Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 27, 2022 | Apr. 30, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 27, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-9183 | |
Entity Registrant Name | Harley-Davidson, Inc. | |
Entity Incorporation, State or Country Code | WI | |
Entity Tax Identification Number | 39-1382325 | |
Entity Address, Address Line One | 3700 West Juneau Avenue | |
Entity Address, City or Town | Milwaukee | |
Entity Address, State or Province | WI | |
Entity Address, Postal Zip Code | 53208 | |
City Area Code | 414 | |
Local Phone Number | 342-4680 | |
Title of 12(b) Security | Common Stock Par Value $.01 PER SHARE | |
Trading Symbol | HOG | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 147,378,290 | |
Entity Central Index Key | 0000793952 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Revenue: | ||
Total revenue | $ 1,495,186 | $ 1,422,507 |
Costs and expenses: | ||
Motorcycles and Related Products cost of goods sold | 895,536 | 811,622 |
Financial Services interest expense | 42,099 | 55,707 |
Financial Services provision for credit losses | 28,822 | (22,474) |
Selling, administrative and engineering expense | 239,625 | 231,844 |
Restructuring benefit | (128) | (366) |
Total costs and expenses | 1,205,954 | 1,076,333 |
Operating income | 289,232 | 346,174 |
Other income, net | 11,030 | 277 |
Investment (loss) income | (1,979) | 1,402 |
Interest expense | 7,711 | 7,708 |
Income before provision for income taxes | 290,572 | 340,145 |
Provision for income taxes | 68,070 | 81,001 |
Net income | $ 222,502 | $ 259,144 |
Earnings per share: | ||
Basic (in dollars per share) | $ 1.46 | $ 1.69 |
Diluted (in dollars per share) | 1.45 | 1.68 |
Cash dividends per share (in dollars per share) | $ 0.1575 | $ 0.1500 |
Motorcycles and Related Products | ||
Revenue: | ||
Motorcycles and Related Products | $ 1,303,171 | $ 1,232,107 |
Financial Services | ||
Revenue: | ||
Financial Services | $ 192,015 | $ 190,400 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 222,502 | $ 259,144 |
Other comprehensive income, net of tax: | ||
Foreign currency translation adjustments | (4,121) | (17,338) |
Derivative financial instruments | 9,928 | 17,530 |
Pension and postretirement benefit plans | 5,502 | 13,588 |
Total other comprehensive loss, net of tax | 11,309 | 13,780 |
Comprehensive income | $ 233,811 | $ 272,924 |
CONSOLIDATED BALANCE SHEETS (Un
CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 27, 2022 | Dec. 31, 2021 | Mar. 28, 2021 |
Current assets: | |||
Cash and cash equivalents | $ 1,393,731 | $ 1,874,745 | $ 2,320,645 |
Accounts receivable, net | 254,286 | 182,148 | 216,569 |
Finance receivables, net of allowance of $60,889, $60,734, and $64,139 | 1,699,642 | 1,465,544 | 1,798,194 |
Inventories, net | 714,259 | 712,942 | 470,997 |
Restricted cash | 142,812 | 128,935 | 185,374 |
Other current assets | 182,527 | 185,777 | 195,356 |
Total current assets | 4,387,257 | 4,550,091 | 5,187,135 |
Finance receivables, net of allowance of $279,584, $278,645, and $282,094 | 5,121,911 | 5,106,377 | 4,958,583 |
Property, plant and equipment, net | 663,807 | 683,984 | 718,968 |
Pension and postretirement assets | 399,029 | 386,152 | 105,910 |
Goodwill | 62,607 | 63,177 | 65,157 |
Deferred income taxes | 71,926 | 82,922 | 135,387 |
Lease assets | 45,073 | 49,625 | 44,765 |
Other long-term assets | 143,030 | 128,727 | 123,083 |
Total assets | 10,894,640 | 11,051,055 | 11,338,988 |
Current liabilities: | |||
Accounts payable | 476,917 | 374,978 | 402,764 |
Accrued liabilities | 597,924 | 601,981 | 570,440 |
Short-term deposits, net | 65,049 | 72,146 | 93,887 |
Short-term debt | 816,016 | 751,286 | 765,263 |
Current portion of long-term debt, net | 1,327,357 | 1,542,496 | 1,622,243 |
Total current liabilities | 3,283,263 | 3,342,887 | 3,454,597 |
Long-term deposits, net | 283,034 | 218,180 | 58,766 |
Long-term debt, net | 4,470,086 | 4,595,617 | 5,478,091 |
Lease liabilities | 27,633 | 29,904 | 30,061 |
Pension and postretirement liabilities | 93,792 | 95,299 | 103,854 |
Deferred income taxes | 9,578 | 9,261 | 8,682 |
Other long-term liabilities | 218,153 | 206,663 | 228,551 |
Commitments and contingencies | |||
Shareholders’ equity: | |||
Common stock | 1,704 | 1,694 | 1,690 |
Additional paid-in-capital | 1,554,840 | 1,547,011 | 1,517,129 |
Retained earnings | 2,040,867 | 1,842,421 | 1,520,862 |
Accumulated other comprehensive loss | (229,610) | (240,919) | (469,637) |
Treasury stock, at cost | (858,700) | (596,963) | (593,658) |
Total shareholders' equity | 2,509,101 | 2,553,244 | 1,976,386 |
Total liabilities and shareholders' equity | $ 10,894,640 | $ 11,051,055 | $ 11,338,988 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 27, 2022 | Dec. 31, 2021 | Mar. 28, 2021 |
Allowance for credit loss, current | $ 60,889 | $ 60,734 | $ 64,139 |
Allowance for credit loss, noncurrent | 279,584 | 278,645 | 282,094 |
Finance receivables, net | 1,699,642 | 1,465,544 | 1,798,194 |
Other current assets | 182,527 | 185,777 | 195,356 |
Finance receivables, net - non-current | 5,121,911 | 5,106,377 | 4,958,583 |
Current portion of long-term debt, net | 1,327,357 | 1,542,496 | 1,622,243 |
Long-term debt, net | 4,470,086 | 4,595,617 | 5,478,091 |
Consolidated VIEs | |||
Finance receivables, net | 455,638 | 493,543 | 567,887 |
Other current assets | 4,373 | 2,982 | 4,027 |
Finance receivables, net - non-current | 1,487,650 | 1,734,428 | 2,113,344 |
Restricted cash - current and non-current | 156,297 | 144,284 | 196,946 |
Current portion of long-term debt, net | 551,305 | 569,145 | 692,903 |
Long-term debt, net | $ 1,075,787 | $ 1,330,586 | $ 1,757,003 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Cash flows from operating activities: | ||
Net cash provided by operating activities | $ 139,321 | $ 162,781 |
Cash flows from investing activities: | ||
Capital expenditures | (27,999) | (18,813) |
Origination of finance receivables | (1,058,461) | (909,138) |
Collections on finance receivables | 965,190 | 900,485 |
Other investing activities | 135 | 733 |
Net cash used by investing activities | (121,135) | (26,733) |
Cash flows from financing activities: | ||
Proceeds from issuance of medium-term notes | 495,785 | 0 |
Repayments of medium-term notes | (550,000) | (1,050,000) |
Proceeds from securitization debt | 0 | 597,411 |
Repayments of securitization debt | (271,499) | (291,346) |
Borrowings of asset-backed commercial paper | 62,455 | 0 |
Repayments of asset-backed commercial paper | (56,634) | (66,894) |
Net increase (decrease) in unsecured commercial paper | 64,521 | (262,517) |
Net increase in credit facilities | 0 | 15,629 |
Net increase in deposits | 57,660 | 72,664 |
Dividends paid | (24,056) | (23,105) |
Repurchase of common stock | (261,737) | (5,646) |
Other financing activities | 0 | 1,085 |
Net cash used by financing activities | (483,505) | (1,012,719) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1,743) | (5,163) |
Net decrease in cash, cash equivalents and restricted cash | (467,062) | (881,834) |
Cash, cash equivalents and restricted cash, beginning of period | 2,025,219 | 3,409,168 |
Net decrease in cash, cash equivalents and restricted cash | (467,062) | (881,834) |
Cash, cash equivalents and restricted cash, end of period | 1,558,157 | 2,527,334 |
Reconciliation of cash, cash equivalents and restricted cash on the Consolidated balance sheets to the Consolidated statements of cash flows: | ||
Cash and cash equivalents | 1,393,731 | 2,320,645 |
Restricted cash | 142,812 | 185,374 |
Restricted cash included in Other long-term assets | $ 21,614 | $ 21,315 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock |
Beginning balance (in shares) at Dec. 31, 2020 | 168,503,526 | |||||
Balance, beginning of period at Dec. 31, 2020 | $ 1,722,785 | $ 1,685 | $ 1,507,706 | $ 1,284,823 | $ (483,417) | $ (588,012) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 259,144 | 259,144 | ||||
Other comprehensive income, net of tax | 13,780 | 13,780 | ||||
Dividends | (23,105) | (23,105) | ||||
Repurchase of common stock | (5,646) | (5,646) | ||||
Share-based compensation (in shares) | 483,326 | |||||
Share-based compensation | 9,428 | $ 5 | 9,423 | |||
Ending balance (in shares) at Mar. 28, 2021 | 168,986,852 | |||||
Balance, end of period at Mar. 28, 2021 | 1,976,386 | $ 1,690 | 1,517,129 | 1,520,862 | (469,637) | (593,658) |
Beginning balance (in shares) at Dec. 31, 2021 | 169,364,686 | |||||
Balance, beginning of period at Dec. 31, 2021 | 2,553,244 | $ 1,694 | 1,547,011 | 1,842,421 | (240,919) | (596,963) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 222,502 | 222,502 | ||||
Other comprehensive income, net of tax | 11,309 | 11,309 | ||||
Dividends | (24,056) | (24,056) | ||||
Repurchase of common stock | (261,737) | (261,737) | ||||
Share-based compensation (in shares) | 976,062 | |||||
Share-based compensation | 7,839 | $ 10 | 7,829 | |||
Ending balance (in shares) at Mar. 27, 2022 | 170,340,748 | |||||
Balance, end of period at Mar. 27, 2022 | $ 2,509,101 | $ 1,704 | $ 1,554,840 | $ 2,040,867 | $ (229,610) | $ (858,700) |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends (in dollars per share) | $ 0.1575 | $ 0.1500 |
Basis of Presentation and Use o
Basis of Presentation and Use of Estimates | 3 Months Ended |
Mar. 27, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Use of Estimates | Basis of Presentation and Use of Estimates Principles of Consolidation and Basis of Presentation – The consolidated financial statements include the accounts of Harley-Davidson, Inc. and its subsidiaries, all of which are wholly-owned (the Company), including the accounts of the groups of companies referred to as Harley-Davidson Motor Company and Harley-Davidson Financial Services. In addition, certain variable interest entities (VIEs) related to secured financing are consolidated as the Company is the primary beneficiary. All intercompany accounts and material intercompany transactions have been eliminated. The Company operates in two reportable segments: Motorcycles and Related Products (Motorcycles) and Financial Services. In the opinion of the Company's management, the accompanying unaudited consolidated financial statements contain all adjustments, consisting only of normal recurring adjustments, necessary to present fairly the Consolidated balance sheets as of March 27, 2022 and March 28, 2021, the Consolidated statements of operations for the three month periods then ended, the Consolidated statements of comprehensive income for the three month periods then ended, the Consolidated statements of cash flows for the three month periods then ended, and the Consolidated statements of shareholders' equity for the three month periods then ended. Certain information and disclosures normally included in complete financial statements have been condensed or omitted pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC) and U.S. generally accepted accounting principles (U.S. GAAP) for interim financial reporting. The consolidated financial statements should be read in conjunction with the audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Use of Estimates – The preparation of financial statements in conformity with U.S. GAAP requires the Company's management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. |
New Accounting Standards
New Accounting Standards | 3 Months Ended |
Mar. 27, 2022 | |
Accounting Policies [Abstract] | |
New Accounting Standards | New Accounting StandardsAccounting Standards Not Yet AdoptedIn March 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (ASU 2022-02). ASU 2022-02 addresses areas identified by the FASB as part of its post-implementation review of its previously issued credit losses standard (ASU 2016-13) that introduced the CECL model. ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings by creditors that have adopted the CECL model and enhances disclosure requirements for certain loan refinancings and restructurings made with borrowers experiencing financial difficulty. In addition, ASU 2022-02 requires a public business entity to disclose current-period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. As the Company has already adopted ASU 2016-13, the new guidance is effective for the fiscal years beginning after December 15, 2022 and for interim periods within those fiscal years. Early adoption is permitted. The adoption of ASU 2022-02 is not expected to have a material impact on the Company's consolidated financial statements. |
Revenue
Revenue | 3 Months Ended |
Mar. 27, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | RevenueThe Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or service to a customer. Revenue is measured based on the consideration that the Company expects to be entitled to in exchange for the goods or services transferred. Taxes that are collected from a customer concurrent with revenue-producing activities are excluded from revenue. Disaggregated revenue by major source was as follows (in thousands): Three months ended March 27, March 28, Motorcycles and Related Products Revenue: Motorcycles $ 1,059,113 $ 1,016,334 Parts and accessories 165,525 149,859 Apparel 51,407 50,323 Licensing 6,497 5,512 Other 20,629 10,079 1,303,171 1,232,107 Financial Services Revenue: Interest income 161,734 159,814 Other 30,281 30,586 192,015 190,400 $ 1,495,186 $ 1,422,507 The Company maintains certain deferred revenue balances related to payments received at contract inception in advance of the Company’s performance under the contract and generally relates to the sale of Harley Owners Group® memberships and extended service plan contracts. Deferred revenue is recognized as revenue as the Company performs under the contract. Deferred revenue, included in Accrued liabilities and Other long-term liabilities on the Consolidated balance sheets , was as follows (in thousands): March 27, March 28, Balance, beginning of period $ 40,092 $ 36,614 Balance, end of period $ 38,842 $ 36,266 |
Restructuring Activities
Restructuring Activities | 3 Months Ended |
Mar. 27, 2022 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Activities | Restructuring Activities The Company's restructuring activities are included in Restructuring benefit on the Consolidated statements of operations . In 2020, the Company initiated restructuring activities including a workforce reduction, the termination of certain current and future products, facility changes, optimizing its global dealer network, exiting certain international markets, and discontinuing its sales and manufacturing operations in India. The workforce reduction resulted in the termination of approximately 500 employees. In addition, the India action resulted in the termination of approximately 70 employees. These restructuring activities are essentially complete, and the Company does not expect restructuring expenses of any significance in 2022. Since the inception of the restructuring activities in 2020 through the three months ended March 27, 2022, the Company has incurred cumulative restructuring expenses of $133.2 million, including $121.7 million and $11.5 million in the Motorcycles and Financial Services segments, respectively. This includes restructuring (benefit) expense for the three months ended March 27, 2022 and March 28, 2021 by segment as follows (in thousands): Three months ended March 27, March 28, Motorcycles and Related Products $ (128) $ (593) Financial Services — 227 $ (128) $ (366) Changes in accrued restructuring expenses, which are included in Accrued liabilities on the Consolidated balance sheets, were as follows (in thousands): Three months ended March 27, 2022 Employee Termination Benefits Contract Terminations Non-Current Asset Adjustments Total Balance, beginning of period $ 121 $ 2,874 $ — $ 2,995 Restructuring benefit — (128) — (128) Utilized – cash (18) (1,614) — (1,632) Foreign currency changes (3) 1 — (2) Balance, end of period $ 100 $ 1,133 $ — $ 1,233 Three months ended March 28, 2021 Employee Termination Benefits Contract Terminations Non-Current Asset Adjustments Total Balance, beginning of period $ 7,724 $ 16,196 $ — $ 23,920 Restructuring (benefit) expense (944) 1,106 (528) (366) Utilized – cash (3,661) (12,781) — (16,442) Utilized – non cash — — 528 528 Foreign currency changes (112) (54) — (166) Balance, end of period $ 3,007 $ 4,467 $ — $ 7,474 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 27, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe Company’s effective income tax rate for the three months ended March 27, 2022 was 23.4% compared to 23.8% for the three months ended March 28, 2021. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 27, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The computation of basic and diluted earnings per share was as follows (in thousands, except per share amounts): Three months ended March 27, March 28, Net income $ 222,502 $ 259,144 Basic weighted-average shares outstanding 152,820 153,478 Effect of dilutive securities – employee stock compensation plan 1,104 1,012 Diluted weighted-average shares outstanding 153,924 154,490 Net earnings per share: Basic $ 1.46 $ 1.69 Diluted $ 1.45 $ 1.68 Shares of common stock related to share-based compensation that were not included in the effect of dilutive securities because the effect would have been anti-dilutive include 0.5 million and 0.6 million shares for the three months ended March 27, 2022 and March 28, 2021, respectively. |
Additional Balance Sheet and Ca
Additional Balance Sheet and Cash Flow Information | 3 Months Ended |
Mar. 27, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Additional Balance Sheet and Cash Flow Information | Additional Balance Sheet and Cash Flow Information Investments in Marketable Securities – The Company’s investments in marketable securities consisted of the following (in thousands): March 27, December 31, March 28, Mutual funds $ 45,189 $ 49,650 $ 50,239 Mutual funds, included in Other long-term assets on the Consolidated balance sheets , are carried at fair value with gains and losses recorded in income. Mutual funds are held to support certain deferred compensation obligations. Inventories, net – Substantially all inventories located in the U.S. are valued using the last-in, first-out (LIFO) method. Other inventories are valued at the lower of cost or net realizable value using the first-in, first-out (FIFO) method. Motorcycle finished goods inventories include motorcycles that are ready for sale and motorcycles that are substantially complete, but awaiting installation of certain components affected by global supply chain constraints. Inventories, net consisted of the following (in thousands): March 27, December 31, March 28, Raw materials and work in process $ 376,600 $ 347,915 $ 251,199 Motorcycle finished goods 291,623 345,956 185,590 Parts and accessories and apparel 130,156 103,191 88,291 Inventory at lower of FIFO cost or net realizable value 798,379 797,062 525,080 Excess of FIFO over LIFO cost (84,120) (84,120) (54,083) $ 714,259 $ 712,942 $ 470,997 Deposits – Harley-Davidson Financial Services offers brokered certificates of deposit to customers indirectly through contractual arrangements with third-party banks and/or securities brokerage firms through its bank subsidiary. The Company had $348.1 million, $290.3 million and $152.7 million , net of fees, of interest-bearing brokered certificates of deposit outstanding as of March 27, 2022, December 31, 2021, and March 28, 2021, respectively. The liabilities for deposits are included in Short-term deposits, net or Long-term deposits, net on the Consolidated balance sheets based upon the term of each brokered certificate of deposit issued. Each separate brokered certificate of deposit is issued under a master certificate, and as such, all outstanding brokered certificates of deposit are considered below the Federal Deposit Insurance Corporation insurance coverage limits. Future maturities of the Company's certificates of deposit as of March 27, 2022 were as follows (in thousands): 2022 $ 58,475 2023 74,304 2024 71,696 2025 19,053 2026 79,742 Thereafter 46,060 Future maturities 349,330 Unamortized fees (1,247) $ 348,083 Operating Cash Flow – The reconciliation of Net income to Net cash provided by operating activities was as follows (in thousands): Three months ended March 27, March 28, Cash flows from operating activities: Net income $ 222,502 $ 259,144 Adjustments to reconcile Net income to Net cash provided by operating activities: Depreciation and amortization 39,258 40,221 Amortization of deferred loan origination costs 22,995 19,200 Amortization of financing origination fees 3,701 3,614 Provision for long-term employee benefits (5,050) 7,090 Employee benefit plan contributions and payments (2,143) (9,885) Stock compensation expense 8,903 8,968 Net change in wholesale finance receivables related to sales (205,727) (308,532) Provision for credit losses 28,822 (22,474) Deferred income taxes 6,307 13,192 Other, net (5,408) (2,138) Changes in current assets and liabilities: Accounts receivable, net (74,993) (79,012) Finance receivables – accrued interest and other 3,115 8,947 Inventories, net (2,630) 45,086 Accounts payable and accrued liabilities 106,969 153,597 Other current assets (7,300) 25,763 (83,181) (96,363) Net cash provided by operating activities $ 139,321 $ 162,781 |
Finance Receivables
Finance Receivables | 3 Months Ended |
Mar. 27, 2022 | |
Receivables [Abstract] | |
Finance Receivables | Finance Receivables The Company provides retail financial services to customers of its dealers in the U.S. and Canada. The origination of retail loans is a separate and distinct transaction between the Company and the retail customer, unrelated to the Company’s sale of product to its dealers. Retail finance receivables consist of secured promissory notes and secured installment sales contracts and are primarily related to dealer sales of motorcycles to retail customers. The Company holds either titles or liens on titles to vehicles financed by promissory notes and installment sales contracts. The Company offers wholesale financing to its dealers in the U.S. and Canada. Wholesale finance receivables are related primarily to the Company's sale of motorcycles and related parts and accessories to dealers. Wholesale loans to dealers are generally secured by financed inventory or property. Finance receivables, net were as follows (in thousands): March 27, December 31, March 28, Retail finance receivables $ 6,511,845 $ 6,493,519 $ 6,310,982 Wholesale finance receivables 650,181 417,781 792,028 7,162,026 6,911,300 7,103,010 Allowance for credit losses (340,473) (339,379) (346,233) $ 6,821,553 $ 6,571,921 $ 6,756,777 The Company’s finance receivables are reported at amortized cost, net of the allowance for credit losses. Amortized cost includes the principal outstanding, accrued interest, and deferred loan fees and costs. The Company's allowance for credit losses reflects expected lifetime credit losses on its finance receivables. Based on differences in the nature of the finance receivables and the underlying methodology for calculating the allowance for credit losses, the Company segments its finance receivables into the retail and wholesale portfolios. The Company further disaggregates each portfolio by credit quality indicators. As the credit risk varies between the retail and wholesale portfolios, the Company utilizes different credit quality indicators for each portfolio. The retail portfolio primarily consists of a large number of small balance, homogeneous finance receivables. The Company performs a collective evaluation of the adequacy of the retail allowance for credit losses. The Company utilizes a vintage-based loss forecast methodology that includes decompositions for probability of default, exposure at default, attrition rate, and recovery balance rate. Reasonable and supportable economic forecasts for a two-year period are incorporated into the methodology to reflect the estimated impact of changes in future economic conditions, such as unemployment rates, household obligations or other relevant factors, over the two-year reasonable and supportable period. For periods beyond the Company’s reasonable and supportable forecasts, the Company reverts to its average historical loss experience using a mean-reversion process over a three-year period. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, or term as well as other relevant factors. The wholesale portfolio is primarily composed of large balance, non-homogeneous loans. The Company’s evaluation for the wholesale allowance for credit losses is first based on a loan-by-loan review to determine whether the loans share similar risk characteristics. The Company individually evaluates loans that do not share risk characteristics. Loans identified as those for which foreclosure is probable are classified as Non-Performing, and a specific allowance for credit losses is established when appropriate. The specific allowance is determined based on the amortized cost of the related finance receivable and the estimated fair value of the collateral, less selling costs and the cash that the Company expects to receive. Finance receivables in the wholesale portfolio not individually assessed are aggregated, based on similar risk characteristics, according to the Company’s internal risk rating system and measured collectively. The related allowance for credit losses is based on factors such as the specific borrower’s financial performance and ability to repay, the Company’s past credit loss experience, reasonable and supportable economic forecasts, and the value of the underlying collateral and expected recoveries. The Company considers various third-party economic forecast scenarios as part of estimating the allowance for expected credit losses and applies a probability-weighting to those economic forecast scenarios. Changes in the Company’s outlook on economic conditions impacted the Company's retail and wholesale estimates for expected credit losses at March 27, 2022. During the first quarter of 2022, the U.S. economy and the Company’s outlook on economic conditions remained largely unchanged from the end of 2021. The pace of economic recovery remained uncertain as demonstrated by rising inflation, muted consumer confidence, continued global supply chain disruptions, and the conflict in Ukraine, among other factors. As such, at the end of the first quarter of 2022, the Company’s outlook on economic conditions included slow economic improvement in its economic scenario weighting. Additionally, the historical experience incorporated into the portfolio-specific models does not fully reflect the Company's comprehensive expectations regarding the future. As such, the Company incorporated qualitative factors to establish an appropriate allowance for credit losses balance. These factors include motorcycle recovery value considerations, delinquency adjustments, specific problem loan trends, and others, as appropriate. Due to the use of projections and assumptions in estimating the losses, the amount of losses actually incurred by the Company in either portfolio could differ from the amounts estimated. Further, the Company’s allowance for credit losses incorporates known conditions at the balance sheet date and the Company’s expectations surrounding the economic forecasts. The Company will continue to monitor future economic trends and conditions. Expectations surrounding the Company's economic forecasts may change in future periods as additional information becomes available. Changes in the Company's allowance for credit losses on its finance receivables by portfolio were as follows (in thousands): Three months ended March 27, 2022 Retail Wholesale Total Balance, beginning of period $ 326,320 $ 13,059 $ 339,379 Provision for credit losses 28,614 208 28,822 Charge-offs (41,804) — (41,804) Recoveries 14,076 — 14,076 Balance, end of period $ 327,206 $ 13,267 $ 340,473 Three months ended March 28, 2021 Retail Wholesale Total Balance, beginning of period $ 371,738 $ 19,198 $ 390,936 Provision for credit losses (22,449) (25) (22,474) Charge-offs (34,589) — (34,589) Recoveries 12,360 — 12,360 Balance, end of period $ 327,060 $ 19,173 $ 346,233 The Company manages retail credit risk through its credit approval process and ongoing collection efforts. The Company uses FICO scores, a standard credit rating measurement, to differentiate the expected default rates of retail credit applicants, enabling the Company to better evaluate credit applicants for approval and to tailor pricing according to this assessment. For the Company’s U.S. and Canadian retail finance receivables, the Company determines the credit quality indicator for each loan at origination and does not update the credit quality indicator subsequent to the loan origination date. As loan performance by credit quality indicator differs between the U.S. and Canadian retail loans, the Company’s credit quality indicators vary for the two portfolios. For U.S. retail finance receivables, those with a FICO score of 740 or above at origination are generally considered super prime, loans with a FICO score between 640 and 740 are generally categorized as prime, and loans with FICO score below 640 are generally considered sub-prime. For Canadian retail finance receivables, those with a FICO score of 700 or above at origination are generally considered super prime, loans with a FICO score between 620 and 700 are generally categorized as prime, and loans with FICO score below 620 are generally considered sub-prime. The amortized cost of the Company's U.S. and Canadian retail finance receivables by vintage and credit quality indicator was as follows (in thousands): March 27, 2022 2022 2021 2020 2019 2018 2017 & Prior Total U.S. Retail: Super prime $ 311,114 $ 890,413 $ 422,454 $ 268,692 $ 139,540 $ 68,682 $ 2,100,895 Prime 394,793 1,247,764 627,102 407,242 233,630 176,018 3,086,549 Sub-prime 125,280 427,813 240,999 159,968 91,444 91,610 1,137,114 831,187 2,565,990 1,290,555 835,902 464,614 336,310 6,324,558 Canadian Retail: Super prime 14,015 47,025 29,382 23,367 11,524 4,515 129,828 Prime 4,228 15,842 11,513 8,349 5,454 4,391 49,777 Sub-prime 506 2,180 1,961 1,401 861 773 7,682 18,749 65,047 42,856 33,117 17,839 9,679 187,287 $ 849,936 $ 2,631,037 $ 1,333,411 $ 869,019 $ 482,453 $ 345,989 $ 6,511,845 December 31, 2021 2021 2020 2019 2018 2017 2016 & Prior Total U.S. Retail: Super prime $ 1,010,636 $ 484,479 $ 316,390 $ 171,763 $ 65,753 $ 27,424 $ 2,076,445 Prime 1,391,385 712,858 470,177 277,206 142,288 82,169 3,076,083 Sub-prime 476,688 273,787 182,002 105,330 61,923 51,035 1,150,765 2,878,709 1,471,124 968,569 554,299 269,964 160,628 6,303,293 Canadian Retail: Super prime 51,779 32,724 27,073 13,984 4,619 1,614 131,793 Prime 16,882 12,675 9,244 6,230 3,628 1,779 50,438 Sub-prime 2,356 2,134 1,571 947 606 381 7,995 71,017 47,533 37,888 21,161 8,853 3,774 190,226 $ 2,949,726 $ 1,518,657 $ 1,006,457 $ 575,460 $ 278,817 $ 164,402 $ 6,493,519 March 28, 2021 2021 2020 2019 2018 2017 2016 & Prior Total U.S. Retail: Super prime $ 260,359 $ 725,383 $ 502,847 $ 301,839 $ 134,213 $ 74,086 $ 1,998,727 Prime 349,662 1,026,080 706,940 445,201 249,327 183,217 2,960,427 Sub-prime 130,389 395,495 263,203 156,368 96,998 100,827 1,143,280 740,410 2,146,958 1,472,990 903,408 480,538 358,130 6,102,434 Canadian Retail: Super prime 13,938 48,309 42,993 24,549 11,116 4,831 145,736 Prime 4,245 17,350 13,055 9,263 5,808 4,178 53,899 Sub-prime 601 2,949 2,227 1,407 951 778 8,913 18,784 68,608 58,275 35,219 17,875 9,787 208,548 $ 759,194 $ 2,215,566 $ 1,531,265 $ 938,627 $ 498,413 $ 367,917 $ 6,310,982 The Company's credit risk on the wholesale portfolio is different from that of the retail portfolio. Whereas the retail portfolio represents a relatively homogeneous pool of retail finance receivables that exhibit more consistent loss patterns, the wholesale portfolio exposures are less consistent. The Company utilizes an internal credit risk rating system to manage credit risk exposure consistently across wholesale borrowers and individually evaluates credit risk factors for each borrower. The Company uses the following internal credit quality indicators, based on an internal risk rating system, listed from highest level of risk to lowest level of risk for the wholesale portfolio: Doubtful, Substandard, Special Mention, Medium Risk and Low Risk. Based upon the Company’s review, the dealers classified in the Doubtful category are the dealers with the greatest likelihood of being charged-off, while the dealers classified as Low Risk are least likely to be charged-off. Additionally, the Company classifies dealers identified as those in which foreclosure is probable as Non-Performing. The internal rating system considers factors such as the specific borrower's ability to repay and the estimated value of any collateral. Dealer risk rating classifications are reviewed and updated by the Company on a quarterly basis. The amortized cost of the Company's wholesale financial receivables, by vintage and credit quality indicator, was as follows (in thousands): March 27, 2022 2022 2021 2020 2019 2018 2017 & Prior Total Non-Performing $ — $ — $ — $ — $ — $ — $ — Doubtful — — — — — — — Substandard — — — — — — — Special Mention — — — — — — — Medium Risk — — — — — — — Low Risk 489,283 127,797 9,108 11,147 9,893 2,953 650,181 $ 489,283 $ 127,797 $ 9,108 $ 11,147 $ 9,893 $ 2,953 $ 650,181 December 31, 2021 2021 2020 2019 2018 2017 2016 & Prior Total Non-Performing $ — $ — $ — $ — $ — $ — $ — Doubtful — — — — — — — Substandard — — — — — — — Special Mention — — — — — — — Medium Risk — — — — — — — Low Risk 380,211 11,379 11,047 10,565 3,662 917 417,781 $ 380,211 $ 11,379 $ 11,047 $ 10,565 $ 3,662 $ 917 $ 417,781 March 28, 2021 2021 2020 2019 2018 2017 2016 & Prior Total Non-Performing $ — $ — $ — $ — $ — $ — $ — Doubtful — — — — — — — Substandard — — — — — — — Special Mention 567 530 262 17 — — 1,376 Medium Risk — 728 417 — — — 1,145 Low Risk 600,144 122,970 44,614 12,568 6,392 2,819 789,507 $ 600,711 $ 124,228 $ 45,293 $ 12,585 $ 6,392 $ 2,819 $ 792,028 Retail finance receivables are contractually delinquent if the minimum payment is not received by the specified due date. Retail finance receivables at amortized cost, excluding accrued interest, are generally charged-off when the receivable is 120 days or more delinquent, the related asset is repossessed, or the receivable is otherwise deemed uncollectible. The Company reverses accrued interest related to charged-off accounts against Financial Services interest income when the account is charged-off. The Company reversed $4.9 million and $5.2 million of accrued interest against Financial Services interest income during the three months ended March 27, 2022 and March 28, 2021, respectively. All retail finance receivables accrue interest until either collected or charged-off. Due to the timely write-off of accrued interest, the Company made the election provided under Accounting Standards Codification (ASC) Topic 326, Financial Instruments - Credit Losses to exclude accrued interest from its allowance for credit losses. Accordingly, as of March 27, 2022, December 31, 2021 and March 28, 2021, all retail finance receivables were accounted for as interest-earning receivables. Wholesale finance receivables are delinquent if the minimum payment is not received by the contractual due date. Wholesale finance receivables are written down once the Company determines that the specific borrower does not have the ability to repay the loan in full. Interest continues to accrue on past due finance receivables until the date the Company determines that foreclosure is probable, and the finance receivable is placed on non-accrual status. The Company will resume accruing interest on these accounts when payments are current according to the terms of the loans and future payments are reasonably assured. While on non-accrual status, all cash received is applied to principal or interest as appropriate. Once an account is charged-off, the Company will reverse the associated accrued interest against interest income. As the Company follows a non-accrual policy for interest, the allowance for credit losses excludes accrued interest for the wholesale portfolio. There were no charged-off accounts during the three months ended March 27, 2022 and March 28, 2021. As such, the Company did not reverse any accrued interest in those periods. There were no dealers on non-accrual status at March 27, 2022, December 31, 2021, and March 28, 2021. The aging analysis of the Company's finance receivables was as follows (in thousands): March 27, 2022 Current 31-60 Days 61-90 Days Greater than Total Total Retail finance receivables $ 6,343,673 $ 99,705 $ 32,521 $ 35,946 $ 168,172 $ 6,511,845 Wholesale finance receivables 649,948 178 27 28 233 650,181 $ 6,993,621 $ 99,883 $ 32,548 $ 35,974 $ 168,405 $ 7,162,026 December 31, 2021 Current 31-60 Days 61-90 Days Greater than Total Total Retail finance receivables $ 6,298,485 $ 115,942 $ 44,326 $ 34,766 $ 195,034 $ 6,493,519 Wholesale finance receivables 417,720 9 1 51 61 417,781 $ 6,716,205 $ 115,951 $ 44,327 $ 34,817 $ 195,095 $ 6,911,300 March 28, 2021 Current 31-60 Days 61-90 Days Greater than Total Total Retail finance receivables $ 6,196,345 $ 69,032 $ 23,420 $ 22,185 $ 114,637 $ 6,310,982 Wholesale finance receivables 791,826 128 22 52 202 792,028 $ 6,988,171 $ 69,160 $ 23,442 $ 22,237 $ 114,839 $ 7,103,010 Generally, it is the Company’s policy not to change the terms and conditions of finance receivables. However, to minimize economic loss, the Company may modify certain finance receivables in troubled debt restructurings. Total finance receivables in troubled debt restructurings were not significant as of March 27, 2022, December 31, 2021 and March 28, 2021. Additionally, in certain situations, the Company may offer short-term adjustments to customer payment due dates without affecting the associated interest rate or loan term. From the second quarter of 2020 through the second quarter of 2021, in response to the impact of the COVID-19 pandemic, the Company granted an increased amount of short-term payment due date extensions on eligible retail loans to help retail customers get through financial difficulties associated with the COVID-19 pandemic. The Company continues to grant standard payment extensions to customers in accordance with its policies. |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 3 Months Ended |
Mar. 27, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments and Hedging Activities | Derivative Financial Instruments and Hedging Activities The Company is exposed to risks from fluctuations in foreign currency exchange rates, interest rates and commodity prices. To reduce its exposure to such risks, the Company selectively uses derivative financial instruments. All derivative transactions are authorized and executed pursuant to regularly reviewed policies and procedures which prohibit the use of financial instruments for speculative trading purposes. The Company sells products in foreign currencies and utilizes foreign currency exchange contracts to mitigate the effects of foreign currency exchange rate fluctuations related to the Euro, Australian dollar, Japanese yen, Brazilian real, Canadian dollar, Mexican peso, Chinese yuan, Singapore dollar, Thai baht, and Pound sterling. The Company's foreign currency exchange contracts generally have maturities of less than one year. The Company utilizes commodity contracts to mitigate the effects of commodity price fluctuations related to metals and fuel consumed in its motorcycle operations. The Company's commodity contracts generally have maturities of less than one year. The Company periodically utilizes treasury rate lock contracts to fix the interest rate on a portion of the principal related to an anticipated issuance of long-term debt, interest rate swaps to reduce the impact of fluctuations in interest rates on medium-term notes with floating interest rates, and cross-currency swaps to mitigate the effect of foreign currency exchange rate fluctuations on its foreign currency-denominated debt. The Company also utilizes interest rate caps to facilitate certain asset-backed securitization transactions. All derivative financial instruments are recognized on the Consolidated balance sheets at fair value. In accordance with ASC Topic 815, Derivatives and Hedging (ASC Topic 815), the accounting for changes in the fair value of a derivative financial instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. Changes in the fair value of derivative financial instruments that are designated as cash flow hedges are initially recorded in Other comprehensive income (OCI) and subsequently reclassified into income when the hedged item affects income. The Company assesses, both at the inception of each hedge and on an ongoing basis, whether the derivative financial instruments that are designated as cash flow hedging transactions are highly effective in offsetting changes in cash flows of the hedged items. No component of a designated hedging derivative financial instrument’s gain or loss is excluded from the assessment of hedge effectiveness. Derivative financial instruments not designated as hedges are not speculative and are used to manage the Company’s exposure to foreign currency, commodity risks, and interest rate risks. Changes in the fair value of derivative financial instruments not designated as hedging instruments are recorded directly in income. Cash flow activity associated with the Company's derivative financial instruments is recorded in Cash flows from operating activities on the Consolidated statement of cash flow. The notional and fair values of the Company's derivative financial instruments under ASC Topic 815 were as follows (in thousands): Derivative Financial Instruments March 27, 2022 December 31, 2021 March 28, 2021 Notional Other Current Assets Accrued Liabilities Notional Other Current Assets Accrued Liabilities Notional Other Current Assets Accrued Liabilities Foreign currency contracts $ 585,451 $ 18,832 $ 3,576 $ 562,262 $ 14,644 $ 1,388 $ 402,814 $ 6,356 $ 6,071 Commodity contracts 964 316 — 996 19 39 668 3 20 Cross-currency swaps 1,367,460 18,835 — 1,367,460 35,071 — 1,367,460 73,449 — $ 1,953,875 $ 37,983 $ 3,576 $ 1,930,718 $ 49,734 $ 1,427 $ 1,770,942 $ 79,808 $ 6,091 Derivative Financial Instruments March 27, 2022 December 31, 2021 March 28, 2021 Notional Other Current Assets Accrued Liabilities Notional Other Current Assets Accrued Liabilities Notional Other Current Assets Accrued Liabilities Foreign currency contracts $ 230,336 $ 587 $ 722 $ 241,935 $ 1,299 $ 916 $ 214,337 $ 670 $ 595 Commodity contracts 11,866 2,435 — 10,631 641 18 8,172 1,193 40 Interest rate caps 412,478 2,060 — 504,526 360 — 844,673 170 — $ 654,680 $ 5,082 $ 722 $ 757,092 $ 2,300 $ 934 $ 1,067,182 $ 2,033 $ 635 The amounts of gains and losses related to the Company's derivative financial instruments designated as cash flow hedges were as follows (in thousands): Gain/(Loss) Gain/(Loss) Three months ended Three months ended March 27, March 28, March 27, March 28, Foreign currency contracts $ 8,444 $ 14,037 $ 5,655 $ (4,953) Commodity contracts 562 3 226 (32) Cross-currency swaps (16,236) (65,174) (25,800) (65,788) Treasury rate lock contracts — — (127) (124) Interest rate swaps — 397 — (2,689) $ (7,230) $ (50,737) $ (20,046) $ (73,586) The location and amount of gains and losses recognized in income related to the Company's derivative financial instruments designated as cash flow hedges were as follows (in thousands): Motorcycles Selling, administrative & Interest expense Financial Services interest expense Three months ended March 27, 2022 Line item on the Consolidated statements of operations in which the effects of cash flow hedges are recorded $ 895,536 $ 239,625 $ 7,711 $ 42,099 Gain/(loss) reclassified from AOCL into income: Foreign currency contracts $ 5,655 $ — $ — $ — Commodity contracts $ 226 $ — $ — $ — Cross-currency swaps $ — $ (25,800) $ — $ — Treasury rate lock contracts $ — $ — $ (91) $ (36) Three months ended March 28, 2021 Line item on the Consolidated statements of operations in which the effects of cash flow hedges are recorded $ 811,622 $ 231,844 $ 7,708 $ 55,707 Gain/(loss) reclassified from AOCL into income: Foreign currency contracts $ (4,953) $ — $ — $ — Commodity contracts $ (32) $ — $ — $ — Cross-currency swaps $ — $ (65,788) $ — $ — Treasury rate lock contracts $ — $ — $ (91) $ (33) Interest rate swaps $ — $ — $ — $ (2,689) The amount of net loss included in Accumulated other comprehensive loss (AOCL) at March 27, 2022, estimated to be reclassified into income over the next 12 months was $1.4 million. The amount of gains and losses recognized in income related to derivative financial instruments not designated as hedging instruments were as follows (in thousands). Gains and losses on foreign currency contracts and commodity contracts were recorded in Motorcycles cost of goods sold and the gains and losses on interest rate caps were recorded in Financial Services revenue . Amount of Gain/(Loss) Three months ended March 27, March 28, Foreign currency contracts $ (3,506) $ (3,629) Commodity contracts 2,387 703 Interest rate caps 1,700 123 $ 581 $ (2,803) The Company is exposed to credit loss risk in the event of non-performance by counterparties to its derivative financial instruments. Although no assurances can be given, the Company does not expect any of the counterparties to its derivative financial instruments to fail to meet their obligations. To manage credit loss risk, the Company evaluates counterparties based on credit ratings and, on a quarterly basis, evaluates each hedge’s net position relative to the counterparty’s ability to cover their position. |
Leases
Leases | 3 Months Ended |
Mar. 27, 2022 | |
Leases [Abstract] | |
Leases | Leases The Company determines if an arrangement is or contains a lease at contract inception. Right-of-use (ROU) assets related to the Company's leases are recorded in Lease assets and lease liabilities are recorded in Accrued liabilities and Lease liabilities on the Consolidated balance sheets . ROU assets represent the Company’s right to use an underlying asset over the lease term, and lease liabilities represent the Company's obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at the lease commencement date based on the present value of future lease payments over the lease term. The ROU asset also includes prepaid lease payments and initial direct costs and is reduced for lease incentives paid by the lessor. The discount rate used to determine the present value is generally the Company's incremental borrowing rate because the implicit rate in the lease is not readily determinable. The lease term used to calculate the ROU asset and lease liabilities includes periods covered by options to extend or terminate when the Company is reasonably certain the lease term will include these optional periods. In accordance with ASC Topic 842, Leases (ASC Topic 842), the Company elected the short-term lease practical expedient that allows entities to recognize lease payments on a straight-line basis over the lease term for leases with a term of 12 months or less. The Company has also elected the practical expedient under ASC Topic 842 allowing entities to not separate non-lease components from lease components, but instead account for such components as a single lease component for all leases except leases involving assets used in manufacturing and distribution processes. The Company has operating lease arrangements for sales and administrative offices, manufacturing and distribution facilities, product testing facilities, equipment and vehicles. The Company’s leases have remaining lease terms ranging from 1 to 6 years, some of which include options to extend the lease term for periods generally not greater than 5 years and some of which include options to terminate the leases within 1 year. Certain leases also include options to purchase the leased asset. The Company's leases do not contain any material residual value guarantees or material restrictive covenants. Operating lease expense for the three months ended March 27, 2022 and March 28, 2021 was $6.7 million and $8.2 million, respectively. This includes variable lease costs related to assets used in manufacturing and distribution processes of approximately $1.0 million and $3.1 million for the three months ended March 27, 2022 and March 28, 2021, respectively. Other variable and short-term lease costs were not material. Balance sheet information related to the Company's leases was as follows (in thousands): March 27, December 31, March 28, Lease assets $ 45,073 $ 49,625 $ 44,765 Accrued liabilities $ 15,745 $ 17,369 $ 17,021 Lease liabilities 27,633 29,904 30,061 $ 43,378 $ 47,273 $ 47,082 Future maturities of the Company's operating lease liabilities as of March 27, 2022 were as follows (in thousands): 2022 $ 13,552 2023 10,484 2024 7,745 2025 6,032 2026 5,075 Thereafter 1,927 Future lease payments 44,815 Present value discount (1,437) Lease liabilities $ 43,378 Other lease information surrounding the Company's operating leases was as follows (dollars in thousands): Three months ended March 27, March 28, Cash outflows for amounts included in the measurement of lease liabilities $ 4,957 $ 4,947 ROU assets obtained in exchange for lease obligations, net of modifications $ 1,279 $ 5,305 March 27, December 31, March 28, Weighted-average remaining lease term (in years) 3.78 3.86 3.81 Weighted-average discount rate 1.9 % 1.9 % 2.9 % |
Debt
Debt | 3 Months Ended |
Mar. 27, 2022 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt with a contractual term less than 12 months is generally classified as short-term and consisted of the following (in thousands): March 27, December 31, March 28, Unsecured commercial paper $ 816,016 $ 751,286 $ 749,801 Global credit facility borrowings — — 15,462 $ 816,016 $ 751,286 $ 765,263 Debt with a contractual term greater than 12 months is generally classified as long-term and consisted of the following (in thousands): March 27, December 31, March 28, Secured debt: Asset-backed Canadian commercial paper conduit facility $ 95,664 $ 85,054 $ 102,543 Asset-backed U.S. commercial paper conduit facility 269,534 272,589 350,648 Asset-backed securitization debt 1,363,254 1,634,753 2,109,046 Unamortized discounts and debt issuance costs (5,696) (7,611) (9,788) 1,722,756 1,984,785 2,552,449 Unsecured notes (at par value): Medium-term notes: Due in 2021, issued May 2018 3.55 % — — 350,000 Due in 2022, issued February 2019 4.05 % — 550,000 550,000 Due in 2022, issued June 2017 2.55 % 400,000 400,000 400,000 Due in 2023, issued February 2018 3.35 % 350,000 350,000 350,000 Due in 2023, issued May 2020 (a) 4.94 % 723,886 737,302 762,996 Due in 2024, issued November 2019 (b) 3.14 % 668,202 680,586 704,304 Due in 2025, issued June 2020 3.35 % 700,000 700,000 700,000 Due in 2027, issued February 2022 3.05 % 500,000 — — Unamortized discounts and debt issuance costs (12,243) (9,228) (13,564) 3,329,845 3,408,660 3,803,736 Senior notes: Due in 2025, issued July 2015 3.50 % 450,000 450,000 450,000 Due in 2045, issued July 2015 4.625 % 300,000 300,000 300,000 Unamortized discounts and debt issuance costs (5,158) (5,332) (5,851) 744,842 744,668 744,149 4,074,687 4,153,328 4,547,885 Long-term debt 5,797,443 6,138,113 7,100,334 Current portion of long-term debt, net (1,327,357) (1,542,496) (1,622,243) Long-term debt, net $ 4,470,086 $ 4,595,617 $ 5,478,091 (a) €650.0 million par value remeasured to U.S. dollar at March 27, 2022, December 31, 2021, and March 28, 2021, respectively (b) €600.0 million par value remeasured to U.S. dollar at March 27, 2022, December 31, 2021, and March 28, 2021, respectively Future principal payments of the Company's debt obligations as of March 27, 2022 were as follows (in thousands): 2022 $ 1,716,955 2023 1,591,745 2024 1,058,291 2025 1,398,474 2026 71,091 Thereafter 800,000 Future principal payments 6,636,556 Unamortized discounts and debt issuance costs (23,097) $ 6,613,459 |
Asset-Backed Financing
Asset-Backed Financing | 3 Months Ended |
Mar. 27, 2022 | |
Transfers and Servicing [Abstract] | |
Asset-Backed Financing | Asset-Backed Financing The Company participates in asset-backed financing both through asset-backed securitization transactions and through asset-backed commercial paper conduit facilities. In the Company's asset-backed financing programs, the Company transfers retail motorcycle finance receivables to special purpose entities (SPEs), which are considered VIEs under U.S. GAAP. Each SPE then converts those assets into cash, through the issuance of debt. The Company retains servicing rights for all of the retail motorcycle finance receivables transferred to SPEs as part of an asset-backed financing. The accounting treatment for asset-backed financings depends on the terms of the related transaction and the Company’s continuing involvement with the VIE. In transactions where the Company has power over the significant activities of the VIE and has an obligation to absorb losses or the right to receive benefits from the VIE that are potentially significant to the VIE, the Company is the primary beneficiary of the VIE and consolidates the VIE within its consolidated financial statements. On a consolidated basis, the asset-backed financing is treated as a secured borrowing in this type of transaction and is referred to as an on-balance sheet asset-backed financing. In transactions where the Company is not the primary beneficiary of the VIE, the Company must determine whether it can achieve a sale for accounting purposes under ASC Topic 860, Transfers and Servicing . To achieve a sale for accounting purposes, the assets being transferred must be legally isolated, not be constrained by restrictions from further transfer, and be deemed to be beyond the Company’s control. If the Company does not meet all of these criteria for sale accounting, then the transaction is accounted for as a secured borrowing and is referred to as an on-balance sheet asset-backed financing. If the Company meets all three of the sale criteria above, the transaction is recorded as a sale for accounting purposes and is referred to as an off-balance sheet asset-backed financing. Upon sale, the retail motorcycle finance receivables are removed from the Company’s Consolidated balance sheets and a gain or loss is recognized for the difference between the cash proceeds received, the assets derecognized, and the liabilities recognized as part of the transaction. The gain or loss on sale is included in Financial Services revenue on the Consolidated statements of operations . The Company is not required, and does not currently intend, to provide any additional financial support to the on- or off-balance sheet VIEs associated with these transactions. Investors and creditors in these transactions only have recourse to the assets held by the VIEs. The assets and liabilities related to the on-balance sheet asset-backed financings included in the Consolidated balance sheets were as follows (in thousands): March 27, 2022 Finance receivables Allowance for credit losses Restricted cash Other assets Total assets Asset-backed debt, net On-balance sheet assets and liabilities: Consolidated VIEs: Asset-backed securitizations $ 1,755,446 $ (88,090) $ 131,992 $ 3,724 $ 1,803,072 $ 1,357,558 Asset-backed U.S. commercial paper conduit facility 290,481 (14,549) 24,305 649 300,886 269,534 Unconsolidated VIEs: Asset-backed Canadian commercial paper conduit facility 108,052 (4,457) 8,129 43 111,767 95,664 $ 2,153,979 $ (107,096) $ 164,426 $ 4,416 $ 2,215,725 $ 1,722,756 December 31, 2021 Finance receivables Allowance for credit losses Restricted cash Other assets Total assets Asset-backed debt, net On-balance sheet assets and liabilities: Consolidated VIEs: Asset-backed securitizations $ 2,048,194 $ (102,779) $ 123,717 $ 2,328 $ 2,071,460 $ 1,627,142 Asset-backed U.S. commercial paper conduit facility 297,454 (14,898) 20,567 654 303,777 272,589 Unconsolidated VIEs: Asset-backed Canadian commercial paper conduit facility 97,180 (3,990) 6,191 139 99,520 85,054 $ 2,442,828 $ (121,667) $ 150,475 $ 3,121 $ 2,474,757 $ 1,984,785 March 28, 2021 Finance receivables Allowance for credit losses Restricted cash Other assets Total assets Asset-backed debt, net On-balance sheet assets and liabilities: Consolidated VIEs: Asset-backed securitizations $ 2,448,681 $ (126,053) $ 166,694 $ 2,852 $ 2,492,174 $ 2,099,258 Asset-backed U.S. commercial paper conduit facility 378,035 (19,432) 30,252 1,175 390,030 350,648 Unconsolidated VIEs: Asset-backed Canadian commercial paper conduit facility 115,742 (5,388) 9,743 206 120,303 102,543 $ 2,942,458 $ (150,873) $ 206,689 $ 4,233 $ 3,002,507 $ 2,552,449 On-Balance Sheet Asset-Backed Securitization VIEs – The Company transfers U.S. retail motorcycle finance receivables to SPEs which in turn issue secured notes to investors, with various maturities and interest rates, secured by future collections of the purchased U.S. retail motorcycle finance receivables. Each on-balance sheet asset-backed securitization SPE is a separate legal entity, and the U.S. retail motorcycle finance receivables included in the asset-backed securitizations are only available for payment of the secured debt and other obligations arising from the asset-backed securitization transactions and are not available to pay other obligations or claims of the Company’s creditors until the associated secured debt and other obligations are satisfied. Restricted cash balances held by the SPEs are used only to support the securitizations. There are no amortization schedules for the secured notes; however, the debt is reduced monthly as available collections on the related U.S. retail motorcycle finance receivables are applied to outstanding principal. The secured notes currently have various contractual maturities ranging from 2024 to 2029. The Company is the primary beneficiary of its on-balance sheet asset-backed securitization VIEs because it retains servicing rights and a residual interest in the VIEs in the form of a debt security. As the servicer, the Company is the variable interest holder with the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance. As a residual interest holder, the Company has the obligation to absorb losses and the right to receive benefits which could potentially be significant to the VIE. There were no on-balance sheet asset-backed securitization transactions during the first quarter of 2022. During the first quarter of 2021, the Company transferred $663.1 million of U.S. retail motorcycle finance receivables to an SPE which, in turn, issued $600.0 million, or $597.4 million net of discount and issuance costs, of secured notes through an on-balance sheet asset-backed securitization transaction. On-Balance Sheet Asset-Backed U.S. Commercial Paper Conduit Facility VIE – The Company has a $900.0 million revolving facility agreement (the U.S. Conduit Facility) with third-party banks and their asset-backed U.S. commercial paper conduits. Under the revolving facility agreement, the Company may transfer U.S. retail motorcycle finance receivables to an SPE, which in turn may issue debt to those third-party banks and their asset-backed U.S. commercial paper conduits. In addition to the $900.0 million aggregate commitment, the agreement allows for additional borrowings, at the lender’s discretion, of up to $300.0 million. Availability under the U.S. Conduit Facility is based on, among other things, the amount of eligible U.S. retail motorcycle finance receivables held by the SPE as collateral. Under the U.S. Conduit Facility, the assets of the SPE are restricted as collateral for the payment of the debt or other obligations arising in the transaction and are not available to pay other obligations or claims of the Company’s creditors. The terms for this debt provide for interest on the outstanding principal based on prevailing commercial paper rates if funded by a conduit lender through the issuance of commercial paper. If not funded by a conduit lender through the issuance of commercial paper, the terms of the interest are based on LIBOR, with provisions for a transition to other benchmark rates, generally aligning to recommendations published by the Alternative Reference Rates Committee convened by the Federal Reserve Board and Federal Reserve Bank of New York. In each of these cases, a program fee is assessed based on the outstanding debt principal balance. The U.S. Conduit Facility also provides for an unused commitment fee based on the unused portion of the total aggregate commitment. When calculating the unused fee, the aggregate commitment does not include any unused portion of the $300.0 million additional borrowings allowed. There is no amortization schedule; however, the debt is reduced monthly as available collections on the related finance receivables are applied to outstanding principal. Upon expiration of the U.S. Conduit Facility, any outstanding principal will continue to be reduced monthly through available collections. The expected remaining term of the related receivables held by the SPE is approximately 5 years. Unless earlier terminated or extended by mutual agreement of the Company and the lenders, as of March 27, 2022, the U.S. Conduit Facility has an expiration date of November 18, 2022. The Company is the primary beneficiary of its U.S. Conduit Facility VIE because it retains servicing rights and a residual interest in the VIE in the form of a debt security. As the servicer, the Company is the variable interest holder with the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance. As a residual interest holder, the Company has the obligation to absorb losses and the right to receive benefits which could potentially be significant to the VIE. During the first quarter of 2022, the Company transferred $47.1 million of U.S. retail motorcycle finance receivables to an SPE which, in turn, issued $41.3 million of debt under the U.S. Conduit Facility. There were no finance receivable transfers under the U.S. Conduit Facility during the first quarter of 2021. On-Balance Sheet Asset-Backed Canadian Commercial Paper Conduit Facility – The Company has a revolving facility agreement (Canadian Conduit) with a Canadian bank-sponsored asset-backed commercial paper conduit. Under the agreement, the Canadian Conduit is contractually committed, at the Company's option, to purchase eligible Canadian retail motorcycle finance receivables for proceeds up to C$125.0 million. Prior to the renewal and amendment, the Canadian Conduit was contractually committed, at the Company's option, to purchase from the Company eligible Canadian retail motorcycle finance receivables for proceeds up to C$220.0 million. The transferred assets are restricted as collateral for the payment of the associated debt. The terms for this debt provide for interest on the outstanding principal based on prevailing market interest rates plus a specified margin. The Canadian Conduit also provides for a program fee and an unused commitment fee based on the unused portion of the total aggregate commitment of C$125.0 million. There is no amortization schedule; however, the debt is reduced monthly as available collections on the related finance receivables are applied to outstanding principal. Upon expiration of the Canadian Conduit, any outstanding principal will continue to be reduced monthly through available collections. The expected remaining term of the related receivables is approximately 5 years. Unless earlier terminated or extended by mutual agreement between the Company and the lenders, as of March 27, 2022, the Canadian Conduit has an expiration date of June 27, 2022. The Company is not the primary beneficiary of the Canadian bank-sponsored, multi-seller conduit VIE; therefore, the Company does not consolidate the VIE. However, the Company treats the conduit facility as a secured borrowing as it maintains effective control over the assets transferred to the VIE and, therefore, does not meet the requirements for sale accounting. As the Company participates in and does not consolidate the Canadian bank-sponsored, multi-seller conduit VIE, the maximum exposure to loss associated with this VIE, which would only be incurred in the unlikely event that all the finance receivables and underlying collateral have no residual value, was $16.1 million at March 27, 2022. The maximum exposure is not an indication of the Company's expected loss exposure. During the first quarter of 2022, the Company transferred $25.3 million of Canadian retail motorcycle finance receivables to the Canadian Conduit for proceeds of $21.2 million. There were no finance receivable transfers under the Canadian Conduit during the first quarter of 2021. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 27, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value The Company assesses the inputs used to measure fair value using a three-tier hierarchy. Level 1 inputs include quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, foreign currency exchange rates, commodity prices, and yield curves. The Company uses the market approach to derive the fair value for its Level 2 fair value measurements. Foreign currency contracts, commodity contracts, and cross-currency swaps are valued using quoted forward rates and prices; interest rate caps are valued using quoted interest rates and yield curves. Level 3 inputs are not observable in the market and include the Company's judgments about the assumptions market participants would use in pricing the asset or liability. Recurring Fair Value Measurements – The Company’s assets and liabilities measured at fair value on a recurring basis were as follows (in thousands): March 27, 2022 Balance Level 1 Level 2 Assets: Cash equivalents $ 968,395 $ 803,400 $ 164,995 Marketable securities 45,189 45,189 — Derivative financial instruments 43,065 — 43,065 $ 1,056,649 $ 848,589 $ 208,060 Liabilities: Derivative financial instruments $ 4,298 $ — $ 4,298 December 31, 2021 Balance Level 1 Level 2 Assets: Cash equivalents $ 1,617,887 $ 1,337,900 $ 279,987 Marketable securities 49,650 49,650 — Derivative financial instruments 52,034 — 52,034 $ 1,719,571 $ 1,387,550 $ 332,021 Liabilities: Derivative financial instruments $ 2,361 $ — $ 2,361 March 28, 2021 Balance Level 1 Level 2 Assets: Cash equivalents $ 2,069,400 $ 1,919,400 $ 150,000 Marketable securities 50,239 50,239 — Derivative financial instruments 81,841 — 81,841 $ 2,201,480 $ 1,969,639 $ 231,841 Liabilities: Derivative financial instruments $ 6,726 $ — $ 6,726 Nonrecurring Fair Value Measurements – Repossessed inventory is recorded at the lower of cost or net realizable value through a nonrecurring fair value measurement. Repossessed inventory was $17.9 million, $18.3 million and $18.6 million at March 27, 2022, December 31, 2021 and March 28, 2021, respectively, for which the fair value adjustment was a decrease of $0.6 million, $2.9 million and $2.4 million, respectively. Fair value is estimated using Level 2 inputs based on the recent market values of repossessed inventory. Fair Value of Financial Instruments Measured at Cost – The carrying value of the Company's Cash and cash equivalents and Restricted cash approximates their fair values. The fair value and carrying value of the Company’s remaining financial instruments that are measured at cost or amortized cost were as follows (in thousands): March 27, 2022 December 31, 2021 March 28, 2021 Fair Value Carrying Value Fair Value Carrying Value Fair Value Carrying Value Assets: Finance receivables, net $ 6,920,395 $ 6,821,553 $ 6,794,499 $ 6,571,921 $ 6,930,531 $ 6,756,777 Liabilities: Deposits, net $ 359,995 $ 348,083 $ 293,602 $ 290,326 $ 152,715 $ 152,653 Debt: Unsecured commercial paper $ 816,016 $ 816,016 $ 751,286 $ 751,286 $ 749,801 $ 749,801 Global credit facility borrowings $ — $ — $ — $ — $ 15,462 $ 15,462 Asset-backed U.S. commercial paper conduit facility $ 269,534 $ 269,534 $ 272,589 $ 272,589 $ 350,648 $ 350,648 Asset-backed Canadian commercial paper conduit facility $ 95,664 $ 95,664 $ 85,054 $ 85,054 $ 102,543 $ 102,543 Asset-backed securitization debt $ 1,343,706 $ 1,357,558 $ 1,633,749 $ 1,627,142 $ 2,120,855 $ 2,099,258 Medium-term notes $ 3,326,310 $ 3,329,845 $ 3,513,815 $ 3,408,660 $ 3,955,743 $ 3,803,736 Senior notes $ 724,089 $ 744,842 $ 790,373 $ 744,668 $ 789,967 $ 744,149 Finance Receivables, net – The carrying value of retail and wholesale finance receivables is amortized cost less an allowance for credit losses. The fair value of retail finance receivables is generally calculated by discounting future cash flows using an estimated discount rate that reflects current credit, interest rate and prepayment risks associated with similar types of instruments. Fair value is determined based on Level 3 inputs. The amortized cost basis of wholesale finance receivables approximates fair value because they are generally either short-term or have interest rates that adjust with changes in market interest rates. Deposits, net – The carrying value of deposits is amortized cost. The fair value of deposits is estimated based upon rates currently available for deposits with similar terms and maturities. Fair value is calculated using Level 3 inputs. Debt – The carrying value of debt is generally cost, net of unamortized discounts and debt issuance costs. The fair value of unsecured commercial paper and credit facility borrowings are calculated using Level 2 inputs and approximates carrying value due to its short maturity. The fair value of debt provided under the U.S. Conduit Facility and the Canadian Conduit Facility is calculated using Level 2 inputs and approximates carrying value since the interest rates charged under the facilities are tied directly to market rates and fluctuate as market rates change. The fair values of the medium-term notes and senior notes are estimated based upon rates currently available for debt with similar terms and remaining maturities (Level 2 inputs). The fair value of the fixed-rate debt related to on-balance sheet asset-backed securitization transactions is estimated based on pricing currently available for transactions with similar terms and maturities (Level 2 inputs). The fair value of the floating-rate debt related to on-balance sheet asset-backed securitization transactions is calculated using Level 2 inputs and approximates carrying value since the interest rates charged are tied directly to market rates and fluctuate as market rates change. |
Product Warranty and Recall Cam
Product Warranty and Recall Campaigns | 3 Months Ended |
Mar. 27, 2022 | |
Product Warranties Disclosures [Abstract] | |
Product Warranty and Recall Campaigns | Product Warranty and Recall CampaignsThe Company currently provides a standard two-year limited warranty on all new motorcycles sold worldwide, except in certain markets, where the Company currently provides a standard three-year limited warranty. The Company also provides a five-year unlimited warranty on the battery for electric motorcycles. In addition, the Company provides a one-year warranty for parts and accessories. The warranty coverage for the retail customer generally begins when the product is sold to a retail customer. The Company accrues for future warranty claims at the time of shipment using an estimated cost based primarily on historical Company claim information. Additionally, the Company has from time to time initiated certain voluntary recall campaigns. The Company records estimated recall costs when the liability is both probable and estimable. This generally occurs when the Company's management approves and commits to a recall. The warranty and recall liability is included in Accrued liabilities and Other long-term liabilities on the Consolidated balance sheets . Changes in the Company’s warranty and recall liabilities were as follows (in thousands): Three months ended March 27, March 28, Balance, beginning of period $ 61,621 $ 69,208 Warranties issued during the period 10,711 11,672 Settlements made during the period (7,096) (8,585) Recalls and changes to pre-existing warranty liabilities (141) 132 Balance, end of period $ 65,095 $ 72,427 The liability for recall campaigns, included in the balance above, was $16.7 million, $16.9 million and $25.3 million at March 27, 2022, December 31, 2021 and March 28, 2021, respectively. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 27, 2022 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans The Company has a qualified pension plan and postretirement healthcare benefit plans. The plans cover certain eligible employees and retirees of the Motorcycles segment. The Company also has unfunded supplemental employee retirement plan agreements (SERPA) with certain employees. Service cost is allocated among Selling, administrative and engineering expense, Motorcycles cost of goods sold and Inventories, net . Amounts capitalized in inventory are not significant. Non-service cost components of net periodic benefit (income) cost are presented in Other income, net . Components of net periodic benefit (income) cost for the Company's defined benefit plans were as follows (in thousands): Three months ended March 27, March 28, Pension and SERPA Benefits: Service cost $ 4,763 $ 6,348 Interest cost 15,472 15,470 Expected return on plan assets (31,476) (32,720) Amortization of unrecognized: Prior service credit (328) (312) Net loss 7,978 18,386 Settlement (gain) loss (256) 816 Net periodic benefit (income) cost $ (3,847) $ 7,988 Postretirement Healthcare Benefits: Service cost $ 1,161 $ 1,288 Interest cost 1,904 1,626 Expected return on plan assets (3,809) (3,495) Amortization of unrecognized: Prior service credit (581) (581) Net loss 122 264 Net periodic benefit income $ (1,203) $ (898) There are no required or planned voluntary qualified pension plan contributions for 2022. The Company expects it will continue to make ongoing benefit payments under the SERPA and postretirement healthcare plans. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 27, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Litigation and Other Claims – The Company is subject to lawsuits and other claims related to product, commercial, employee, environmental and other matters. In determining costs to accrue related to these items, the Company carefully analyzes cases and considers the likelihood of adverse judgments or outcomes, as well as the potential range of possible loss. The Company accrues for matters when losses are both probable and estimable. Any amounts accrued for these matters are monitored on an ongoing basis and are updated based on new developments or new information as it becomes available for each matter. The Company also maintains insurance coverage for product liability exposures. The Company believes that its accruals and insurance coverage are adequate and there are no material exposures to loss in excess of amounts accrued and insured for losses related to these matters. LiveWire Transaction – On December 13, 2021, the Company and AEA-Bridges Impact Corp. (ABIC), a special purpose acquisition company (SPAC), announced that they have entered into a definitive business combination agreement under which LiveWire, the Company's electric motorcycle division, will become a separate business of the Company and ABIC will combine with LiveWire to create a new publicly traded company. The parties expect that the transaction will be financed by ABIC’s $400 million cash held in trust (assuming no redemptions by ABIC’s shareholders in the context of the transaction), a $100 million cash investment from the Company, and a $100 million investment from an independent strategic investor, Kwang Yang Motor Co., Ltd. (KYMCO). In addition, to the extent any shares of the SPAC are redeemed, the Company will invest an additional amount equal to the dollar value of such redemptions up to a maximum of $100 million. The transaction, which has been approved by the boards of directors of both the Company and ABIC, is expected to close mid-2022. The consummation of the business combination is subject to the approval of ABIC’s shareholders as well as other conditions and regulatory approvals. Upon closing of the transaction, the Company will retain a controlling financial interest in LiveWire. The expectation is that, upon closing of the transaction, the Company will retain an equity interest in the separate public company of approximately 74%. As the controlling shareholder following the transaction, the Company will continue to consolidate LiveWire’s results, with additional adjustments to recognize non-controlling shareholder interests. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 27, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss Changes in Accumulated other comprehensive loss were as follows (in thousands): Three months ended March 27, 2022 Foreign currency translation adjustments Derivative financial instruments Pension and postretirement benefit plans Total Balance, beginning of period $ (44,401) $ (2,005) $ (194,513) $ (240,919) Other comprehensive loss, before reclassifications (3,804) (7,230) — (11,034) Income tax (expense) benefit (317) 1,493 — 1,176 (4,121) (5,737) — (9,858) Reclassifications: Net loss on derivative financial instruments — 20,046 — 20,046 Prior service credits (a) — — (909) (909) Actuarial losses (a) — — 8,100 8,100 Reclassifications before tax — 20,046 7,191 27,237 Income tax expense — (4,381) (1,689) (6,070) — 15,665 5,502 21,167 Other comprehensive (loss) income (4,121) 9,928 5,502 11,309 Balance, end of period $ (48,522) $ 7,923 $ (189,011) $ (229,610) Three months ended March 28, 2021 Foreign currency translation adjustments Derivative financial instruments Pension and postretirement benefit plans Total Balance, beginning of period $ (7,589) $ (46,116) $ (429,712) $ (483,417) Other comprehensive loss, before reclassifications (17,074) (50,737) — (67,811) Income tax (expense) benefit (264) 11,092 — 10,828 (17,338) (39,645) — (56,983) Reclassifications: Net loss on derivative financial instruments — 73,586 — 73,586 Prior service credits (a) — — (893) (893) Actuarial losses (a) — — 18,650 18,650 Reclassifications before tax — 73,586 17,757 91,343 Income tax expense — (16,411) (4,169) (20,580) — 57,175 13,588 70,763 Other comprehensive (loss) income (17,338) 17,530 13,588 13,780 Balance, end of period $ (24,927) $ (28,586) $ (416,124) $ (469,637) (a) Amounts reclassified are included in the computation of net periodic benefit (income) cost, discussed further in Note 15 |
Reportable Segments
Reportable Segments | 3 Months Ended |
Mar. 27, 2022 | |
Segment Reporting [Abstract] | |
Reportable Segments | Reportable Segments Harley-Davidson, Inc. is the parent company for the groups of companies referred to as Harley-Davidson Motor Company and Harley-Davidson Financial Services. The Company operates in two business segments: Motorcycles and Related Products (Motorcycles) and Financial Services. The Company's reportable segments are strategic business units that offer different products and services and are managed separately based on the fundamental differences in their operations. The Motorcycles segment consists of the activities of Harley-Davidson Motor Company which designs, manufactures and sells motorcycles. The Motorcycles segment also sells motorcycle parts, accessories, and apparel as well as licenses its trademarks. The Company's products are sold to retail customers primarily through a network of dealers. The Financial Services segment consists of Harley-Davidson Financial Services which is engaged in the business of financing and servicing wholesale inventory receivables and retail consumer loans, primarily for the purchase of Harley-Davidson motorcycles. Harley-Davidson Financial Services also works with certain unaffiliated insurance companies to provide motorcycle insurance and protection products to motorcycle owners. Selected segment information is set forth below (in thousands): Three months ended March 27, March 28, Motorcycles and Related Products: Motorcycles revenue $ 1,303,171 $ 1,232,107 Gross profit 407,635 420,485 Selling, administrative and engineering expense 204,888 193,546 Restructuring benefit (128) (593) Operating income 202,875 227,532 Financial Services: Financial Services revenue 192,015 190,400 Financial Services expense 105,658 71,531 Restructuring expense — 227 Operating income 86,357 118,642 Operating income $ 289,232 $ 346,174 Total assets for the Motorcycles and Financial Services segments were $3.0 billion and $7.9 billion, respectively, as of March 27, 2022, $3.3 billion and $7.7 billion, respectively, as of December 31, 2021, and $2.4 billion and $8.9 billion, respectively, as of March 28, 2021. |
Supplemental Consolidating Data
Supplemental Consolidating Data | 3 Months Ended |
Mar. 27, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Consolidating Data | Supplemental Consolidating Data The supplemental consolidating legal entity data for Harley-Davidson Motor Company, Harley-Davidson Financial Services and related consolidating adjustments are presented for informational purposes. The legal entity income statement information presented below differs from reportable segment income statement information due to the allocation of legal entity consolidating adjustments to income for reportable segments. Supplemental consolidating data is as follows (in thousands): Three months ended March 27, 2022 Harley-Davidson Motor Company Harley-Davidson Financial Services Consolidating Adjustments Consolidated Revenue: Motorcycles and Related Products $ 1,306,293 $ — $ (3,122) $ 1,303,171 Financial Services — 192,390 (375) 192,015 1,306,293 192,390 (3,497) 1,495,186 Costs and expenses: Motorcycles and Related Products cost of goods sold 895,536 — — 895,536 Financial Services interest expense — 42,099 — 42,099 Financial Services provision for credit losses — 28,822 — 28,822 Selling, administrative and engineering expense 205,417 37,858 (3,650) 239,625 Restructuring benefit (128) — — (128) 1,100,825 108,779 (3,650) 1,205,954 Operating income 205,468 83,611 153 289,232 Other income, net 11,030 — — 11,030 Investment loss (1,979) — — (1,979) Interest expense 7,711 — — 7,711 Income before income taxes 206,808 83,611 153 290,572 Provision for income taxes 47,847 20,223 — 68,070 Net income $ 158,961 $ 63,388 $ 153 $ 222,502 Three months ended March 28, 2021 Harley-Davidson Motor Company Harley-Davidson Financial Services Consolidating Adjustments Consolidated Revenue: Motorcycles and Related Products $ 1,238,468 $ — $ (6,361) $ 1,232,107 Financial Services — 188,750 1,650 190,400 1,238,468 188,750 (4,711) 1,422,507 Costs and expenses: Motorcycles and Related Products cost of goods sold 811,622 — — 811,622 Financial Services interest expense — 55,707 — 55,707 Financial Services provision for credit losses — (22,474) — (22,474) Selling, administrative and engineering expense 196,359 40,275 (4,790) 231,844 Restructuring (benefit) expense (593) 227 — (366) 1,007,388 73,735 (4,790) 1,076,333 Operating income 231,080 115,015 79 346,174 Other income, net 277 — — 277 Investment income 1,402 — — 1,402 Interest expense 7,708 — — 7,708 Income before income taxes 225,051 115,015 79 340,145 Provision for income taxes 55,996 25,005 — 81,001 Net income $ 169,055 $ 90,010 $ 79 $ 259,144 March 27, 2022 Harley-Davidson Motor Company Harley-Davidson Financial Services Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ 678,616 $ 715,115 $ — $ 1,393,731 Accounts receivable, net 601,148 — (346,862) 254,286 Finance receivables, net — 1,699,642 — 1,699,642 Inventories, net 714,259 — — 714,259 Restricted cash — 142,812 — 142,812 Other current assets 149,955 61,455 (28,883) 182,527 2,143,978 2,619,024 (375,745) 4,387,257 Finance receivables, net — 5,121,911 — 5,121,911 Property, plant and equipment, net 636,216 27,591 — 663,807 Pension and postretirement assets 399,029 — — 399,029 Goodwill 62,607 — — 62,607 Deferred income taxes — 75,185 (3,259) 71,926 Lease assets 38,126 6,947 — 45,073 Other long-term assets 210,157 37,595 (104,722) 143,030 $ 3,490,113 $ 7,888,253 $ (483,726) $ 10,894,640 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 434,731 $ 389,048 $ (346,862) $ 476,917 Accrued liabilities 495,921 129,581 (27,578) 597,924 Short-term deposits, net — 65,049 — 65,049 Short-term debt — 816,016 — 816,016 Current portion of long-term debt, net — 1,327,357 — 1,327,357 930,652 2,727,051 (374,440) 3,283,263 Long-term deposits, net — 283,034 — 283,034 Long-term debt, net 744,842 3,725,244 — 4,470,086 Lease liabilities 20,544 7,089 — 27,633 Pension and postretirement liabilities 93,792 — — 93,792 Deferred income taxes 10,478 1,848 (2,748) 9,578 Other long-term liabilities 165,990 50,190 1,973 218,153 Commitments and contingencies (Note 16) Shareholders’ equity 1,523,815 1,093,797 (108,511) 2,509,101 $ 3,490,113 $ 7,888,253 $ (483,726) $ 10,894,640 March 28, 2021 Harley-Davidson Motor Company Harley-Davidson Financial Services Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ 607,941 $ 1,712,704 $ — $ 2,320,645 Accounts receivable, net 603,273 — (386,704) 216,569 Finance receivables, net — 1,798,194 — 1,798,194 Inventories, net 470,997 — — 470,997 Restricted cash — 185,374 — 185,374 Other current assets 81,559 113,797 — 195,356 1,763,770 3,810,069 (386,704) 5,187,135 Finance receivables, net — 4,958,583 — 4,958,583 Property, plant and equipment, net 687,086 31,882 — 718,968 Pension and postretirement assets 105,910 — — 105,910 Goodwill 65,157 — — 65,157 Deferred income taxes 56,911 79,206 (730) 135,387 Lease assets 36,559 8,206 — 44,765 Other long-term assets 184,876 33,929 (95,722) 123,083 $ 2,900,269 $ 8,921,875 $ (483,156) $ 11,338,988 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 355,722 $ 433,746 $ (386,704) $ 402,764 Accrued liabilities 443,529 125,768 1,143 570,440 Short-term deposits, net — 93,887 — 93,887 Short-term debt — 765,263 — 765,263 Current portion of long-term debt, net — 1,622,243 — 1,622,243 799,251 3,040,907 (385,561) 3,454,597 Long-term deposits, net — 58,766 — 58,766 Long-term debt, net 744,149 4,733,942 — 5,478,091 Lease liabilities 22,461 7,600 — 30,061 Pension and postretirement liabilities 103,854 — — 103,854 Deferred income taxes 7,166 1,516 — 8,682 Other long-term liabilities 179,525 46,920 2,106 228,551 Commitments and contingencies (Note 16) Shareholders’ equity 1,043,863 1,032,224 (99,701) 1,976,386 $ 2,900,269 $ 8,921,875 $ (483,156) $ 11,338,988 Three months ended March 27, 2022 Harley-Davidson Motor Company Harley-Davidson Financial Services Consolidating Adjustments Consolidated Cash flows from operating activities: Net income $ 158,961 $ 63,388 $ 153 $ 222,502 Adjustments to reconcile Net income to Net cash (used) provided by operating activities: Depreciation and amortization 37,106 2,152 — 39,258 Amortization of deferred loan origination costs — 22,995 — 22,995 Amortization of financing origination fees 174 3,527 — 3,701 Provision for long-term employee benefits (5,050) — — (5,050) Employee benefit plan contributions and payments (2,143) — — (2,143) Stock compensation expense 8,233 670 — 8,903 Net change in wholesale finance receivables related to sales — — (205,727) (205,727) Provision for credit losses — 28,822 — 28,822 Deferred income taxes 6,176 665 (534) 6,307 Other, net (5,322) 67 (153) (5,408) Changes in current assets and liabilities: Accounts receivable, net (319,329) — 244,336 (74,993) Finance receivables – accrued interest and other — 3,115 — 3,115 Inventories, net (2,630) — — (2,630) Accounts payable and accrued liabilities 86,546 289,876 (269,453) 106,969 Other current assets (47,418) 14,467 25,651 (7,300) (243,657) 366,356 (205,880) (83,181) Net cash (used) provided by operating activities (84,696) 429,744 (205,727) 139,321 Cash flows from investing activities: Capital expenditures (27,149) (850) — (27,999) Origination of finance receivables — (2,023,861) 965,400 (1,058,461) Collections on finance receivables — 1,724,863 (759,673) 965,190 Other investing activities 135 — — 135 Net cash used by investing activities (27,014) (299,848) 205,727 (121,135) Three months ended March 27, 2022 Harley-Davidson Motor Company Harley-Davidson Financial Services Consolidating Adjustments Consolidated Cash flows from financing activities: Proceeds from issuance of medium-term notes — 495,785 — 495,785 Repayments of medium-term notes — (550,000) — (550,000) Repayments of securitization debt — (271,499) — (271,499) Borrowings of asset-backed commercial paper — 62,455 — 62,455 Repayments of asset-backed commercial paper — (56,634) — (56,634) Net increase in unsecured commercial paper — 64,521 — 64,521 Net increase in deposits — 57,660 — 57,660 Dividends paid (24,056) — — (24,056) Repurchase of common stock (261,737) — — (261,737) Net cash used by financing activities (285,793) (197,712) — (483,505) Effect of exchange rate changes on cash, cash equivalents and restricted cash (2,086) 343 — (1,743) Net decrease in cash, cash equivalents and restricted cash $ (399,589) $ (67,473) $ — $ (467,062) Cash, cash equivalents and restricted cash: Cash, cash equivalents and restricted cash, beginning of period $ 1,078,205 $ 947,014 $ — $ 2,025,219 Net decrease in cash, cash equivalents and restricted cash (399,589) (67,473) — (467,062) Cash, cash equivalents and restricted cash, end of period $ 678,616 $ 879,541 $ — $ 1,558,157 |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 27, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event In April 2022, the Company issued $550.0 million of secured notes through an on-balance sheet asset-backed securitization transaction at a weighted average interest rate of 2.40% . |
Basis of Presentation and Use_2
Basis of Presentation and Use of Estimates (Policies) | 3 Months Ended |
Mar. 27, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Use of Estimates | The preparation of financial statements in conformity with U.S. GAAP requires the Company's management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. |
New Accounting Standards | Accounting Standards Not Yet AdoptedIn March 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-02, Financial Instruments-Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (ASU 2022-02). ASU 2022-02 addresses areas identified by the FASB as part of its post-implementation review of its previously issued credit losses standard (ASU 2016-13) that introduced the CECL model. ASU 2022-02 eliminates the accounting guidance for troubled debt restructurings by creditors that have adopted the CECL model and enhances disclosure requirements for certain loan refinancings and restructurings made with borrowers experiencing financial difficulty. In addition, ASU 2022-02 requires a public business entity to disclose current-period gross write-offs for financing receivables and net investment in leases by year of origination in the vintage disclosures. As the Company has already adopted ASU 2016-13, the new guidance is effective for the fiscal years beginning after December 15, 2022 and for interim periods within those fiscal years. Early adoption is permitted. The adoption of ASU 2022-02 is not expected to have a material impact on the Company's consolidated financial statements. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Disaggregated revenue by major source was as follows (in thousands): Three months ended March 27, March 28, Motorcycles and Related Products Revenue: Motorcycles $ 1,059,113 $ 1,016,334 Parts and accessories 165,525 149,859 Apparel 51,407 50,323 Licensing 6,497 5,512 Other 20,629 10,079 1,303,171 1,232,107 Financial Services Revenue: Interest income 161,734 159,814 Other 30,281 30,586 192,015 190,400 $ 1,495,186 $ 1,422,507 |
Deferred Revenue | Deferred revenue, included in Accrued liabilities and Other long-term liabilities on the Consolidated balance sheets , was as follows (in thousands): March 27, March 28, Balance, beginning of period $ 40,092 $ 36,614 Balance, end of period $ 38,842 $ 36,266 |
Restructuring Activities (Table
Restructuring Activities (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Restructuring and Related Activities [Abstract] | |
Changes in the Accrued Restructuring Liability | This includes restructuring (benefit) expense for the three months ended March 27, 2022 and March 28, 2021 by segment as follows (in thousands): Three months ended March 27, March 28, Motorcycles and Related Products $ (128) $ (593) Financial Services — 227 $ (128) $ (366) Changes in accrued restructuring expenses, which are included in Accrued liabilities on the Consolidated balance sheets, were as follows (in thousands): Three months ended March 27, 2022 Employee Termination Benefits Contract Terminations Non-Current Asset Adjustments Total Balance, beginning of period $ 121 $ 2,874 $ — $ 2,995 Restructuring benefit — (128) — (128) Utilized – cash (18) (1,614) — (1,632) Foreign currency changes (3) 1 — (2) Balance, end of period $ 100 $ 1,133 $ — $ 1,233 Three months ended March 28, 2021 Employee Termination Benefits Contract Terminations Non-Current Asset Adjustments Total Balance, beginning of period $ 7,724 $ 16,196 $ — $ 23,920 Restructuring (benefit) expense (944) 1,106 (528) (366) Utilized – cash (3,661) (12,781) — (16,442) Utilized – non cash — — 528 528 Foreign currency changes (112) (54) — (166) Balance, end of period $ 3,007 $ 4,467 $ — $ 7,474 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Earnings Per Share [Abstract] | |
Reconciliation of Earnings Per Share Basic and Diluted | The computation of basic and diluted earnings per share was as follows (in thousands, except per share amounts): Three months ended March 27, March 28, Net income $ 222,502 $ 259,144 Basic weighted-average shares outstanding 152,820 153,478 Effect of dilutive securities – employee stock compensation plan 1,104 1,012 Diluted weighted-average shares outstanding 153,924 154,490 Net earnings per share: Basic $ 1.46 $ 1.69 Diluted $ 1.45 $ 1.68 |
Additional Balance Sheet and _2
Additional Balance Sheet and Cash Flow Information (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Marketable Securities | Investments in Marketable Securities – The Company’s investments in marketable securities consisted of the following (in thousands): March 27, December 31, March 28, Mutual funds $ 45,189 $ 49,650 $ 50,239 |
Inventories, Net | Inventories, net consisted of the following (in thousands): March 27, December 31, March 28, Raw materials and work in process $ 376,600 $ 347,915 $ 251,199 Motorcycle finished goods 291,623 345,956 185,590 Parts and accessories and apparel 130,156 103,191 88,291 Inventory at lower of FIFO cost or net realizable value 798,379 797,062 525,080 Excess of FIFO over LIFO cost (84,120) (84,120) (54,083) $ 714,259 $ 712,942 $ 470,997 |
Certificates of Deposit Maturity | Future maturities of the Company's certificates of deposit as of March 27, 2022 were as follows (in thousands): 2022 $ 58,475 2023 74,304 2024 71,696 2025 19,053 2026 79,742 Thereafter 46,060 Future maturities 349,330 Unamortized fees (1,247) $ 348,083 |
Reconciliation of Net Cash Provided by Operating Activities | The reconciliation of Net income to Net cash provided by operating activities was as follows (in thousands): Three months ended March 27, March 28, Cash flows from operating activities: Net income $ 222,502 $ 259,144 Adjustments to reconcile Net income to Net cash provided by operating activities: Depreciation and amortization 39,258 40,221 Amortization of deferred loan origination costs 22,995 19,200 Amortization of financing origination fees 3,701 3,614 Provision for long-term employee benefits (5,050) 7,090 Employee benefit plan contributions and payments (2,143) (9,885) Stock compensation expense 8,903 8,968 Net change in wholesale finance receivables related to sales (205,727) (308,532) Provision for credit losses 28,822 (22,474) Deferred income taxes 6,307 13,192 Other, net (5,408) (2,138) Changes in current assets and liabilities: Accounts receivable, net (74,993) (79,012) Finance receivables – accrued interest and other 3,115 8,947 Inventories, net (2,630) 45,086 Accounts payable and accrued liabilities 106,969 153,597 Other current assets (7,300) 25,763 (83,181) (96,363) Net cash provided by operating activities $ 139,321 $ 162,781 |
Finance Receivables (Tables)
Finance Receivables (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Receivables [Abstract] | |
Finance Receivables | Finance receivables, net were as follows (in thousands): March 27, December 31, March 28, Retail finance receivables $ 6,511,845 $ 6,493,519 $ 6,310,982 Wholesale finance receivables 650,181 417,781 792,028 7,162,026 6,911,300 7,103,010 Allowance for credit losses (340,473) (339,379) (346,233) $ 6,821,553 $ 6,571,921 $ 6,756,777 |
Changes In The Allowance For Finance Credit Losses On Finance Receivables | Changes in the Company's allowance for credit losses on its finance receivables by portfolio were as follows (in thousands): Three months ended March 27, 2022 Retail Wholesale Total Balance, beginning of period $ 326,320 $ 13,059 $ 339,379 Provision for credit losses 28,614 208 28,822 Charge-offs (41,804) — (41,804) Recoveries 14,076 — 14,076 Balance, end of period $ 327,206 $ 13,267 $ 340,473 Three months ended March 28, 2021 Retail Wholesale Total Balance, beginning of period $ 371,738 $ 19,198 $ 390,936 Provision for credit losses (22,449) (25) (22,474) Charge-offs (34,589) — (34,589) Recoveries 12,360 — 12,360 Balance, end of period $ 327,060 $ 19,173 $ 346,233 |
Financing Receivable Credit Quality Indicators | The amortized cost of the Company's U.S. and Canadian retail finance receivables by vintage and credit quality indicator was as follows (in thousands): March 27, 2022 2022 2021 2020 2019 2018 2017 & Prior Total U.S. Retail: Super prime $ 311,114 $ 890,413 $ 422,454 $ 268,692 $ 139,540 $ 68,682 $ 2,100,895 Prime 394,793 1,247,764 627,102 407,242 233,630 176,018 3,086,549 Sub-prime 125,280 427,813 240,999 159,968 91,444 91,610 1,137,114 831,187 2,565,990 1,290,555 835,902 464,614 336,310 6,324,558 Canadian Retail: Super prime 14,015 47,025 29,382 23,367 11,524 4,515 129,828 Prime 4,228 15,842 11,513 8,349 5,454 4,391 49,777 Sub-prime 506 2,180 1,961 1,401 861 773 7,682 18,749 65,047 42,856 33,117 17,839 9,679 187,287 $ 849,936 $ 2,631,037 $ 1,333,411 $ 869,019 $ 482,453 $ 345,989 $ 6,511,845 December 31, 2021 2021 2020 2019 2018 2017 2016 & Prior Total U.S. Retail: Super prime $ 1,010,636 $ 484,479 $ 316,390 $ 171,763 $ 65,753 $ 27,424 $ 2,076,445 Prime 1,391,385 712,858 470,177 277,206 142,288 82,169 3,076,083 Sub-prime 476,688 273,787 182,002 105,330 61,923 51,035 1,150,765 2,878,709 1,471,124 968,569 554,299 269,964 160,628 6,303,293 Canadian Retail: Super prime 51,779 32,724 27,073 13,984 4,619 1,614 131,793 Prime 16,882 12,675 9,244 6,230 3,628 1,779 50,438 Sub-prime 2,356 2,134 1,571 947 606 381 7,995 71,017 47,533 37,888 21,161 8,853 3,774 190,226 $ 2,949,726 $ 1,518,657 $ 1,006,457 $ 575,460 $ 278,817 $ 164,402 $ 6,493,519 March 28, 2021 2021 2020 2019 2018 2017 2016 & Prior Total U.S. Retail: Super prime $ 260,359 $ 725,383 $ 502,847 $ 301,839 $ 134,213 $ 74,086 $ 1,998,727 Prime 349,662 1,026,080 706,940 445,201 249,327 183,217 2,960,427 Sub-prime 130,389 395,495 263,203 156,368 96,998 100,827 1,143,280 740,410 2,146,958 1,472,990 903,408 480,538 358,130 6,102,434 Canadian Retail: Super prime 13,938 48,309 42,993 24,549 11,116 4,831 145,736 Prime 4,245 17,350 13,055 9,263 5,808 4,178 53,899 Sub-prime 601 2,949 2,227 1,407 951 778 8,913 18,784 68,608 58,275 35,219 17,875 9,787 208,548 $ 759,194 $ 2,215,566 $ 1,531,265 $ 938,627 $ 498,413 $ 367,917 $ 6,310,982 The amortized cost of the Company's wholesale financial receivables, by vintage and credit quality indicator, was as follows (in thousands): March 27, 2022 2022 2021 2020 2019 2018 2017 & Prior Total Non-Performing $ — $ — $ — $ — $ — $ — $ — Doubtful — — — — — — — Substandard — — — — — — — Special Mention — — — — — — — Medium Risk — — — — — — — Low Risk 489,283 127,797 9,108 11,147 9,893 2,953 650,181 $ 489,283 $ 127,797 $ 9,108 $ 11,147 $ 9,893 $ 2,953 $ 650,181 December 31, 2021 2021 2020 2019 2018 2017 2016 & Prior Total Non-Performing $ — $ — $ — $ — $ — $ — $ — Doubtful — — — — — — — Substandard — — — — — — — Special Mention — — — — — — — Medium Risk — — — — — — — Low Risk 380,211 11,379 11,047 10,565 3,662 917 417,781 $ 380,211 $ 11,379 $ 11,047 $ 10,565 $ 3,662 $ 917 $ 417,781 March 28, 2021 2021 2020 2019 2018 2017 2016 & Prior Total Non-Performing $ — $ — $ — $ — $ — $ — $ — Doubtful — — — — — — — Substandard — — — — — — — Special Mention 567 530 262 17 — — 1,376 Medium Risk — 728 417 — — — 1,145 Low Risk 600,144 122,970 44,614 12,568 6,392 2,819 789,507 $ 600,711 $ 124,228 $ 45,293 $ 12,585 $ 6,392 $ 2,819 $ 792,028 |
Past Due Financing Receivables | The aging analysis of the Company's finance receivables was as follows (in thousands): March 27, 2022 Current 31-60 Days 61-90 Days Greater than Total Total Retail finance receivables $ 6,343,673 $ 99,705 $ 32,521 $ 35,946 $ 168,172 $ 6,511,845 Wholesale finance receivables 649,948 178 27 28 233 650,181 $ 6,993,621 $ 99,883 $ 32,548 $ 35,974 $ 168,405 $ 7,162,026 December 31, 2021 Current 31-60 Days 61-90 Days Greater than Total Total Retail finance receivables $ 6,298,485 $ 115,942 $ 44,326 $ 34,766 $ 195,034 $ 6,493,519 Wholesale finance receivables 417,720 9 1 51 61 417,781 $ 6,716,205 $ 115,951 $ 44,327 $ 34,817 $ 195,095 $ 6,911,300 March 28, 2021 Current 31-60 Days 61-90 Days Greater than Total Total Retail finance receivables $ 6,196,345 $ 69,032 $ 23,420 $ 22,185 $ 114,637 $ 6,310,982 Wholesale finance receivables 791,826 128 22 52 202 792,028 $ 6,988,171 $ 69,160 $ 23,442 $ 22,237 $ 114,839 $ 7,103,010 |
Derivative Financial Instrume_2
Derivative Financial Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instrument Fair Value | The notional and fair values of the Company's derivative financial instruments under ASC Topic 815 were as follows (in thousands): Derivative Financial Instruments March 27, 2022 December 31, 2021 March 28, 2021 Notional Other Current Assets Accrued Liabilities Notional Other Current Assets Accrued Liabilities Notional Other Current Assets Accrued Liabilities Foreign currency contracts $ 585,451 $ 18,832 $ 3,576 $ 562,262 $ 14,644 $ 1,388 $ 402,814 $ 6,356 $ 6,071 Commodity contracts 964 316 — 996 19 39 668 3 20 Cross-currency swaps 1,367,460 18,835 — 1,367,460 35,071 — 1,367,460 73,449 — $ 1,953,875 $ 37,983 $ 3,576 $ 1,930,718 $ 49,734 $ 1,427 $ 1,770,942 $ 79,808 $ 6,091 Derivative Financial Instruments March 27, 2022 December 31, 2021 March 28, 2021 Notional Other Current Assets Accrued Liabilities Notional Other Current Assets Accrued Liabilities Notional Other Current Assets Accrued Liabilities Foreign currency contracts $ 230,336 $ 587 $ 722 $ 241,935 $ 1,299 $ 916 $ 214,337 $ 670 $ 595 Commodity contracts 11,866 2,435 — 10,631 641 18 8,172 1,193 40 Interest rate caps 412,478 2,060 — 504,526 360 — 844,673 170 — $ 654,680 $ 5,082 $ 722 $ 757,092 $ 2,300 $ 934 $ 1,067,182 $ 2,033 $ 635 |
Gain/(Loss) on Derivative Cash Flow Hedges Reclassified From AOCI Into Income | The amounts of gains and losses related to the Company's derivative financial instruments designated as cash flow hedges were as follows (in thousands): Gain/(Loss) Gain/(Loss) Three months ended Three months ended March 27, March 28, March 27, March 28, Foreign currency contracts $ 8,444 $ 14,037 $ 5,655 $ (4,953) Commodity contracts 562 3 226 (32) Cross-currency swaps (16,236) (65,174) (25,800) (65,788) Treasury rate lock contracts — — (127) (124) Interest rate swaps — 397 — (2,689) $ (7,230) $ (50,737) $ (20,046) $ (73,586) The location and amount of gains and losses recognized in income related to the Company's derivative financial instruments designated as cash flow hedges were as follows (in thousands): Motorcycles Selling, administrative & Interest expense Financial Services interest expense Three months ended March 27, 2022 Line item on the Consolidated statements of operations in which the effects of cash flow hedges are recorded $ 895,536 $ 239,625 $ 7,711 $ 42,099 Gain/(loss) reclassified from AOCL into income: Foreign currency contracts $ 5,655 $ — $ — $ — Commodity contracts $ 226 $ — $ — $ — Cross-currency swaps $ — $ (25,800) $ — $ — Treasury rate lock contracts $ — $ — $ (91) $ (36) Three months ended March 28, 2021 Line item on the Consolidated statements of operations in which the effects of cash flow hedges are recorded $ 811,622 $ 231,844 $ 7,708 $ 55,707 Gain/(loss) reclassified from AOCL into income: Foreign currency contracts $ (4,953) $ — $ — $ — Commodity contracts $ (32) $ — $ — $ — Cross-currency swaps $ — $ (65,788) $ — $ — Treasury rate lock contracts $ — $ — $ (91) $ (33) Interest rate swaps $ — $ — $ — $ (2,689) |
Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The amount of gains and losses recognized in income related to derivative financial instruments not designated as hedging instruments were as follows (in thousands). Gains and losses on foreign currency contracts and commodity contracts were recorded in Motorcycles cost of goods sold and the gains and losses on interest rate caps were recorded in Financial Services revenue . Amount of Gain/(Loss) Three months ended March 27, March 28, Foreign currency contracts $ (3,506) $ (3,629) Commodity contracts 2,387 703 Interest rate caps 1,700 123 $ 581 $ (2,803) |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Leases [Abstract] | |
Balance Sheet Information Related to Leases | Balance sheet information related to the Company's leases was as follows (in thousands): March 27, December 31, March 28, Lease assets $ 45,073 $ 49,625 $ 44,765 Accrued liabilities $ 15,745 $ 17,369 $ 17,021 Lease liabilities 27,633 29,904 30,061 $ 43,378 $ 47,273 $ 47,082 |
Future Maturities of Lease Liabilities | Future maturities of the Company's operating lease liabilities as of March 27, 2022 were as follows (in thousands): 2022 $ 13,552 2023 10,484 2024 7,745 2025 6,032 2026 5,075 Thereafter 1,927 Future lease payments 44,815 Present value discount (1,437) Lease liabilities $ 43,378 |
Other Lease Information | Other lease information surrounding the Company's operating leases was as follows (dollars in thousands): Three months ended March 27, March 28, Cash outflows for amounts included in the measurement of lease liabilities $ 4,957 $ 4,947 ROU assets obtained in exchange for lease obligations, net of modifications $ 1,279 $ 5,305 March 27, December 31, March 28, Weighted-average remaining lease term (in years) 3.78 3.86 3.81 Weighted-average discount rate 1.9 % 1.9 % 2.9 % |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Debt Disclosure [Abstract] | |
Schedule of Short-term Debt | Debt with a contractual term less than 12 months is generally classified as short-term and consisted of the following (in thousands): March 27, December 31, March 28, Unsecured commercial paper $ 816,016 $ 751,286 $ 749,801 Global credit facility borrowings — — 15,462 $ 816,016 $ 751,286 $ 765,263 |
Schedule of Long-term Debt Instruments | Debt with a contractual term greater than 12 months is generally classified as long-term and consisted of the following (in thousands): March 27, December 31, March 28, Secured debt: Asset-backed Canadian commercial paper conduit facility $ 95,664 $ 85,054 $ 102,543 Asset-backed U.S. commercial paper conduit facility 269,534 272,589 350,648 Asset-backed securitization debt 1,363,254 1,634,753 2,109,046 Unamortized discounts and debt issuance costs (5,696) (7,611) (9,788) 1,722,756 1,984,785 2,552,449 Unsecured notes (at par value): Medium-term notes: Due in 2021, issued May 2018 3.55 % — — 350,000 Due in 2022, issued February 2019 4.05 % — 550,000 550,000 Due in 2022, issued June 2017 2.55 % 400,000 400,000 400,000 Due in 2023, issued February 2018 3.35 % 350,000 350,000 350,000 Due in 2023, issued May 2020 (a) 4.94 % 723,886 737,302 762,996 Due in 2024, issued November 2019 (b) 3.14 % 668,202 680,586 704,304 Due in 2025, issued June 2020 3.35 % 700,000 700,000 700,000 Due in 2027, issued February 2022 3.05 % 500,000 — — Unamortized discounts and debt issuance costs (12,243) (9,228) (13,564) 3,329,845 3,408,660 3,803,736 Senior notes: Due in 2025, issued July 2015 3.50 % 450,000 450,000 450,000 Due in 2045, issued July 2015 4.625 % 300,000 300,000 300,000 Unamortized discounts and debt issuance costs (5,158) (5,332) (5,851) 744,842 744,668 744,149 4,074,687 4,153,328 4,547,885 Long-term debt 5,797,443 6,138,113 7,100,334 Current portion of long-term debt, net (1,327,357) (1,542,496) (1,622,243) Long-term debt, net $ 4,470,086 $ 4,595,617 $ 5,478,091 (a) €650.0 million par value remeasured to U.S. dollar at March 27, 2022, December 31, 2021, and March 28, 2021, respectively (b) €600.0 million par value remeasured to U.S. dollar at March 27, 2022, December 31, 2021, and March 28, 2021, respectively |
Schedule of Maturities of Long-term Debt | Future principal payments of the Company's debt obligations as of March 27, 2022 were as follows (in thousands): 2022 $ 1,716,955 2023 1,591,745 2024 1,058,291 2025 1,398,474 2026 71,091 Thereafter 800,000 Future principal payments 6,636,556 Unamortized discounts and debt issuance costs (23,097) $ 6,613,459 |
Asset-Backed Financing (Tables)
Asset-Backed Financing (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Transfers and Servicing [Abstract] | |
Assets and Liabilities Related to the On-Balance Sheet Financing | The assets and liabilities related to the on-balance sheet asset-backed financings included in the Consolidated balance sheets were as follows (in thousands): March 27, 2022 Finance receivables Allowance for credit losses Restricted cash Other assets Total assets Asset-backed debt, net On-balance sheet assets and liabilities: Consolidated VIEs: Asset-backed securitizations $ 1,755,446 $ (88,090) $ 131,992 $ 3,724 $ 1,803,072 $ 1,357,558 Asset-backed U.S. commercial paper conduit facility 290,481 (14,549) 24,305 649 300,886 269,534 Unconsolidated VIEs: Asset-backed Canadian commercial paper conduit facility 108,052 (4,457) 8,129 43 111,767 95,664 $ 2,153,979 $ (107,096) $ 164,426 $ 4,416 $ 2,215,725 $ 1,722,756 December 31, 2021 Finance receivables Allowance for credit losses Restricted cash Other assets Total assets Asset-backed debt, net On-balance sheet assets and liabilities: Consolidated VIEs: Asset-backed securitizations $ 2,048,194 $ (102,779) $ 123,717 $ 2,328 $ 2,071,460 $ 1,627,142 Asset-backed U.S. commercial paper conduit facility 297,454 (14,898) 20,567 654 303,777 272,589 Unconsolidated VIEs: Asset-backed Canadian commercial paper conduit facility 97,180 (3,990) 6,191 139 99,520 85,054 $ 2,442,828 $ (121,667) $ 150,475 $ 3,121 $ 2,474,757 $ 1,984,785 March 28, 2021 Finance receivables Allowance for credit losses Restricted cash Other assets Total assets Asset-backed debt, net On-balance sheet assets and liabilities: Consolidated VIEs: Asset-backed securitizations $ 2,448,681 $ (126,053) $ 166,694 $ 2,852 $ 2,492,174 $ 2,099,258 Asset-backed U.S. commercial paper conduit facility 378,035 (19,432) 30,252 1,175 390,030 350,648 Unconsolidated VIEs: Asset-backed Canadian commercial paper conduit facility 115,742 (5,388) 9,743 206 120,303 102,543 $ 2,942,458 $ (150,873) $ 206,689 $ 4,233 $ 3,002,507 $ 2,552,449 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Fair Value Disclosures [Abstract] | |
Summary of Assets and Liabilities Measured At Fair Value On A Recurring Basis | The Company’s assets and liabilities measured at fair value on a recurring basis were as follows (in thousands): March 27, 2022 Balance Level 1 Level 2 Assets: Cash equivalents $ 968,395 $ 803,400 $ 164,995 Marketable securities 45,189 45,189 — Derivative financial instruments 43,065 — 43,065 $ 1,056,649 $ 848,589 $ 208,060 Liabilities: Derivative financial instruments $ 4,298 $ — $ 4,298 December 31, 2021 Balance Level 1 Level 2 Assets: Cash equivalents $ 1,617,887 $ 1,337,900 $ 279,987 Marketable securities 49,650 49,650 — Derivative financial instruments 52,034 — 52,034 $ 1,719,571 $ 1,387,550 $ 332,021 Liabilities: Derivative financial instruments $ 2,361 $ — $ 2,361 March 28, 2021 Balance Level 1 Level 2 Assets: Cash equivalents $ 2,069,400 $ 1,919,400 $ 150,000 Marketable securities 50,239 50,239 — Derivative financial instruments 81,841 — 81,841 $ 2,201,480 $ 1,969,639 $ 231,841 Liabilities: Derivative financial instruments $ 6,726 $ — $ 6,726 |
Summary of The Fair Value and Carrying Value of The Company's Financial Instruments | The fair value and carrying value of the Company’s remaining financial instruments that are measured at cost or amortized cost were as follows (in thousands): March 27, 2022 December 31, 2021 March 28, 2021 Fair Value Carrying Value Fair Value Carrying Value Fair Value Carrying Value Assets: Finance receivables, net $ 6,920,395 $ 6,821,553 $ 6,794,499 $ 6,571,921 $ 6,930,531 $ 6,756,777 Liabilities: Deposits, net $ 359,995 $ 348,083 $ 293,602 $ 290,326 $ 152,715 $ 152,653 Debt: Unsecured commercial paper $ 816,016 $ 816,016 $ 751,286 $ 751,286 $ 749,801 $ 749,801 Global credit facility borrowings $ — $ — $ — $ — $ 15,462 $ 15,462 Asset-backed U.S. commercial paper conduit facility $ 269,534 $ 269,534 $ 272,589 $ 272,589 $ 350,648 $ 350,648 Asset-backed Canadian commercial paper conduit facility $ 95,664 $ 95,664 $ 85,054 $ 85,054 $ 102,543 $ 102,543 Asset-backed securitization debt $ 1,343,706 $ 1,357,558 $ 1,633,749 $ 1,627,142 $ 2,120,855 $ 2,099,258 Medium-term notes $ 3,326,310 $ 3,329,845 $ 3,513,815 $ 3,408,660 $ 3,955,743 $ 3,803,736 Senior notes $ 724,089 $ 744,842 $ 790,373 $ 744,668 $ 789,967 $ 744,149 |
Product Warranty and Recall C_2
Product Warranty and Recall Campaigns (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Product Warranties Disclosures [Abstract] | |
Warranty and Recall Liability | Changes in the Company’s warranty and recall liabilities were as follows (in thousands): Three months ended March 27, March 28, Balance, beginning of period $ 61,621 $ 69,208 Warranties issued during the period 10,711 11,672 Settlements made during the period (7,096) (8,585) Recalls and changes to pre-existing warranty liabilities (141) 132 Balance, end of period $ 65,095 $ 72,427 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Retirement Benefits [Abstract] | |
Components of Net Periodic Benefit Costs | Components of net periodic benefit (income) cost for the Company's defined benefit plans were as follows (in thousands): Three months ended March 27, March 28, Pension and SERPA Benefits: Service cost $ 4,763 $ 6,348 Interest cost 15,472 15,470 Expected return on plan assets (31,476) (32,720) Amortization of unrecognized: Prior service credit (328) (312) Net loss 7,978 18,386 Settlement (gain) loss (256) 816 Net periodic benefit (income) cost $ (3,847) $ 7,988 Postretirement Healthcare Benefits: Service cost $ 1,161 $ 1,288 Interest cost 1,904 1,626 Expected return on plan assets (3,809) (3,495) Amortization of unrecognized: Prior service credit (581) (581) Net loss 122 264 Net periodic benefit income $ (1,203) $ (898) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | Changes in Accumulated other comprehensive loss were as follows (in thousands): Three months ended March 27, 2022 Foreign currency translation adjustments Derivative financial instruments Pension and postretirement benefit plans Total Balance, beginning of period $ (44,401) $ (2,005) $ (194,513) $ (240,919) Other comprehensive loss, before reclassifications (3,804) (7,230) — (11,034) Income tax (expense) benefit (317) 1,493 — 1,176 (4,121) (5,737) — (9,858) Reclassifications: Net loss on derivative financial instruments — 20,046 — 20,046 Prior service credits (a) — — (909) (909) Actuarial losses (a) — — 8,100 8,100 Reclassifications before tax — 20,046 7,191 27,237 Income tax expense — (4,381) (1,689) (6,070) — 15,665 5,502 21,167 Other comprehensive (loss) income (4,121) 9,928 5,502 11,309 Balance, end of period $ (48,522) $ 7,923 $ (189,011) $ (229,610) Three months ended March 28, 2021 Foreign currency translation adjustments Derivative financial instruments Pension and postretirement benefit plans Total Balance, beginning of period $ (7,589) $ (46,116) $ (429,712) $ (483,417) Other comprehensive loss, before reclassifications (17,074) (50,737) — (67,811) Income tax (expense) benefit (264) 11,092 — 10,828 (17,338) (39,645) — (56,983) Reclassifications: Net loss on derivative financial instruments — 73,586 — 73,586 Prior service credits (a) — — (893) (893) Actuarial losses (a) — — 18,650 18,650 Reclassifications before tax — 73,586 17,757 91,343 Income tax expense — (16,411) (4,169) (20,580) — 57,175 13,588 70,763 Other comprehensive (loss) income (17,338) 17,530 13,588 13,780 Balance, end of period $ (24,927) $ (28,586) $ (416,124) $ (469,637) (a) Amounts reclassified are included in the computation of net periodic benefit (income) cost, discussed further in Note 15 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Selected segment information is set forth below (in thousands): Three months ended March 27, March 28, Motorcycles and Related Products: Motorcycles revenue $ 1,303,171 $ 1,232,107 Gross profit 407,635 420,485 Selling, administrative and engineering expense 204,888 193,546 Restructuring benefit (128) (593) Operating income 202,875 227,532 Financial Services: Financial Services revenue 192,015 190,400 Financial Services expense 105,658 71,531 Restructuring expense — 227 Operating income 86,357 118,642 Operating income $ 289,232 $ 346,174 |
Supplemental Consolidating Da_2
Supplemental Consolidating Data (Tables) | 3 Months Ended |
Mar. 27, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Operations | Supplemental consolidating data is as follows (in thousands): Three months ended March 27, 2022 Harley-Davidson Motor Company Harley-Davidson Financial Services Consolidating Adjustments Consolidated Revenue: Motorcycles and Related Products $ 1,306,293 $ — $ (3,122) $ 1,303,171 Financial Services — 192,390 (375) 192,015 1,306,293 192,390 (3,497) 1,495,186 Costs and expenses: Motorcycles and Related Products cost of goods sold 895,536 — — 895,536 Financial Services interest expense — 42,099 — 42,099 Financial Services provision for credit losses — 28,822 — 28,822 Selling, administrative and engineering expense 205,417 37,858 (3,650) 239,625 Restructuring benefit (128) — — (128) 1,100,825 108,779 (3,650) 1,205,954 Operating income 205,468 83,611 153 289,232 Other income, net 11,030 — — 11,030 Investment loss (1,979) — — (1,979) Interest expense 7,711 — — 7,711 Income before income taxes 206,808 83,611 153 290,572 Provision for income taxes 47,847 20,223 — 68,070 Net income $ 158,961 $ 63,388 $ 153 $ 222,502 Three months ended March 28, 2021 Harley-Davidson Motor Company Harley-Davidson Financial Services Consolidating Adjustments Consolidated Revenue: Motorcycles and Related Products $ 1,238,468 $ — $ (6,361) $ 1,232,107 Financial Services — 188,750 1,650 190,400 1,238,468 188,750 (4,711) 1,422,507 Costs and expenses: Motorcycles and Related Products cost of goods sold 811,622 — — 811,622 Financial Services interest expense — 55,707 — 55,707 Financial Services provision for credit losses — (22,474) — (22,474) Selling, administrative and engineering expense 196,359 40,275 (4,790) 231,844 Restructuring (benefit) expense (593) 227 — (366) 1,007,388 73,735 (4,790) 1,076,333 Operating income 231,080 115,015 79 346,174 Other income, net 277 — — 277 Investment income 1,402 — — 1,402 Interest expense 7,708 — — 7,708 Income before income taxes 225,051 115,015 79 340,145 Provision for income taxes 55,996 25,005 — 81,001 Net income $ 169,055 $ 90,010 $ 79 $ 259,144 |
Balance Sheet | March 27, 2022 Harley-Davidson Motor Company Harley-Davidson Financial Services Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ 678,616 $ 715,115 $ — $ 1,393,731 Accounts receivable, net 601,148 — (346,862) 254,286 Finance receivables, net — 1,699,642 — 1,699,642 Inventories, net 714,259 — — 714,259 Restricted cash — 142,812 — 142,812 Other current assets 149,955 61,455 (28,883) 182,527 2,143,978 2,619,024 (375,745) 4,387,257 Finance receivables, net — 5,121,911 — 5,121,911 Property, plant and equipment, net 636,216 27,591 — 663,807 Pension and postretirement assets 399,029 — — 399,029 Goodwill 62,607 — — 62,607 Deferred income taxes — 75,185 (3,259) 71,926 Lease assets 38,126 6,947 — 45,073 Other long-term assets 210,157 37,595 (104,722) 143,030 $ 3,490,113 $ 7,888,253 $ (483,726) $ 10,894,640 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 434,731 $ 389,048 $ (346,862) $ 476,917 Accrued liabilities 495,921 129,581 (27,578) 597,924 Short-term deposits, net — 65,049 — 65,049 Short-term debt — 816,016 — 816,016 Current portion of long-term debt, net — 1,327,357 — 1,327,357 930,652 2,727,051 (374,440) 3,283,263 Long-term deposits, net — 283,034 — 283,034 Long-term debt, net 744,842 3,725,244 — 4,470,086 Lease liabilities 20,544 7,089 — 27,633 Pension and postretirement liabilities 93,792 — — 93,792 Deferred income taxes 10,478 1,848 (2,748) 9,578 Other long-term liabilities 165,990 50,190 1,973 218,153 Commitments and contingencies (Note 16) Shareholders’ equity 1,523,815 1,093,797 (108,511) 2,509,101 $ 3,490,113 $ 7,888,253 $ (483,726) $ 10,894,640 March 28, 2021 Harley-Davidson Motor Company Harley-Davidson Financial Services Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ 607,941 $ 1,712,704 $ — $ 2,320,645 Accounts receivable, net 603,273 — (386,704) 216,569 Finance receivables, net — 1,798,194 — 1,798,194 Inventories, net 470,997 — — 470,997 Restricted cash — 185,374 — 185,374 Other current assets 81,559 113,797 — 195,356 1,763,770 3,810,069 (386,704) 5,187,135 Finance receivables, net — 4,958,583 — 4,958,583 Property, plant and equipment, net 687,086 31,882 — 718,968 Pension and postretirement assets 105,910 — — 105,910 Goodwill 65,157 — — 65,157 Deferred income taxes 56,911 79,206 (730) 135,387 Lease assets 36,559 8,206 — 44,765 Other long-term assets 184,876 33,929 (95,722) 123,083 $ 2,900,269 $ 8,921,875 $ (483,156) $ 11,338,988 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 355,722 $ 433,746 $ (386,704) $ 402,764 Accrued liabilities 443,529 125,768 1,143 570,440 Short-term deposits, net — 93,887 — 93,887 Short-term debt — 765,263 — 765,263 Current portion of long-term debt, net — 1,622,243 — 1,622,243 799,251 3,040,907 (385,561) 3,454,597 Long-term deposits, net — 58,766 — 58,766 Long-term debt, net 744,149 4,733,942 — 5,478,091 Lease liabilities 22,461 7,600 — 30,061 Pension and postretirement liabilities 103,854 — — 103,854 Deferred income taxes 7,166 1,516 — 8,682 Other long-term liabilities 179,525 46,920 2,106 228,551 Commitments and contingencies (Note 16) Shareholders’ equity 1,043,863 1,032,224 (99,701) 1,976,386 $ 2,900,269 $ 8,921,875 $ (483,156) $ 11,338,988 |
Cash Flows | Three months ended March 27, 2022 Harley-Davidson Motor Company Harley-Davidson Financial Services Consolidating Adjustments Consolidated Cash flows from operating activities: Net income $ 158,961 $ 63,388 $ 153 $ 222,502 Adjustments to reconcile Net income to Net cash (used) provided by operating activities: Depreciation and amortization 37,106 2,152 — 39,258 Amortization of deferred loan origination costs — 22,995 — 22,995 Amortization of financing origination fees 174 3,527 — 3,701 Provision for long-term employee benefits (5,050) — — (5,050) Employee benefit plan contributions and payments (2,143) — — (2,143) Stock compensation expense 8,233 670 — 8,903 Net change in wholesale finance receivables related to sales — — (205,727) (205,727) Provision for credit losses — 28,822 — 28,822 Deferred income taxes 6,176 665 (534) 6,307 Other, net (5,322) 67 (153) (5,408) Changes in current assets and liabilities: Accounts receivable, net (319,329) — 244,336 (74,993) Finance receivables – accrued interest and other — 3,115 — 3,115 Inventories, net (2,630) — — (2,630) Accounts payable and accrued liabilities 86,546 289,876 (269,453) 106,969 Other current assets (47,418) 14,467 25,651 (7,300) (243,657) 366,356 (205,880) (83,181) Net cash (used) provided by operating activities (84,696) 429,744 (205,727) 139,321 Cash flows from investing activities: Capital expenditures (27,149) (850) — (27,999) Origination of finance receivables — (2,023,861) 965,400 (1,058,461) Collections on finance receivables — 1,724,863 (759,673) 965,190 Other investing activities 135 — — 135 Net cash used by investing activities (27,014) (299,848) 205,727 (121,135) Three months ended March 27, 2022 Harley-Davidson Motor Company Harley-Davidson Financial Services Consolidating Adjustments Consolidated Cash flows from financing activities: Proceeds from issuance of medium-term notes — 495,785 — 495,785 Repayments of medium-term notes — (550,000) — (550,000) Repayments of securitization debt — (271,499) — (271,499) Borrowings of asset-backed commercial paper — 62,455 — 62,455 Repayments of asset-backed commercial paper — (56,634) — (56,634) Net increase in unsecured commercial paper — 64,521 — 64,521 Net increase in deposits — 57,660 — 57,660 Dividends paid (24,056) — — (24,056) Repurchase of common stock (261,737) — — (261,737) Net cash used by financing activities (285,793) (197,712) — (483,505) Effect of exchange rate changes on cash, cash equivalents and restricted cash (2,086) 343 — (1,743) Net decrease in cash, cash equivalents and restricted cash $ (399,589) $ (67,473) $ — $ (467,062) Cash, cash equivalents and restricted cash: Cash, cash equivalents and restricted cash, beginning of period $ 1,078,205 $ 947,014 $ — $ 2,025,219 Net decrease in cash, cash equivalents and restricted cash (399,589) (67,473) — (467,062) Cash, cash equivalents and restricted cash, end of period $ 678,616 $ 879,541 $ — $ 1,558,157 Three months ended March 28, 2021 Harley-Davidson Motor Company Harley-Davidson Financial Services Consolidating Adjustments Consolidated Cash flows from operating activities: Net income $ 169,055 $ 90,010 $ 79 $ 259,144 Adjustments to reconcile Net income to Net cash (used) provided by operating activities: Depreciation and amortization 37,778 2,443 — 40,221 Amortization of deferred loan origination costs — 19,200 — 19,200 Amortization of financing origination fees 172 3,442 — 3,614 Provision for long-term employee benefits 7,090 — — 7,090 Employee benefit plan contributions and payments (9,885) — — (9,885) Stock compensation expense 8,174 794 — 8,968 Net change in wholesale finance receivables related to sales — — (308,532) (308,532) Provision for credit losses — (22,474) — (22,474) Deferred income taxes 3,811 9,812 (431) 13,192 Other, net (2,743) 685 (80) (2,138) Changes in current assets and liabilities: Accounts receivable, net (388,688) — 309,676 (79,012) Finance receivables – accrued interest and other — 8,947 — 8,947 Inventories, net 45,086 — — 45,086 Accounts payable and accrued liabilities 104,486 354,507 (305,396) 153,597 Other current assets 18,222 11,271 (3,730) 25,763 (176,497) 388,627 (308,493) (96,363) Net cash (used) provided by operating activities (7,442) 478,637 (308,414) 162,781 Cash flows from investing activities: Capital expenditures (18,427) (386) — (18,813) Origination of finance receivables — (1,923,911) 1,014,773 (909,138) Collections on finance receivables — 1,606,844 (706,359) 900,485 Other investing activities 733 — — 733 Net cash used by investing activities (17,694) (317,453) 308,414 (26,733) Three months ended March 28, 2021 Harley-Davidson Motor Company Harley-Davidson Financial Services Consolidating Adjustments Consolidated Cash flows from financing activities: Repayments of medium-term notes — (1,050,000) — (1,050,000) Proceeds from securitization debt — 597,411 — 597,411 Repayments of securitization debt — (291,346) — (291,346) Borrowings of asset-backed commercial paper — Repayments of asset-backed commercial paper — (66,894) — (66,894) Net decrease in unsecured commercial paper — (262,517) — (262,517) Net increase in credit facilities — 15,629 — 15,629 Net increase in deposits 72,664 72,664 Dividends paid (23,105) — — (23,105) Repurchase of common stock (5,646) — — (5,646) Other financing activities 1,085 — — 1,085 Net cash used by financing activities (27,666) (985,053) — (1,012,719) Effect of exchange rate changes on cash, cash equivalents and restricted cash (5,418) 255 — (5,163) Net decrease in cash, cash equivalents and restricted cash $ (58,220) $ (823,614) $ — $ (881,834) Cash, cash equivalents and restricted cash: Cash, cash equivalents and restricted cash, beginning of period $ 666,161 $ 2,743,007 $ — $ 3,409,168 Net decrease in cash, cash equivalents and restricted cash (58,220) (823,614) — (881,834) Cash, cash equivalents and restricted cash, end of period $ 607,941 $ 1,919,393 $ — $ 2,527,334 |
Basis of Presentation and Use_3
Basis of Presentation and Use of Estimates (Details) | 3 Months Ended |
Mar. 27, 2022segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of reportable segments | 2 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Disaggregation of Revenue | ||
Total revenue | $ 1,495,186 | $ 1,422,507 |
Motorcycles and Related Products | ||
Disaggregation of Revenue | ||
Motorcycles revenue | 1,303,171 | 1,232,107 |
Motorcycles | ||
Disaggregation of Revenue | ||
Motorcycles revenue | 1,059,113 | 1,016,334 |
Parts and accessories | ||
Disaggregation of Revenue | ||
Motorcycles revenue | 165,525 | 149,859 |
Apparel | ||
Disaggregation of Revenue | ||
Motorcycles revenue | 51,407 | 50,323 |
Licensing | ||
Disaggregation of Revenue | ||
Motorcycles revenue | 6,497 | 5,512 |
Other | ||
Disaggregation of Revenue | ||
Motorcycles revenue | 20,629 | 10,079 |
Financial Services | ||
Disaggregation of Revenue | ||
Financial Services | 192,015 | 190,400 |
Interest income | ||
Disaggregation of Revenue | ||
Financial Services | 161,734 | 159,814 |
Other | ||
Disaggregation of Revenue | ||
Financial Services | $ 30,281 | $ 30,586 |
Revenue - Contract Liabilities
Revenue - Contract Liabilities (Details) - USD ($) $ in Thousands | Mar. 27, 2022 | Dec. 31, 2021 | Mar. 28, 2021 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |||
Balance, beginning of period | $ 40,092 | $ 36,266 | $ 36,614 |
Balance, end of period | $ 38,842 | $ 40,092 | $ 36,266 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Recognized deferred revenue | $ 7.7 | $ 6.2 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-03-28 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Unearned revenue to be recognized | $ 17.5 | |
Revenue, remaining performance obligation period | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-03-28 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Unearned revenue to be recognized | $ 21.4 | |
Revenue, remaining performance obligation period | 12 months |
Restructuring Activities - Addi
Restructuring Activities - Additional Information (Details) $ in Millions | Mar. 27, 2022USD ($)Employees |
Motorcycles and Related Products | |
Restructuring Cost and Reserve | |
Restructuring and consolidation costs | $ 121.7 |
Financial Services | |
Restructuring Cost and Reserve | |
Restructuring and consolidation costs | $ 11.5 |
2020 Restructuring Activities | |
Restructuring Cost and Reserve | |
Expected number of employees eliminated | Employees | 500 |
Restructuring and consolidation costs | $ 133.2 |
2020 Restructuring Activities | India | |
Restructuring Cost and Reserve | |
Expected number of employees eliminated | Employees | 70 |
Restructuring Activities - Rest
Restructuring Activities - Restructuring Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Restructuring Cost and Reserve | ||
Restructuring benefit | $ (128) | $ (366) |
Motorcycles and Related Products | ||
Restructuring Cost and Reserve | ||
Restructuring benefit | (128) | (593) |
Financial Services | ||
Restructuring Cost and Reserve | ||
Restructuring benefit | $ 0 | $ 227 |
Restructuring Activities - Re_2
Restructuring Activities - Restructuring Plan Reserve Recorded in Accrued Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Restructuring Reserve | ||
Balance, beginning of period | $ 2,995 | $ 23,920 |
Restructuring (benefit) expense | (128) | (366) |
Utilized – cash | (1,632) | (16,442) |
Utilized – non cash | 528 | |
Foreign currency changes | (2) | (166) |
Balance, end of period | 1,233 | 7,474 |
Employee Termination Benefits | ||
Restructuring Reserve | ||
Balance, beginning of period | 121 | 7,724 |
Restructuring (benefit) expense | 0 | (944) |
Utilized – cash | (18) | (3,661) |
Utilized – non cash | 0 | |
Foreign currency changes | (3) | (112) |
Balance, end of period | 100 | 3,007 |
Contract Terminations & Other | ||
Restructuring Reserve | ||
Balance, beginning of period | 2,874 | 16,196 |
Restructuring (benefit) expense | (128) | 1,106 |
Utilized – cash | (1,614) | (12,781) |
Utilized – non cash | 0 | |
Foreign currency changes | 1 | (54) |
Balance, end of period | 1,133 | 4,467 |
Non-Current Asset Adjustments | ||
Restructuring Reserve | ||
Balance, beginning of period | 0 | 0 |
Restructuring (benefit) expense | 0 | (528) |
Utilized – cash | 0 | 0 |
Utilized – non cash | 528 | |
Foreign currency changes | 0 | 0 |
Balance, end of period | $ 0 | $ 0 |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Income Tax Disclosure [Abstract] | ||
Income tax rate | 23.40% | 23.80% |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation Of Earnings Per Share Basic And Diluted (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Numerator: | ||
Net income | $ 222,502 | $ 259,144 |
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | ||
Basic weighted-average shares outstanding (in shares) | 152,820 | 153,478 |
Effect of dilutive securities - employee stock compensation plan (in shares) | 1,104 | 1,012 |
Diluted weighted-average shares outstanding (in shares) | 153,924 | 154,490 |
Net earnings per share: | ||
Basic (in dollars per share) | $ 1.46 | $ 1.69 |
Diluted (in dollars per share) | $ 1.45 | $ 1.68 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Stock Option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Shares considered anti-dilutive and excluded from computation | 0.5 | 0.6 |
Additional Balance Sheet and _3
Additional Balance Sheet and Cash Flow Information - Marketable Securities (Details) - USD ($) $ in Thousands | Mar. 27, 2022 | Dec. 31, 2021 | Mar. 28, 2021 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Mutual funds | $ 45,189 | $ 49,650 | $ 50,239 |
Additional Balance Sheet and _4
Additional Balance Sheet and Cash Flow Information - Inventories, Net (Details) - USD ($) $ in Thousands | Mar. 27, 2022 | Dec. 31, 2021 | Mar. 28, 2021 |
Inventory | |||
Raw materials and work in process | $ 376,600 | $ 347,915 | $ 251,199 |
Inventory at lower of FIFO cost or net realizable value | 798,379 | 797,062 | 525,080 |
Excess of FIFO over LIFO cost | (84,120) | (84,120) | (54,083) |
Total inventories, net | 714,259 | 712,942 | 470,997 |
Certificates of Deposit | |||
Inventory | |||
Deposits | 348,100 | 290,300 | 152,700 |
Motorcycles | |||
Inventory | |||
Inventory, finished goods, net of inventory valuation adjustment | 291,623 | 345,956 | 185,590 |
Parts and accessories and apparel | |||
Inventory | |||
Inventory, finished goods, net of inventory valuation adjustment | $ 130,156 | $ 103,191 | $ 88,291 |
Additional Balance Sheet and _5
Additional Balance Sheet and Cash Flow Information - Certificates of Deposit (Details) $ in Thousands | Mar. 27, 2022USD ($) |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
2022 | $ 58,475 |
2023 | 74,304 |
2024 | 71,696 |
2025 | 19,053 |
2026 | 79,742 |
Thereafter | 46,060 |
Future maturities | 349,330 |
Unamortized fees | (1,247) |
Total | $ 348,083 |
Additional Balance Sheet and _6
Additional Balance Sheet and Cash Flow Information - Reconciliation Of Net Income To Net Cash Used By Operating Activities (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 222,502 | $ 259,144 |
Adjustments to reconcile Net income to Net cash provided by operating activities: | ||
Depreciation and amortization | 39,258 | 40,221 |
Amortization of deferred loan origination costs | 22,995 | 19,200 |
Amortization of financing origination fees | 3,701 | 3,614 |
Provision for long-term employee benefits | (5,050) | 7,090 |
Employee benefit plan contributions and payments | (2,143) | (9,885) |
Stock compensation expense | 8,903 | 8,968 |
Net change in wholesale finance receivables related to sales | (205,727) | (308,532) |
Provision for credit losses | 28,822 | (22,474) |
Deferred income taxes | 6,307 | 13,192 |
Other, net | (5,408) | (2,138) |
Changes in current assets and liabilities: | ||
Accounts receivable, net | (74,993) | (79,012) |
Finance receivables – accrued interest and other | 3,115 | 8,947 |
Inventories, net | (2,630) | 45,086 |
Accounts payable and accrued liabilities | 106,969 | 153,597 |
Other current assets | (7,300) | 25,763 |
Total adjustments | (83,181) | (96,363) |
Net cash provided by operating activities | $ 139,321 | $ 162,781 |
Finance Receivables - Finance R
Finance Receivables - Finance Receivables, Net (Details) - USD ($) $ in Thousands | Mar. 27, 2022 | Dec. 31, 2021 | Mar. 28, 2021 | Dec. 31, 2020 |
Accounts, Notes, Loans and Financing Receivable | ||||
Financing receivable, gross | $ 7,162,026 | $ 6,911,300 | $ 7,103,010 | |
Allowance for credit losses | (340,473) | (339,379) | (346,233) | $ (390,936) |
Total allowance for credit loss | 6,821,553 | 6,571,921 | 6,756,777 | |
Retail | ||||
Accounts, Notes, Loans and Financing Receivable | ||||
Financing receivable, gross | 6,511,845 | 6,493,519 | 6,310,982 | |
Allowance for credit losses | (327,206) | (326,320) | (327,060) | (371,738) |
Wholesale | ||||
Accounts, Notes, Loans and Financing Receivable | ||||
Financing receivable, gross | 650,181 | 417,781 | 792,028 | |
Allowance for credit losses | $ (13,267) | $ (13,059) | $ (19,173) | $ (19,198) |
Finance Receivables - Additiona
Finance Receivables - Additional Information (Details) $ in Millions | 3 Months Ended | |
Mar. 27, 2022USD ($)portfolio | Mar. 28, 2021USD ($) | |
Accounts, Notes, Loans and Financing Receivable | ||
Reasonable and supportable economic forecast length | 2 years | |
Length of mean reversion process used in economic forecasting | 3 years | |
Number of portfolios | portfolio | 2 | |
Retail | ||
Accounts, Notes, Loans and Financing Receivable | ||
Reversal of accrued interest against interest income | $ 4.9 | $ 5.2 |
Wholesale | ||
Accounts, Notes, Loans and Financing Receivable | ||
Reversal of accrued interest against interest income | $ 0 |
Finance Receivables - Changes I
Finance Receivables - Changes In Allowance For Credit Losses On Finance Receivables (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance, beginning of period | $ 339,379 | $ 390,936 |
Provision for credit losses | 28,822 | (22,474) |
Charge-offs | (41,804) | (34,589) |
Recoveries | 14,076 | 12,360 |
Balance, end of period | 340,473 | 346,233 |
Retail | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance, beginning of period | 326,320 | 371,738 |
Provision for credit losses | 28,614 | (22,449) |
Charge-offs | (41,804) | (34,589) |
Recoveries | 14,076 | 12,360 |
Balance, end of period | 327,206 | 327,060 |
Wholesale | ||
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance, beginning of period | 13,059 | 19,198 |
Provision for credit losses | 208 | (25) |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Balance, end of period | $ 13,267 | $ 19,173 |
Finance Receivables - Recorded
Finance Receivables - Recorded Investment in Retail Finance Receivables, by Credit Quality Indicator (Details) - USD ($) $ in Thousands | Mar. 27, 2022 | Dec. 31, 2021 | Mar. 28, 2021 |
Financing Receivable, Allowance for Credit Losses | |||
Total | $ 7,162,026 | $ 6,911,300 | $ 7,103,010 |
Retail | |||
Financing Receivable, Allowance for Credit Losses | |||
2022 | 849,936 | ||
2021 | 2,631,037 | 2,949,726 | 759,194 |
2020 | 1,333,411 | 1,518,657 | 2,215,566 |
2019 | 869,019 | 1,006,457 | 1,531,265 |
2018 | 482,453 | 575,460 | 938,627 |
2017 & Prior | 345,989 | 278,817 | 498,413 |
2016 & Prior | 164,402 | 367,917 | |
Total | 6,511,845 | 6,493,519 | 6,310,982 |
Retail | UNITED STATES | |||
Financing Receivable, Allowance for Credit Losses | |||
2022 | 831,187 | ||
2021 | 2,565,990 | 2,878,709 | 740,410 |
2020 | 1,290,555 | 1,471,124 | 2,146,958 |
2019 | 835,902 | 968,569 | 1,472,990 |
2018 | 464,614 | 554,299 | 903,408 |
2017 & Prior | 336,310 | 269,964 | 480,538 |
2016 & Prior | 160,628 | 358,130 | |
Total | 6,324,558 | 6,303,293 | 6,102,434 |
Retail | CANADA | |||
Financing Receivable, Allowance for Credit Losses | |||
2022 | 18,749 | ||
2021 | 65,047 | 71,017 | 18,784 |
2020 | 42,856 | 47,533 | 68,608 |
2019 | 33,117 | 37,888 | 58,275 |
2018 | 17,839 | 21,161 | 35,219 |
2017 & Prior | 9,679 | 8,853 | 17,875 |
2016 & Prior | 3,774 | 9,787 | |
Total | 187,287 | 190,226 | 208,548 |
Retail | Super prime | UNITED STATES | |||
Financing Receivable, Allowance for Credit Losses | |||
2022 | 311,114 | ||
2021 | 890,413 | 1,010,636 | 260,359 |
2020 | 422,454 | 484,479 | 725,383 |
2019 | 268,692 | 316,390 | 502,847 |
2018 | 139,540 | 171,763 | 301,839 |
2017 & Prior | 68,682 | 65,753 | 134,213 |
2016 & Prior | 27,424 | 74,086 | |
Total | 2,100,895 | 2,076,445 | 1,998,727 |
Retail | Super prime | CANADA | |||
Financing Receivable, Allowance for Credit Losses | |||
2022 | 14,015 | ||
2021 | 47,025 | 51,779 | 13,938 |
2020 | 29,382 | 32,724 | 48,309 |
2019 | 23,367 | 27,073 | 42,993 |
2018 | 11,524 | 13,984 | 24,549 |
2017 & Prior | 4,515 | 4,619 | 11,116 |
2016 & Prior | 1,614 | 4,831 | |
Total | 129,828 | 131,793 | 145,736 |
Retail | Prime | UNITED STATES | |||
Financing Receivable, Allowance for Credit Losses | |||
2022 | 394,793 | ||
2021 | 1,247,764 | 1,391,385 | 349,662 |
2020 | 627,102 | 712,858 | 1,026,080 |
2019 | 407,242 | 470,177 | 706,940 |
2018 | 233,630 | 277,206 | 445,201 |
2017 & Prior | 176,018 | 142,288 | 249,327 |
2016 & Prior | 82,169 | 183,217 | |
Total | 3,086,549 | 3,076,083 | 2,960,427 |
Retail | Prime | CANADA | |||
Financing Receivable, Allowance for Credit Losses | |||
2022 | 4,228 | ||
2021 | 15,842 | 16,882 | 4,245 |
2020 | 11,513 | 12,675 | 17,350 |
2019 | 8,349 | 9,244 | 13,055 |
2018 | 5,454 | 6,230 | 9,263 |
2017 & Prior | 4,391 | 3,628 | 5,808 |
2016 & Prior | 1,779 | 4,178 | |
Total | 49,777 | 50,438 | 53,899 |
Retail | Sub-prime | UNITED STATES | |||
Financing Receivable, Allowance for Credit Losses | |||
2022 | 125,280 | ||
2021 | 427,813 | 476,688 | 130,389 |
2020 | 240,999 | 273,787 | 395,495 |
2019 | 159,968 | 182,002 | 263,203 |
2018 | 91,444 | 105,330 | 156,368 |
2017 & Prior | 91,610 | 61,923 | 96,998 |
2016 & Prior | 51,035 | 100,827 | |
Total | 1,137,114 | 1,150,765 | 1,143,280 |
Retail | Sub-prime | CANADA | |||
Financing Receivable, Allowance for Credit Losses | |||
2022 | 506 | ||
2021 | 2,180 | 2,356 | 601 |
2020 | 1,961 | 2,134 | 2,949 |
2019 | 1,401 | 1,571 | 2,227 |
2018 | 861 | 947 | 1,407 |
2017 & Prior | 773 | 606 | 951 |
2016 & Prior | 381 | 778 | |
Total | $ 7,682 | $ 7,995 | $ 8,913 |
Finance Receivables - Recorde_2
Finance Receivables - Recorded Investment Of Retail and Wholesale Finance Receivables By Credit Quality Indicator (Details) - USD ($) $ in Thousands | Mar. 27, 2022 | Dec. 31, 2021 | Mar. 28, 2021 |
Financing Receivable, Recorded Investment | |||
Total | $ 7,162,026 | $ 6,911,300 | $ 7,103,010 |
Wholesale | |||
Financing Receivable, Recorded Investment | |||
2022 | 489,283 | ||
2021 | 127,797 | 380,211 | 600,711 |
2020 | 9,108 | 11,379 | 124,228 |
2019 | 11,147 | 11,047 | 45,293 |
2018 | 9,893 | 10,565 | 12,585 |
2017 & Prior | 2,953 | 3,662 | 6,392 |
2016 & Prior | 917 | 2,819 | |
Total | 650,181 | 417,781 | 792,028 |
Wholesale | Non-Performing | |||
Financing Receivable, Recorded Investment | |||
2022 | 0 | ||
2021 | 0 | 0 | 0 |
2020 | 0 | 0 | 0 |
2019 | 0 | 0 | 0 |
2018 | 0 | 0 | 0 |
2017 & Prior | 0 | 0 | 0 |
2016 & Prior | 0 | 0 | |
Total | 0 | 0 | 0 |
Wholesale | Doubtful | |||
Financing Receivable, Recorded Investment | |||
2022 | 0 | ||
2021 | 0 | 0 | 0 |
2020 | 0 | 0 | 0 |
2019 | 0 | 0 | 0 |
2018 | 0 | 0 | 0 |
2017 & Prior | 0 | 0 | 0 |
2016 & Prior | 0 | 0 | |
Total | 0 | 0 | 0 |
Wholesale | Substandard | |||
Financing Receivable, Recorded Investment | |||
2022 | 0 | ||
2021 | 0 | 0 | 0 |
2020 | 0 | 0 | 0 |
2019 | 0 | 0 | 0 |
2018 | 0 | 0 | 0 |
2017 & Prior | 0 | 0 | 0 |
2016 & Prior | 0 | 0 | |
Total | 0 | 0 | 0 |
Wholesale | Special Mention | |||
Financing Receivable, Recorded Investment | |||
2022 | 0 | ||
2021 | 0 | 0 | 567 |
2020 | 0 | 0 | 530 |
2019 | 0 | 0 | 262 |
2018 | 0 | 0 | 17 |
2017 & Prior | 0 | 0 | 0 |
2016 & Prior | 0 | 0 | |
Total | 0 | 0 | 1,376 |
Wholesale | Medium Risk | |||
Financing Receivable, Recorded Investment | |||
2022 | 0 | ||
2021 | 0 | 0 | 0 |
2020 | 0 | 0 | 728 |
2019 | 0 | 0 | 417 |
2018 | 0 | 0 | 0 |
2017 & Prior | 0 | 0 | 0 |
2016 & Prior | 0 | 0 | |
Total | 0 | 0 | 1,145 |
Wholesale | Low Risk | |||
Financing Receivable, Recorded Investment | |||
2022 | 489,283 | ||
2021 | 127,797 | 380,211 | 600,144 |
2020 | 9,108 | 11,379 | 122,970 |
2019 | 11,147 | 11,047 | 44,614 |
2018 | 9,893 | 10,565 | 12,568 |
2017 & Prior | 2,953 | 3,662 | 6,392 |
2016 & Prior | 917 | 2,819 | |
Total | $ 650,181 | $ 417,781 | $ 789,507 |
Finance Receivables - Aging Of
Finance Receivables - Aging Of Past Due Finance Receivables Including Non Accrual Status Finance Receivables (Details) - USD ($) $ in Thousands | Mar. 27, 2022 | Dec. 31, 2021 | Mar. 28, 2021 |
Financing Receivable, Recorded Investment, Past Due | |||
Total | $ 7,162,026 | $ 6,911,300 | $ 7,103,010 |
Current | |||
Financing Receivable, Recorded Investment, Past Due | |||
Total | 6,993,621 | 6,716,205 | 6,988,171 |
Total Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Total | 168,405 | 195,095 | 114,839 |
31-60 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Total | 99,883 | 115,951 | 69,160 |
61-90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Total | 32,548 | 44,327 | 23,442 |
Greater than 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Total | 35,974 | 34,817 | 22,237 |
Retail | |||
Financing Receivable, Recorded Investment, Past Due | |||
Total | 6,511,845 | 6,493,519 | 6,310,982 |
Retail | Current | |||
Financing Receivable, Recorded Investment, Past Due | |||
Total | 6,343,673 | 6,298,485 | 6,196,345 |
Retail | Total Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Total | 168,172 | 195,034 | 114,637 |
Retail | 31-60 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Total | 99,705 | 115,942 | 69,032 |
Retail | 61-90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Total | 32,521 | 44,326 | 23,420 |
Retail | Greater than 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Total | 35,946 | 34,766 | 22,185 |
Wholesale | |||
Financing Receivable, Recorded Investment, Past Due | |||
Total | 650,181 | 417,781 | 792,028 |
Wholesale | Current | |||
Financing Receivable, Recorded Investment, Past Due | |||
Total | 649,948 | 417,720 | 791,826 |
Wholesale | Total Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Total | 233 | 61 | 202 |
Wholesale | 31-60 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Total | 178 | 9 | 128 |
Wholesale | 61-90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Total | 27 | 1 | 22 |
Wholesale | Greater than 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Total | $ 28 | $ 51 | $ 52 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Hedging Activities - Derivative Instrument Fair Value (Details) - USD ($) $ in Thousands | Mar. 27, 2022 | Dec. 31, 2021 | Mar. 28, 2021 |
Designated as Hedging Instrument | Cash Flow Hedging | |||
Derivatives, Fair Value | |||
Notional Value | $ 1,953,875 | $ 1,930,718 | $ 1,770,942 |
Designated as Hedging Instrument | Cash Flow Hedging | Other Current Assets | |||
Derivatives, Fair Value | |||
Other Current Assets | 37,983 | 49,734 | 79,808 |
Designated as Hedging Instrument | Cash Flow Hedging | Accrued Liabilities | |||
Derivatives, Fair Value | |||
Accrued Liabilities | 3,576 | 1,427 | 6,091 |
Designated as Hedging Instrument | Cash Flow Hedging | Foreign currency contracts | |||
Derivatives, Fair Value | |||
Notional Value | 585,451 | 562,262 | 402,814 |
Designated as Hedging Instrument | Cash Flow Hedging | Foreign currency contracts | Other Current Assets | |||
Derivatives, Fair Value | |||
Other Current Assets | 18,832 | 14,644 | 6,356 |
Designated as Hedging Instrument | Cash Flow Hedging | Foreign currency contracts | Accrued Liabilities | |||
Derivatives, Fair Value | |||
Accrued Liabilities | 3,576 | 1,388 | 6,071 |
Designated as Hedging Instrument | Cash Flow Hedging | Commodity contracts | |||
Derivatives, Fair Value | |||
Notional Value | 964 | 996 | 668 |
Designated as Hedging Instrument | Cash Flow Hedging | Commodity contracts | Other Current Assets | |||
Derivatives, Fair Value | |||
Other Current Assets | 316 | 19 | 3 |
Designated as Hedging Instrument | Cash Flow Hedging | Commodity contracts | Accrued Liabilities | |||
Derivatives, Fair Value | |||
Accrued Liabilities | 0 | 39 | 20 |
Designated as Hedging Instrument | Cash Flow Hedging | Cross-currency swaps | |||
Derivatives, Fair Value | |||
Notional Value | 1,367,460 | 1,367,460 | 1,367,460 |
Designated as Hedging Instrument | Cash Flow Hedging | Cross-currency swaps | Other Current Assets | |||
Derivatives, Fair Value | |||
Other Current Assets | 18,835 | 35,071 | 73,449 |
Designated as Hedging Instrument | Cash Flow Hedging | Cross-currency swaps | Accrued Liabilities | |||
Derivatives, Fair Value | |||
Accrued Liabilities | 0 | 0 | 0 |
Not Designated as Hedging Instrument | |||
Derivatives, Fair Value | |||
Notional Value | 654,680 | 757,092 | 1,067,182 |
Not Designated as Hedging Instrument | Other Current Assets | |||
Derivatives, Fair Value | |||
Other Current Assets | 5,082 | 2,300 | 2,033 |
Not Designated as Hedging Instrument | Accrued Liabilities | |||
Derivatives, Fair Value | |||
Accrued Liabilities | 722 | 934 | 635 |
Not Designated as Hedging Instrument | Foreign currency contracts | |||
Derivatives, Fair Value | |||
Notional Value | 230,336 | 241,935 | 214,337 |
Not Designated as Hedging Instrument | Foreign currency contracts | Other Current Assets | |||
Derivatives, Fair Value | |||
Other Current Assets | 587 | 1,299 | 670 |
Not Designated as Hedging Instrument | Foreign currency contracts | Accrued Liabilities | |||
Derivatives, Fair Value | |||
Accrued Liabilities | 722 | 916 | 595 |
Not Designated as Hedging Instrument | Commodity contracts | |||
Derivatives, Fair Value | |||
Notional Value | 11,866 | 10,631 | 8,172 |
Not Designated as Hedging Instrument | Commodity contracts | Other Current Assets | |||
Derivatives, Fair Value | |||
Other Current Assets | 2,435 | 641 | 1,193 |
Not Designated as Hedging Instrument | Commodity contracts | Accrued Liabilities | |||
Derivatives, Fair Value | |||
Accrued Liabilities | 0 | 18 | 40 |
Not Designated as Hedging Instrument | Interest rate caps | |||
Derivatives, Fair Value | |||
Notional Value | 412,478 | 504,526 | 844,673 |
Not Designated as Hedging Instrument | Interest rate caps | Other Current Assets | |||
Derivatives, Fair Value | |||
Other Current Assets | 2,060 | 360 | 170 |
Not Designated as Hedging Instrument | Interest rate caps | Accrued Liabilities | |||
Derivatives, Fair Value | |||
Accrued Liabilities | $ 0 | $ 0 | $ 0 |
Derivative Financial Instrume_4
Derivative Financial Instruments and Hedging Activities - Amount Of Gains And Losses Related To Derivative Financial Instruments (Details) - Designated as Hedging Instrument - Cash Flow Hedging - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Derivative Instruments, Gain (Loss) | ||
Gain/(Loss) Recognized in OCI | $ (7,230) | $ (50,737) |
Gain/(Loss) Reclassified from AOCL into Income | (20,046) | (73,586) |
Foreign currency contracts | ||
Derivative Instruments, Gain (Loss) | ||
Gain/(Loss) Recognized in OCI | 8,444 | 14,037 |
Gain/(Loss) Reclassified from AOCL into Income | 5,655 | (4,953) |
Commodity contracts | ||
Derivative Instruments, Gain (Loss) | ||
Gain/(Loss) Recognized in OCI | 562 | 3 |
Gain/(Loss) Reclassified from AOCL into Income | 226 | (32) |
Cross-currency swaps | ||
Derivative Instruments, Gain (Loss) | ||
Gain/(Loss) Recognized in OCI | (16,236) | (65,174) |
Gain/(Loss) Reclassified from AOCL into Income | (25,800) | (65,788) |
Treasury rate lock contracts | ||
Derivative Instruments, Gain (Loss) | ||
Gain/(Loss) Recognized in OCI | 0 | 0 |
Gain/(Loss) Reclassified from AOCL into Income | (127) | (124) |
Interest rate swaps | ||
Derivative Instruments, Gain (Loss) | ||
Gain/(Loss) Recognized in OCI | 0 | 397 |
Gain/(Loss) Reclassified from AOCL into Income | $ 0 | $ (2,689) |
Derivative Financial Instrume_5
Derivative Financial Instruments and Hedging Activities - Amount Of Gains And Losses Recognized In Income Related To Derivative Financial Instruments (Details) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Derivative | ||
Motorcycles and Related Products cost of goods sold | $ 895,536 | $ 811,622 |
Selling, administrative and engineering expense | 239,625 | 231,844 |
Interest expense | 7,711 | 7,708 |
Financial Services interest expense | 42,099 | 55,707 |
Expected to be reclassified over the next twelve months | (1,400) | |
Cash Flow Hedging | Designated as Hedging Instrument | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | (20,046) | (73,586) |
Cash Flow Hedging | Designated as Hedging Instrument | Foreign currency contracts | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | 5,655 | (4,953) |
Cash Flow Hedging | Designated as Hedging Instrument | Foreign currency contracts | Motorcycles cost of goods sold | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | 5,655 | (4,953) |
Cash Flow Hedging | Designated as Hedging Instrument | Commodity contracts | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | 226 | (32) |
Cash Flow Hedging | Designated as Hedging Instrument | Commodity contracts | Motorcycles cost of goods sold | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | 226 | (32) |
Cash Flow Hedging | Designated as Hedging Instrument | Cross-currency swaps | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | (25,800) | (65,788) |
Cash Flow Hedging | Designated as Hedging Instrument | Cross-currency swaps | Selling, administrative & engineering expense | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | (25,800) | (65,788) |
Cash Flow Hedging | Designated as Hedging Instrument | Treasury rate lock contracts | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | (127) | (124) |
Cash Flow Hedging | Designated as Hedging Instrument | Treasury rate lock contracts | Interest expense | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | (91) | (91) |
Cash Flow Hedging | Designated as Hedging Instrument | Treasury rate lock contracts | Financial Services interest expense | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | (36) | (33) |
Cash Flow Hedging | Designated as Hedging Instrument | Interest rate swaps | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | $ 0 | (2,689) |
Cash Flow Hedging | Designated as Hedging Instrument | Interest rate swaps | Financial Services interest expense | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | $ (2,689) |
Derivative Financial Instrume_6
Derivative Financial Instruments and Hedging Activities - Gain Loss Recognized In Income On Hedged Derivatives (Details) - Not Designated as Hedging Instrument - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Derivative | ||
Amount of Gain/(Loss) Recognized in Income | $ 581 | $ (2,803) |
Foreign currency contracts | Cost of Sales | ||
Derivative | ||
Amount of Gain/(Loss) Recognized in Income | (3,506) | (3,629) |
Commodity contracts | Cost of Sales | ||
Derivative | ||
Amount of Gain/(Loss) Recognized in Income | 2,387 | 703 |
Interest rate caps | Cost of Sales | ||
Derivative | ||
Amount of Gain/(Loss) Recognized in Income | $ 1,700 | $ 123 |
Leases - Additional Information
Leases - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 27, 2022 | Mar. 28, 2021 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | |||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued liabilities | Accrued liabilities | Accrued liabilities |
Renewal term | 5 years | ||
Termination period | 1 year | ||
Operating lease expense | $ 6.7 | $ 8.2 | |
Variable lease cost | $ 1 | $ 3.1 | |
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease terms | 1 year | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Remaining lease terms | 6 years |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet Information (Details) - USD ($) $ in Thousands | Mar. 27, 2022 | Dec. 31, 2021 | Mar. 28, 2021 |
Assets | |||
Lease assets | $ 45,073 | $ 49,625 | $ 44,765 |
Liabilities | |||
Accrued liabilities | 15,745 | 17,369 | 17,021 |
Lease liabilities | 27,633 | 29,904 | 30,061 |
Lease liability | $ 43,378 | $ 47,273 | $ 47,082 |
Leases - Future Maturities of L
Leases - Future Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 27, 2022 | Dec. 31, 2021 | Mar. 28, 2021 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |||
2022 | $ 13,552 | ||
2023 | 10,484 | ||
2024 | 7,745 | ||
2025 | 6,032 | ||
2026 | 5,075 | ||
Thereafter | 1,927 | ||
Future lease payments | 44,815 | ||
Present value discount | (1,437) | ||
Lease liabilities | $ 43,378 | $ 47,273 | $ 47,082 |
Leases - Other Lease Informatio
Leases - Other Lease Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 27, 2022 | Mar. 28, 2021 | Dec. 31, 2021 | |
Leases [Abstract] | |||
Cash outflows for amounts included in the measurement of lease liabilities | $ 4,957 | $ 4,947 | |
ROU assets obtained in exchange for lease obligations, net of modifications | $ 1,279 | $ 5,305 | |
Weighted-average remaining lease term (in years) | 3 years 9 months 10 days | 3 years 9 months 21 days | 3 years 10 months 9 days |
Weighted-average discount rate | 1.90% | 2.90% | 1.90% |
Debt - Debt With Contractual Te
Debt - Debt With Contractual Term Less Than One Year (Details) - USD ($) $ in Thousands | Mar. 27, 2022 | Dec. 31, 2021 | Mar. 28, 2021 |
Short-term Debt | |||
Short-term debt | $ 816,016 | $ 751,286 | $ 765,263 |
Unsecured commercial paper | |||
Short-term Debt | |||
Short-term debt | 816,016 | 751,286 | 749,801 |
Global credit facility borrowings | |||
Short-term Debt | |||
Short-term debt | $ 0 | $ 0 | $ 15,462 |
Debt - Debt With A Contractual
Debt - Debt With A Contractual Term Greater Than One Year (Details) $ in Thousands, € in Millions | Mar. 27, 2022USD ($) | Mar. 27, 2022EUR (€) | Dec. 31, 2021USD ($) | Dec. 31, 2021EUR (€) | Mar. 28, 2021USD ($) | Mar. 28, 2021EUR (€) |
Debt Instrument | ||||||
Less: unamortized discount and debt issuance costs | $ (23,097) | |||||
Long-term debt | 5,797,443 | $ 6,138,113 | $ 7,100,334 | |||
Current portion of long-term debt, net | (1,327,357) | (1,542,496) | (1,622,243) | |||
Long-term debt, net | 4,470,086 | 4,595,617 | 5,478,091 | |||
Secured Debt | ||||||
Debt Instrument | ||||||
Less: unamortized discount and debt issuance costs | (5,696) | (7,611) | (9,788) | |||
Long-term debt | 1,722,756 | 1,984,785 | 2,552,449 | |||
Secured Debt | Asset-backed Canadian commercial paper conduit facility | ||||||
Debt Instrument | ||||||
Long-term debt, gross | 95,664 | 85,054 | 102,543 | |||
Secured Debt | Asset-backed U.S. commercial paper conduit facility | ||||||
Debt Instrument | ||||||
Long-term debt, gross | 269,534 | 272,589 | 350,648 | |||
Secured Debt | Asset-backed securitization debt | ||||||
Debt Instrument | ||||||
Long-term debt, gross | 1,363,254 | 1,634,753 | 2,109,046 | |||
Medium-term notes | ||||||
Debt Instrument | ||||||
Long-term debt, gross | 3,329,845 | 3,408,660 | 3,803,736 | |||
Less: unamortized discount and debt issuance costs | $ (12,243) | (9,228) | (13,564) | |||
Medium-term notes | Due in 2021, issued May 2018 | ||||||
Debt Instrument | ||||||
Debt instrument, stated percentage | 3.55% | 3.55% | ||||
Long-term debt, gross | $ 0 | 0 | 350,000 | |||
Medium-term notes | Due in 2022, issued February 2019 | ||||||
Debt Instrument | ||||||
Debt instrument, stated percentage | 4.05% | 4.05% | ||||
Long-term debt, gross | $ 0 | 550,000 | 550,000 | |||
Medium-term notes | Due in 2022, issued June 2017 | ||||||
Debt Instrument | ||||||
Debt instrument, stated percentage | 2.55% | 2.55% | ||||
Long-term debt, gross | $ 400,000 | 400,000 | 400,000 | |||
Medium-term notes | Due in 2023, issued February 2018 | ||||||
Debt Instrument | ||||||
Debt instrument, stated percentage | 3.35% | 3.35% | ||||
Long-term debt, gross | $ 350,000 | 350,000 | 350,000 | |||
Medium-term notes | Due in 2023, issued May 2020 | ||||||
Debt Instrument | ||||||
Debt instrument, stated percentage | 4.94% | 4.94% | ||||
Long-term debt, gross | $ 723,886 | € 650 | 737,302 | € 650 | 762,996 | € 650 |
Medium-term notes | Due in 2024, issued November 2019 | ||||||
Debt Instrument | ||||||
Debt instrument, stated percentage | 3.14% | 3.14% | ||||
Long-term debt, gross | $ 668,202 | € 600 | 680,586 | € 600 | 704,304 | € 600 |
Medium-term notes | Due in 2025, issued June 2020 | ||||||
Debt Instrument | ||||||
Debt instrument, stated percentage | 3.35% | 3.35% | ||||
Long-term debt, gross | $ 700,000 | 700,000 | 700,000 | |||
Medium-term notes | Due in 2027, issued February 2022 | ||||||
Debt Instrument | ||||||
Debt instrument, stated percentage | 3.05% | 3.05% | ||||
Long-term debt, gross | $ 500,000 | 0 | 0 | |||
Senior notes | ||||||
Debt Instrument | ||||||
Less: unamortized discount and debt issuance costs | (5,158) | (5,332) | (5,851) | |||
Long-term debt | $ 744,842 | 744,668 | 744,149 | |||
Senior notes | Due in 2025, issued July 2015 | ||||||
Debt Instrument | ||||||
Debt instrument, stated percentage | 3.50% | 3.50% | ||||
Long-term debt, gross | $ 450,000 | 450,000 | 450,000 | |||
Senior notes | Due in 2045, issued July 2015 | ||||||
Debt Instrument | ||||||
Debt instrument, stated percentage | 4.625% | 4.625% | ||||
Long-term debt, gross | $ 300,000 | 300,000 | 300,000 | |||
Unsecured Debt | ||||||
Debt Instrument | ||||||
Long-term debt | $ 4,074,687 | $ 4,153,328 | $ 4,547,885 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Long-term debt (Details) $ in Thousands | Mar. 27, 2022USD ($) |
Debt Disclosure [Abstract] | |
2022 | $ 1,716,955 |
2023 | 1,591,745 |
2024 | 1,058,291 |
2025 | 1,398,474 |
2026 | 71,091 |
Thereafter | 800,000 |
Future principal payments | 6,636,556 |
Less: unamortized discount and debt issuance costs | (23,097) |
Total future payments | $ 6,613,459 |
Asset-Backed Financing - Assets
Asset-Backed Financing - Assets And Liabilities Of Variable Interest Entities (Details) - USD ($) $ in Thousands | Mar. 27, 2022 | Dec. 31, 2021 | Mar. 28, 2021 |
Finance receivables | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, assets, carrying amount | $ 2,153,979 | $ 2,442,828 | $ 2,942,458 |
Transfers accounted for as secured borrowings, assets, allowance for credit losses, carrying amount | (107,096) | (121,667) | (150,873) |
Finance receivables | Asset-backed securitizations | Consolidated VIEs | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, assets, carrying amount | 1,755,446 | 2,048,194 | 2,448,681 |
Transfers accounted for as secured borrowings, assets, allowance for credit losses, carrying amount | (88,090) | (102,779) | (126,053) |
Finance receivables | Asset-backed U.S. commercial paper conduit facility | Consolidated VIEs | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, assets, carrying amount | 290,481 | 297,454 | 378,035 |
Transfers accounted for as secured borrowings, assets, allowance for credit losses, carrying amount | (14,549) | (14,898) | (19,432) |
Finance receivables | Asset-backed Canadian commercial paper conduit facility | Unconsolidated VIEs | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, assets, carrying amount | 108,052 | 97,180 | 115,742 |
Transfers accounted for as secured borrowings, assets, allowance for credit losses, carrying amount | (4,457) | (3,990) | (5,388) |
Restricted cash | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, assets, carrying amount | 164,426 | 150,475 | 206,689 |
Restricted cash | Asset-backed securitizations | Consolidated VIEs | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, assets, carrying amount | 131,992 | 123,717 | 166,694 |
Restricted cash | Asset-backed U.S. commercial paper conduit facility | Consolidated VIEs | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, assets, carrying amount | 24,305 | 20,567 | 30,252 |
Restricted cash | Asset-backed Canadian commercial paper conduit facility | Unconsolidated VIEs | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, assets, carrying amount | 8,129 | 6,191 | 9,743 |
Other assets | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, assets, carrying amount | 4,416 | 3,121 | 4,233 |
Other assets | Asset-backed securitizations | Consolidated VIEs | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, assets, carrying amount | 3,724 | 2,328 | 2,852 |
Other assets | Asset-backed U.S. commercial paper conduit facility | Consolidated VIEs | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, assets, carrying amount | 649 | 654 | 1,175 |
Other assets | Asset-backed Canadian commercial paper conduit facility | Unconsolidated VIEs | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, assets, carrying amount | 43 | 139 | 206 |
Total assets | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, assets, carrying amount | 2,215,725 | 2,474,757 | 3,002,507 |
Total assets | Asset-backed securitizations | Consolidated VIEs | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, assets, carrying amount | 1,803,072 | 2,071,460 | 2,492,174 |
Total assets | Asset-backed U.S. commercial paper conduit facility | Consolidated VIEs | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, assets, carrying amount | 300,886 | 303,777 | 390,030 |
Total assets | Asset-backed Canadian commercial paper conduit facility | Unconsolidated VIEs | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, assets, carrying amount | 111,767 | 99,520 | 120,303 |
Asset-backed debt, net | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, associated liabilities, carrying amount | 1,722,756 | 1,984,785 | 2,552,449 |
Asset-backed debt, net | Asset-backed securitizations | Consolidated VIEs | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, associated liabilities, carrying amount | 1,357,558 | 1,627,142 | 2,099,258 |
Asset-backed debt, net | Asset-backed U.S. commercial paper conduit facility | Consolidated VIEs | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, associated liabilities, carrying amount | 269,534 | 272,589 | 350,648 |
Asset-backed debt, net | Asset-backed Canadian commercial paper conduit facility | Unconsolidated VIEs | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, associated liabilities, carrying amount | $ 95,664 | $ 85,054 | $ 102,543 |
Asset-Backed Financing - Additi
Asset-Backed Financing - Additional Information (Details) $ in Millions | 3 Months Ended | ||||
Mar. 27, 2022USD ($) | Mar. 28, 2021USD ($) | Mar. 27, 2022CAD ($) | Jun. 30, 2021CAD ($) | Nov. 25, 2020USD ($) | |
Variable Interest Entity | |||||
Proceeds from securitization debt | $ 0 | $ 597,411,000 | |||
Asset Backed Securitization 1 | Consolidated VIEs | Secured Debt | Asset-backed Securities, Securitized Loans and Receivables | |||||
Variable Interest Entity | |||||
Secured notes issued | 600,000,000 | ||||
Proceeds from securitization debt | 597,400,000 | ||||
U.S. Line of Credit | Asset-backed U.S. commercial paper conduit facility | Consolidated VIEs | Secured Debt | |||||
Variable Interest Entity | |||||
Length of option | 5 years | ||||
Amount transferred to receivables | $ 47,100,000 | 0 | |||
Proceeds from transfer of finance receivables | 41,300,000 | ||||
U.S. Line of Credit | Asset-backed U.S. commercial paper conduit facility VIE, facility one | Consolidated VIEs | Secured Debt | |||||
Variable Interest Entity | |||||
Line of credit, maximum borrowing capacity | 300,000,000 | ||||
U.S. Line of Credit | Asset-Backed U.S. Commercial Paper Conduit Facility VIE, Combined Facilities | Consolidated VIEs | Secured Debt | |||||
Variable Interest Entity | |||||
Line of credit, maximum borrowing capacity | $ 900,000,000 | ||||
Line of credit facility, remaining borrowing capacity | $ 300,000,000 | ||||
U.S. Line of Credit | Asset Backed Securitization 1 | |||||
Variable Interest Entity | |||||
Off-balance sheet asset-backed securitization VIE repurchase | 0 | ||||
Finance receivables | 663,100,000 | ||||
Global credit facility borrowings | Asset-backed Canadian commercial paper conduit facility | Consolidated VIEs | Secured Debt | |||||
Variable Interest Entity | |||||
Amount transferred to receivables | $ 0 | ||||
Proceeds from transfer of finance receivables | $ 21,200,000 | ||||
Global credit facility borrowings | Asset-backed Canadian commercial paper conduit facility | Unconsolidated VIEs | Secured Debt | |||||
Variable Interest Entity | |||||
Line of credit, maximum borrowing capacity | $ 220 | $ 125 | |||
Length of option | 5 years | ||||
VIE, maximum loss exposure, amount | $ 16,100,000 | ||||
Global credit facility borrowings | Asset-backed Canadian Retail Motorcycle Finance Receivables | Consolidated VIEs | Secured Debt | |||||
Variable Interest Entity | |||||
Amount transferred to receivables | $ 25,300,000 |
Fair Value - Summary of Assets
Fair Value - Summary of Assets And Liabilities Measured at Fair Value (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Mar. 27, 2022 | Dec. 31, 2021 | Mar. 28, 2021 |
Assets: | |||
Cash equivalents | $ 968,395 | $ 1,617,887 | $ 2,069,400 |
Marketable securities | 45,189 | 49,650 | 50,239 |
Derivative financial instruments | 43,065 | 52,034 | 81,841 |
Assets, fair value | 1,056,649 | 1,719,571 | 2,201,480 |
Liabilities: | |||
Derivative financial instruments | 4,298 | 2,361 | 6,726 |
Level 1 | |||
Assets: | |||
Cash equivalents | 803,400 | 1,337,900 | 1,919,400 |
Marketable securities | 45,189 | 49,650 | 50,239 |
Derivative financial instruments | 0 | 0 | 0 |
Assets, fair value | 848,589 | 1,387,550 | 1,969,639 |
Liabilities: | |||
Derivative financial instruments | 0 | 0 | 0 |
Level 2 | |||
Assets: | |||
Cash equivalents | 164,995 | 279,987 | 150,000 |
Marketable securities | 0 | 0 | 0 |
Derivative financial instruments | 43,065 | 52,034 | 81,841 |
Assets, fair value | 208,060 | 332,021 | 231,841 |
Liabilities: | |||
Derivative financial instruments | $ 4,298 | $ 2,361 | $ 6,726 |
Fair Value - Additional Informa
Fair Value - Additional Information (Details) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Millions | Mar. 27, 2022 | Dec. 31, 2021 | Mar. 28, 2021 |
Fair Value Adjustment | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Repossessed inventory | $ (0.6) | $ (2.9) | $ (2.4) |
Level 2 | Estimate of Fair Value Measurement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Repossessed inventory | $ 17.9 | $ 18.3 | $ 18.6 |
Fair Value - Summary of Fair Va
Fair Value - Summary of Fair Value and Carrying Value of Company Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 27, 2022 | Dec. 31, 2021 | Mar. 28, 2021 |
Fair Value | |||
ASSETS | |||
Finance receivables, net | $ 6,920,395 | $ 6,794,499 | $ 6,930,531 |
Liabilities | |||
Deposits, net | 359,995 | 293,602 | 152,715 |
Fair Value | Medium-term notes | |||
Debt | |||
Long-term debt, fair value | 3,326,310 | 3,513,815 | 3,955,743 |
Fair Value | Senior notes | |||
Debt | |||
Long-term debt, fair value | 724,089 | 790,373 | 789,967 |
Fair Value | Asset-backed U.S. commercial paper conduit facility | Secured Debt | |||
Debt | |||
Long-term debt, fair value | 269,534 | 272,589 | 350,648 |
Fair Value | Asset-backed Canadian commercial paper conduit facility | Secured Debt | |||
Debt | |||
Long-term debt, fair value | 95,664 | 85,054 | 102,543 |
Fair Value | Asset-backed securitization debt | Secured Debt | |||
Debt | |||
Long-term debt, fair value | 1,343,706 | 1,633,749 | 2,120,855 |
Fair Value | Unsecured commercial paper | |||
Debt | |||
Unsecured commercial paper | 816,016 | 751,286 | 749,801 |
Fair Value | Global credit facility borrowings | |||
Debt | |||
Unsecured commercial paper | 0 | 0 | 15,462 |
Carrying Value | |||
ASSETS | |||
Finance receivables, net | 6,821,553 | 6,571,921 | 6,756,777 |
Liabilities | |||
Deposits, net | 348,083 | 290,326 | 152,653 |
Carrying Value | Medium-term notes | |||
Debt | |||
Long-term debt, fair value | 3,329,845 | 3,408,660 | 3,803,736 |
Carrying Value | Senior notes | |||
Debt | |||
Long-term debt, fair value | 744,842 | 744,668 | 744,149 |
Carrying Value | Asset-backed U.S. commercial paper conduit facility | Secured Debt | |||
Debt | |||
Long-term debt, fair value | 269,534 | 272,589 | 350,648 |
Carrying Value | Asset-backed Canadian commercial paper conduit facility | Secured Debt | |||
Debt | |||
Long-term debt, fair value | 95,664 | 85,054 | 102,543 |
Carrying Value | Asset-backed securitization debt | Secured Debt | |||
Debt | |||
Long-term debt, fair value | 1,357,558 | 1,627,142 | 2,099,258 |
Carrying Value | Unsecured commercial paper | |||
Debt | |||
Unsecured commercial paper | 816,016 | 751,286 | 749,801 |
Carrying Value | Global credit facility borrowings | |||
Debt | |||
Unsecured commercial paper | $ 0 | $ 0 | $ 15,462 |
Product Warranty and Recall C_3
Product Warranty and Recall Campaigns - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 27, 2022 | Dec. 31, 2021 | Mar. 28, 2021 | Dec. 31, 2020 | |
Product Information | ||||
Liability for recall campaigns | $ 65,095 | $ 61,621 | $ 72,427 | $ 69,208 |
Recall Campaign | ||||
Product Information | ||||
Liability for recall campaigns | $ 16,700 | $ 16,900 | $ 25,300 | |
Motorcycles | ||||
Product Information | ||||
Standard product warranty, period | 3 years | |||
Battery For Electric Motorcycles | ||||
Product Information | ||||
Unlimited warranty period | 5 years | |||
Parts and accessories and apparel | ||||
Product Information | ||||
Standard product warranty, period | 1 year | |||
All Countries, except certain markets | Motorcycles | ||||
Product Information | ||||
Standard product warranty, period | 2 years |
Product Warranty and Recall C_4
Product Warranty and Recall Campaigns - Warranty and Recall Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Movement in Standard Product Warranty Accrual | ||
Balance, beginning of period | $ 61,621 | $ 69,208 |
Warranties issued during the period | 10,711 | 11,672 |
Settlements made during the period | (7,096) | (8,585) |
Recalls and changes to pre-existing warranty liabilities | (141) | 132 |
Balance, end of period | $ 65,095 | $ 72,427 |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components Of Net Periodic Benefit Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Pension and SERPA Benefits: | ||
Defined Benefit Plan Disclosure | ||
Service cost | $ 4,763 | $ 6,348 |
Interest cost | 15,472 | 15,470 |
Expected return on plan assets | (31,476) | (32,720) |
Amortization of unrecognized: Prior service credit | (328) | (312) |
Amortization of unrecognized: Net loss | 7,978 | 18,386 |
Settlement (gain) loss | (256) | 816 |
Net periodic benefit (income) cost | (3,847) | 7,988 |
Postretirement Healthcare Benefits: | ||
Defined Benefit Plan Disclosure | ||
Service cost | 1,161 | 1,288 |
Interest cost | 1,904 | 1,626 |
Expected return on plan assets | (3,809) | (3,495) |
Amortization of unrecognized: Prior service credit | (581) | (581) |
Amortization of unrecognized: Net loss | 122 | 264 |
Net periodic benefit (income) cost | $ (1,203) | $ (898) |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | Dec. 13, 2021 | Mar. 27, 2022 |
Site Contingency | ||
Investment from the company | $ 100 | |
LiveWire | ||
Site Contingency | ||
Retained equity | 74.00% | |
LiveWire | ||
Site Contingency | ||
Cash held in trust used in transaction | 400 | |
Investment from independent strategic investor | 100 | |
Additional amount of redemptions, maximum | $ 100 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
AOCI Attributable to Parent, Net of Tax | ||
Balance, beginning of period | $ 2,553,244 | $ 1,722,785 |
Other comprehensive loss, before reclassifications | (11,034) | (67,811) |
Income tax benefit (expense) | 1,176 | 10,828 |
Net other comprehensive income (loss) before reclassifications | (9,858) | (56,983) |
Total reclassifications before tax | 27,237 | 91,343 |
Income tax expense | (6,070) | (20,580) |
Net reclassifications | 21,167 | 70,763 |
Total other comprehensive loss, net of tax | 11,309 | 13,780 |
Balance, end of period | 2,509,101 | 1,976,386 |
Accumulated Other Comprehensive Loss | ||
AOCI Attributable to Parent, Net of Tax | ||
Balance, beginning of period | (240,919) | (483,417) |
Total other comprehensive loss, net of tax | 11,309 | 13,780 |
Balance, end of period | (229,610) | (469,637) |
Foreign currency translation adjustments | ||
AOCI Attributable to Parent, Net of Tax | ||
Balance, beginning of period | (44,401) | (7,589) |
Other comprehensive loss, before reclassifications | (3,804) | (17,074) |
Income tax benefit (expense) | (317) | (264) |
Net other comprehensive income (loss) before reclassifications | (4,121) | (17,338) |
Total other comprehensive loss, net of tax | (4,121) | (17,338) |
Balance, end of period | (48,522) | (24,927) |
Derivative financial instruments | ||
AOCI Attributable to Parent, Net of Tax | ||
Balance, beginning of period | (2,005) | (46,116) |
Other comprehensive loss, before reclassifications | (7,230) | (50,737) |
Income tax benefit (expense) | 1,493 | 11,092 |
Net other comprehensive income (loss) before reclassifications | (5,737) | (39,645) |
Total reclassifications before tax | 20,046 | 73,586 |
Income tax expense | (4,381) | (16,411) |
Net reclassifications | 15,665 | 57,175 |
Total other comprehensive loss, net of tax | 9,928 | 17,530 |
Balance, end of period | 7,923 | (28,586) |
Pension and postretirement benefit plans | ||
AOCI Attributable to Parent, Net of Tax | ||
Balance, beginning of period | (194,513) | (429,712) |
Total reclassifications before tax | 7,191 | 17,757 |
Income tax expense | (1,689) | (4,169) |
Net reclassifications | 5,502 | 13,588 |
Total other comprehensive loss, net of tax | 5,502 | 13,588 |
Balance, end of period | (189,011) | (416,124) |
Pension and postretirement benefit plans - Prior service credits | ||
AOCI Attributable to Parent, Net of Tax | ||
Total reclassifications before tax | (909) | (893) |
Pension and postretirement benefit plans - Actuarial losses | ||
AOCI Attributable to Parent, Net of Tax | ||
Total reclassifications before tax | $ 8,100 | $ 18,650 |
Reportable Segments (Details)
Reportable Segments (Details) $ in Thousands | 3 Months Ended | ||
Mar. 27, 2022USD ($)segment | Mar. 28, 2021USD ($) | Dec. 31, 2021USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 2 | ||
Segment Reporting Information | |||
Selling, administrative and engineering expense | $ 239,625 | $ 231,844 | |
Restructuring benefit | (128) | (366) | |
Motorcycles and Related Products cost of goods sold | 895,536 | 811,622 | |
Operating income | 289,232 | 346,174 | |
Assets | 10,894,640 | 11,338,988 | $ 11,051,055 |
Motorcycles and Related Products | |||
Segment Reporting Information | |||
Motorcycles revenue | 1,303,171 | 1,232,107 | |
Gross profit | 407,635 | 420,485 | |
Selling, administrative and engineering expense | 204,888 | 193,546 | |
Restructuring benefit | (128) | (593) | |
Operating income | 202,875 | 227,532 | |
Assets | 3,000,000 | 2,400,000 | 3,300,000 |
Financial Services | |||
Segment Reporting Information | |||
Restructuring benefit | 0 | 227 | |
Financial Services | 192,015 | 190,400 | |
Motorcycles and Related Products cost of goods sold | 105,658 | 71,531 | |
Operating income | 86,357 | 118,642 | |
Assets | $ 7,900,000 | $ 8,900,000 | $ 7,700,000 |
Supplemental Consolidating Da_3
Supplemental Consolidating Data - Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Revenue: | ||
Total revenue | $ 1,495,186 | $ 1,422,507 |
Costs and expenses: | ||
Motorcycles and Related Products cost of goods sold | 895,536 | 811,622 |
Financial Services interest expense | 42,099 | 55,707 |
Provision for credit losses | 28,822 | (22,474) |
Selling, administrative and engineering expense | 239,625 | 231,844 |
Restructuring benefit | (128) | (366) |
Total costs and expenses | 1,205,954 | 1,076,333 |
Operating income | 289,232 | 346,174 |
Other income, net | 11,030 | 277 |
Investment (loss) income | (1,979) | 1,402 |
Interest expense | 7,711 | 7,708 |
Income before provision for income taxes | 290,572 | 340,145 |
Provision for income taxes | 68,070 | 81,001 |
Net income | 222,502 | 259,144 |
Reportable Legal Entities | Harley-Davidson Motor Company | ||
Revenue: | ||
Total revenue | 1,306,293 | 1,238,468 |
Costs and expenses: | ||
Motorcycles and Related Products cost of goods sold | 895,536 | 811,622 |
Financial Services interest expense | 0 | 0 |
Provision for credit losses | 0 | 0 |
Selling, administrative and engineering expense | 205,417 | 196,359 |
Restructuring benefit | (128) | (593) |
Total costs and expenses | 1,100,825 | 1,007,388 |
Operating income | 205,468 | 231,080 |
Other income, net | 11,030 | 277 |
Investment (loss) income | (1,979) | 1,402 |
Interest expense | 7,711 | 7,708 |
Income before provision for income taxes | 206,808 | 225,051 |
Provision for income taxes | 47,847 | 55,996 |
Net income | 158,961 | 169,055 |
Reportable Legal Entities | Harley-Davidson Financial Services | ||
Revenue: | ||
Total revenue | 192,390 | 188,750 |
Costs and expenses: | ||
Motorcycles and Related Products cost of goods sold | 0 | 0 |
Financial Services interest expense | 42,099 | 55,707 |
Provision for credit losses | 28,822 | (22,474) |
Selling, administrative and engineering expense | 37,858 | 40,275 |
Restructuring benefit | 0 | 227 |
Total costs and expenses | 108,779 | 73,735 |
Operating income | 83,611 | 115,015 |
Other income, net | 0 | 0 |
Investment (loss) income | 0 | 0 |
Interest expense | 0 | 0 |
Income before provision for income taxes | 83,611 | 115,015 |
Provision for income taxes | 20,223 | 25,005 |
Net income | 63,388 | 90,010 |
Consolidating Adjustments | ||
Revenue: | ||
Total revenue | (3,497) | (4,711) |
Costs and expenses: | ||
Motorcycles and Related Products cost of goods sold | 0 | 0 |
Financial Services interest expense | 0 | 0 |
Provision for credit losses | 0 | 0 |
Selling, administrative and engineering expense | (3,650) | (4,790) |
Restructuring benefit | 0 | 0 |
Total costs and expenses | (3,650) | (4,790) |
Operating income | 153 | 79 |
Other income, net | 0 | 0 |
Investment (loss) income | 0 | 0 |
Interest expense | 0 | 0 |
Income before provision for income taxes | 153 | 79 |
Provision for income taxes | 0 | 0 |
Net income | 153 | 79 |
Motorcycles and Related Products | ||
Revenue: | ||
Motorcycles and Related Products | 1,303,171 | 1,232,107 |
Motorcycles and Related Products | Reportable Legal Entities | Harley-Davidson Motor Company | ||
Revenue: | ||
Motorcycles and Related Products | 1,306,293 | 1,238,468 |
Motorcycles and Related Products | Reportable Legal Entities | Harley-Davidson Financial Services | ||
Revenue: | ||
Motorcycles and Related Products | 0 | 0 |
Motorcycles and Related Products | Consolidating Adjustments | ||
Revenue: | ||
Motorcycles and Related Products | (3,122) | (6,361) |
Financial Services | ||
Revenue: | ||
Financial Services | 192,015 | 190,400 |
Financial Services | Reportable Legal Entities | Harley-Davidson Motor Company | ||
Revenue: | ||
Financial Services | 0 | 0 |
Financial Services | Reportable Legal Entities | Harley-Davidson Financial Services | ||
Revenue: | ||
Financial Services | 192,390 | 188,750 |
Financial Services | Consolidating Adjustments | ||
Revenue: | ||
Financial Services | $ (375) | $ 1,650 |
Supplemental Consolidating Da_4
Supplemental Consolidating Data - Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 27, 2022 | Dec. 31, 2021 | Mar. 28, 2021 | Dec. 31, 2020 |
Current assets: | ||||
Cash and cash equivalents | $ 1,393,731 | $ 1,874,745 | $ 2,320,645 | |
Accounts receivable, net | 254,286 | 182,148 | 216,569 | |
Finance receivables, net | 1,699,642 | 1,465,544 | 1,798,194 | |
Inventories, net | 714,259 | 712,942 | 470,997 | |
Restricted cash | 142,812 | 128,935 | 185,374 | |
Other current assets | 182,527 | 185,777 | 195,356 | |
Total current assets | 4,387,257 | 4,550,091 | 5,187,135 | |
Finance receivables, net | 5,121,911 | 5,106,377 | 4,958,583 | |
Property, plant and equipment, net | 663,807 | 683,984 | 718,968 | |
Pension and postretirement assets | 399,029 | 386,152 | 105,910 | |
Goodwill | 62,607 | 63,177 | 65,157 | |
Deferred income taxes | 71,926 | 82,922 | 135,387 | |
Lease assets | 45,073 | 49,625 | 44,765 | |
Other long-term assets | 143,030 | 128,727 | 123,083 | |
Total assets | 10,894,640 | 11,051,055 | 11,338,988 | |
Current liabilities: | ||||
Accounts payable | 476,917 | 374,978 | 402,764 | |
Accrued liabilities | 597,924 | 601,981 | 570,440 | |
Short-term deposits, net | 65,049 | 72,146 | 93,887 | |
Short-term debt | 816,016 | 751,286 | 765,263 | |
Current portion of long-term debt, net | 1,327,357 | 1,542,496 | 1,622,243 | |
Total current liabilities | 3,283,263 | 3,342,887 | 3,454,597 | |
Long-term deposits, net | 283,034 | 218,180 | 58,766 | |
Long-term debt, net | 4,470,086 | 4,595,617 | 5,478,091 | |
Lease liabilities | 27,633 | 29,904 | 30,061 | |
Pension and postretirement liabilities | 93,792 | 103,854 | ||
Deferred income taxes | 9,578 | 9,261 | 8,682 | |
Other long-term liabilities | 218,153 | 206,663 | 228,551 | |
Commitments and contingencies | ||||
Shareholders’ equity | 2,509,101 | 2,553,244 | 1,976,386 | $ 1,722,785 |
Total liabilities and shareholders' equity | 10,894,640 | $ 11,051,055 | 11,338,988 | |
Reportable Legal Entities | Harley-Davidson Motor Company | ||||
Current assets: | ||||
Cash and cash equivalents | 678,616 | 607,941 | ||
Accounts receivable, net | 601,148 | 603,273 | ||
Finance receivables, net | 0 | 0 | ||
Inventories, net | 714,259 | 470,997 | ||
Restricted cash | 0 | 0 | ||
Other current assets | 149,955 | 81,559 | ||
Total current assets | 2,143,978 | 1,763,770 | ||
Finance receivables, net | 0 | 0 | ||
Property, plant and equipment, net | 636,216 | 687,086 | ||
Pension and postretirement assets | 399,029 | 105,910 | ||
Goodwill | 62,607 | 65,157 | ||
Deferred income taxes | 0 | 56,911 | ||
Lease assets | 38,126 | 36,559 | ||
Other long-term assets | 210,157 | 184,876 | ||
Total assets | 3,490,113 | 2,900,269 | ||
Current liabilities: | ||||
Accounts payable | 434,731 | 355,722 | ||
Accrued liabilities | 495,921 | 443,529 | ||
Short-term deposits, net | 0 | 0 | ||
Short-term debt | 0 | 0 | ||
Current portion of long-term debt, net | 0 | 0 | ||
Total current liabilities | 930,652 | 799,251 | ||
Long-term deposits, net | 0 | 0 | ||
Long-term debt, net | 744,842 | 744,149 | ||
Lease liabilities | 20,544 | 22,461 | ||
Pension and postretirement liabilities | 93,792 | 103,854 | ||
Deferred income taxes | 10,478 | 7,166 | ||
Other long-term liabilities | 165,990 | 179,525 | ||
Commitments and contingencies | ||||
Shareholders’ equity | 1,523,815 | 1,043,863 | ||
Total liabilities and shareholders' equity | 3,490,113 | 2,900,269 | ||
Reportable Legal Entities | Harley-Davidson Financial Services | ||||
Current assets: | ||||
Cash and cash equivalents | 715,115 | 1,712,704 | ||
Accounts receivable, net | 0 | 0 | ||
Finance receivables, net | 1,699,642 | 1,798,194 | ||
Inventories, net | 0 | 0 | ||
Restricted cash | 142,812 | 185,374 | ||
Other current assets | 61,455 | 113,797 | ||
Total current assets | 2,619,024 | 3,810,069 | ||
Finance receivables, net | 5,121,911 | 4,958,583 | ||
Property, plant and equipment, net | 27,591 | 31,882 | ||
Pension and postretirement assets | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Deferred income taxes | 75,185 | 79,206 | ||
Lease assets | 6,947 | 8,206 | ||
Other long-term assets | 37,595 | 33,929 | ||
Total assets | 7,888,253 | 8,921,875 | ||
Current liabilities: | ||||
Accounts payable | 389,048 | 433,746 | ||
Accrued liabilities | 129,581 | 125,768 | ||
Short-term deposits, net | 65,049 | 93,887 | ||
Short-term debt | 816,016 | 765,263 | ||
Current portion of long-term debt, net | 1,327,357 | 1,622,243 | ||
Total current liabilities | 2,727,051 | 3,040,907 | ||
Long-term deposits, net | 283,034 | 58,766 | ||
Long-term debt, net | 3,725,244 | 4,733,942 | ||
Lease liabilities | 7,089 | 7,600 | ||
Pension and postretirement liabilities | 0 | 0 | ||
Deferred income taxes | 1,848 | 1,516 | ||
Other long-term liabilities | 50,190 | 46,920 | ||
Commitments and contingencies | ||||
Shareholders’ equity | 1,093,797 | 1,032,224 | ||
Total liabilities and shareholders' equity | 7,888,253 | 8,921,875 | ||
Consolidating Adjustments | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Accounts receivable, net | (346,862) | (386,704) | ||
Finance receivables, net | 0 | 0 | ||
Inventories, net | 0 | 0 | ||
Restricted cash | 0 | 0 | ||
Other current assets | (28,883) | 0 | ||
Total current assets | (375,745) | (386,704) | ||
Finance receivables, net | 0 | 0 | ||
Property, plant and equipment, net | 0 | 0 | ||
Pension and postretirement assets | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Deferred income taxes | (3,259) | (730) | ||
Lease assets | 0 | 0 | ||
Other long-term assets | (104,722) | (95,722) | ||
Total assets | (483,726) | (483,156) | ||
Current liabilities: | ||||
Accounts payable | (346,862) | (386,704) | ||
Accrued liabilities | (27,578) | 1,143 | ||
Short-term deposits, net | 0 | 0 | ||
Short-term debt | 0 | 0 | ||
Current portion of long-term debt, net | 0 | 0 | ||
Total current liabilities | (374,440) | (385,561) | ||
Long-term deposits, net | 0 | 0 | ||
Long-term debt, net | 0 | 0 | ||
Lease liabilities | 0 | 0 | ||
Pension and postretirement liabilities | 0 | 0 | ||
Deferred income taxes | (2,748) | 0 | ||
Other long-term liabilities | 1,973 | 2,106 | ||
Commitments and contingencies | ||||
Shareholders’ equity | (108,511) | (99,701) | ||
Total liabilities and shareholders' equity | $ (483,726) | $ (483,156) |
Supplemental Consolidating Da_5
Supplemental Consolidating Data - Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 27, 2022 | Mar. 28, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 222,502 | $ 259,144 |
Adjustments to reconcile Net income to Net cash provided by operating activities: | ||
Depreciation and amortization | 39,258 | 40,221 |
Amortization of deferred loan origination costs | 22,995 | 19,200 |
Amortization of financing origination fees | 3,701 | 3,614 |
Provision for long-term employee benefits | (5,050) | 7,090 |
Employee benefit plan contributions and payments | (2,143) | (9,885) |
Stock compensation expense | 8,903 | 8,968 |
Net change in wholesale finance receivables related to sales | (205,727) | (308,532) |
Provision for credit losses | 28,822 | (22,474) |
Deferred income taxes | 6,307 | 13,192 |
Other, net | (5,408) | (2,138) |
Changes in current assets and liabilities: | ||
Accounts receivable, net | (74,993) | (79,012) |
Finance receivables – accrued interest and other | 3,115 | 8,947 |
Inventories, net | (2,630) | 45,086 |
Accounts payable and accrued liabilities | 106,969 | 153,597 |
Other current assets | (7,300) | 25,763 |
Total adjustments | (83,181) | (96,363) |
Net cash provided by operating activities | 139,321 | 162,781 |
Cash flows from investing activities: | ||
Capital expenditures | (27,999) | (18,813) |
Origination of finance receivables | (1,058,461) | (909,138) |
Collections on finance receivables | 965,190 | 900,485 |
Other investing activities | 135 | 733 |
Net cash used by investing activities | (121,135) | (26,733) |
Cash flows from financing activities: | ||
Proceeds from issuance of medium-term notes | 495,785 | 0 |
Repayments of medium-term notes | (550,000) | (1,050,000) |
Proceeds from securitization debt | 0 | 597,411 |
Repayments of securitization debt | (271,499) | (291,346) |
Borrowings of asset-backed commercial paper | 62,455 | 0 |
Repayments of asset-backed commercial paper | (56,634) | (66,894) |
Net increase (decrease) in unsecured commercial paper | 64,521 | (262,517) |
Net increase in credit facilities | 0 | 15,629 |
Net increase in deposits | 57,660 | 72,664 |
Dividends paid | (24,056) | (23,105) |
Repurchase of common stock | (261,737) | (5,646) |
Other financing activities | 0 | 1,085 |
Net cash used by financing activities | (483,505) | (1,012,719) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (1,743) | (5,163) |
Cash, cash equivalents and restricted cash: | ||
Cash, cash equivalents and restricted cash, beginning of period | 2,025,219 | 3,409,168 |
Net decrease in cash, cash equivalents and restricted cash | (467,062) | (881,834) |
Cash, cash equivalents and restricted cash, end of period | 1,558,157 | 2,527,334 |
Reportable Legal Entities | Harley-Davidson Motor Company | ||
Cash flows from operating activities: | ||
Net income | 158,961 | 169,055 |
Adjustments to reconcile Net income to Net cash provided by operating activities: | ||
Depreciation and amortization | 37,106 | 37,778 |
Amortization of deferred loan origination costs | 0 | 0 |
Amortization of financing origination fees | 174 | 172 |
Provision for long-term employee benefits | (5,050) | 7,090 |
Employee benefit plan contributions and payments | (2,143) | (9,885) |
Stock compensation expense | 8,233 | 8,174 |
Net change in wholesale finance receivables related to sales | 0 | 0 |
Provision for credit losses | 0 | 0 |
Deferred income taxes | 6,176 | 3,811 |
Other, net | (5,322) | (2,743) |
Changes in current assets and liabilities: | ||
Accounts receivable, net | (319,329) | (388,688) |
Finance receivables – accrued interest and other | 0 | 0 |
Inventories, net | (2,630) | 45,086 |
Accounts payable and accrued liabilities | 86,546 | 104,486 |
Other current assets | (47,418) | 18,222 |
Total adjustments | (243,657) | (176,497) |
Net cash provided by operating activities | (84,696) | (7,442) |
Cash flows from investing activities: | ||
Capital expenditures | (27,149) | (18,427) |
Origination of finance receivables | 0 | 0 |
Collections on finance receivables | 0 | 0 |
Net cash used by investing activities | (27,014) | (17,694) |
Cash flows from financing activities: | ||
Proceeds from issuance of medium-term notes | 0 | |
Repayments of medium-term notes | 0 | 0 |
Proceeds from securitization debt | 0 | |
Repayments of securitization debt | 0 | 0 |
Borrowings of asset-backed commercial paper | 0 | |
Repayments of asset-backed commercial paper | 0 | 0 |
Net increase (decrease) in unsecured commercial paper | 0 | 0 |
Net increase in credit facilities | 0 | |
Net increase in deposits | 0 | |
Dividends paid | (24,056) | (23,105) |
Repurchase of common stock | (261,737) | (5,646) |
Other financing activities | 1,085 | |
Net cash used by financing activities | (285,793) | (27,666) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (2,086) | (5,418) |
Cash, cash equivalents and restricted cash: | ||
Cash, cash equivalents and restricted cash, beginning of period | 1,078,205 | 666,161 |
Net decrease in cash, cash equivalents and restricted cash | (399,589) | (58,220) |
Cash, cash equivalents and restricted cash, end of period | 678,616 | 607,941 |
Reportable Legal Entities | Harley-Davidson Financial Services | ||
Cash flows from operating activities: | ||
Net income | 63,388 | 90,010 |
Adjustments to reconcile Net income to Net cash provided by operating activities: | ||
Depreciation and amortization | 2,152 | 2,443 |
Amortization of deferred loan origination costs | 22,995 | 19,200 |
Amortization of financing origination fees | 3,527 | 3,442 |
Provision for long-term employee benefits | 0 | 0 |
Employee benefit plan contributions and payments | 0 | 0 |
Stock compensation expense | 670 | 794 |
Net change in wholesale finance receivables related to sales | 0 | 0 |
Provision for credit losses | 28,822 | (22,474) |
Deferred income taxes | 665 | 9,812 |
Other, net | 67 | 685 |
Changes in current assets and liabilities: | ||
Accounts receivable, net | 0 | 0 |
Finance receivables – accrued interest and other | 3,115 | 8,947 |
Inventories, net | 0 | 0 |
Accounts payable and accrued liabilities | 289,876 | 354,507 |
Other current assets | 14,467 | 11,271 |
Total adjustments | 366,356 | 388,627 |
Net cash provided by operating activities | 429,744 | 478,637 |
Cash flows from investing activities: | ||
Capital expenditures | (850) | (386) |
Origination of finance receivables | (2,023,861) | (1,923,911) |
Collections on finance receivables | 1,724,863 | 1,606,844 |
Other investing activities | 0 | 0 |
Net cash used by investing activities | (299,848) | (317,453) |
Cash flows from financing activities: | ||
Proceeds from issuance of medium-term notes | 495,785 | |
Repayments of medium-term notes | (550,000) | (1,050,000) |
Proceeds from securitization debt | 597,411 | |
Repayments of securitization debt | (271,499) | (291,346) |
Borrowings of asset-backed commercial paper | 62,455 | |
Repayments of asset-backed commercial paper | (56,634) | (66,894) |
Net increase (decrease) in unsecured commercial paper | 64,521 | (262,517) |
Net increase in credit facilities | 15,629 | |
Net increase in deposits | 57,660 | 72,664 |
Dividends paid | 0 | 0 |
Repurchase of common stock | 0 | 0 |
Other financing activities | 0 | |
Net cash used by financing activities | (197,712) | (985,053) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 343 | 255 |
Cash, cash equivalents and restricted cash: | ||
Cash, cash equivalents and restricted cash, beginning of period | 947,014 | 2,743,007 |
Net decrease in cash, cash equivalents and restricted cash | (67,473) | (823,614) |
Cash, cash equivalents and restricted cash, end of period | 879,541 | 1,919,393 |
Consolidating Adjustments | ||
Cash flows from operating activities: | ||
Net income | 153 | 79 |
Adjustments to reconcile Net income to Net cash provided by operating activities: | ||
Depreciation and amortization | 0 | 0 |
Amortization of deferred loan origination costs | 0 | 0 |
Amortization of financing origination fees | 0 | 0 |
Provision for long-term employee benefits | 0 | 0 |
Employee benefit plan contributions and payments | 0 | 0 |
Stock compensation expense | 0 | 0 |
Net change in wholesale finance receivables related to sales | (205,727) | (308,532) |
Provision for credit losses | 0 | 0 |
Deferred income taxes | (534) | (431) |
Other, net | (153) | (80) |
Changes in current assets and liabilities: | ||
Accounts receivable, net | 244,336 | 309,676 |
Finance receivables – accrued interest and other | 0 | 0 |
Inventories, net | 0 | 0 |
Accounts payable and accrued liabilities | (269,453) | (305,396) |
Other current assets | 25,651 | (3,730) |
Total adjustments | (205,880) | (308,493) |
Net cash provided by operating activities | (205,727) | (308,414) |
Cash flows from investing activities: | ||
Capital expenditures | 0 | 0 |
Origination of finance receivables | 965,400 | 1,014,773 |
Collections on finance receivables | (759,673) | (706,359) |
Other investing activities | 0 | 0 |
Net cash used by investing activities | 205,727 | 308,414 |
Cash flows from financing activities: | ||
Proceeds from issuance of medium-term notes | 0 | |
Repayments of medium-term notes | 0 | 0 |
Proceeds from securitization debt | 0 | |
Repayments of securitization debt | 0 | 0 |
Borrowings of asset-backed commercial paper | 0 | |
Repayments of asset-backed commercial paper | 0 | 0 |
Net increase (decrease) in unsecured commercial paper | 0 | 0 |
Net increase in credit facilities | 0 | |
Net increase in deposits | 0 | |
Dividends paid | 0 | 0 |
Repurchase of common stock | 0 | 0 |
Other financing activities | 0 | |
Net cash used by financing activities | 0 | 0 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 0 | 0 |
Cash, cash equivalents and restricted cash: | ||
Cash, cash equivalents and restricted cash, beginning of period | 0 | 0 |
Net decrease in cash, cash equivalents and restricted cash | 0 | 0 |
Cash, cash equivalents and restricted cash, end of period | $ 0 | $ 0 |
Subsequent Event (Details)
Subsequent Event (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Apr. 30, 2022 | Mar. 27, 2022 | Mar. 28, 2021 | |
Subsequent Event [Line Items] | |||
Proceeds from securitization debt | $ 0 | $ 597,411 | |
Subsequent Event | |||
Subsequent Event [Line Items] | |||
Proceeds from securitization debt | $ 550,000 | ||
Weighted average interest rate | 2.40% |