 31,087 | ||||||||
Other countries | 11,137 | 15,355 | 24,662 | ||||||||
89,788 | 65,686 | 55,749 | |||||||||
$ | 847,382 | $ | 904,132 | $ | 967,781 |
2017 | 2016 | 2015 | ||||||||||
Revenue from Motorcycles(a): | ||||||||||||
United States | $ | 3,215,513 | $ | 3,579,129 | $ | 3,768,069 | ||||||
EMEA | 790,725 | 798,489 | 728,198 | |||||||||
Japan | 180,938 | 200,309 | 162,675 | |||||||||
Canada | 232,883 | 212,099 | 178,042 | |||||||||
Australia and New Zealand | 168,670 | 181,809 | 165,854 | |||||||||
Other foreign countries | 326,298 | 299,541 | 305,906 | |||||||||
Total revenue from Motorcycles | $ | 4,915,027 | $ | 5,271,376 | $ | 5,308,744 | ||||||
Revenue from Financial Services(a): | ||||||||||||
United States | $ | 698,383 | $ | 692,784 | $ | 656,888 | ||||||
Europe | 6,845 | 6,528 | 5,373 | |||||||||
Canada | 22,580 | 21,626 | 21,180 | |||||||||
Other foreign countries | 4,389 | 4,144 | 3,217 | |||||||||
Total revenue from Financial Services | $ | 732,197 | $ | 725,082 | $ | 686,658 | ||||||
Long-lived assets(b): | ||||||||||||
United States | $ | 912,032 | $ | 943,479 | $ | 915,509 | ||||||
International | 55,749 | 38,114 | 26,909 | |||||||||
Total long-lived assets | $ | 967,781 | $ | 981,593 | $ | 942,418 |
(a) | Revenue is attributed to geographic regions based on location of customer. |
(b) | Long-lived assets include all long-term assets except those specifically excluded under ASC Topic 280, |
Year Ended December 31, 2019 | |||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||
Revenue: | |||||||||||||||
Motorcycles and Related Products | $ | 4,593,585 | $ | — | $ | (20,907 | ) | $ | 4,572,678 | ||||||
Financial Services | — | 779,163 | 9,948 | 789,111 | |||||||||||
4,593,585 | 779,163 | (10,959 | ) | 5,361,789 | |||||||||||
Costs and expenses: | |||||||||||||||
Motorcycles and Related Products cost of goods sold | 3,229,798 | — | — | 3,229,798 | |||||||||||
Financial Services interest expense | — | 210,438 | — | 210,438 | |||||||||||
Financial Services provision for credit losses | — | 134,536 | — | 134,536 | |||||||||||
Selling, administrative and engineering expense | 1,034,921 | 175,258 | (11,123 | ) | 1,199,056 | ||||||||||
Restructuring expense | 32,353 | — | — | 32,353 | |||||||||||
4,297,072 | 520,232 | (11,123 | ) | 4,806,181 | |||||||||||
Operating income | 296,513 | 258,931 | 164 | 555,608 | |||||||||||
Other income (expense), net | 16,514 | — | — | 16,514 | |||||||||||
Investment income | 196,371 | — | (180,000 | ) | 16,371 | ||||||||||
Interest expense | 31,078 | — | — | 31,078 | |||||||||||
Income before provision for income taxes | 478,320 | 258,931 | (179,836 | ) | 557,415 | ||||||||||
Provision for income taxes | 75,278 | 58,502 | — | 133,780 | |||||||||||
Net income | $ | 403,042 | $ | 200,429 | $ | (179,836 | ) | $ | 423,635 |
Year Ended December 31, 2017 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
Revenue: | ||||||||||||||||
Motorcycles and Related Products | $ | 4,925,003 | $ | — | $ | (9,976 | ) | $ | 4,915,027 | |||||||
Financial Services | — | 734,008 | (1,811 | ) | 732,197 | |||||||||||
Total revenue | 4,925,003 | 734,008 | (11,787 | ) | 5,647,224 | |||||||||||
Costs and expenses: | ||||||||||||||||
Motorcycles and Related Products cost of goods sold | 3,261,683 | — | — | 3,261,683 | ||||||||||||
Financial Services interest expense | — | 180,193 | — | 180,193 | ||||||||||||
Financial Services provision for credit losses | — | 132,444 | — | 132,444 | ||||||||||||
Selling, administrative and engineering expense | 1,038,994 | 154,232 | (11,585 | ) | 1,181,641 | |||||||||||
Total costs and expenses | 4,300,677 | 466,869 | (11,585 | ) | 4,755,961 | |||||||||||
Operating income | 624,326 | 267,139 | (202 | ) | 891,263 | |||||||||||
Investment income | 199,580 | — | (196,000 | ) | 3,580 | |||||||||||
Interest expense | 31,004 | — | — | 31,004 | ||||||||||||
Income before provision for income taxes | 792,902 | 267,139 | (196,202 | ) | 863,839 | |||||||||||
Provision for income taxes | 214,175 | 127,905 | — | 342,080 | ||||||||||||
Net income | $ | 578,727 | $ | 139,234 | $ | (196,202 | ) | $ | 521,759 |
Year Ended December 31, 2018 | |||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||
Revenue: | |||||||||||||||
Motorcycles and Related Products | $ | 4,981,445 | $ | — | $ | (12,799 | ) | $ | 4,968,646 | ||||||
Financial Services | — | 747,432 | 797 | 748,229 | |||||||||||
4,981,445 | 747,432 | (12,002 | ) | 5,716,875 | |||||||||||
Costs and expenses: | |||||||||||||||
Motorcycles and Related Products cost of goods sold | 3,352,438 | — | (642 | ) | 3,351,796 | ||||||||||
Financial Services interest expense | — | 193,187 | — | 193,187 | |||||||||||
Financial Services provision for credit losses | — | 106,870 | — | 106,870 | |||||||||||
Selling, administrative and engineering expense | 1,104,919 | 164,623 | (11,444 | ) | 1,258,098 | ||||||||||
Restructuring expense | 93,401 | — | — | 93,401 | |||||||||||
4,550,758 | 464,680 | �� | (12,086 | ) | 5,003,352 | ||||||||||
Operating income | 430,687 | 282,752 | 84 | 713,523 | |||||||||||
Other income (expense), net | 3,039 | — | — | 3,039 | |||||||||||
Investment income | 235,951 | — | (235,000 | ) | 951 | ||||||||||
Interest expense | 30,884 | — | — | 30,884 | |||||||||||
Income before provision for income taxes | 638,793 | 282,752 | (234,916 | ) | 686,629 | ||||||||||
Provision for income taxes | 85,153 | 70,025 | — | 155,178 | |||||||||||
Net income | $ | 553,640 | $ | 212,727 | $ | (234,916 | ) | $ | 531,451 |
Year Ended December 31, 2016 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
Revenue: | ||||||||||||||||
Motorcycles and Related Products | $ | 5,281,355 | $ | — | $ | (9,979 | ) | $ | 5,271,376 | |||||||
Financial Services | — | 726,736 | (1,654 | ) | 725,082 | |||||||||||
Total revenue | 5,281,355 | 726,736 | (11,633 | ) | 5,996,458 | |||||||||||
Costs and expenses: | ||||||||||||||||
Motorcycles and Related Products cost of goods sold | 3,419,710 | — | — | 3,419,710 | ||||||||||||
Financial Services interest expense | — | 173,756 | — | 173,756 | ||||||||||||
Financial Services provision for credit losses | — | 136,617 | — | 136,617 | ||||||||||||
Selling, administrative and engineering expense | 1,080,020 | 149,157 | (11,738 | ) | 1,217,439 | |||||||||||
Total costs and expenses | 4,499,730 | 459,530 | (11,738 | ) | 4,947,522 | |||||||||||
Operating income | 781,625 | 267,206 | 105 | 1,048,936 | ||||||||||||
Investment income | 187,645 | — | (183,000 | ) | 4,645 | |||||||||||
Interest expense | 29,670 | — | — | 29,670 | ||||||||||||
Income before provision for income taxes | 939,600 | 267,206 | (182,895 | ) | 1,023,911 | |||||||||||
Provision for income taxes | 231,986 | 99,761 | — | 331,747 | ||||||||||||
Net income | $ | 707,614 | $ | 167,445 | $ | (182,895 | ) | $ | 692,164 |
Year Ended December 31, 2017 | |||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||
Revenue: | |||||||||||||||
Motorcycles and Related Products | $ | 4,925,003 | $ | — | $ | (9,976 | ) | $ | 4,915,027 | ||||||
Financial Services | — | 734,008 | (1,811 | ) | 732,197 | ||||||||||
4,925,003 | 734,008 | (11,787 | ) | 5,647,224 | |||||||||||
Costs and expenses: | |||||||||||||||
Motorcycles and Related Products cost of goods sold | 3,272,330 | — | — | 3,272,330 | |||||||||||
Financial Services interest expense | — | 180,193 | — | 180,193 | |||||||||||
Financial Services provision for credit losses | — | 132,444 | — | 132,444 | |||||||||||
Selling, administrative and engineering expense | 1,037,529 | 154,232 | (11,585 | ) | 1,180,176 | ||||||||||
4,309,859 | 466,869 | (11,585 | ) | 4,765,143 | |||||||||||
Operating income | 615,144 | 267,139 | (202 | ) | 882,081 | ||||||||||
Other income (expense), net | 9,182 | — | — | 9,182 | |||||||||||
Investment income | 199,580 | — | (196,000 | ) | 3,580 | ||||||||||
Interest expense | 31,004 | — | — | 31,004 | |||||||||||
Income before provision for income taxes | 792,902 | 267,139 | (196,202 | ) | 863,839 | ||||||||||
Provision for income taxes | 214,175 | 127,905 | — | 342,080 | |||||||||||
Net income | $ | 578,727 | $ | 139,234 | $ | (196,202 | ) | $ | 521,759 |
Year Ended December 31, 2015 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
Revenue: | ||||||||||||||||
Motorcycles and Related Products | $ | 5,318,850 | $ | — | $ | (10,106 | ) | $ | 5,308,744 | |||||||
Financial Services | — | 688,211 | (1,553 | ) | 686,658 | |||||||||||
Total revenue | 5,318,850 | 688,211 | (11,659 | ) | 5,995,402 | |||||||||||
Costs and expenses: | ||||||||||||||||
Motorcycles and Related Products cost of goods sold | 3,356,284 | — | — | 3,356,284 | ||||||||||||
Financial Services interest expense | — | 161,983 | — | 161,983 | ||||||||||||
Financial Services provision for credit losses | — | 101,345 | — | 101,345 | ||||||||||||
Selling, administrative and engineering expense | 1,078,525 | 153,229 | (11,659 | ) | 1,220,095 | |||||||||||
Total costs and expenses | 4,434,809 | 416,557 | (11,659 | ) | 4,839,707 | |||||||||||
Operating income | 884,041 | 271,654 | — | 1,155,695 | ||||||||||||
Investment income | 106,585 | — | (100,000 | ) | 6,585 | |||||||||||
Interest expense | 12,117 | — | — | 12,117 | ||||||||||||
Income before provision for income taxes | 978,509 | 271,654 | (100,000 | ) | 1,150,163 | |||||||||||
Provision for income taxes | 300,499 | 97,457 | — | 397,956 | ||||||||||||
Net income | $ | 678,010 | $ | 174,197 | $ | (100,000 | ) | $ | 752,207 |
December 31, 2019 | |||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||
ASSETS | |||||||||||||||
Current assets: | |||||||||||||||
Cash and cash equivalents | $ | 470,649 | $ | 363,219 | $ | — | $ | 833,868 | |||||||
Marketable securities | — | — | — | — | |||||||||||
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 liability | 38,783 | 5,664 | — | 44,447 | |||||||||||
Pension liability | 56,138 | — | — | 56,138 | |||||||||||
Postretirement healthcare liability | 72,513 | — | — | 72,513 | |||||||||||
Deferred income taxes | 6,219 | 1,916 | — | 8,135 | |||||||||||
Other long-term liabilities | 180,033 | 38,693 | 2,603 | 221,329 | |||||||||||
Commitments and contingencies (Note 16) | |||||||||||||||
Shareholders’ equity | 926,666 | 974,898 | (97,565 | ) | 1,803,999 | ||||||||||
$ | 2,753,849 | $ | 7,980,044 | $ | (205,734 | ) | $ | 10,528,159 |
December 31, 2017 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 338,186 | $ | 349,335 | $ | — | $ | 687,521 | ||||||||
Accounts receivable, net | 483,709 | — | (153,723 | ) | 329,986 | |||||||||||
Finance receivables, net | — | 2,105,662 | — | 2,105,662 | ||||||||||||
Inventories | 538,202 | — | — | 538,202 | ||||||||||||
Restricted cash | — | 47,518 | — | 47,518 | ||||||||||||
Other current assets | 132,999 | 48,521 | (5,667 | ) | 175,853 | |||||||||||
Total current assets | 1,493,096 | 2,551,036 | (159,390 | ) | 3,884,742 | |||||||||||
Finance receivables, net | — | 4,859,424 | — | 4,859,424 | ||||||||||||
Property, plant and equipment, net | 922,280 | 45,501 | — | 967,781 | ||||||||||||
Prepaid pension costs | 19,816 | — | — | 19,816 | ||||||||||||
Goodwill | 55,947 | — | — | 55,947 | ||||||||||||
Deferred income taxes | 66,877 | 43,515 | (1,319 | ) | 109,073 | |||||||||||
Other long-term assets | 138,344 | 23,593 | (86,048 | ) | 75,889 | |||||||||||
$ | 2,696,360 | $ | 7,523,069 | $ | (246,757 | ) | $ | 9,972,672 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable | $ | 214,263 | $ | 167,057 | $ | (153,723 | ) | $ | 227,597 | |||||||
Accrued liabilities | 444,028 | 90,942 | (5,148 | ) | 529,822 | |||||||||||
Short-term debt | — | 1,273,482 | — | 1,273,482 | ||||||||||||
Current portion of long-term debt, net | — | 1,127,269 | — | 1,127,269 | ||||||||||||
Total current liabilities | 658,291 | 2,658,750 | (158,871 | ) | 3,158,170 | |||||||||||
Long-term debt, net | 741,961 | 3,845,297 | — | 4,587,258 | ||||||||||||
Pension liability | 54,606 | — | — | 54,606 | ||||||||||||
Postretirement healthcare liability | 118,753 | — | — | 118,753 | ||||||||||||
Other long-term liabilities | 171,200 | 35,503 | 2,905 | 209,608 | ||||||||||||
Commitments and contingencies (Note 14) | ||||||||||||||||
Shareholders’ equity | 951,549 | 983,519 | (90,791 | ) | 1,844,277 | |||||||||||
$ | 2,696,360 | $ | 7,523,069 | $ | (246,757 | ) | $ | 9,972,672 |
December 31, 2018 | |||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||
ASSETS | |||||||||||||||
Current assets: | |||||||||||||||
Cash and cash equivalents | $ | 544,548 | $ | 659,218 | $ | — | $ | 1,203,766 | |||||||
Marketable securities | 10,007 | — | — | 10,007 | |||||||||||
Accounts receivable, net | 425,727 | — | (119,253 | ) | 306,474 | ||||||||||
Finance receivables, net | — | 2,214,424 | — | 2,214,424 | |||||||||||
Inventories, net | 556,128 | — | — | 556,128 | |||||||||||
Restricted cash | — | 49,275 | — | 49,275 | |||||||||||
Other current assets | 91,172 | 59,070 | (5,874 | ) | 144,368 | ||||||||||
1,627,582 | 2,981,987 | (125,127 | ) | 4,484,442 | |||||||||||
Finance receivables, net | — | 5,007,507 | — | 5,007,507 | |||||||||||
Property, plant and equipment, net | 847,176 | 56,956 | — | 904,132 | |||||||||||
Goodwill | 55,048 | — | — | 55,048 | |||||||||||
Deferred income taxes | 105,388 | 37,603 | (1,527 | ) | 141,464 | ||||||||||
Other long-term assets | 144,122 | 18,680 | (89,731 | ) | 73,071 | ||||||||||
$ | 2,779,316 | $ | 8,102,733 | $ | (216,385 | ) | $ | 10,665,664 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||||||||
Current liabilities: | |||||||||||||||
Accounts payable | $ | 258,587 | $ | 145,527 | $ | (119,253 | ) | $ | 284,861 | ||||||
Accrued liabilities | 496,643 | 110,063 | (5,576 | ) | 601,130 | ||||||||||
Short-term debt | — | 1,135,810 | — | 1,135,810 | |||||||||||
Current portion of long-term debt, net | — | 1,575,799 | — | 1,575,799 | |||||||||||
755,230 | 2,967,199 | (124,829 | ) | 3,597,600 | |||||||||||
Long-term debt, net | 742,624 | 4,145,043 | — | 4,887,667 | |||||||||||
Pension liability | 107,776 | — | — | 107,776 | |||||||||||
Postretirement healthcare liability | 94,453 | — | — | 94,453 | |||||||||||
Other long-term liabilities | 164,243 | 37,142 | 2,834 | 204,219 | |||||||||||
Commitments and contingencies (Note 16) | |||||||||||||||
Shareholders’ equity | 914,990 | 953,349 | (94,390 | ) | 1,773,949 | ||||||||||
$ | 2,779,316 | $ | 8,102,733 | $ | (216,385 | ) | $ | 10,665,664 |
December 31, 2016 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 425,540 | $ | 334,444 | $ | — | $ | 759,984 | ||||||||
Marketable securities | 5,019 | 500 | — | 5,519 | ||||||||||||
Accounts receivable, net | 450,186 | — | (165,080 | ) | 285,106 | |||||||||||
Finance receivables, net | — | 2,076,261 | — | 2,076,261 | ||||||||||||
Inventories | 499,917 | — | — | 499,917 | ||||||||||||
Restricted cash | — | 52,574 | — | 52,574 | ||||||||||||
Other current assets | 127,606 | 46,934 | (49 | ) | 174,491 | |||||||||||
Total current assets | 1,508,268 | 2,510,713 | (165,129 | ) | 3,853,852 | |||||||||||
Finance receivables, net | — | 4,759,197 | — | 4,759,197 | ||||||||||||
Property, plant and equipment, net | 942,634 | 38,959 | — | 981,593 | ||||||||||||
Goodwill | 53,391 | — | — | 53,391 | ||||||||||||
Deferred income taxes | 103,487 | 66,152 | (1,910 | ) | 167,729 | |||||||||||
Other long-term assets | 132,835 | 24,769 | (83,126 | ) | 74,478 | |||||||||||
$ | 2,740,615 | $ | 7,399,790 | $ | (250,165 | ) | $ | 9,890,240 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable | $ | 219,353 | $ | 181,045 | $ | (165,080 | ) | $ | 235,318 | |||||||
Accrued liabilities | 395,907 | 90,910 | (165 | ) | 486,652 | |||||||||||
Short-term debt | — | 1,055,708 | — | 1,055,708 | ||||||||||||
Current portion of long-term debt, net | — | 1,084,884 | — | 1,084,884 | ||||||||||||
Total current liabilities | 615,260 | 2,412,547 | (165,245 | ) | 2,862,562 | |||||||||||
Long-term debt, net | 741,306 | 3,925,669 | — | 4,666,975 | ||||||||||||
Pension liability | 84,442 | — | — | 84,442 | ||||||||||||
Postretirement healthcare liability | 173,267 | — | — | 173,267 | ||||||||||||
Other long-term liabilities | 150,391 | 29,697 | 2,748 | 182,836 | ||||||||||||
Commitments and contingencies (Note 14) | ||||||||||||||||
Shareholders’ equity | 975,949 | 1,031,877 | (87,668 | ) | 1,920,158 | |||||||||||
$ | 2,740,615 | $ | 7,399,790 | $ | (250,165 | ) | $ | 9,890,240 |
Year Ended December 31, 2019 | |||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income | $ | 403,042 | $ | 200,429 | $ | (179,836 | ) | $ | 423,635 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 223,656 | 8,881 | — | 232,537 | |||||||||||
Amortization of deferred loan origination costs | — | 76,326 | — | 76,326 | |||||||||||
Amortization of financing origination fees | 672 | 9,151 | — | 9,823 | |||||||||||
Provision for long-term employee benefits | 13,344 | — | — | 13,344 | |||||||||||
Employee benefit plan contributions and payments | (13,256 | ) | — | — | (13,256 | ) | |||||||||
Stock compensation expense | 30,396 | 3,337 | — | 33,733 | |||||||||||
Net change in wholesale finance receivables related to sales | — | — | (5,822 | ) | (5,822 | ) | |||||||||
Provision for credit losses | — | 134,536 | — | 134,536 | |||||||||||
Deferred income taxes | 20,952 | 676 | (81 | ) | 21,547 | ||||||||||
Other, net | 4,425 | (3,963 | ) | (164 | ) | 298 | |||||||||
Changes in current assets and liabilities: | |||||||||||||||
Accounts receivable, net | 53,772 | — | (8,870 | ) | 44,902 | ||||||||||
Finance receivables - accrued interest and other | — | (11,119 | ) | — | (11,119 | ) | |||||||||
Inventories, net | (47,576 | ) | — | — | (47,576 | ) | |||||||||
Accounts payable and accrued liabilities | (43,211 | ) | (4,107 | ) | 28,856 | (18,462 | ) | ||||||||
Derivative financial instruments | 1,808 | 128 | — | 1,936 | |||||||||||
Other | (33,105 | ) | 10,033 | (5,038 | ) | (28,110 | ) | ||||||||
211,877 | 223,879 | 8,881 | 444,637 | ||||||||||||
Net cash provided by operating activities | 614,919 | 424,308 | (170,955 | ) | 868,272 | ||||||||||
Cash flows from investing activities: | |||||||||||||||
Capital expenditures | (176,264 | ) | (5,176 | ) | — | (181,440 | ) | ||||||||
Origination of finance receivables | — | (7,053,898 | ) | 3,206,576 | (3,847,322 | ) | |||||||||
Collections on finance receivables | — | 6,715,338 | (3,215,621 | ) | 3,499,717 | ||||||||||
Sales and redemptions of marketable securities | 10,007 | — | — | 10,007 | |||||||||||
Acquisition of business | (7,000 | ) | — | — | (7,000 | ) | |||||||||
Other investing activities | 17,912 | — | — | 17,912 | |||||||||||
Net cash used by investing activities | (155,345 | ) | (343,736 | ) | (9,045 | ) | (508,126 | ) |
Year Ended December 31, 2017 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income | $ | 578,727 | $ | 139,234 | $ | (196,202 | ) | $ | 521,759 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization of intangibles | 215,639 | 6,549 | — | 222,188 | ||||||||||||
Amortization of deferred loan origination costs | — | 82,911 | — | 82,911 | ||||||||||||
Amortization of financing origination fees | 655 | 7,390 | — | 8,045 | ||||||||||||
Provision for long-term employee benefits | 29,900 | — | — | 29,900 | ||||||||||||
Employee benefit plan contributions and payments | (63,277 | ) | — | — | (63,277 | ) | ||||||||||
Stock compensation expense | 29,570 | 2,921 | — | 32,491 | ||||||||||||
Net change in wholesale finance receivables related to sales | — | — | 35,172 | 35,172 | ||||||||||||
Provision for credit losses | — | 132,444 | — | 132,444 | ||||||||||||
Deferred income taxes | 29,949 | 21,497 | (591 | ) | 50,855 | |||||||||||
Other, net | 4,858 | 3,498 | 203 | 8,559 | ||||||||||||
Changes in current assets and liabilities: | ||||||||||||||||
Accounts receivable, net | (6,792 | ) | — | (11,357 | ) | (18,149 | ) | |||||||||
Finance receivables—accrued interest and other | — | (1,313 | ) | — | (1,313 | ) | ||||||||||
Inventories | (20,584 | ) | — | — | (20,584 | ) | ||||||||||
Accounts payable and accrued liabilities | 9,753 | (11,497 | ) | 11,872 | 10,128 | |||||||||||
Derivative instruments | 1,785 | 81 | — | 1,866 | ||||||||||||
Other | (31,868 | ) | (1,684 | ) | 5,618 | (27,934 | ) | |||||||||
Total adjustments | 199,588 | 242,797 | 40,917 | 483,302 | ||||||||||||
Net cash provided by operating activities | 778,315 | 382,031 | (155,285 | ) | 1,005,061 | |||||||||||
Cash flows from investing activities: | ||||||||||||||||
Capital expenditures | (193,204 | ) | (13,090 | ) | — | (206,294 | ) | |||||||||
Origination of finance receivables | — | (7,109,624 | ) | 3,517,676 | (3,591,948 | ) | ||||||||||
Collections on finance receivables | — | 6,786,702 | (3,558,391 | ) | 3,228,311 | |||||||||||
Sales and redemptions of marketable securities | 6,916 | — | — | 6,916 | ||||||||||||
Other | 547 | — | — | 547 | ||||||||||||
Net cash used by investing activities | (185,741 | ) | (336,012 | ) | (40,715 | ) | (562,468 | ) |
Year Ended December 31, 2019 | |||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds from issuance of medium-term notes | — | 1,203,236 | — | 1,203,236 | |||||||||||
Repayments of medium-term notes | — | (1,350,000 | ) | — | (1,350,000 | ) | |||||||||
Proceeds from securitization debt | — | 1,021,453 | — | 1,021,453 | |||||||||||
Repayments of securitization debt | — | (353,251 | ) | — | (353,251 | ) | |||||||||
Borrowings of asset-backed commercial paper | — | 177,950 | — | 177,950 | |||||||||||
Repayments of asset-backed commercial paper | — | (318,006 | ) | — | (318,006 | ) | |||||||||
Net decrease in credit facilities and unsecured commercial paper | — | (563,453 | ) | — | (563,453 | ) | |||||||||
Dividends paid | (237,221 | ) | (180,000 | ) | 180,000 | (237,221 | ) | ||||||||
Repurchase of common stock | (296,520 | ) | — | — | (296,520 | ) | |||||||||
Issuance of common stock under employee stock option plans | 3,589 | — | — | 3,589 | |||||||||||
Net cash used by financing activities | (530,152 | ) | (362,071 | ) | 180,000 | (712,223 | ) | ||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (3,321 | ) | 1,016 | — | (2,305 | ) | |||||||||
Net decrease in cash, cash equivalents and restricted cash | $ | (73,899 | ) | $ | (280,483 | ) | $ | — | $ | (354,382 | ) | ||||
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 | (73,899 | ) | (280,483 | ) | — | (354,382 | ) | ||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 470,649 | $ | 434,717 | $ | — | $ | 905,366 |
Year Ended December 31, 2017 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Proceeds from issuance of medium-term notes | — | 893,668 | — | 893,668 | ||||||||||||
Repayments of medium-term notes | — | (800,000 | ) | — | (800,000 | ) | ||||||||||
Repayments of securitization debt | — | (444,671 | ) | — | (444,671 | ) | ||||||||||
Borrowings of asset-backed commercial paper | — | 469,932 | — | 469,932 | ||||||||||||
Repayments of asset-backed commercial paper | — | (176,227 | ) | — | (176,227 | ) | ||||||||||
Net increase in credit facilities and unsecured commercial paper | — | 212,809 | — | 212,809 | ||||||||||||
Net change in restricted cash | — | 8,458 | — | 8,458 | ||||||||||||
Dividends paid | (251,862 | ) | (196,000 | ) | 196,000 | (251,862 | ) | |||||||||
Purchase of common stock for treasury | (465,263 | ) | — | — | (465,263 | ) | ||||||||||
Issuance of common stock under employee stock option plans | 11,353 | — | — | 11,353 | ||||||||||||
Net cash used by financing activities | (705,772 | ) | (32,031 | ) | 196,000 | (541,803 | ) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 25,844 | 903 | — | 26,747 | ||||||||||||
Net (decrease) increase in cash and cash equivalents | $ | (87,354 | ) | $ | 14,891 | $ | — | $ | (72,463 | ) | ||||||
Cash and cash equivalents: | ||||||||||||||||
Cash and cash equivalents—beginning of period | $ | 425,540 | $ | 334,444 | $ | — | $ | 759,984 | ||||||||
Net (decrease) increase in cash and cash equivalents | (87,354 | ) | 14,891 | — | (72,463 | ) | ||||||||||
Cash and cash equivalents—end of period | $ | 338,186 | $ | 349,335 | $ | — | $ | 687,521 |
Year Ended December 31, 2018 | |||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income | $ | 553,640 | $ | 212,727 | $ | (234,916 | ) | $ | 531,451 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization of intangibles | 260,707 | 4,156 | — | 264,863 | |||||||||||
Amortization of deferred loan origination costs | — | 81,315 | — | 81,315 | |||||||||||
Amortization of financing origination fees | 663 | 7,704 | — | 8,367 | |||||||||||
Provision for long-term employee benefits | 36,481 | — | — | 36,481 | |||||||||||
Employee benefit plan contributions and payments | (10,544 | ) | — | — | (10,544 | ) | |||||||||
Stock compensation expense | 31,855 | 3,684 | — | 35,539 | |||||||||||
Net change in wholesale finance receivables related to sales | — | — | (56,538 | ) | (56,538 | ) | |||||||||
Provision for credit losses | — | 106,870 | — | 106,870 | |||||||||||
Deferred income taxes | (41,905 | ) | 7,716 | 208 | (33,981 | ) | |||||||||
Other, net | 36,840 | 798 | (84 | ) | 37,554 | ||||||||||
Changes in current assets and liabilities: | |||||||||||||||
Accounts receivable, net | 43,613 | — | (34,470 | ) | 9,143 | ||||||||||
Finance receivables – accrued interest and other | — | 773 | — | 773 | |||||||||||
Inventories, net | (31,059 | ) | — | — | (31,059 | ) | |||||||||
Accounts payable and accrued liabilities | 152,930 | (1,778 | ) | 45,040 | 196,192 | ||||||||||
Derivative financial instruments | 337 | 136 | — | 473 | |||||||||||
Other | 39,031 | (10,216 | ) | 207 | 29,022 | ||||||||||
518,949 | 201,158 | (45,637 | ) | 674,470 | |||||||||||
Net cash provided by operating activities | 1,072,589 | 413,885 | (280,553 | ) | 1,205,921 | ||||||||||
Cash flows from investing activities: | |||||||||||||||
Capital expenditures | (197,905 | ) | (15,611 | ) | — | (213,516 | ) | ||||||||
Origination of finance receivables | — | (7,192,063 | ) | 3,439,246 | (3,752,817 | ) | |||||||||
Collections on finance receivables | — | 6,719,362 | (3,393,693 | ) | 3,325,669 | ||||||||||
Purchases of marketable securities | (10,007 | ) | — | — | (10,007 | ) | |||||||||
Other investing activities | (11,598 | ) | — | — | (11,598 | ) | |||||||||
Net cash used by investing activities | (219,510 | ) | (488,312 | ) | 45,553 | (662,269 | ) |
Year Ended December 31, 2016 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income | $ | 707,614 | $ | 167,445 | $ | (182,895 | ) | $ | 692,164 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization of intangibles | 202,122 | 7,433 | — | 209,555 | ||||||||||||
Amortization of deferred loan origination costs | — | 86,681 | — | 86,681 | ||||||||||||
Amortization of financing origination fees | 654 | 8,598 | — | 9,252 | ||||||||||||
Provision for long-term employee benefits | 38,273 | — | — | 38,273 | ||||||||||||
Employee benefit plan contributions and payments | (55,809 | ) | — | — | (55,809 | ) | ||||||||||
Stock compensation expense | 29,811 | 2,525 | — | 32,336 | ||||||||||||
Net change in wholesale finance receivables related to sales | — | — | (3,233 | ) | (3,233 | ) | ||||||||||
Provision for credit losses | — | 136,617 | — | 136,617 | ||||||||||||
Gain on off-balance sheet asset-backed securitization | — | (9,269 | ) | — | (9,269 | ) | ||||||||||
Loss on debt extinguishment | — | 118 | — | 118 | ||||||||||||
Deferred income taxes | 7,772 | (7,705 | ) | (232 | ) | (165 | ) | |||||||||
Other, net | (7,041 | ) | 239 | (105 | ) | (6,907 | ) | |||||||||
Changes in current assets and liabilities: | ||||||||||||||||
Accounts receivable, net | (67,621 | ) | — | 21,687 | (45,934 | ) | ||||||||||
Finance receivables – accrued interest and other | — | (1,489 | ) | — | (1,489 | ) | ||||||||||
Inventories | 85,072 | — | — | 85,072 | ||||||||||||
Accounts payable and accrued liabilities | 26,005 | 25,027 | (12,795 | ) | 38,237 | |||||||||||
Derivative instruments | (3,413 | ) | — | — | (3,413 | ) | ||||||||||
Other | (25,415 | ) | (2,332 | ) | — | (27,747 | ) | |||||||||
Total adjustments | 230,410 | 246,443 | 5,322 | 482,175 | ||||||||||||
Net cash provided by operating activities | 938,024 | 413,888 | (177,573 | ) | 1,174,339 | |||||||||||
Cash flows from investing activities: | ||||||||||||||||
Capital expenditures | (245,316 | ) | (10,947 | ) | — | (256,263 | ) | |||||||||
Origination of finance receivables | — | (7,420,177 | ) | 3,755,682 | (3,664,495 | ) | ||||||||||
Collections on finance receivables | — | 6,936,140 | (3,761,109 | ) | 3,175,031 | |||||||||||
Proceeds from finance receivables sold | — | 312,571 | — | 312,571 | ||||||||||||
Sales and redemptions of marketable securities | 40,014 | — | — | 40,014 | ||||||||||||
Other | 411 | — | — | 411 | ||||||||||||
Net cash used by investing activities | (204,891 | ) | (182,413 | ) | (5,427 | ) | (392,731 | ) |
Year Ended December 31, 2018 | |||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds from issuance of medium-term notes | — | 1,591,828 | — | 1,591,828 | |||||||||||
Repayments of medium-term notes | — | (877,488 | ) | — | (877,488 | ) | |||||||||
Repayments of securitization debt | — | (257,869 | ) | — | (257,869 | ) | |||||||||
Borrowings of asset-backed commercial paper | — | 509,742 | — | 509,742 | |||||||||||
Repayments of asset-backed commercial paper | — | (212,729 | ) | — | (212,729 | ) | |||||||||
Net decrease in credit facilities and unsecured commercial paper | — | (135,356 | ) | — | (135,356 | ) | |||||||||
Dividends paid | (245,810 | ) | (235,000 | ) | 235,000 | (245,810 | ) | ||||||||
Repurchase of common stock | (390,606 | ) | — | — | (390,606 | ) | |||||||||
Issuance of common stock under employee stock option plans | 3,525 | — | — | 3,525 | |||||||||||
Net cash (used by) provided by financing activities | (632,891 | ) | 383,128 | 235,000 | (14,763 | ) | |||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (13,826 | ) | (1,525 | ) | — | (15,351 | ) | ||||||||
Net increase in cash, cash equivalents and restricted cash | $ | 206,362 | $ | 307,176 | $ | — | $ | 513,538 | |||||||
Cash, cash equivalents and restricted cash: | |||||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | $ | 338,186 | $ | 408,024 | $ | — | $ | 746,210 | |||||||
Net increase in cash, cash equivalents and restricted cash | 206,362 | 307,176 | — | 513,538 | |||||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 544,548 | $ | 715,200 | $ | — | $ | 1,259,748 |
Year Ended December 31, 2017 | |||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||
Cash flows from operating activities: | |||||||||||||||
Net income | $ | 578,727 | $ | 139,234 | $ | (196,202 | ) | $ | 521,759 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||||||
Depreciation and amortization | 215,639 | 6,549 | — | 222,188 | |||||||||||
Amortization of deferred loan origination costs | — | 82,911 | — | 82,911 | |||||||||||
Amortization of financing origination fees | 655 | 7,390 | — | 8,045 | |||||||||||
Provision for long-term employee benefits | 29,900 | — | — | 29,900 | |||||||||||
Employee benefit plan contributions and payments | (63,277 | ) | — | — | (63,277 | ) | |||||||||
Stock compensation expense | 29,570 | 2,921 | — | 32,491 | |||||||||||
Net change in wholesale finance receivables related to sales | — | — | 35,172 | 35,172 | |||||||||||
Provision for credit losses | — | 132,444 | — | 132,444 | |||||||||||
Deferred income taxes | 29,949 | 21,497 | (591 | ) | 50,855 | ||||||||||
Other, net | 4,858 | 3,498 | 203 | 8,559 | |||||||||||
Changes in current assets and liabilities: | |||||||||||||||
Accounts receivable, net | (6,792 | ) | — | (11,357 | ) | (18,149 | ) | ||||||||
Finance receivables – accrued interest and other | — | (1,313 | ) | — | (1,313 | ) | |||||||||
Inventories, net | (20,584 | ) | — | — | (20,584 | ) | |||||||||
Accounts payable and accrued liabilities | 9,753 | (11,497 | ) | 11,872 | 10,128 | ||||||||||
Derivative financial instruments | 1,785 | 81 | — | 1,866 | |||||||||||
Other | (31,868 | ) | (1,684 | ) | 5,618 | (27,934 | ) | ||||||||
199,588 | 242,797 | 40,917 | 483,302 | ||||||||||||
Net cash provided by operating activities | 778,315 | 382,031 | (155,285 | ) | 1,005,061 | ||||||||||
Cash flows from investing activities: | |||||||||||||||
Capital expenditures | (193,204 | ) | (13,090 | ) | — | (206,294 | ) | ||||||||
Origination of finance receivables | — | (7,109,624 | ) | 3,517,676 | (3,591,948 | ) | |||||||||
Collections on finance receivables | — | 6,786,702 | (3,558,391 | ) | 3,228,311 | ||||||||||
Sales and redemptions of marketable securities | 6,916 | — | — | 6,916 | |||||||||||
Other investing activities | 547 | — | — | 547 | |||||||||||
Net cash used by investing activities | (185,741 | ) | (336,012 | ) | (40,715 | ) | (562,468 | ) | |||||||
Year Ended December 31, 2016 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Proceeds from issuance of medium-term notes | — | 1,193,396 | — | 1,193,396 | ||||||||||||
Repayments of medium-term notes | — | (451,336 | ) | — | (451,336 | ) | ||||||||||
Repayments of securitization debt | — | (665,400 | ) | — | (665,400 | ) | ||||||||||
Borrowings of asset-backed commercial paper | — | 62,396 | — | 62,396 | ||||||||||||
Repayments of asset-backed commercial paper | — | (71,500 | ) | — | (71,500 | ) | ||||||||||
Net decrease in credit facilities and unsecured commercial paper | — | (145,812 | ) | — | (145,812 | ) | ||||||||||
Net change in restricted cash | — | 43,495 | — | 43,495 | ||||||||||||
Dividends paid | (252,321 | ) | (183,000 | ) | 183,000 | (252,321 | ) | |||||||||
Purchase of common stock for treasury | (465,341 | ) | — | — | (465,341 | ) | ||||||||||
Excess tax benefits from share-based payments | 2,251 | — | — | 2,251 | ||||||||||||
Issuance of common stock under employee stock option plans | 15,782 | — | — | 15,782 | ||||||||||||
Net cash used by financing activities | (699,629 | ) | (217,761 | ) | 183,000 | (734,390 | ) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (8,407 | ) | (1,036 | ) | — | (9,443 | ) | |||||||||
Net increase in cash and cash equivalents | $ | 25,097 | $ | 12,678 | $ | — | $ | 37,775 | ||||||||
Cash and cash equivalents: | ||||||||||||||||
Cash and cash equivalents – beginning of period | $ | 400,443 | $ | 321,766 | $ | — | $ | 722,209 | ||||||||
Net increase in cash and cash equivalents | 25,097 | 12,678 | — | 37,775 | ||||||||||||
Cash and cash equivalents – end of period | $ | 425,540 | $ | 334,444 | $ | — | $ | 759,984 |
Year Ended December 31, 2017 | |||||||||||||||
HDMC Entities | HDFS Entities | Consolidating Adjustments | Consolidated | ||||||||||||
Cash flows from financing activities: | |||||||||||||||
Proceeds from issuance of medium-term notes | — | 893,668 | — | 893,668 | |||||||||||
Repayments of medium-term notes | — | (800,000 | ) | — | (800,000 | ) | |||||||||
Repayments of securitization debt | — | (444,671 | ) | — | (444,671 | ) | |||||||||
Borrowings of asset-backed commercial paper | — | 469,932 | — | 469,932 | |||||||||||
Repayments of asset-backed commercial paper | — | (176,227 | ) | — | (176,227 | ) | |||||||||
Net increase in credit facilities and unsecured commercial paper | — | 212,809 | — | 212,809 | |||||||||||
Dividends paid | (251,862 | ) | (196,000 | ) | 196,000 | (251,862 | ) | ||||||||
Repurchase of common stock | (465,263 | ) | — | — | (465,263 | ) | |||||||||
Issuance of common stock under employee stock option plans | 11,353 | — | — | 11,353 | |||||||||||
Net cash used by financing activities | (705,772 | ) | (40,489 | ) | 196,000 | (550,261 | ) | ||||||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 25,844 | 903 | — | 26,747 | |||||||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | $ | (87,354 | ) | $ | 6,433 | $ | — | $ | (80,921 | ) | |||||
Cash, cash equivalents and restricted cash: | |||||||||||||||
Cash, cash equivalents and restricted cash, beginning of period | $ | 425,540 | $ | 401,591 | $ | — | $ | 827,131 | |||||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (87,354 | ) | 6,433 | — | (80,921 | ) | |||||||||
Cash, cash equivalents and restricted cash, end of period | $ | 338,186 | $ | 408,024 | $ | — | $ | 746,210 |
Year Ended December 31, 2015 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income | $ | 678,010 | $ | 174,197 | $ | (100,000 | ) | $ | 752,207 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization of intangibles | 188,926 | 9,148 | — | 198,074 | ||||||||||||
Amortization of deferred loan origination costs | — | 93,546 | — | 93,546 | ||||||||||||
Amortization of financing origination fees | 267 | 9,708 | — | 9,975 | ||||||||||||
Provision for long-term employee benefits | 60,824 | — | — | 60,824 | ||||||||||||
Employee benefit plan contributions and payments | (28,490 | ) | — | — | (28,490 | ) | ||||||||||
Stock compensation expense | 26,775 | 2,658 | — | 29,433 | ||||||||||||
Net change in wholesale finance receivables related to sales | — | — | (113,970 | ) | (113,970 | ) | ||||||||||
Provision for credit losses | — | 101,345 | — | 101,345 | ||||||||||||
Loss on debt extinguishment | — | 1,099 | — | 1,099 | ||||||||||||
Deferred income taxes | (4,792 | ) | (11,692 | ) | — | (16,484 | ) | |||||||||
Other, net | 19,625 | 1,288 | — | 20,913 | ||||||||||||
Changes in current assets and liabilities: | ||||||||||||||||
Accounts receivable, net | 4,055 | — | (17,720 | ) | (13,665 | ) | ||||||||||
Finance receivables – accrued interest and other | — | (3,046 | ) | — | (3,046 | ) | ||||||||||
Inventories | (155,222 | ) | — | — | (155,222 | ) | ||||||||||
Accounts payable and accrued liabilities | 81,929 | 18,539 | 38,355 | 138,823 | ||||||||||||
Derivative instruments | (5,615 | ) | — | — | (5,615 | ) | ||||||||||
Other | 33,658 | (3,287 | ) | — | 30,371 | |||||||||||
Total adjustments | 221,940 | 219,306 | (93,335 | ) | 347,911 | |||||||||||
Net cash provided by operating activities | 899,950 | 393,503 | (193,335 | ) | 1,100,118 | |||||||||||
Cash flows from investing activities: | ||||||||||||||||
Capital expenditures | (249,772 | ) | (10,202 | ) | — | (259,974 | ) | |||||||||
Origination of finance receivables | — | (7,836,279 | ) | 4,084,449 | (3,751,830 | ) | ||||||||||
Collections on finance receivables | — | 7,127,999 | (3,991,114 | ) | 3,136,885 | |||||||||||
Sales and redemptions of marketable securities | 11,507 | — | — | 11,507 | ||||||||||||
Acquisition of business | (59,910 | ) | — | — | (59,910 | ) | ||||||||||
Other | 7,474 | — | — | 7,474 | ||||||||||||
Net cash used by investing activities | (290,701 | ) | (718,482 | ) | 93,335 | (915,848 | ) |
Year Ended December 31, 2015 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Proceeds from issuance of medium-term notes | — | 595,386 | — | 595,386 | ||||||||||||
Repayments of medium-term notes | — | (610,331 | ) | — | (610,331 | ) | ||||||||||
Proceeds from issuance of senior unsecured notes | 740,385 | — | — | 740,385 | ||||||||||||
Intercompany borrowing activity | 250,000 | (250,000 | ) | — | — | |||||||||||
Proceeds from securitization debt | — | 1,195,668 | — | 1,195,668 | ||||||||||||
Repayments of securitization debt | — | (1,008,135 | ) | — | (1,008,135 | ) | ||||||||||
Borrowings of asset-backed commercial paper | — | 87,442 | — | 87,442 | ||||||||||||
Repayments of asset-backed commercial paper | — | (72,727 | ) | — | (72,727 | ) | ||||||||||
Net increase in credit facilities and unsecured commercial paper | — | 469,473 | — | 469,473 | ||||||||||||
Net change in restricted cash | — | 11,410 | — | 11,410 | ||||||||||||
Dividends paid | (249,262 | ) | (100,000 | ) | 100,000 | (249,262 | ) | |||||||||
Purchase of common stock for treasury | (1,537,020 | ) | — | — | (1,537,020 | ) | ||||||||||
Excess tax benefits from share-based payments | 3,468 | — | — | 3,468 | ||||||||||||
Issuance of common stock under employee stock option plans | 20,179 | — | — | 20,179 | ||||||||||||
Net cash (used by) provided by financing activities | (772,250 | ) | 318,186 | 100,000 | (354,064 | ) | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | (10,451 | ) | (4,226 | ) | — | (14,677 | ) | |||||||||
Net decrease in cash and cash equivalents | $ | (173,452 | ) | $ | (11,019 | ) | $ | — | $ | (184,471 | ) | |||||
Cash and cash equivalents: | ||||||||||||||||
Cash and cash equivalents – beginning of period | $ | 573,895 | $ | 332,785 | $ | — | $ | 906,680 | ||||||||
Net decrease in cash and cash equivalents | (173,452 | ) | (11,019 | ) | — | (184,471 | ) | |||||||||
Cash and cash equivalents – end of period | $ | 400,443 | $ | 321,766 | $ | — | $ | 722,209 |
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | ||||||||||||||||||||||||||||
(In millions, except per share data) | March 31, 2019 | April 1, 2018 | June 30, 2019 | July 1, 2018 | Sep 29, 2019 | Sep 30, 2018 | Dec 31, 2019 | Dec 31, 2018 | |||||||||||||||||||||||
Motorcycles: | |||||||||||||||||||||||||||||||
Revenue | $ | 1,195.6 | $ | 1,363.9 | $ | 1,434.0 | $ | 1,525.1 | $ | 1,068.9 | $ | 1,123.9 | $ | 874.1 | $ | 955.6 | |||||||||||||||
Operating income (loss) | $ | 108.4 | $ | 172.8 | $ | 180.7 | $ | 243.4 | $ | 47.0 | $ | 65.7 | $ | (46.5 | ) | $ | (59.5 | ) | |||||||||||||
Financial Services: | |||||||||||||||||||||||||||||||
Revenue | $ | 188.7 | $ | 178.2 | $ | 198.6 | $ | 188.1 | $ | 203.6 | $ | 191.7 | $ | 198.2 | $ | 190.2 | |||||||||||||||
Operating income | $ | 58.7 | $ | 63.6 | $ | 75.5 | $ | 80.5 | $ | 72.9 | $ | 83.8 | $ | 58.9 | $ | 63.3 | |||||||||||||||
Consolidated: | |||||||||||||||||||||||||||||||
Income (loss) before taxes | $ | 170.4 | $ | 230.2 | $ | 256.1 | $ | 319.4 | $ | 117.3 | $ | 141.2 | $ | 13.7 | $ | (4.1 | ) | ||||||||||||||
Net income | $ | 127.9 | $ | 174.8 | $ | 195.6 | $ | 242.3 | $ | 86.6 | $ | 113.9 | $ | 13.5 | $ | 0.5 | |||||||||||||||
Earnings per share: | |||||||||||||||||||||||||||||||
Basic | $ | 0.80 | $ | 1.04 | $ | 1.23 | $ | 1.45 | $ | 0.55 | $ | 0.69 | $ | 0.09 | $ | — | |||||||||||||||
Diluted | $ | 0.80 | $ | 1.03 | $ | 1.23 | $ | 1.45 | $ | 0.55 | $ | 0.68 | $ | 0.09 | $ | — |
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |||||||||||||||||||||||||||||
Mar 26, 2017 | Mar 27, 2016 | June 25, 2017 | June 26, 2016 | Sep 24, 2017 | Sep 25, 2016 | Dec 31, 2017 | Dec 31, 2016 | |||||||||||||||||||||||||
Motorcycles: | ||||||||||||||||||||||||||||||||
Revenue | $ | 1,328.7 | $ | 1,576.6 | $ | 1,577.1 | $ | 1,670.1 | $ | 962.1 | $ | 1,091.6 | $ | 1,047.0 | $ | 933.0 | ||||||||||||||||
Operating income | $ | 238.8 | $ | 332.5 | $ | 319.6 | $ | 322.7 | $ | 19.6 | $ | 108.9 | $ | 37.8 | $ | 9.3 | ||||||||||||||||
Financial Services: | ||||||||||||||||||||||||||||||||
Revenue | $ | 173.2 | $ | 173.4 | $ | 188.0 | $ | 191.0 | $ | 189.1 | $ | 183.2 | $ | 181.9 | $ | 177.6 | ||||||||||||||||
Operating income | $ | 52.6 | $ | 56.4 | $ | 81.9 | $ | 89.6 | $ | 77.1 | $ | 69.4 | $ | 63.7 | $ | 60.1 | ||||||||||||||||
Consolidated: | ||||||||||||||||||||||||||||||||
Income before taxes | $ | 284.7 | $ | 382.4 | $ | 394.4 | $ | 405.9 | $ | 89.9 | $ | 173.0 | $ | 94.8 | $ | 62.6 | ||||||||||||||||
Net income | $ | 186.4 | $ | 250.5 | $ | 258.9 | $ | 280.4 | $ | 68.2 | $ | 114.1 | $ | 8.3 | $ | 47.2 | ||||||||||||||||
Earnings per common share: | ||||||||||||||||||||||||||||||||
Basic | $ | 1.06 | $ | 1.37 | $ | 1.48 | $ | 1.55 | $ | 0.40 | $ | 0.64 | $ | 0.05 | $ | 0.27 | ||||||||||||||||
Diluted | $ | 1.05 | $ | 1.36 | $ | 1.48 | $ | 1.55 | $ | 0.40 | $ | 0.64 | $ | 0.05 | $ | 0.27 |
Plan Category | Number of securities to be issued upon the exercise of outstanding options | Weighted- average exercise price of outstanding options | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column) | |||||||
Equity compensation plans approved by shareholders: | ||||||||||
Management employees | 1,404,287 | $ | 48.13 | 10,768,576 | ||||||
Equity compensation plans not approved by shareholders: | ||||||||||
Union employees: | ||||||||||
Kansas City, MO | — | $ | — | 26,718 | ||||||
York, PA | — | $ | — | 96,770 | ||||||
Non employees: | ||||||||||
Board of Directors | — | $ | — | 33,466 | ||||||
— | $ | — | 156,954 | |||||||
Total all plans | 1,404,287 | 10,925,530 |
Plan Category | Number of securities to be issued upon the exercise of outstanding options | Weighted-average exercise price of outstanding options | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column) | |||||||
Plan approved by shareholders: | ||||||||||
Management employees | 815,676 | $ | 55.76 | 7,196,998 | ||||||
Plan not approved by shareholders: | ||||||||||
Non-employee Board of Directors | — | $ | — | 218,029 | ||||||
815,676 | 7,415,027 |
(1 | ) | Financial Statements | ||
Consolidated statements of income for each of the three years in the period ended December 31, 2017 | ||||
Consolidated statements of comprehensive income for each of the three years in the period ended December 31, 2017 | ||||
Consolidated balance sheets at December 31, 2017 and December 31, 2016 | ||||
Consolidated statements of cash flows for each of the three years in the period ended December 31, 2017 | ||||
Consolidated statements of shareholders’ equity for each of the three years in the period ended December 31, 2017 | ||||
Notes to consolidated financial statements | ||||
(2 | ) | Financial Statement Schedule | ||
Schedule II – Valuation and qualifying accounts | ||||
(3 | ) | Exhibits |
(1) | Financial Statements under Item 8. Consolidated Financial Statements and Supplementary Data | |
(2) | Financial Statement Schedule | |
(3) |
2017 | 2016 | 2015 | 2019 | 2018 | 2017 | ||||||||||||||||||
Accounts receivable – allowance for doubtful accounts | |||||||||||||||||||||||
Accounts receivable - Allowance for doubtful accounts | |||||||||||||||||||||||
Balance, beginning of period | $ | 2,741 | $ | 2,905 | $ | 3,458 | $ | 4,007 | $ | 4,091 | $ | 2,741 | |||||||||||
Provision charged to expense | 1,328 | (101 | ) | 266 | 1,569 | 731 | 1,328 | ||||||||||||||||
Reserve adjustments | 99 | (63 | ) | (276 | ) | 7 | (137 | ) | 99 | ||||||||||||||
Write-offs, net of recoveries | (77 | ) | — | (543 | ) | (655 | ) | (678 | ) | (77 | ) | ||||||||||||
Balance, end of period | $ | 4,091 | $ | 2,741 | $ | 2,905 | $ | 4,928 | $ | 4,007 | $ | 4,091 | |||||||||||
Finance receivables – allowance for credit losses | |||||||||||||||||||||||
Finance receivables - Allowance for credit losses | |||||||||||||||||||||||
Balance, beginning of period | $ | 173,343 | $ | 147,178 | $ | 127,364 | $ | 189,885 | $ | 192,471 | $ | 173,343 | |||||||||||
Provision for credit losses | 132,444 | 136,617 | 101,345 | 134,536 | 106,870 | 132,444 | |||||||||||||||||
Charge-offs, net of recoveries | (113,316 | ) | (107,161 | ) | (81,531 | ) | (125,840 | ) | (109,456 | ) | (113,316 | ) | |||||||||||
Other(a) | — | (3,291 | ) | — | |||||||||||||||||||
Balance, end of period | $ | 192,471 | $ | 173,343 | $ | 147,178 | $ | 198,581 | $ | 189,885 | $ | 192,471 | |||||||||||
Inventories – allowance for obsolescence(b) | |||||||||||||||||||||||
Inventories - Allowance for obsolescence(a) | |||||||||||||||||||||||
Balance, beginning of period | $ | 39,873 | $ | 26,740 | $ | 17,775 | $ | 39,015 | $ | 38,669 | $ | 39,873 | |||||||||||
Provision charged to expense | 16,940 | 21,137 | 19,564 | 24,984 | 25,722 | 16,940 | |||||||||||||||||
Reserve adjustments | 306 | (88 | ) | (1,028 | ) | (39 | ) | (332 | ) | 306 | |||||||||||||
Write-offs, net of recoveries | (18,450 | ) | (7,916 | ) | (9,571 | ) | (14,611 | ) | (25,044 | ) | (18,450 | ) | |||||||||||
Balance, end of period | $ | 38,669 | $ | 39,873 | $ | 26,740 | $ | 49,349 | $ | 39,015 | $ | 38,669 | |||||||||||
Deferred tax assets – valuation allowance | |||||||||||||||||||||||
Deferred tax assets - Valuation allowance | |||||||||||||||||||||||
Balance, beginning of period | $ | 30,953 | $ | 20,659 | $ | 25,462 | $ | 21,868 | $ | 21,561 | $ | 30,953 | |||||||||||
Adjustments | (9,392 | ) | 10,294 | (4,803 | ) | 7,156 | 307 | (9,392 | ) | ||||||||||||||
Balance, end of period | $ | 21,561 | $ | 30,953 | $ | 20,659 | $ | 29,024 | $ | 21,868 | $ | 21,561 |
(a) |
Inventory obsolescence reserves deducted from cost determined on first-in, first-out (FIFO) basis, before deductions for last-in, first-out (LIFO) valuation reserves. |
INDEX TO EXHIBITS [Items 15(a)(3) and 15(c)] | ||
Exhibit No. | Description | |
Asset Purchase Agreement, dated April 30, 2015, among Harley-Davidson Canada LP, Fred Deeley Imports Ltd. and Harley-Davidson Motor Company, Inc., as amended (incorporated herein by reference to Exhibit 2.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 28, 2015 (File No. 1-9183)) | ||
Restated Articles of Incorporation as amended through April 27, 2015 (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2015 (File No. 1-9183)) | ||
Harley-Davidson, Inc. By-Laws, as amended through April 27, 2015 (incorporated herein by reference by reference to Exhibit 3.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 29, 2015 (File No. 1-9183)) | ||
5-Year Credit Agreement, dated as of April | ||
Indenture, dated as of March 4, 2011, among Harley-Davidson Financial Services, Inc., Issuer, Harley-Davidson Credit Corp., Guarantor, and Bank of New York Mellon Trust Company, N.A., Trustee (incorporated herein by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated March 1, 2011 (File No. 1-9183)) | ||
Officers' Certificate, dated September 16, 2014, pursuant to Sections 102 and 301 of the Indenture, dated March 4, 2011, with the forms of 2.400% Medium-Term Notes due 2019 (incorporated herein by reference to Exhibit 4.14 to the Registrant’s Annual Report | ||
Officers' Certificate, dated February 26, 2015, pursuant to Sections 102 and 301 of the Indenture, dated March 4, 2011, with the form of 2.150% Medium-Term Notes due 2020 (incorporated herein by reference to Exhibit 4.10 to the Registrant’s Annual Report | ||
Indenture, dated July 28, 2015, by and between Harley-Davidson, Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee. (incorporated herein by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K dated July 28, 2015 (File No. 1-9183)) | ||
Officers' Certificate, dated July 28, 2015 establishing the form of 3.500% Senior Notes due 2025 and 4.625% Senior Notes due 2045 (incorporated herein by reference to Exhibit 4.2 to the Registrant's Current Report on From 8-K dates July 28, 2015 (File No. 1-9183)) | ||
Officers' Certificate dated January 8, 2016, pursuant to Sections 102 and 301 of the Indenture, dated March 4, 2011, with the form of 2.250% Medium-Term Notes due 2019 (incorporated herein by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K dated January 5, 2016 (File No. 1-9183)) | ||
Officers' Certificate, dated January 8, 2016, pursuant to Sections 102 and 301 of the Indenture, dated March 4, 2011, with the form of 2.850% Medium-Term Notes due 2021 (incorporated herein by reference to Exhibit 4.3 to the Registrant's Current Report on Form 8-K dated January 5, 2016 (File No. 1-9183)) | ||
Amendment No. | ||
5-Year Credit Agreement, dated as of April 7, 2016 among the Company, certain subsidiaries of the Company, the financial institutions parties thereto and JPMorgan Chase Bank, N.A., as among other things, global administrative agent (incorporated herein by reference to Exhibit 4.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 27, 2016 (File No. 1-9183)) |
Amendment No. 1 5-year Credit Agreement, dated as of April 7, 2016, among the Company, certain subsidiaries of the Company, the financial institutions parties thereto, and JPMorgan Chase Bank, N.A., as, among other things, global administrative agent, relating to the 5-year Credit Agreement, dated as of April 7, 2014 among the Company, certain subsidiaries of the Company, the financial institutions parties thereto and JPMorgan Chase Bank, N.A., as among other things, global administrative agent (incorporated herein by reference to Exhibit 4.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 27, 2016 (File No. 1-9183)) | ||
Officers' Certificate, dated March 10, 2017, pursuant to Sections 102 and 301 of the Indenture, dated March 4, 2011, with the form of 2.400% Medium-Term Notes due 2020 (incorporated herein by reference to Exhibit 4.14 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2017 (File No. 1-9183)) | ||
Officers' Certificate, dated March 10, 2017, pursuant to Sections 102 and 301 of the Indenture, dated March 4, 2011, with the form of Floating Rate Medium-Term Notes due 2019 (incorporated herein by reference to Exhibit 4.15 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2017 (File No. 1-9183)) |
* | Represents a management contract or compensatory plan, contract or arrangement in which a Director or named executive officer of the Company participated. |
INDEX TO EXHIBITS [Items 15(a)(3) and 15(c)] | ||
Exhibit No. | Description | |
Officers' Certificate, dated June 9, 2017, pursuant to Sections 102 and 301 of the Indenture, dated March 4, 2011, with the form of 2.550% Medium-Term Notes due 2022 (incorporated herein by reference to Exhibit 4.17 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2017 (File No. 1-9183)) | ||
Officers' Certificate, dated February 9, 2018, pursuant to Sections 102 and 301 of the Indenture, dated March 4, 2011, with the form of 3.350% Medium-Term Notes due 2023 (incorporated herein by reference to Exhibit 4.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended April 1, 2018 (File No. 1-9183)) | ||
Officers' Certificate, dated May 21, 2018, pursuant to Sections 102 and 301 of the Indenture, dated March 4, 2011, with the form of 3.550% Medium-Term Notes due 2021(incorporated herein by reference to Exhibit 4.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended July 1, 2018 (File No. 1-9183)) | ||
Officers' Certificate, dated May 21, 2018, pursuant to Sections 102 and 301 of the Indenture, dated March 4, 2011, with the form of Floating Rate Medium-Term Notes due 2020 (incorporated herein by reference to Exhibit 4.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended July 1, 2018 (File No. 1-9183)) | ||
Officers' Certificate, dated November 28, 2018, pursuant to Sections 102 and 301 of the Indenture, dated March 4, 2011, with the form of Floating Rate Medium-Term Notes due 2021 (incorporated herein by reference to Exhibit 4.20 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2018 (File No. 1-9183)) | ||
Officers' Certificate, dated February 4, 2019, pursuant to Sections 102 and 301 of the Indenture, dated March 4, 2011, with the form of 4.05% Medium-Term Notes due 2022 (incorporated herein by reference to Exhibit 4.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019 (File No. 1-9183)) | ||
Fiscal Agency Agreement, dated November 19, 2019, relating to the 0.9% Medium Term Notes due November 2024, among certain subsidiaries of the Company, The Bank of New York Mellon Trust Company, N.A. and The Bank of New York Mellon, London Branch | ||
364-Day Credit Agreement, dated May 13, 2019, among the Company, certain subsidiaries of the Company, the financial institutions parties thereto, and JPMorgan Chase Bank, N.A., as, among other things, global administrative agent | ||
Description of Registrants Securities | ||
Harley-Davidson, Inc. 2004 Incentive Stock Plan as amended through April 28, 2007 (incorporated herein by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended April 1, 2007 (File No. 1-9183)) | ||
Harley-Davidson, Inc. 2009 Incentive Stock Plan (incorporated herein by reference to Appendix A to the Company’s definitive proxy statement on Schedule 14A for the Company’s Annual Meeting of Shareholders held on April 25, 2009 filed on April 3, 2009 (File No. 1-9183)) | ||
Amended and Restated Harley-Davidson, Inc. 2014 Incentive Stock Plan | ||
Amended and Restated Harley-Davidson, Inc. Director Stock Plan as amended effective December 1, 2014 (incorporated herein by reference to Exhibit 10.6 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2014 (File No. 1-9183)) | ||
Director Compensation Policy approved April 29, 2016 (incorporated herein by reference from Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 26, 2016 (File No. 1-9183)) | ||
Deferred Compensation Plan for Nonemployee Directors as amended and restated effective January 1, 2009 (incorporated herein by reference to Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 1-9183)) | ||
Harley-Davidson Management Deferred Compensation Plan as amended and restated effective January 1, 2017 (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 25, 2016 (File No. 1-9183)) | ||
Harley-Davidson, Inc. Employee Incentive Plan (incorporated herein by reference to the Appendix to the Company’s definitive proxy statement on Schedule 14A for the Company’s Annual Meeting of Shareholders held April 25, 2015 (File No. 1-9183)) | ||
Harley-Davidson, Inc. Short-Term Incentive Plan for Senior Executives (incorporated herein by reference to Appendix D to the Company’s definitive proxy statement on Schedule 14A for the Company’s Annual Meeting of Shareholders held April 30, 2011 (File No. 1-9183)) | ||
Harley-Davidson Pension Benefit Restoration Plan as amended and restated effective January 1, 2009 (incorporated herein by reference to Exhibit 10.9 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 1-9183)) | ||
Form of Notice of Grant of Stock Options and Option Agreement of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2009 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 28, 2010 (File No. 1-9183)) |
* | Represents a management contract or compensatory plan, contract or arrangement in which a Director or named executive officer of the Company participated. |
INDEX TO EXHIBITS [Items 15(a)(3) and 15(c)] | ||
Exhibit No. | Description | |
Form of Notice of Grant of Stock Options and Option Agreement (Transition Agreement) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2009 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 28, 2010 (File No. 1-9183)) | ||
Form of Notice of Special Grant of Stock Options and Option Agreement (Transition Agreement) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2009 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 28, 2010 (File No. 1-9183)) | ||
Form of Notice of Grant of Stock Appreciation Rights and Stock Appreciation Rights Agreement of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2009 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.10 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 28, 2010 (File No. 1-9183)) | ||
Form of Notice of Award of Restricted Stock Units and Restricted Stock Unit Agreement of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2009 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 28, 2010 (File No. 1-9183)) | ||
Form of Notice of Award of Restricted Stock Units and Restricted Stock Unit Agreement (Transition Agreement) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2009 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.8 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 28, 2010 (File No. 1-9183)) | ||
Form of Notice of Grant of Stock Options and Option Agreement of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2009 Incentive Stock Plan to each of Messrs. Hund, Levatich and Olin (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated May 1, 2009 (File No. 1-9183)) | ||
Form of Notice of Grant of Stock Options and Option Agreement of Harley-Davidson, Inc. under the Harley-Davidson Inc. 1995 Stock Option Plan and the Harley-Davidson, Inc. 2004 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.21 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2005 (File No. 1-9183)) | ||
Form of Notice of Special Grant of Stock Options and Option Agreement of Harley-Davidson, Inc. under the Harley-Davidson Inc. 1995 Stock Option Plan and the Harley-Davidson, Inc. 2004 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.22 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2005 (File No. 1-9183)) | ||
Form of Notice of Grant | ||
Form of Notice of Grant | ||
Form of Notice of Grant | ||
Form of Transition Agreement between the Registrant and each of Messrs. Levatich and Olin (incorporated herein by reference to Exhibit 10.4 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 1-9183)) | ||
Transition Agreement between the Registrant and Mr. Hund dated November 30, 2009 (incorporated herein by reference to Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 1-9183)) | ||
Form of Aircraft Time Sharing Agreement between the Registrant and each of Messrs. Levatich, Olin, | ||
Form of Non-competition and Non-solicitation Agreement between Harley-Davidson Canada LP, Fred Deeley Imports Ltd. and Harley-Davidson Motor Company, Inc., as amended (incorporated herein by reference to exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 28, 2015 (File No. 1-9183)) | ||
Harley-Davidson Retiree Insurance Allowance Plan, as amended and restated effective January 1, 2016 (incorporated herein by reference to Exhibit 10.44 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2016 (File No. 1-9183)) | ||
Form of Notice of Award of Performance Shares and Performance Share Agreement (Standard) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2014 Incentive Stock Plan first approved for use in February 2017 (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Annual Report on Form 10-Q for the quarter ended March 26, 2017 (File No. 1-9183)) |
* | Represents a management contract or compensatory plan, contract or arrangement in which a Director or named executive officer of the Company participated. |
INDEX TO EXHIBITS [Items 15(a)(3) and 15(c)] | ||
Exhibit No. | Description | |
Form of Notice of Award of Performance | ||
Form of Notice of Award of Performance Shares and Performance Share Agreement (Transition Agreement) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2014 Incentive Stock Plan first approved for use in February 2017 (incorporated herein by reference to Exhibit 10.3 to the Registrant’s Annual Report on Form 10-Q for the quarter ended March 26, 2017 (File No. 1-9183)) | ||
Form of Notice of Award of | ||
Form of Notice of Award of Restricted Stock Units and Restricted Stock Unit Agreement (Standard), Form of Notice of Award of Restricted Stock Units and Restricted Stock Unit Agreement (Standard International), Form of Notice of Award of Restricted Stock Units and Restricted Stock Unit Agreement (Special), Form of Notice of Award of Restricted Stock Units and Restricted Stock Unit Agreement (Special Retention), and Form of Notice of Award of Restricted Stock Units and Restricted Stock Unit Agreement (Transition Agreement) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2014 Incentive Stock Plan first approved for use in February 2018 (incorporated herein by reference to Exhibit 10.43 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2018 (File No. 1-9183)) | ||
Form of Notice of Award of Performance Shares and Performance Shares Agreement (Standard), Form of Notice of Award of Performance Share Units and Performance Share Unit Agreement (Standard International), and Form of Notice of Award of Performance Shares and Performance Shares Agreement (Transition Agreement) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2014 Incentive Stock Plan first approved for use in February 2018 (incorporated herein by reference to Exhibit 10.44 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2018 (File No. 1-9183)) | ||
Form of Notice of Award of Restricted Stock Units and Restricted Stock Unit Agreement (Standard), Form of Notice of Award of Restricted Stock Units and Restricted Stock Unit Agreement (Standard International), Form of Notice of Award of Restricted Stock Units and Restricted Stock Unit Agreement (Special), and Form of Notice of Award of Restricted Stock Units and Restricted Stock Unit Agreement (Special Retention) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2014 Incentive Stock Plan first approved for use in February 2019 (incorporated herein by reference to Exhibit 10.45 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2018 (File No. 1-9183)) | ||
Form of Notice of Award of Performance Shares and Performance Shares Agreement (Standard) and Form of Notice of Award of Performance Share Units and Performance Share Unit Agreement (Standard International) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2014 Incentive Stock Plan first approved for use in February 2019 (incorporated herein by reference to Exhibit 10.46 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 2018 (File No. 1-9183)) | ||
Separation Agreement and Release between the Registrant and Mr. Grimmer dated October 25, 2019 | ||
Harley-Davidson, Inc. Subsidiaries | ||
Consent of Independent Registered Public Accounting Firm | ||
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 |
* | Represents a management contract or compensatory plan, contract or arrangement in which a |
HARLEY-DAVIDSON, INC. | ||
By: | /S/ Matthew S. Levatich | |
Matthew S. Levatich | ||
President and Chief Executive Officer |
Name | Title | |
/S/ Matthew S. Levatich | President and Chief Executive Officer | |
Matthew S. Levatich | (Principal executive officer) | |
/S/ John A. Olin | Senior Vice President and Chief Financial Officer | |
John A. Olin | (Principal financial officer) | |
/S/ Mark R. Kornetzke | Chief Accounting Officer | |
Mark R. Kornetzke | (Principal accounting officer) | |
/S/ Troy Alstead | Director | |
Troy Alstead | ||
/S/ R. John Anderson | Director | |
R. John Anderson | ||
/S/ Michael J. Cave | Non-Executive Chairman | |
Michael J. Cave | ||
/S/ Allan Golston | Director | |
Allan Golston | ||
/S/ Sara L. Levinson | Director | |
Sara L. Levinson | ||
/S/ N. Thomas Linebarger | Director | |
N. Thomas Linebarger | ||
/S/ Brian Niccol | Director | |
Brian Niccol | ||
/S/ Maryrose Sylvester | Director | |
Maryrose Sylvester | ||
/S/ Jochen Zeitz | Director | |
Jochen Zeitz |