Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 28, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
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 $.01 PER SHARE | |
Trading Symbol | HOG | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 143,760,258 | |
Entity Central Index Key | 0000793952 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 27, 2022 | |
Revenue: | ||
Motorcycles and related products | $ 1,565,591 | $ 1,303,171 |
Financial services | 223,095 | 192,015 |
Total revenue | 1,788,686 | 1,495,186 |
Costs and expenses: | ||
Motorcycles and related products cost of goods sold | 1,007,301 | 895,536 |
Financial services interest expense | 73,549 | 42,099 |
Financial services provision for credit losses | 52,364 | 28,822 |
Selling, administrative and engineering expense | 285,863 | 239,625 |
Restructuring benefit | 0 | (128) |
Total costs and expenses | 1,419,077 | 1,205,954 |
Operating income | 369,609 | 289,232 |
Other income, net | 20,096 | 11,030 |
Investment income (loss) | 10,025 | (1,979) |
Interest expense | 7,720 | 7,711 |
Income before income taxes | 392,010 | 290,572 |
Income tax provision | 90,181 | 68,070 |
Net income | 301,829 | 222,502 |
Less: Loss attributable to noncontrolling interests | 2,261 | 0 |
Net income attributable to Harley-Davidson, Inc. | $ 304,090 | $ 222,502 |
Earnings per share: | ||
Basic (in dollars per share) | $ 2.08 | $ 1.46 |
Diluted (in dollars per share) | 2.04 | 1.45 |
Cash dividends per share (in dollars per share) | $ 0.1650 | $ 0.1575 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 27, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 301,829 | $ 222,502 |
Other comprehensive (loss) income, net of tax: | ||
Foreign currency translation adjustments | 10,121 | (4,121) |
Derivative financial instruments | (21,882) | 9,928 |
Pension and postretirement benefit plans | (962) | 5,502 |
Other comprehensive (loss) income | (12,723) | 11,309 |
Comprehensive income | 289,106 | 233,811 |
Less: Loss attributable to noncontrolling interests | 2,261 | 0 |
Comprehensive income attributable to Harley-Davidson, Inc. | $ 291,367 | $ 233,811 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 27, 2022 |
ASSETS | |||
Cash and cash equivalents | $ 1,561,200 | $ 1,433,175 | $ 1,393,731 |
Accounts receivable, net | 333,533 | 252,225 | 254,286 |
Finance receivables, net of allowance of $62,706, $62,488, and $60,889 | 2,245,628 | 1,782,631 | 1,699,642 |
Inventories, net | 830,521 | 950,960 | 714,259 |
Restricted cash | 164,965 | 135,424 | 142,812 |
Other current assets | 154,660 | 196,238 | 182,527 |
Current assets | 5,290,507 | 4,750,653 | 4,387,257 |
Finance receivables, net of allowance of $295,725, $296,223, and $279,584 | 5,328,095 | 5,355,807 | 5,121,911 |
Property, plant and equipment, net | 690,051 | 689,886 | 663,807 |
Pension and postretirement assets | 336,569 | 320,133 | 399,029 |
Goodwill | 62,426 | 62,090 | 62,607 |
Deferred income taxes | 141,208 | 135,041 | 71,926 |
Lease assets | 43,540 | 43,931 | 45,073 |
Other long-term assets | 137,189 | 134,935 | 143,030 |
Assets | 12,029,585 | 11,492,476 | 10,894,640 |
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||
Accounts payable | 404,414 | 378,002 | 476,917 |
Accrued liabilities | 625,296 | 620,945 | 597,924 |
Short-term deposits, net | 144,854 | 79,710 | 65,049 |
Short-term debt | 501,243 | 770,468 | 816,016 |
Current portion of long-term debt, net | 1,408,777 | 1,684,782 | 1,327,357 |
Total current liabilities | 3,084,584 | 3,533,907 | 3,283,263 |
Long-term deposits, net | 224,457 | 237,665 | 283,034 |
Long-term debt, net | 5,275,169 | 4,457,052 | 4,470,086 |
Lease liabilities | 26,674 | 26,777 | 27,633 |
Pension and postretirement liabilities | 66,968 | 67,955 | 93,792 |
Deferred income taxes | 31,032 | 29,528 | 9,578 |
Other long-term liabilities | 224,852 | 232,784 | 218,153 |
Commitments and contingencies | |||
Shareholders’ equity: | |||
Common stock | 1,711 | 1,704 | 1,704 |
Additional paid-in-capital | 1,707,214 | 1,688,159 | 1,554,840 |
Retained earnings | 2,770,616 | 2,490,649 | 2,040,867 |
Accumulated other comprehensive loss | (354,652) | (341,929) | (229,610) |
Treasury stock, at cost | (1,031,831) | (935,064) | (858,700) |
Shareholders’ equity | 3,093,058 | 2,903,519 | 2,509,101 |
Noncontrolling interest | 2,791 | 3,289 | 0 |
Total equity | 3,095,849 | 2,906,808 | 2,509,101 |
Total liabilities and shareholders' equity | $ 12,029,585 | $ 11,492,476 | $ 10,894,640 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 27, 2022 |
Allowance for credit loss, current | $ 62,706 | $ 62,488 | $ 60,889 |
Allowance for credit loss, noncurrent | 295,725 | 296,223 | 279,584 |
Finance receivables, net - current | 2,245,628 | 1,782,631 | 1,699,642 |
Long-term debt, net | 5,275,169 | 4,457,052 | 4,470,086 |
Other current assets | 154,660 | 196,238 | 182,527 |
Finance receivables, net - non-current | 5,328,095 | 5,355,807 | 5,121,911 |
Current portion of long-term debt, net | 1,408,777 | 1,684,782 | 1,327,357 |
Consolidated VIEs | |||
Finance receivables, net - current | 597,952 | 559,651 | 455,638 |
Long-term debt, net | 1,946,435 | 1,825,525 | 1,075,787 |
Other current assets | 10,738 | 9,805 | 4,373 |
Finance receivables, net - non-current | 2,463,095 | 2,317,956 | 1,487,650 |
Restricted cash - current and non-current | 171,285 | 141,128 | 156,297 |
Current portion of long-term debt, net | $ 684,180 | $ 619,683 | $ 551,305 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 27, 2022 | |
Cash flows from operating activities: | ||
Net cash provided by operating activities | $ 46,677 | $ 139,321 |
Cash flows from investing activities: | ||
Capital expenditures | (45,114) | (27,999) |
Origination of finance receivables | (917,145) | (1,058,461) |
Collections on finance receivables | 890,852 | 965,190 |
Other investing activities | 821 | 135 |
Net cash used by investing activities | (70,586) | (121,135) |
Cash flows from financing activities: | ||
Proceeds from issuance of medium-term notes | 693,276 | 495,785 |
Repayments of medium-term notes | (350,000) | (550,000) |
Proceeds from securitization debt | 547,706 | 0 |
Repayments of securitization debt | (310,640) | (271,499) |
Borrowings of asset-backed commercial paper | 0 | 62,455 |
Repayments of asset-backed commercial paper | (62,634) | (56,634) |
Net (decrease) increase in unsecured commercial paper | (270,119) | 64,521 |
Net increase in deposits | 51,822 | 57,660 |
Dividends paid | (24,123) | (24,056) |
Repurchase of common stock | (96,767) | (261,737) |
Other financing activities | 69 | 0 |
Net cash provided (used) by financing activities | 178,590 | (483,505) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 3,820 | (1,743) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 158,501 | (467,062) |
Cash, cash equivalents and restricted cash, beginning of period | 1,579,177 | 2,025,219 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 158,501 | (467,062) |
Cash, cash equivalents and restricted cash, end of period | 1,737,678 | 1,558,157 |
Reconciliation of cash, cash equivalents and restricted cash on the Consolidated balance sheets to the Consolidated statements of cash flows: | ||
Cash and cash equivalents | 1,561,200 | 1,393,731 |
Restricted cash | 164,965 | 142,812 |
Restricted cash included in Other long-term assets | 11,513 | 21,614 |
Cash, cash equivalents and restricted cash per the Consolidated statements of cash flows | $ 1,737,678 | $ 1,558,157 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Parent | Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Equity Attributable to Noncontrolling Interests |
Balance, beginning of period at Dec. 31, 2021 | $ 2,553,244 | $ 2,553,244 | $ 1,694 | $ 1,547,011 | $ 1,842,421 | $ (240,919) | $ (596,963) | $ 0 |
Beginning balance (in shares) at Dec. 31, 2021 | 169,364,686 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 222,502 | 222,502 | 222,502 | |||||
Other comprehensive income, net of tax | 11,309 | 11,309 | 11,309 | |||||
Dividends | (24,056) | (24,056) | (24,056) | |||||
Repurchase of common stock | (261,737) | (261,737) | (261,737) | |||||
Share-based compensation | 7,839 | 7,839 | $ 10 | 7,829 | ||||
Share-based compensation (in shares) | 976,062 | |||||||
Balance, ending of period at Mar. 27, 2022 | 2,509,101 | 2,509,101 | $ 1,704 | 1,554,840 | 2,040,867 | (229,610) | (858,700) | 0 |
Ending balance (in shares) at Mar. 27, 2022 | 170,340,748 | |||||||
Balance, beginning of period at Dec. 31, 2022 | 2,906,808 | 2,903,519 | $ 1,704 | 1,688,159 | 2,490,649 | (341,929) | (935,064) | 3,289 |
Beginning balance (in shares) at Dec. 31, 2022 | 170,400,212 | |||||||
Increase (Decrease) in Stockholders' Equity | ||||||||
Net income | 301,829 | 304,090 | 304,090 | (2,261) | ||||
Other comprehensive income, net of tax | (12,723) | (12,723) | (12,723) | |||||
Dividends | (24,123) | (24,123) | (24,123) | |||||
Repurchase of common stock | (96,767) | (96,767) | (96,767) | |||||
Share-based compensation | 20,825 | 19,062 | $ 7 | 19,055 | 1,763 | |||
Share-based compensation (in shares) | 733,658 | |||||||
Balance, ending of period at Mar. 31, 2023 | $ 3,095,849 | $ 3,093,058 | $ 1,711 | $ 1,707,214 | $ 2,770,616 | $ (354,652) | $ (1,031,831) | $ 2,791 |
Ending balance (in shares) at Mar. 31, 2023 | 171,133,870 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 27, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||
Dividends (in dollars per share) | $ 0.1650 | $ 0.1575 |
Basis of Presentation and Use o
Basis of Presentation and Use of Estimates | 3 Months Ended |
Mar. 31, 2023 | |
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 and certain variable interest entities (VIEs) related to secured financing as the Company is the primary beneficiary. All intercompany accounts and material intercompany transactions have been eliminated. The Company has a controlling equity interest in LiveWire Group, Inc. As the controlling shareholder, the Company consolidates LiveWire Group, Inc. results with additional adjustments to recognize non-controlling shareholder interests. The Company operates in three reportable segments: Harley-Davidson Motor Company (HDMC), LiveWire and Harley-Davidson Financial Services (HDFS). The Company changed its segments in the period ended December 31, 2022. The change has been retrospectively reflected in the periods presented below. Substantially all of the Company’s international subsidiaries use their respective local currency as their functional currency. Assets and liabilities of international subsidiaries have been translated at period-end exchange rates, and revenues and expenses have been translated using average exchange rates for the period. Monetary assets and liabilities denominated in a currency that is different from an entity's functional currency are remeasured from the transactional currency to the entity's functional currency on a monthly basis. The aggregate transaction gain resulting from foreign currency remeasurements was $3.3 million and $1.6 million for the three month periods ended March 31, 2023 and March 27, 2022, respectively. 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 31, 2023 and March 27, 2022, 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 ended March 31, 2023 and March 27, 2022. 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, 2022. 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. Fair Value Measurements – 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. |
New Accounting Standards
New Accounting Standards | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
New Accounting Standards | New Accounting Standards Accounting Standards Recently Adopted In 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 current expected credit losses (CECL) model. ASU 2022-02 |
Revenue
Revenue | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The 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 31, March 27, HDMC: Motorcycles $ 1,302,378 $ 1,057,005 Parts and accessories 167,671 165,320 Apparel 71,391 51,404 Licensing 6,210 6,497 Other 10,179 12,544 1,557,829 1,292,770 LiveWire 7,762 10,401 Motorcycles and related products revenue 1,565,591 1,303,171 HDFS: Interest income 182,270 161,734 Other 40,825 30,281 Financial services revenue 223,095 192,015 $ 1,788,686 $ 1,495,186 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 various financial services products. 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 31, March 27, Balance, beginning of period $ 44,100 $ 40,092 Balance, end of period $ 43,176 $ 38,842 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income TaxesThe Company’s effective income tax rate for the three months ended March 31, 2023 was 23.0% compared to 23.4% for the three months ended March 27, 2022. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2023 | |
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 31, March 27, Net income attributable to Harley-Davidson, Inc. $ 304,090 $ 222,502 Basic weighted-average shares outstanding 146,048 152,820 Effect of dilutive securities – employee stock compensation plan 2,883 1,104 Diluted weighted-average shares outstanding 148,931 153,924 Net earnings per share: Basic $ 2.08 $ 1.46 Diluted $ 2.04 $ 1.45 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 1.3 million and 0.5 million shares for the three months ended March 31, 2023 and March 27, 2022, respectively. |
Additional Balance Sheet and Ca
Additional Balance Sheet and Cash Flow Information | 3 Months Ended |
Mar. 31, 2023 | |
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 31, December 31, March 27, Mutual funds $ 34,017 $ 33,071 $ 45,189 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 31, December 31, March 27, Raw materials and work in process $ 387,466 $ 331,380 $ 376,600 Motorcycle finished goods 380,083 549,041 291,623 Parts and accessories and apparel 182,905 187,039 130,156 Inventory at lower of FIFO cost or net realizable value 950,454 1,067,460 798,379 Excess of FIFO over LIFO cost (119,933) (116,500) (84,120) $ 830,521 $ 950,960 $ 714,259 Deposits – HDFS 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 $369.3 million, $317.4 million and $348.1 million , net of fees, of interest-bearing brokered certificates of deposit outstanding as of March 31, 2023, December 31, 2022, and March 27, 2022, 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 31, 2023 were as follows (in thousands): 2023 $ 81,167 2024 115,491 2025 39,740 2026 79,742 2027 54,158 Thereafter — Future maturities 370,298 Unamortized fees (987) $ 369,311 Operating Cash Flow – The reconciliation of Net income to Net cash provided by operating activities was as follows (in thousands): Three months ended March 31, March 27, Cash flows from operating activities: Net income $ 301,829 $ 222,502 Adjustments to reconcile Net income to Net cash provided by operating activities: Depreciation and amortization 34,352 39,258 Amortization of deferred loan origination costs 21,858 22,995 Amortization of financing origination fees 3,011 3,701 Provision for long-term employee benefits (16,939) (5,050) Employee benefit plan contributions and payments (1,739) (2,143) Stock compensation expense 23,628 8,903 Net change in wholesale finance receivables related to sales (487,314) (205,727) Provision for credit losses 52,364 28,822 Deferred income taxes 5,648 6,307 Other, net (21,671) (5,408) Changes in current assets and liabilities: Accounts receivable, net (77,993) (74,993) Finance receivables – accrued interest and other 2,252 3,115 Inventories, net 123,047 (2,630) Accounts payable and accrued liabilities 43,787 106,969 Other current assets 40,557 (7,300) (255,152) (83,181) Net cash provided by operating activities $ 46,677 $ 139,321 |
Finance Receivables
Finance Receivables | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Finance Receivables | Finance Receivables Finance receivables include both retail and wholesale finance receivables, including amounts held by consolidated VIEs. Finance receivables are recorded in the financial statements at amortized cost net of an allowance for credit losses. 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 31, December 31, March 27, Retail finance receivables $ 6,708,103 $ 6,748,201 $ 6,511,845 Wholesale finance receivables 1,224,051 748,948 650,181 7,932,154 7,497,149 7,162,026 Allowance for credit losses (358,431) (358,711) (340,473) $ 7,573,723 $ 7,138,438 $ 6,821,553 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. Each quarter, the Company’s outlook on economic conditions impacts the Company's retail and wholesale estimates for expected credit losses. During the first quarter of 2023, the overall macro-economic conditions remained uncertain as near-term recession concerns did not abate, elevated levels of inflation continued to challenge the U.S. and global economies, and muted consumer confidence persisted, among other factors. As such, at the end the first quarter of 2023, the Company’s outlook on economic conditions and its probability weighting of its economic forecast scenarios were weighted towards a near-term recession. 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 changes in other portfolio-specific loan characteristics. 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 31, 2023 Retail Wholesale Total Balance, beginning of period $ 345,275 $ 13,436 $ 358,711 Provision for credit losses 50,969 1,395 52,364 Charge-offs (68,008) — (68,008) Recoveries 15,364 — 15,364 Balance, end of period $ 343,600 $ 14,831 $ 358,431 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 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 31, 2023 2023 2022 2021 2020 2019 2018 & Prior Total U.S. Retail: Super prime $ 284,656 $ 1,007,543 $ 547,008 $ 240,495 $ 133,205 $ 72,247 $ 2,285,154 Prime 314,959 1,317,733 799,814 378,539 224,682 170,944 3,206,671 Sub-prime 86,541 379,206 264,358 145,132 94,898 85,829 1,055,964 686,156 2,704,482 1,611,180 764,166 452,785 329,020 6,547,789 Canadian Retail: Super prime 10,428 44,213 26,550 15,250 9,921 4,668 111,030 Prime 3,650 14,850 9,711 6,482 4,439 3,917 43,049 Sub-prime 579 2,013 1,237 1,033 754 619 6,235 14,657 61,076 37,498 22,765 15,114 9,204 160,314 $ 700,813 $ 2,765,558 $ 1,648,678 $ 786,931 $ 467,899 $ 338,224 $ 6,708,103 Current-period gross charge-offs: US Retail $ — $ 23,440 $ 22,535 $ 10,215 $ 5,818 $ 5,100 $ 67,108 Canadian Retail — 300 245 150 33 172 900 $ — $ 23,740 $ 22,780 $ 10,365 $ 5,851 $ 5,272 $ 68,008 December 31, 2022 2022 2021 2020 2019 2018 2017 & Prior Total U.S. Retail: Super prime $ 1,118,198 $ 612,890 $ 276,492 $ 159,550 $ 69,652 $ 26,701 $ 2,263,483 Prime 1,433,141 887,817 425,401 260,458 135,454 79,611 3,221,882 Sub-prime 420,660 298,153 164,946 108,372 57,993 46,827 1,096,951 2,971,999 1,798,860 866,839 528,380 263,099 153,139 6,582,316 Canadian Retail: Super prime 49,033 30,090 17,553 12,215 4,975 1,527 115,393 Prime 16,094 10,705 7,283 5,098 3,068 1,787 44,035 Sub-prime 2,223 1,402 1,173 869 475 315 6,457 67,350 42,197 26,009 18,182 8,518 3,629 165,885 $ 3,039,349 $ 1,841,057 $ 892,848 $ 546,562 $ 271,617 $ 156,768 $ 6,748,201 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 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 31, 2023 2023 2022 2021 2020 2019 2018 & Prior Total Non-Performing $ — $ — $ — $ — $ — $ — $ — Doubtful — — — — — — — Substandard — — — — — — — Special Mention — — — — — — — Medium Risk — — — — — — — Low Risk 857,152 335,247 9,123 6,191 11,130 5,208 1,224,051 $ 857,152 $ 335,247 $ 9,123 $ 6,191 $ 11,130 $ 5,208 $ 1,224,051 December 31, 2022 2022 2021 2020 2019 2018 2017 & Prior Total Non-Performing $ — $ — $ — $ — $ — $ — $ — Doubtful — — — — — — — Substandard — — — — — — — Special Mention — — — — — — — Medium Risk — — — — — — — Low Risk 714,238 11,478 6,646 8,457 7,938 191 748,948 $ 714,238 $ 11,478 $ 6,646 $ 8,457 $ 7,938 $ 191 $ 748,948 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 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 $7.2 million and $4.9 million of accrued interest against Financial Services interest income during the three months ended March 31, 2023 and March 27, 2022, 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 31, 2023, December 31, 2022 and March 27, 2022, 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 31, 2023 and March 27, 2022. As such, the Company did not reverse any wholesale accrued interest in those periods. There were no dealers on non-accrual status at March 31, 2023, December 31, 2022, and March 27, 2022. The aging analysis of the Company's finance receivables was as follows (in thousands): March 31, 2023 Current 31-60 Days 61-90 Days Greater than Total Total Retail finance receivables $ 6,488,892 $ 125,327 $ 44,748 $ 49,136 $ 219,211 $ 6,708,103 Wholesale finance receivables 1,223,752 298 — 1 299 1,224,051 $ 7,712,644 $ 125,625 $ 44,748 $ 49,137 $ 219,510 $ 7,932,154 December 31, 2022 Current 31-60 Days 61-90 Days Greater than Total Total Retail finance receivables $ 6,473,462 $ 152,343 $ 60,446 $ 61,950 $ 274,739 $ 6,748,201 Wholesale finance receivables 748,682 222 44 — 266 748,948 $ 7,222,144 $ 152,565 $ 60,490 $ 61,950 $ 275,005 $ 7,497,149 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 |
Derivative Financial Instrument
Derivative Financial Instruments and Hedging Activities | 3 Months Ended |
Mar. 31, 2023 | |
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 and swap rate lock contracts to fix the interest rate on a portion of the principal related to an anticipated issuance of long-term debt 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 (loss) 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 31, 2023 December 31, 2022 March 27, 2022 Notional Assets (a) Liabilities (b) Notional Assets (a) Liabilities (b) Notional Assets (a) Liabilities (b) Foreign currency contracts $ 530,175 $ 3,134 $ 12,659 $ 550,160 $ 6,054 $ 13,440 $ 585,451 $ 18,832 $ 3,576 Commodity contracts 906 — 339 1,361 — 410 964 316 — Cross-currency swaps 2,127,240 — 34,685 1,367,460 — 36,101 1,367,460 18,835 — Swap rate lock contracts 324,843 — 1,780 — — — — — — $ 2,983,164 $ 3,134 $ 49,463 $ 1,918,981 $ 6,054 $ 49,951 $ 1,953,875 $ 37,983 $ 3,576 Derivative Financial Instruments March 31, 2023 December 31, 2022 March 27, 2022 Notional Assets (a) Liabilities (b) Notional Assets (a) Liabilities (b) Notional Assets (a) Liabilities (b) Foreign currency contracts $ — $ — $ — $ — $ — $ — $ 230,336 $ 587 $ 722 Commodity contracts 11,229 99 755 10,803 310 310 11,866 2,435 — Interest rate caps 938,768 1,414 — 1,058,827 2,373 — 412,478 2,060 — $ 949,997 $ 1,513 $ 755 $ 1,069,630 $ 2,683 $ 310 $ 654,680 $ 5,082 $ 722 (a) Includes $1.4 million and $2.4 million of interest rate caps recorded in Other long-term assets as of March 31, 2023 and December 31, 2022, respectively, with all remaining amounts recorded in Other current assets. (b) Includes $27.9 million and $24.2 million of cross-currency swaps recorded in Other long-term liabilities as of March 31, 2023 and December 31, 2022, respectively, with all remaining amounts recorded in Accrued liabilities . 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 31, March 27, March 31, March 27, Foreign currency contracts $ (1,706) $ 8,444 $ 6,290 $ 5,655 Commodity contracts (309) 562 (379) 226 Cross-currency swaps 1,416 (16,236) 21,625 (25,800) Treasury rate lock contracts 1,139 — (66) (127) Swap rate lock contracts (1,780) — (5) — $ (1,240) $ (7,230) $ 27,465 $ (20,046) 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 and related products Selling, administrative & Interest expense Financial services interest expense Three months ended March 31, 2023 Line item on the Consolidated statements of operations in which the effects of cash flow hedges are recorded $ 1,007,301 $ 285,863 $ 7,720 $ 73,549 Gain/(loss) reclassified from AOCL into income: Foreign currency contracts $ 6,290 $ — $ — $ — Commodity contracts $ (379) $ — $ — $ — Cross-currency swaps $ — $ 21,625 $ — $ — Treasury rate lock contracts $ — $ — $ (91) $ 25 Swap rate lock contracts $ — $ — $ — $ (5) 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) The amount of net loss included in Accumulated other comprehensive loss (AOCL) at March 31, 2023, estimated to be reclassified into income over the next 12 months was $17.6 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 and related products cost of goods sold . Gains and losses on interest rate caps were recorded in Selling, administrative & engineering expense. Amount of Gain/(Loss) Three months ended March 31, March 27, Foreign currency contracts $ (627) $ (3,506) Commodity contracts (99) 2,387 Interest rate caps (958) 1,700 $ (1,684) $ 581 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. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
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 31, December 31, March 27, Unsecured commercial paper $ 501,243 $ 770,468 $ 816,016 Debt with a contractual term greater than 12 months is generally classified as long-term and consisted of the following (in thousands): March 31, December 31, March 27, Secured debt: Asset-backed Canadian commercial paper conduit facility $ 62,195 $ 71,785 $ 95,664 Asset-backed U.S. commercial paper conduit facility 372,816 425,794 269,534 Asset-backed securitization debt 2,267,516 2,028,155 1,363,254 Unamortized discounts and debt issuance costs (9,717) (8,741) (5,696) 2,692,810 2,516,993 1,722,756 Unsecured notes (at par value): Medium-term notes: Due in 2022, issued June 2017 2.55 % — — 400,000 Due in 2023, issued February 2018 3.35 % — 350,000 350,000 Due in 2023, issued May 2020 (a) 4.94 % 706,972 695,727 723,886 Due in 2024, issued November 2019 (b) 3.14 % 652,590 642,210 668,202 Due in 2025, issued June 2020 3.35 % 700,000 700,000 700,000 Due in 2027, issued February 2022 3.05 % 500,000 500,000 500,000 Due in 2028, issued March 2023 6.50 % 700,000 — — Unamortized discounts and debt issuance costs (13,971) (8,464) (12,243) 3,245,591 2,879,473 3,329,845 March 31, December 31, March 27, 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 (4,455) (4,632) (5,158) 745,545 745,368 744,842 3,991,136 3,624,841 4,074,687 Long-term debt 6,683,946 6,141,834 5,797,443 Current portion of long-term debt, net (1,408,777) (1,684,782) (1,327,357) Long-term debt, net $ 5,275,169 $ 4,457,052 $ 4,470,086 (a) €650.0 million par value remeasured to U.S. dollar at March 31, 2023, December 31, 2022, and March 27, 2022, respectively (b) €600.0 million par value remeasured to U.S. dollar at March 31, 2023, December 31, 2022, and March 27, 2022, respectively Future principal payments of the Company's debt obligations as of March 31, 2023 were as follows (in thousands): 2023 $ 1,783,948 2024 1,302,020 2025 1,857,244 2026 606,941 2027 663,172 Thereafter 1,000,007 Future principal payments 7,213,332 Unamortized discounts and debt issuance costs (28,143) $ 7,185,189 |
Asset-Backed Financing
Asset-Backed Financing | 3 Months Ended |
Mar. 31, 2023 | |
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 31, 2023 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 $ 2,815,885 $ (144,336) $ 142,265 $ 8,799 $ 2,822,613 $ 2,257,799 Asset-backed U.S. commercial paper conduit facility 410,529 (21,031) 29,020 1,939 420,457 372,816 Unconsolidated VIEs: Asset-backed Canadian commercial paper conduit facility 70,485 (2,980) 5,193 151 72,849 62,195 $ 3,296,899 $ (168,347) $ 176,478 $ 10,889 $ 3,315,919 $ 2,692,810 December 31, 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 $ 2,558,450 $ (130,774) $ 114,254 $ 7,899 $ 2,549,829 $ 2,019,414 Asset-backed U.S. commercial paper conduit facility 474,167 (24,236) 26,874 1,906 478,711 425,794 Unconsolidated VIEs: Asset-backed Canadian commercial paper conduit facility 82,375 (3,452) 4,873 130 83,926 71,785 $ 3,114,992 $ (158,462) $ 146,001 $ 9,935 $ 3,112,466 $ 2,516,993 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 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 2030. 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. During the first quarter of 2023, the Company transferred $628.5 million of U.S. retail motorcycle finance receivables to an SPE which, in turn, issued $550.0 million, or $547.7 million net of discount and issuance costs, of secured notes through an on-balance sheet asset-backed securitization transaction. There were no on-balance sheet asset-backed securitization transactions during the first quarter of 2022. On-Balance Sheet Asset-Backed U.S. Commercial Paper Conduit Facility VIE – The Company has a $1.50 billion 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 November 2022, the Company renewed the U.S. Conduit Facility. As a result of the renewal, the agreement no longer allows for uncommitted additional borrowings, at the lender's discretion, of up to $300.0 million in addition to the $1.50 billion aggregate commitment. Prior to the November 2022 renewal, the Company drew against the $300.0 million of uncommitted additional borrowings that were available prior to the renewal and, at March 31, 2023, $72.8 million of the amount drawn remained outstanding. 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. Subsequent to the November 2022 renewal, the interest rate on all outstanding debt and future borrowings, if not funded by a conduit lender through the issuance of commercial paper, is based on the Secured Overnight Financing Rate (SOFR), with provisions for a transition to other benchmark rates in the future, if necessary. Prior to the renewal, if not funded by a conduit lender through the issuance of commercial paper, the terms of the interest were based on LIBOR or SOFR, as appropriate, with provisions for a transition to other benchmark rates. In addition to interest, 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. 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 4 years. Unless earlier terminated or extended by mutual agreement of the Company and the lenders, as of March 31, 2023, the U.S. Conduit Facility has an expiration date of November 17, 2023. 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. There were no finance receivable transfers under the U.S. Conduit Facility during the first quarter of 2023. 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. 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. 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 4 years. Unless earlier terminated or extended by mutual agreement between the Company and the lenders, as of March 31, 2023, the Canadian Conduit has an expiration date of June 30, 2023. 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 $10.7 million at March 31, 2023. The maximum exposure is not an indication of the Company's expected loss exposure. |
Fair Value
Fair Value | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value | Fair Value The following tables present the fair values of certain of the Company's assets and liabilities within the fair value hierarchy as defined in Note 1. Recurring Fair Value Measurements – The Company’s assets and liabilities measured at fair value on a recurring basis were as follows (in thousands): March 31, 2023 Balance Level 1 Level 2 Assets: Cash equivalents $ 1,030,696 $ 858,000 $ 172,696 Marketable securities 34,017 34,017 — Derivative financial instruments 4,647 — 4,647 $ 1,069,360 $ 892,017 $ 177,343 Liabilities: Derivative financial instruments $ 50,218 $ — $ 50,218 LiveWire warrants 7,320 4,800 2,520 $ 57,538 $ 4,800 $ 52,738 December 31, 2022 Balance Level 1 Level 2 Assets: Cash equivalents $ 805,629 $ 594,000 $ 211,629 Marketable securities 33,071 33,071 — Derivative financial instruments 8,737 — 8,737 $ 847,437 $ 627,071 $ 220,366 Liabilities: Derivative financial instruments $ 50,261 $ — $ 50,261 LiveWire warrants 8,388 5,500 2,888 $ 58,649 $ 5,500 $ 53,149 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 LiveWire warrants — $ — $ — $ 4,298 $ — $ 4,298 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 $24.9 million, $20.7 million and 17.9 million as of March 31, 2023, December 31, 2022 and March 27, 2022, respectively, for which the fair value adjustment was a decrease of $6.8 million, $7.5 million and $0.6 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 31, 2023 December 31, 2022 March 27, 2022 Fair Value Carrying Value Fair Value Carrying Value Fair Value Carrying Value Assets: Finance receivables, net $ 7,611,579 $ 7,573,723 $ 7,248,353 $ 7,138,438 $ 6,920,395 $ 6,821,553 Liabilities: Deposits, net $ 391,238 $ 369,311 $ 339,981 $ 317,375 $ 359,995 $ 348,083 Debt: Unsecured commercial paper $ 501,243 $ 501,243 $ 770,468 $ 770,468 $ 816,016 $ 816,016 Asset-backed U.S. commercial paper conduit facility $ 372,816 $ 372,816 $ 425,794 $ 425,794 $ 269,534 $ 269,534 Asset-backed Canadian commercial paper conduit facility $ 62,195 $ 62,195 $ 71,785 $ 71,785 $ 95,664 $ 95,664 Asset-backed securitization debt $ 2,240,966 $ 2,257,799 $ 1,996,550 $ 2,019,414 $ 1,343,706 $ 1,357,558 Medium-term notes $ 3,153,175 $ 3,245,591 $ 2,760,093 $ 2,879,473 $ 3,326,310 $ 3,329,845 Senior notes $ 665,665 $ 745,545 $ 661,630 $ 745,368 $ 724,089 $ 744,842 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, net of fees. 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 is 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. 31, 2023 | |
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 limited 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 31, March 27, Balance, beginning of period $ 75,960 $ 61,621 Warranties issued during the period 11,927 10,711 Settlements made during the period (12,051) (7,096) Recalls and changes to pre-existing warranty liabilities (1,168) (141) Balance, end of period $ 74,668 $ 65,095 The liability for recall campaigns, included in the balance above, was $26.6 million, $29.7 million and $16.7 million at March 31, 2023, December 31, 2022 and March 27, 2022, respectively. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2023 | |
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 HDMC 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 and related products 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 31, March 27, Pension and SERPA Benefits: Service cost $ 1,294 $ 4,763 Interest cost 20,476 15,472 Expected return on plan assets (36,519) (31,476) Amortization of unrecognized: Prior service cost (credit) 188 (328) Net (gain) loss (181) 7,978 Settlement gain (222) (256) Net periodic benefit income $ (14,964) $ (3,847) Postretirement Healthcare Benefits: Service cost $ 797 $ 1,161 Interest cost 2,772 1,904 Expected return on plan assets (4,281) (3,809) Amortization of unrecognized: Prior service credit (166) (581) Net (gain) loss (1,097) 122 Net periodic benefit income $ (1,975) $ (1,203) There are no required or planned voluntary qualified pension plan contributions for 2023. 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. 31, 2023 | |
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. Supply Matter – During the second quarter of 2022, the Company received information from a third-party sub-supplier concerning a potential regulatory compliance matter relating to the sub-supplier’s brake hose assemblies. As a result, out of an abundance of caution, the Company suspended all vehicle assembly and shipments (excluding LiveWire models, which did not utilize the brake hose assemblies at issue) for approximately two weeks during the second quarter of 2022. Since then, the Company has been working through the regulatory compliance matter with the sub-supplier, the Company’s relevant Tier-1 suppliers, and the National Highway Traffic Safety Administration (NHTSA), which is the agency responsible for brake hose assembly compliance in the United States. In connection with this matter, in July 2022, the sub-supplier notified NHTSA of a population of brake hose assemblies that were non-compliant with select NHTSA laboratory test standards. Based on that filing, in August 2022, the Company notified NHTSA of the corresponding population of Harley-Davidson motorcycles containing those brake hose assemblies. In October 2022, the sub-supplier amended its original notification, expanding its population of non-compliant brake hose assemblies to include units produced by the sub-supplier for use in Harley-Davidson motorcycles beginning as early as model year 2008. In December 2022, the Company amended its August notification, expanding the population to also include Harley-Davidson motorcycles that contained the sub-supplier’s newly identified brake hose assemblies. On March 30, 2023, the sub-supplier again amended its notification to NHTSA, identifying additional compliance issues with its brake hose assemblies. The Company is currently evaluating the sub-supplier’s latest amended notification and plans to again amend its notification to NHTSA to align with the sub-supplier’s amended notification. As permitted by federal law, both the sub-supplier and the Company have leveraged NHTSA’s standard process to petition the agency for a determination that these compliance issues are inconsequential to motor vehicle safety (an “Inconsequentiality Determination”). If NHTSA makes the Inconsequentiality Determination requested, the Company will be exempt from conducting a field action or a recall of its motorcycles related to this matter. In its inconsequentiality petition, the Company has presented (and plans to further present) NHTSA with: (1) extensive independent, third-party and internal testing demonstrating that the brake hose assemblies at issue are robust to extreme conditions - which far exceed maximum expected motorcycle lifetime demands - with no impact to brake performance; and (2) real-world field safety data showing no documented crashes or injuries attributable to the identified compliance issues. The Company believes its petition is closely comparable to inconsequentiality petitions which have resulted in successful Inconsequentiality Determinations in the past. The Company is also confident that its position that the compliance issues are inconsequential to motor vehicle safety is strong and, therefore, no field action or recall will be necessary. Based on its expectation that NHTSA will make an Inconsequentiality Determination, the Company does not expect that this matter will result in material costs in the future and no such costs have been accrued to date. However, it is possible that a field action or recall could be required that could cause the Company to incur material costs. There are several variables and uncertainties associated with any potential field action or recall that are not yet known including, but not limited to, the population of brake hose assemblies and motorcycles, the specific field action or recall required, the complexity of the required repair, and the number of motorcycle owners that would participate. Based on the Company’s information and assumptions, it estimates the cost of a potential field action or recall, if it were to occur, could range from approximately $200 million to $400 million. While the Company anticipates this estimated range to change based on information most recently provided by the sub-supplier, the Company cannot make a reasonable updated estimate at this time. The Company maintains its expectation that NHTSA will make an Inconsequentiality Determination and that this matter will not result in any material field action or recall costs. If material field action or recall costs were to result, the Company would seek full recovery of those amounts. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2023 | |
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 31, 2023 Foreign currency translation adjustments Derivative financial instruments Pension and postretirement benefit plans Total Balance, beginning of period $ (80,271) $ (10,440) $ (251,218) $ (341,929) Other comprehensive income (loss), before reclassifications 10,976 (1,240) — 9,736 Income tax (expense) benefit (855) 374 — (481) 10,121 (866) — 9,255 Reclassifications: Net gain on derivative financial instruments — (27,465) — (27,465) Prior service credits (a) — — 22 22 Actuarial gains (a) — — (1,278) (1,278) Reclassifications before tax — (27,465) (1,256) (28,721) Income tax benefit — 6,449 294 6,743 — (21,016) (962) (21,978) Other comprehensive (loss) income 10,121 (21,882) (962) (12,723) Balance, end of period $ (70,150) $ (32,322) $ (252,180) $ (354,652) 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) (a) Amounts reclassified are included in the computation of net periodic benefit (income) cost, discussed further in Note 13. |
Reportable Segments
Reportable Segments | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Reportable Segments | Reportable Segments The Company operates in three business segments: HDMC, LiveWire and HDFS. 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 Company changed its segments in the period ended December 31, 2022. The change has been retrospectively reflected in the periods presented below. Selected segment information is set forth below (in thousands): Three months ended March 31, March 27, HDMC: Revenue $ 1,557,829 $ 1,292,770 Gross profit 557,026 407,582 Selling, administrative and engineering expense 221,290 188,776 Restructuring benefit — (128) Operating income 335,736 218,934 LiveWire: Revenue 7,762 10,401 Gross profit 1,264 53 Selling, administrative and engineering expense 25,811 16,112 Operating loss (24,547) (16,059) HDFS: Financial services revenue 223,095 192,015 Financial services expense 164,675 105,658 Operating income 58,420 86,357 Operating income $ 369,609 $ 289,232 Total assets for the HDMC, LiveWire and HDFS segments were $3.1 billion, $325.8 million and $8.6 billion, respectively, as of March 31, 2023, $3.3 billion, $351.4 million and $7.9 billion, respectively, as of December 31, 2022, and $2.9 billion, $75.7 million and $7.9 billion, respectively, as of March 27, 2022. |
Supplemental Consolidating Data
Supplemental Consolidating Data | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Supplemental Consolidating Data | Supplemental Consolidating DataThe supplemental consolidating data includes separate legal entity data for Harley-Davidson Financial Services, Inc. and its subsidiaries (Financial Services Entities) and all other Harley-Davidson, Inc. entities (Non-Financial Services Entities). This information is presented to highlight the separate financial statement impacts of the Company's Financial Services Entities and its Non-Financial Services Entities. 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 31, 2023 Non-Financial Services Entities Financial Services Entities Consolidating Adjustments Consolidated Revenue: Motorcycles and related products $ 1,567,709 $ — $ (2,118) $ 1,565,591 Financial services — 223,523 (428) 223,095 1,567,709 223,523 (2,546) 1,788,686 Costs and expenses: Motorcycles and related products cost of goods sold 1,007,301 — — 1,007,301 Financial services interest expense — 73,549 — 73,549 Financial services provision for credit losses — 52,364 — 52,364 Selling, administrative and engineering expense 247,695 40,880 (2,712) 285,863 1,254,996 166,793 (2,712) 1,419,077 Operating income 312,713 56,730 166 369,609 Other income, net 20,096 — — 20,096 Investment income 10,025 — — 10,025 Interest expense 7,720 — — 7,720 Income before income taxes 335,114 56,730 166 392,010 Provision for income taxes 78,729 11,452 — 90,181 Net income 256,385 45,278 166 301,829 Less: (income) loss attributable to noncontrolling interests 2,261 — — 2,261 Net income attributable to Harley-Davidson, Inc. $ 258,646 $ 45,278 $ 166 $ 304,090 Three months ended March 27, 2022 Non-Financial Services Entities Financial Services Entities 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 Less: (income) loss attributable to noncontrolling interests — — — — Net income attributable to Harley-Davidson, Inc. $ 158,961 $ 63,388 $ 153 $ 222,502 March 31, 2023 Non-Financial Services Entities Financial Services Entities Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ 876,248 $ 684,952 $ — $ 1,561,200 Accounts receivable, net 798,728 — (465,195) 333,533 Finance receivables, net — 2,245,628 — 2,245,628 Inventories, net 830,521 — — 830,521 Restricted cash — 164,965 — 164,965 Other current assets 110,559 50,727 (6,626) 154,660 2,616,056 3,146,272 (471,821) 5,290,507 Finance receivables, net — 5,328,095 — 5,328,095 Property, plant and equipment, net 667,474 22,577 — 690,051 Pension and postretirement assets 336,569 — — 336,569 Goodwill 62,426 — — 62,426 Deferred income taxes 58,175 83,725 (692) 141,208 Lease assets 37,868 5,672 — 43,540 Other long-term assets 217,124 28,650 (108,585) 137,189 $ 3,995,692 $ 8,614,991 $ (581,098) $ 12,029,585 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 375,395 $ 494,214 $ (465,195) $ 404,414 Accrued liabilities 488,814 142,192 (5,710) 625,296 Short-term deposits, net — 144,854 — 144,854 Short-term debt — 501,243 — 501,243 Current portion of long-term debt, net — 1,408,777 — 1,408,777 864,209 2,691,280 (470,905) 3,084,584 Long-term deposits, net — 224,457 — 224,457 Long-term debt, net 745,545 4,529,624 — 5,275,169 Lease liabilities 21,160 5,514 — 26,674 Pension and postretirement liabilities 66,968 — — 66,968 Deferred income taxes 28,180 2,852 — 31,032 Other long-term liabilities 155,487 67,626 1,739 224,852 Commitments and contingencies (Note 14) Shareholders’ equity 2,114,143 1,093,638 (111,932) 3,095,849 $ 3,995,692 $ 8,614,991 $ (581,098) $ 12,029,585 March 27, 2022 Non-Financial Services Entities Financial Services Entities 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 14) Shareholders’ equity 1,523,815 1,093,797 (108,511) 2,509,101 $ 3,490,113 $ 7,888,253 $ (483,726) $ 10,894,640 Three months ended March 31, 2023 Non-Financial Services Entities Financial Services Entities Consolidating Adjustments Consolidated Cash flows from operating activities: Net income $ 256,385 $ 45,278 $ 166 $ 301,829 Adjustments to reconcile Net income to Net cash provided by operating activities: Depreciation and amortization 32,120 2,232 — 34,352 Amortization of deferred loan origination costs — 21,858 — 21,858 Amortization of financing origination fees 177 2,834 — 3,011 Provision for long-term employee benefits (16,939) — — (16,939) Employee benefit plan contributions and payments (1,739) — — (1,739) Stock compensation expense 22,494 1,134 — 23,628 Net change in wholesale finance receivables related to sales — — (487,314) (487,314) Provision for credit losses — 52,364 — 52,364 Deferred income taxes 4,261 1,717 (330) 5,648 Other, net (18,087) (3,418) (166) (21,671) Changes in current assets and liabilities: Accounts receivable, net (426,221) — 348,228 (77,993) Finance receivables – accrued interest and other — 2,252 — 2,252 Inventories, net 123,047 — — 123,047 Accounts payable and accrued liabilities 14,610 379,094 (349,917) 43,787 Other current assets 25,342 13,131 2,084 40,557 (240,935) 473,198 (487,415) (255,152) Net cash provided by operating activities 15,450 518,476 (487,249) 46,677 Cash flows from investing activities: Capital expenditures (44,894) (220) — (45,114) Origination of finance receivables — (2,100,019) 1,182,874 (917,145) Collections on finance receivables — 1,586,477 (695,625) 890,852 Other investing activities 821 — — 821 Net cash used by investing activities (44,073) (513,762) 487,249 (70,586) Three months ended March 31, 2023 Non-Financial Services Entities Financial Services Entities Consolidating Adjustments Consolidated Cash flows from financing activities: Proceeds from issuance of medium-term notes — 693,276 — 693,276 Repayments of medium-term notes — (350,000) — (350,000) Proceeds from securitization debt — 547,706 — 547,706 Repayments of securitization debt — (310,640) — (310,640) Repayments of asset-backed commercial paper — (62,634) — (62,634) Net decrease in unsecured commercial paper — (270,119) — (270,119) Net increase in deposits — 51,822 — 51,822 Dividends paid (24,123) — — (24,123) Repurchase of common stock (96,767) — — (96,767) Other financing activities 69 — — 69 Net cash (used) provided by financing activities (120,821) 299,411 — 178,590 Effect of exchange rate changes on cash, cash equivalents and restricted cash 3,894 (74) — 3,820 Net (decrease) increase in cash, cash equivalents and restricted cash $ (145,550) $ 304,051 $ — $ 158,501 Cash, cash equivalents and restricted cash: Cash, cash equivalents and restricted cash, beginning of period $ 1,021,798 $ 557,379 $ — $ 1,579,177 Net (decrease) increase in cash, cash equivalents and restricted cash (145,550) 304,051 — 158,501 Cash, cash equivalents and restricted cash, end of period $ 876,248 $ 861,430 $ — $ 1,737,678 Three months ended March 27, 2022 Non-Financial Services Entities Financial Services Entities 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 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 Non-Financial Services Entities Financial Services Entities 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 decrease 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. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent EventIn April 2023, the Company issued €700.0 million of medium-term notes that mature in April 2026 and have an annual interest rate of 6.36%. |
Basis of Presentation and Use_2
Basis of Presentation and Use of Estimates (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
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. |
Fair Value Measurements | 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. |
New Accounting Standards | Accounting Standards Recently Adopted In 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 current expected credit losses (CECL) model. ASU 2022-02 |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Disaggregated revenue by major source was as follows (in thousands): Three months ended March 31, March 27, HDMC: Motorcycles $ 1,302,378 $ 1,057,005 Parts and accessories 167,671 165,320 Apparel 71,391 51,404 Licensing 6,210 6,497 Other 10,179 12,544 1,557,829 1,292,770 LiveWire 7,762 10,401 Motorcycles and related products revenue 1,565,591 1,303,171 HDFS: Interest income 182,270 161,734 Other 40,825 30,281 Financial services revenue 223,095 192,015 $ 1,788,686 $ 1,495,186 |
Schedule of Deferred Revenue | Deferred revenue, included in Accrued liabilities and Other long-term liabilities on the Consolidated balance sheets , was as follows (in thousands): March 31, March 27, Balance, beginning of period $ 44,100 $ 40,092 Balance, end of period $ 43,176 $ 38,842 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of 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 31, March 27, Net income attributable to Harley-Davidson, Inc. $ 304,090 $ 222,502 Basic weighted-average shares outstanding 146,048 152,820 Effect of dilutive securities – employee stock compensation plan 2,883 1,104 Diluted weighted-average shares outstanding 148,931 153,924 Net earnings per share: Basic $ 2.08 $ 1.46 Diluted $ 2.04 $ 1.45 |
Additional Balance Sheet and _2
Additional Balance Sheet and Cash Flow Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Marketable Securities | Investments in Marketable Securities – The Company’s investments in marketable securities consisted of the following (in thousands): March 31, December 31, March 27, Mutual funds $ 34,017 $ 33,071 $ 45,189 |
Schedule of Inventories, Net | Inventories, net consisted of the following (in thousands): March 31, December 31, March 27, Raw materials and work in process $ 387,466 $ 331,380 $ 376,600 Motorcycle finished goods 380,083 549,041 291,623 Parts and accessories and apparel 182,905 187,039 130,156 Inventory at lower of FIFO cost or net realizable value 950,454 1,067,460 798,379 Excess of FIFO over LIFO cost (119,933) (116,500) (84,120) $ 830,521 $ 950,960 $ 714,259 |
Schedule of Certificates of Deposit Maturity | Future maturities of the Company's certificates of deposit as of March 31, 2023 were as follows (in thousands): 2023 $ 81,167 2024 115,491 2025 39,740 2026 79,742 2027 54,158 Thereafter — Future maturities 370,298 Unamortized fees (987) $ 369,311 |
Schedule of Reconciliation of Net Cash Provided by Operating Activities | Operating Cash Flow – The reconciliation of Net income to Net cash provided by operating activities was as follows (in thousands): Three months ended March 31, March 27, Cash flows from operating activities: Net income $ 301,829 $ 222,502 Adjustments to reconcile Net income to Net cash provided by operating activities: Depreciation and amortization 34,352 39,258 Amortization of deferred loan origination costs 21,858 22,995 Amortization of financing origination fees 3,011 3,701 Provision for long-term employee benefits (16,939) (5,050) Employee benefit plan contributions and payments (1,739) (2,143) Stock compensation expense 23,628 8,903 Net change in wholesale finance receivables related to sales (487,314) (205,727) Provision for credit losses 52,364 28,822 Deferred income taxes 5,648 6,307 Other, net (21,671) (5,408) Changes in current assets and liabilities: Accounts receivable, net (77,993) (74,993) Finance receivables – accrued interest and other 2,252 3,115 Inventories, net 123,047 (2,630) Accounts payable and accrued liabilities 43,787 106,969 Other current assets 40,557 (7,300) (255,152) (83,181) Net cash provided by operating activities $ 46,677 $ 139,321 |
Finance Receivables (Tables)
Finance Receivables (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Schedule of Finance Receivables | Finance receivables, net were as follows (in thousands): March 31, December 31, March 27, Retail finance receivables $ 6,708,103 $ 6,748,201 $ 6,511,845 Wholesale finance receivables 1,224,051 748,948 650,181 7,932,154 7,497,149 7,162,026 Allowance for credit losses (358,431) (358,711) (340,473) $ 7,573,723 $ 7,138,438 $ 6,821,553 |
Schedule of 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 31, 2023 Retail Wholesale Total Balance, beginning of period $ 345,275 $ 13,436 $ 358,711 Provision for credit losses 50,969 1,395 52,364 Charge-offs (68,008) — (68,008) Recoveries 15,364 — 15,364 Balance, end of period $ 343,600 $ 14,831 $ 358,431 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 |
Schedule of 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 31, 2023 2023 2022 2021 2020 2019 2018 & Prior Total U.S. Retail: Super prime $ 284,656 $ 1,007,543 $ 547,008 $ 240,495 $ 133,205 $ 72,247 $ 2,285,154 Prime 314,959 1,317,733 799,814 378,539 224,682 170,944 3,206,671 Sub-prime 86,541 379,206 264,358 145,132 94,898 85,829 1,055,964 686,156 2,704,482 1,611,180 764,166 452,785 329,020 6,547,789 Canadian Retail: Super prime 10,428 44,213 26,550 15,250 9,921 4,668 111,030 Prime 3,650 14,850 9,711 6,482 4,439 3,917 43,049 Sub-prime 579 2,013 1,237 1,033 754 619 6,235 14,657 61,076 37,498 22,765 15,114 9,204 160,314 $ 700,813 $ 2,765,558 $ 1,648,678 $ 786,931 $ 467,899 $ 338,224 $ 6,708,103 Current-period gross charge-offs: US Retail $ — $ 23,440 $ 22,535 $ 10,215 $ 5,818 $ 5,100 $ 67,108 Canadian Retail — 300 245 150 33 172 900 $ — $ 23,740 $ 22,780 $ 10,365 $ 5,851 $ 5,272 $ 68,008 December 31, 2022 2022 2021 2020 2019 2018 2017 & Prior Total U.S. Retail: Super prime $ 1,118,198 $ 612,890 $ 276,492 $ 159,550 $ 69,652 $ 26,701 $ 2,263,483 Prime 1,433,141 887,817 425,401 260,458 135,454 79,611 3,221,882 Sub-prime 420,660 298,153 164,946 108,372 57,993 46,827 1,096,951 2,971,999 1,798,860 866,839 528,380 263,099 153,139 6,582,316 Canadian Retail: Super prime 49,033 30,090 17,553 12,215 4,975 1,527 115,393 Prime 16,094 10,705 7,283 5,098 3,068 1,787 44,035 Sub-prime 2,223 1,402 1,173 869 475 315 6,457 67,350 42,197 26,009 18,182 8,518 3,629 165,885 $ 3,039,349 $ 1,841,057 $ 892,848 $ 546,562 $ 271,617 $ 156,768 $ 6,748,201 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 The amortized cost of the Company's wholesale financial receivables, by vintage and credit quality indicator, was as follows (in thousands): March 31, 2023 2023 2022 2021 2020 2019 2018 & Prior Total Non-Performing $ — $ — $ — $ — $ — $ — $ — Doubtful — — — — — — — Substandard — — — — — — — Special Mention — — — — — — — Medium Risk — — — — — — — Low Risk 857,152 335,247 9,123 6,191 11,130 5,208 1,224,051 $ 857,152 $ 335,247 $ 9,123 $ 6,191 $ 11,130 $ 5,208 $ 1,224,051 December 31, 2022 2022 2021 2020 2019 2018 2017 & Prior Total Non-Performing $ — $ — $ — $ — $ — $ — $ — Doubtful — — — — — — — Substandard — — — — — — — Special Mention — — — — — — — Medium Risk — — — — — — — Low Risk 714,238 11,478 6,646 8,457 7,938 191 748,948 $ 714,238 $ 11,478 $ 6,646 $ 8,457 $ 7,938 $ 191 $ 748,948 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 |
Schedule of Past Due Financing Receivables | The aging analysis of the Company's finance receivables was as follows (in thousands): March 31, 2023 Current 31-60 Days 61-90 Days Greater than Total Total Retail finance receivables $ 6,488,892 $ 125,327 $ 44,748 $ 49,136 $ 219,211 $ 6,708,103 Wholesale finance receivables 1,223,752 298 — 1 299 1,224,051 $ 7,712,644 $ 125,625 $ 44,748 $ 49,137 $ 219,510 $ 7,932,154 December 31, 2022 Current 31-60 Days 61-90 Days Greater than Total Total Retail finance receivables $ 6,473,462 $ 152,343 $ 60,446 $ 61,950 $ 274,739 $ 6,748,201 Wholesale finance receivables 748,682 222 44 — 266 748,948 $ 7,222,144 $ 152,565 $ 60,490 $ 61,950 $ 275,005 $ 7,497,149 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 |
Derivative Financial Instrume_2
Derivative Financial Instruments and Hedging Activities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 31, 2023 December 31, 2022 March 27, 2022 Notional Assets (a) Liabilities (b) Notional Assets (a) Liabilities (b) Notional Assets (a) Liabilities (b) Foreign currency contracts $ 530,175 $ 3,134 $ 12,659 $ 550,160 $ 6,054 $ 13,440 $ 585,451 $ 18,832 $ 3,576 Commodity contracts 906 — 339 1,361 — 410 964 316 — Cross-currency swaps 2,127,240 — 34,685 1,367,460 — 36,101 1,367,460 18,835 — Swap rate lock contracts 324,843 — 1,780 — — — — — — $ 2,983,164 $ 3,134 $ 49,463 $ 1,918,981 $ 6,054 $ 49,951 $ 1,953,875 $ 37,983 $ 3,576 Derivative Financial Instruments March 31, 2023 December 31, 2022 March 27, 2022 Notional Assets (a) Liabilities (b) Notional Assets (a) Liabilities (b) Notional Assets (a) Liabilities (b) Foreign currency contracts $ — $ — $ — $ — $ — $ — $ 230,336 $ 587 $ 722 Commodity contracts 11,229 99 755 10,803 310 310 11,866 2,435 — Interest rate caps 938,768 1,414 — 1,058,827 2,373 — 412,478 2,060 — $ 949,997 $ 1,513 $ 755 $ 1,069,630 $ 2,683 $ 310 $ 654,680 $ 5,082 $ 722 (a) Includes $1.4 million and $2.4 million of interest rate caps recorded in Other long-term assets as of March 31, 2023 and December 31, 2022, respectively, with all remaining amounts recorded in Other current assets. (b) Includes $27.9 million and $24.2 million of cross-currency swaps recorded in Other long-term liabilities as of March 31, 2023 and December 31, 2022, respectively, with all remaining amounts recorded in Accrued liabilities . |
Schedule of 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 31, March 27, March 31, March 27, Foreign currency contracts $ (1,706) $ 8,444 $ 6,290 $ 5,655 Commodity contracts (309) 562 (379) 226 Cross-currency swaps 1,416 (16,236) 21,625 (25,800) Treasury rate lock contracts 1,139 — (66) (127) Swap rate lock contracts (1,780) — (5) — $ (1,240) $ (7,230) $ 27,465 $ (20,046) 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 and related products Selling, administrative & Interest expense Financial services interest expense Three months ended March 31, 2023 Line item on the Consolidated statements of operations in which the effects of cash flow hedges are recorded $ 1,007,301 $ 285,863 $ 7,720 $ 73,549 Gain/(loss) reclassified from AOCL into income: Foreign currency contracts $ 6,290 $ — $ — $ — Commodity contracts $ (379) $ — $ — $ — Cross-currency swaps $ — $ 21,625 $ — $ — Treasury rate lock contracts $ — $ — $ (91) $ 25 Swap rate lock contracts $ — $ — $ — $ (5) 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) |
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 and related products cost of goods sold . Gains and losses on interest rate caps were recorded in Selling, administrative & engineering expense. Amount of Gain/(Loss) Three months ended March 31, March 27, Foreign currency contracts $ (627) $ (3,506) Commodity contracts (99) 2,387 Interest rate caps (958) 1,700 $ (1,684) $ 581 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 31, December 31, March 27, Unsecured commercial paper $ 501,243 $ 770,468 $ 816,016 |
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 31, December 31, March 27, Secured debt: Asset-backed Canadian commercial paper conduit facility $ 62,195 $ 71,785 $ 95,664 Asset-backed U.S. commercial paper conduit facility 372,816 425,794 269,534 Asset-backed securitization debt 2,267,516 2,028,155 1,363,254 Unamortized discounts and debt issuance costs (9,717) (8,741) (5,696) 2,692,810 2,516,993 1,722,756 Unsecured notes (at par value): Medium-term notes: Due in 2022, issued June 2017 2.55 % — — 400,000 Due in 2023, issued February 2018 3.35 % — 350,000 350,000 Due in 2023, issued May 2020 (a) 4.94 % 706,972 695,727 723,886 Due in 2024, issued November 2019 (b) 3.14 % 652,590 642,210 668,202 Due in 2025, issued June 2020 3.35 % 700,000 700,000 700,000 Due in 2027, issued February 2022 3.05 % 500,000 500,000 500,000 Due in 2028, issued March 2023 6.50 % 700,000 — — Unamortized discounts and debt issuance costs (13,971) (8,464) (12,243) 3,245,591 2,879,473 3,329,845 March 31, December 31, March 27, 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 (4,455) (4,632) (5,158) 745,545 745,368 744,842 3,991,136 3,624,841 4,074,687 Long-term debt 6,683,946 6,141,834 5,797,443 Current portion of long-term debt, net (1,408,777) (1,684,782) (1,327,357) Long-term debt, net $ 5,275,169 $ 4,457,052 $ 4,470,086 (a) €650.0 million par value remeasured to U.S. dollar at March 31, 2023, December 31, 2022, and March 27, 2022, respectively (b) €600.0 million par value remeasured to U.S. dollar at March 31, 2023, December 31, 2022, and March 27, 2022, respectively |
Schedule of Maturities of Long-term Debt | Future principal payments of the Company's debt obligations as of March 31, 2023 were as follows (in thousands): 2023 $ 1,783,948 2024 1,302,020 2025 1,857,244 2026 606,941 2027 663,172 Thereafter 1,000,007 Future principal payments 7,213,332 Unamortized discounts and debt issuance costs (28,143) $ 7,185,189 |
Asset-Backed Financing (Tables)
Asset-Backed Financing (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Transfers and Servicing [Abstract] | |
Schedule of 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 31, 2023 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 $ 2,815,885 $ (144,336) $ 142,265 $ 8,799 $ 2,822,613 $ 2,257,799 Asset-backed U.S. commercial paper conduit facility 410,529 (21,031) 29,020 1,939 420,457 372,816 Unconsolidated VIEs: Asset-backed Canadian commercial paper conduit facility 70,485 (2,980) 5,193 151 72,849 62,195 $ 3,296,899 $ (168,347) $ 176,478 $ 10,889 $ 3,315,919 $ 2,692,810 December 31, 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 $ 2,558,450 $ (130,774) $ 114,254 $ 7,899 $ 2,549,829 $ 2,019,414 Asset-backed U.S. commercial paper conduit facility 474,167 (24,236) 26,874 1,906 478,711 425,794 Unconsolidated VIEs: Asset-backed Canadian commercial paper conduit facility 82,375 (3,452) 4,873 130 83,926 71,785 $ 3,114,992 $ (158,462) $ 146,001 $ 9,935 $ 3,112,466 $ 2,516,993 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 |
Fair Value (Tables)
Fair Value (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Summary of Assets and Liabilities Measured At Fair Value On A Recurring Basis | Recurring Fair Value Measurements – The Company’s assets and liabilities measured at fair value on a recurring basis were as follows (in thousands): March 31, 2023 Balance Level 1 Level 2 Assets: Cash equivalents $ 1,030,696 $ 858,000 $ 172,696 Marketable securities 34,017 34,017 — Derivative financial instruments 4,647 — 4,647 $ 1,069,360 $ 892,017 $ 177,343 Liabilities: Derivative financial instruments $ 50,218 $ — $ 50,218 LiveWire warrants 7,320 4,800 2,520 $ 57,538 $ 4,800 $ 52,738 December 31, 2022 Balance Level 1 Level 2 Assets: Cash equivalents $ 805,629 $ 594,000 $ 211,629 Marketable securities 33,071 33,071 — Derivative financial instruments 8,737 — 8,737 $ 847,437 $ 627,071 $ 220,366 Liabilities: Derivative financial instruments $ 50,261 $ — $ 50,261 LiveWire warrants 8,388 5,500 2,888 $ 58,649 $ 5,500 $ 53,149 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 LiveWire warrants — $ — $ — $ 4,298 $ — $ 4,298 |
Schedule of 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 31, 2023 December 31, 2022 March 27, 2022 Fair Value Carrying Value Fair Value Carrying Value Fair Value Carrying Value Assets: Finance receivables, net $ 7,611,579 $ 7,573,723 $ 7,248,353 $ 7,138,438 $ 6,920,395 $ 6,821,553 Liabilities: Deposits, net $ 391,238 $ 369,311 $ 339,981 $ 317,375 $ 359,995 $ 348,083 Debt: Unsecured commercial paper $ 501,243 $ 501,243 $ 770,468 $ 770,468 $ 816,016 $ 816,016 Asset-backed U.S. commercial paper conduit facility $ 372,816 $ 372,816 $ 425,794 $ 425,794 $ 269,534 $ 269,534 Asset-backed Canadian commercial paper conduit facility $ 62,195 $ 62,195 $ 71,785 $ 71,785 $ 95,664 $ 95,664 Asset-backed securitization debt $ 2,240,966 $ 2,257,799 $ 1,996,550 $ 2,019,414 $ 1,343,706 $ 1,357,558 Medium-term notes $ 3,153,175 $ 3,245,591 $ 2,760,093 $ 2,879,473 $ 3,326,310 $ 3,329,845 Senior notes $ 665,665 $ 745,545 $ 661,630 $ 745,368 $ 724,089 $ 744,842 |
Product Warranty and Recall C_2
Product Warranty and Recall Campaigns (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Product Warranties Disclosures [Abstract] | |
Schedule of Warranty and Recall Liability | Changes in the Company’s warranty and recall liabilities were as follows (in thousands): Three months ended March 31, March 27, Balance, beginning of period $ 75,960 $ 61,621 Warranties issued during the period 11,927 10,711 Settlements made during the period (12,051) (7,096) Recalls and changes to pre-existing warranty liabilities (1,168) (141) Balance, end of period $ 74,668 $ 65,095 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of 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 31, March 27, Pension and SERPA Benefits: Service cost $ 1,294 $ 4,763 Interest cost 20,476 15,472 Expected return on plan assets (36,519) (31,476) Amortization of unrecognized: Prior service cost (credit) 188 (328) Net (gain) loss (181) 7,978 Settlement gain (222) (256) Net periodic benefit income $ (14,964) $ (3,847) Postretirement Healthcare Benefits: Service cost $ 797 $ 1,161 Interest cost 2,772 1,904 Expected return on plan assets (4,281) (3,809) Amortization of unrecognized: Prior service credit (166) (581) Net (gain) loss (1,097) 122 Net periodic benefit income $ (1,975) $ (1,203) |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | Changes in Accumulated other comprehensive loss were as follows (in thousands): Three months ended March 31, 2023 Foreign currency translation adjustments Derivative financial instruments Pension and postretirement benefit plans Total Balance, beginning of period $ (80,271) $ (10,440) $ (251,218) $ (341,929) Other comprehensive income (loss), before reclassifications 10,976 (1,240) — 9,736 Income tax (expense) benefit (855) 374 — (481) 10,121 (866) — 9,255 Reclassifications: Net gain on derivative financial instruments — (27,465) — (27,465) Prior service credits (a) — — 22 22 Actuarial gains (a) — — (1,278) (1,278) Reclassifications before tax — (27,465) (1,256) (28,721) Income tax benefit — 6,449 294 6,743 — (21,016) (962) (21,978) Other comprehensive (loss) income 10,121 (21,882) (962) (12,723) Balance, end of period $ (70,150) $ (32,322) $ (252,180) $ (354,652) 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) (a) Amounts reclassified are included in the computation of net periodic benefit (income) cost, discussed further in Note 13. |
Reportable Segments (Tables)
Reportable Segments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment | Selected segment information is set forth below (in thousands): Three months ended March 31, March 27, HDMC: Revenue $ 1,557,829 $ 1,292,770 Gross profit 557,026 407,582 Selling, administrative and engineering expense 221,290 188,776 Restructuring benefit — (128) Operating income 335,736 218,934 LiveWire: Revenue 7,762 10,401 Gross profit 1,264 53 Selling, administrative and engineering expense 25,811 16,112 Operating loss (24,547) (16,059) HDFS: Financial services revenue 223,095 192,015 Financial services expense 164,675 105,658 Operating income 58,420 86,357 Operating income $ 369,609 $ 289,232 |
Supplemental Consolidating Da_2
Supplemental Consolidating Data (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Operations | Supplemental consolidating data is as follows (in thousands): Three months ended March 31, 2023 Non-Financial Services Entities Financial Services Entities Consolidating Adjustments Consolidated Revenue: Motorcycles and related products $ 1,567,709 $ — $ (2,118) $ 1,565,591 Financial services — 223,523 (428) 223,095 1,567,709 223,523 (2,546) 1,788,686 Costs and expenses: Motorcycles and related products cost of goods sold 1,007,301 — — 1,007,301 Financial services interest expense — 73,549 — 73,549 Financial services provision for credit losses — 52,364 — 52,364 Selling, administrative and engineering expense 247,695 40,880 (2,712) 285,863 1,254,996 166,793 (2,712) 1,419,077 Operating income 312,713 56,730 166 369,609 Other income, net 20,096 — — 20,096 Investment income 10,025 — — 10,025 Interest expense 7,720 — — 7,720 Income before income taxes 335,114 56,730 166 392,010 Provision for income taxes 78,729 11,452 — 90,181 Net income 256,385 45,278 166 301,829 Less: (income) loss attributable to noncontrolling interests 2,261 — — 2,261 Net income attributable to Harley-Davidson, Inc. $ 258,646 $ 45,278 $ 166 $ 304,090 Three months ended March 27, 2022 Non-Financial Services Entities Financial Services Entities 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 Less: (income) loss attributable to noncontrolling interests — — — — Net income attributable to Harley-Davidson, Inc. $ 158,961 $ 63,388 $ 153 $ 222,502 |
Schedule of Balance Sheet | March 31, 2023 Non-Financial Services Entities Financial Services Entities Consolidating Adjustments Consolidated ASSETS Current assets: Cash and cash equivalents $ 876,248 $ 684,952 $ — $ 1,561,200 Accounts receivable, net 798,728 — (465,195) 333,533 Finance receivables, net — 2,245,628 — 2,245,628 Inventories, net 830,521 — — 830,521 Restricted cash — 164,965 — 164,965 Other current assets 110,559 50,727 (6,626) 154,660 2,616,056 3,146,272 (471,821) 5,290,507 Finance receivables, net — 5,328,095 — 5,328,095 Property, plant and equipment, net 667,474 22,577 — 690,051 Pension and postretirement assets 336,569 — — 336,569 Goodwill 62,426 — — 62,426 Deferred income taxes 58,175 83,725 (692) 141,208 Lease assets 37,868 5,672 — 43,540 Other long-term assets 217,124 28,650 (108,585) 137,189 $ 3,995,692 $ 8,614,991 $ (581,098) $ 12,029,585 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 375,395 $ 494,214 $ (465,195) $ 404,414 Accrued liabilities 488,814 142,192 (5,710) 625,296 Short-term deposits, net — 144,854 — 144,854 Short-term debt — 501,243 — 501,243 Current portion of long-term debt, net — 1,408,777 — 1,408,777 864,209 2,691,280 (470,905) 3,084,584 Long-term deposits, net — 224,457 — 224,457 Long-term debt, net 745,545 4,529,624 — 5,275,169 Lease liabilities 21,160 5,514 — 26,674 Pension and postretirement liabilities 66,968 — — 66,968 Deferred income taxes 28,180 2,852 — 31,032 Other long-term liabilities 155,487 67,626 1,739 224,852 Commitments and contingencies (Note 14) Shareholders’ equity 2,114,143 1,093,638 (111,932) 3,095,849 $ 3,995,692 $ 8,614,991 $ (581,098) $ 12,029,585 March 27, 2022 Non-Financial Services Entities Financial Services Entities 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 14) Shareholders’ equity 1,523,815 1,093,797 (108,511) 2,509,101 $ 3,490,113 $ 7,888,253 $ (483,726) $ 10,894,640 |
Schedule of Cash Flows | Three months ended March 31, 2023 Non-Financial Services Entities Financial Services Entities Consolidating Adjustments Consolidated Cash flows from operating activities: Net income $ 256,385 $ 45,278 $ 166 $ 301,829 Adjustments to reconcile Net income to Net cash provided by operating activities: Depreciation and amortization 32,120 2,232 — 34,352 Amortization of deferred loan origination costs — 21,858 — 21,858 Amortization of financing origination fees 177 2,834 — 3,011 Provision for long-term employee benefits (16,939) — — (16,939) Employee benefit plan contributions and payments (1,739) — — (1,739) Stock compensation expense 22,494 1,134 — 23,628 Net change in wholesale finance receivables related to sales — — (487,314) (487,314) Provision for credit losses — 52,364 — 52,364 Deferred income taxes 4,261 1,717 (330) 5,648 Other, net (18,087) (3,418) (166) (21,671) Changes in current assets and liabilities: Accounts receivable, net (426,221) — 348,228 (77,993) Finance receivables – accrued interest and other — 2,252 — 2,252 Inventories, net 123,047 — — 123,047 Accounts payable and accrued liabilities 14,610 379,094 (349,917) 43,787 Other current assets 25,342 13,131 2,084 40,557 (240,935) 473,198 (487,415) (255,152) Net cash provided by operating activities 15,450 518,476 (487,249) 46,677 Cash flows from investing activities: Capital expenditures (44,894) (220) — (45,114) Origination of finance receivables — (2,100,019) 1,182,874 (917,145) Collections on finance receivables — 1,586,477 (695,625) 890,852 Other investing activities 821 — — 821 Net cash used by investing activities (44,073) (513,762) 487,249 (70,586) Three months ended March 31, 2023 Non-Financial Services Entities Financial Services Entities Consolidating Adjustments Consolidated Cash flows from financing activities: Proceeds from issuance of medium-term notes — 693,276 — 693,276 Repayments of medium-term notes — (350,000) — (350,000) Proceeds from securitization debt — 547,706 — 547,706 Repayments of securitization debt — (310,640) — (310,640) Repayments of asset-backed commercial paper — (62,634) — (62,634) Net decrease in unsecured commercial paper — (270,119) — (270,119) Net increase in deposits — 51,822 — 51,822 Dividends paid (24,123) — — (24,123) Repurchase of common stock (96,767) — — (96,767) Other financing activities 69 — — 69 Net cash (used) provided by financing activities (120,821) 299,411 — 178,590 Effect of exchange rate changes on cash, cash equivalents and restricted cash 3,894 (74) — 3,820 Net (decrease) increase in cash, cash equivalents and restricted cash $ (145,550) $ 304,051 $ — $ 158,501 Cash, cash equivalents and restricted cash: Cash, cash equivalents and restricted cash, beginning of period $ 1,021,798 $ 557,379 $ — $ 1,579,177 Net (decrease) increase in cash, cash equivalents and restricted cash (145,550) 304,051 — 158,501 Cash, cash equivalents and restricted cash, end of period $ 876,248 $ 861,430 $ — $ 1,737,678 Three months ended March 27, 2022 Non-Financial Services Entities Financial Services Entities 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 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 Non-Financial Services Entities Financial Services Entities 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 decrease 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 |
Basis of Presentation and Use_3
Basis of Presentation and Use of Estimates (Details) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 USD ($) segment | Mar. 27, 2022 USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of reportable segments | segment | 3 | |
Pre-tax gain (loss) from foreign currency remeasurements | $ | $ 3.3 | $ 1.6 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 27, 2022 | |
Disaggregation of Revenue | ||
Revenue from contract with customer, excluding assessed tax | $ 1,565,591 | $ 1,303,171 |
Financial services | 223,095 | 192,015 |
Total revenue | 1,788,686 | 1,495,186 |
HDMC | ||
Disaggregation of Revenue | ||
Revenue from contract with customer, excluding assessed tax | 1,557,829 | 1,292,770 |
LiveWire | ||
Disaggregation of Revenue | ||
Revenue from contract with customer, excluding assessed tax | 7,762 | 10,401 |
HDFS | ||
Disaggregation of Revenue | ||
Financial services | 223,095 | 192,015 |
Motorcycles | HDMC | ||
Disaggregation of Revenue | ||
Revenue from contract with customer, excluding assessed tax | 1,302,378 | 1,057,005 |
Parts and accessories | HDMC | ||
Disaggregation of Revenue | ||
Revenue from contract with customer, excluding assessed tax | 167,671 | 165,320 |
Apparel | HDMC | ||
Disaggregation of Revenue | ||
Revenue from contract with customer, excluding assessed tax | 71,391 | 51,404 |
Licensing | HDMC | ||
Disaggregation of Revenue | ||
Revenue from contract with customer, excluding assessed tax | 6,210 | 6,497 |
Other | HDMC | ||
Disaggregation of Revenue | ||
Revenue from contract with customer, excluding assessed tax | 10,179 | 12,544 |
Interest income | HDFS | ||
Disaggregation of Revenue | ||
Financial services | 182,270 | 161,734 |
Other | HDFS | ||
Disaggregation of Revenue | ||
Financial services | $ 40,825 | $ 30,281 |
Revenue - Contract Liabilities
Revenue - Contract Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 27, 2022 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction | |||
Balance, beginning of period | $ 44,100 | $ 38,842 | $ 40,092 |
Balance, end of period | $ 43,176 | $ 44,100 | $ 38,842 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 27, 2022 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Recognized deferred revenue | $ 6.8 | $ 7.7 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Unearned revenue to be recognized | $ 17.8 | |
Revenue, remaining performance obligation period | 12 months | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Unearned revenue to be recognized | $ 25.4 | |
Revenue, remaining performance obligation period |
Income Taxes (Details)
Income Taxes (Details) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 27, 2022 | |
Income Tax Disclosure [Abstract] | ||
Income tax rate | 23% | 23.40% |
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. 31, 2023 | Mar. 27, 2022 | |
Numerator: | ||
Net income attributable to Harley-Davidson, Inc. | $ 304,090 | $ 222,502 |
Weighted Average Number of Shares Outstanding Reconciliation | ||
Basic weighted-average shares outstanding (in shares) | 146,048 | 152,820 |
Effect of dilutive securities - employee stock compensation plan (in shares) | 2,883 | 1,104 |
Diluted weighted-average shares outstanding (in shares) | 148,931 | 153,924 |
Net earnings per share: | ||
Basic (in dollars per share) | $ 2.08 | $ 1.46 |
Diluted (in dollars per share) | $ 2.04 | $ 1.45 |
Earnings Per Share - Additional
Earnings Per Share - Additional Information (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 27, 2022 | |
Stock Option | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Shares considered anti-dilutive and excluded from computation | 1.3 | 0.5 |
Additional Balance Sheet and _3
Additional Balance Sheet and Cash Flow Information - Marketable Securities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 27, 2022 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Mutual funds | $ 34,017 | $ 33,071 | $ 45,189 |
Additional Balance Sheet and _4
Additional Balance Sheet and Cash Flow Information - Inventories, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 27, 2022 |
Inventory | |||
Raw materials and work in process | $ 387,466 | $ 331,380 | $ 376,600 |
Inventory at lower of FIFO cost or net realizable value | 950,454 | 1,067,460 | 798,379 |
Excess of FIFO over LIFO cost | (119,933) | (116,500) | (84,120) |
Total inventories, net | 830,521 | 950,960 | 714,259 |
Certificates of Deposit | |||
Inventory | |||
Deposits | 369,300 | 317,400 | 348,100 |
Motorcycle finished goods | |||
Inventory | |||
Inventory, finished goods, net of inventory valuation adjustment | 380,083 | 549,041 | 291,623 |
Parts and accessories and apparel | |||
Inventory | |||
Inventory, finished goods, net of inventory valuation adjustment | $ 182,905 | $ 187,039 | $ 130,156 |
Additional Balance Sheet and _5
Additional Balance Sheet and Cash Flow Information - Certificates of Deposit (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Fiscal Year | |
2023 | $ 81,167 |
2024 | 115,491 |
2025 | 39,740 |
2026 | 79,742 |
2027 | 54,158 |
Thereafter | 0 |
Future maturities | 370,298 |
Unamortized fees | (987) |
Total | $ 369,311 |
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. 31, 2023 | Mar. 27, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 301,829 | $ 222,502 |
Adjustments to reconcile Net income to Net cash provided by operating activities: | ||
Depreciation and amortization | 34,352 | 39,258 |
Amortization of deferred loan origination costs | 21,858 | 22,995 |
Amortization of financing origination fees | 3,011 | 3,701 |
Provision for long-term employee benefits | (16,939) | (5,050) |
Employee benefit plan contributions and payments | (1,739) | (2,143) |
Stock compensation expense | 23,628 | 8,903 |
Net change in wholesale finance receivables related to sales | (487,314) | (205,727) |
Provision for credit losses | 52,364 | 28,822 |
Deferred income taxes | 5,648 | 6,307 |
Other, net | (21,671) | (5,408) |
Changes in current assets and liabilities: | ||
Accounts receivable, net | (77,993) | (74,993) |
Finance receivables – accrued interest and other | 2,252 | 3,115 |
Inventories, net | 123,047 | (2,630) |
Accounts payable and accrued liabilities | 43,787 | 106,969 |
Other current assets | 40,557 | (7,300) |
Total adjustments | (255,152) | (83,181) |
Net cash provided by operating activities | $ 46,677 | $ 139,321 |
Finance Receivables - Finance R
Finance Receivables - Finance Receivables, Net (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 27, 2022 | Dec. 31, 2021 |
Accounts, Notes, Loans and Financing Receivable | ||||
Financing receivable, gross | $ 7,932,154 | $ 7,497,149 | $ 7,162,026 | |
Allowance for credit losses | (358,431) | (358,711) | (340,473) | $ (339,379) |
Total allowance for credit loss | 7,573,723 | 7,138,438 | 6,821,553 | |
Retail | ||||
Accounts, Notes, Loans and Financing Receivable | ||||
Financing receivable, gross | 6,708,103 | 6,748,201 | 6,511,845 | |
Allowance for credit losses | (343,600) | (345,275) | (327,206) | (326,320) |
Wholesale | ||||
Accounts, Notes, Loans and Financing Receivable | ||||
Financing receivable, gross | 1,224,051 | 748,948 | 650,181 | |
Allowance for credit losses | $ (14,831) | $ (13,436) | $ (13,267) | $ (13,059) |
Finance Receivables - Additiona
Finance Receivables - Additional Information (Details) | 3 Months Ended | |
Mar. 31, 2023 USD ($) portfolio | Mar. 27, 2022 USD ($) | |
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 | $ 7,200,000 | $ 4,900,000 |
Wholesale | ||
Accounts, Notes, Loans and Financing Receivable | ||
Reversal of accrued interest against interest income | $ 0 | $ 0 |
Finance Receivables - Changes I
Finance Receivables - Changes In Allowance For Credit Losses On Finance Receivables (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 27, 2022 | |
Financing Receivable, Allowance for Credit Loss | ||
Balance, beginning of period | $ 358,711 | $ 339,379 |
Provision for credit losses | 52,364 | 28,822 |
Charge-offs | (68,008) | (41,804) |
Recoveries | 15,364 | 14,076 |
Balance, end of period | 358,431 | 340,473 |
Retail | ||
Financing Receivable, Allowance for Credit Loss | ||
Balance, beginning of period | 345,275 | 326,320 |
Provision for credit losses | 50,969 | 28,614 |
Charge-offs | (68,008) | (41,804) |
Recoveries | 15,364 | 14,076 |
Balance, end of period | 343,600 | 327,206 |
Wholesale | ||
Financing Receivable, Allowance for Credit Loss | ||
Balance, beginning of period | 13,436 | 13,059 |
Provision for credit losses | 1,395 | 208 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Balance, end of period | $ 14,831 | $ 13,267 |
Finance Receivables - Recorded
Finance Receivables - Recorded Investment in Retail Finance Receivables, by Credit Quality Indicator (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 27, 2022 | Dec. 31, 2022 | |
Financing Receivable, Allowance for Credit Losses | |||
Total | $ 7,932,154 | $ 7,162,026 | $ 7,497,149 |
Current-period gross charge-offs: | |||
Total | 68,008 | 41,804 | |
Retail | |||
Financing Receivable, Allowance for Credit Losses | |||
2023 | 700,813 | ||
2022 | 2,765,558 | 849,936 | 3,039,349 |
2021 | 1,648,678 | 2,631,037 | 1,841,057 |
2020 | 786,931 | 1,333,411 | 892,848 |
2019 | 467,899 | 869,019 | 546,562 |
2018 & Prior | 338,224 | 482,453 | 271,617 |
2017 & Prior | 345,989 | 156,768 | |
Total | 6,708,103 | 6,511,845 | 6,748,201 |
Current-period gross charge-offs: | |||
2023 | 0 | ||
2022 | 23,740 | ||
2021 | 22,780 | ||
2020 | 10,365 | ||
2019 | 5,851 | ||
2018 & Prior | 5,272 | ||
Total | 68,008 | 41,804 | |
Retail | UNITED STATES | |||
Financing Receivable, Allowance for Credit Losses | |||
2023 | 686,156 | ||
2022 | 2,704,482 | 831,187 | 2,971,999 |
2021 | 1,611,180 | 2,565,990 | 1,798,860 |
2020 | 764,166 | 1,290,555 | 866,839 |
2019 | 452,785 | 835,902 | 528,380 |
2018 & Prior | 329,020 | 464,614 | 263,099 |
2017 & Prior | 336,310 | 153,139 | |
Total | 6,547,789 | 6,324,558 | 6,582,316 |
Current-period gross charge-offs: | |||
2023 | 0 | ||
2022 | 23,440 | ||
2021 | 22,535 | ||
2020 | 10,215 | ||
2019 | 5,818 | ||
2018 & Prior | 5,100 | ||
Total | 67,108 | ||
Retail | CANADA | |||
Financing Receivable, Allowance for Credit Losses | |||
2023 | 14,657 | ||
2022 | 61,076 | 18,749 | 67,350 |
2021 | 37,498 | 65,047 | 42,197 |
2020 | 22,765 | 42,856 | 26,009 |
2019 | 15,114 | 33,117 | 18,182 |
2018 & Prior | 9,204 | 17,839 | 8,518 |
2017 & Prior | 9,679 | 3,629 | |
Total | 160,314 | 187,287 | 165,885 |
Current-period gross charge-offs: | |||
2023 | 0 | ||
2022 | 300 | ||
2021 | 245 | ||
2020 | 150 | ||
2019 | 33 | ||
2018 & Prior | 172 | ||
Total | 900 | ||
Retail | Super prime | UNITED STATES | |||
Financing Receivable, Allowance for Credit Losses | |||
2023 | 284,656 | ||
2022 | 1,007,543 | 311,114 | 1,118,198 |
2021 | 547,008 | 890,413 | 612,890 |
2020 | 240,495 | 422,454 | 276,492 |
2019 | 133,205 | 268,692 | 159,550 |
2018 & Prior | 72,247 | 139,540 | 69,652 |
2017 & Prior | 68,682 | 26,701 | |
Total | 2,285,154 | 2,100,895 | 2,263,483 |
Retail | Super prime | CANADA | |||
Financing Receivable, Allowance for Credit Losses | |||
2023 | 10,428 | ||
2022 | 44,213 | 14,015 | 49,033 |
2021 | 26,550 | 47,025 | 30,090 |
2020 | 15,250 | 29,382 | 17,553 |
2019 | 9,921 | 23,367 | 12,215 |
2018 & Prior | 4,668 | 11,524 | 4,975 |
2017 & Prior | 4,515 | 1,527 | |
Total | 111,030 | 129,828 | 115,393 |
Retail | Prime | UNITED STATES | |||
Financing Receivable, Allowance for Credit Losses | |||
2023 | 314,959 | ||
2022 | 1,317,733 | 394,793 | 1,433,141 |
2021 | 799,814 | 1,247,764 | 887,817 |
2020 | 378,539 | 627,102 | 425,401 |
2019 | 224,682 | 407,242 | 260,458 |
2018 & Prior | 170,944 | 233,630 | 135,454 |
2017 & Prior | 176,018 | 79,611 | |
Total | 3,206,671 | 3,086,549 | 3,221,882 |
Retail | Prime | CANADA | |||
Financing Receivable, Allowance for Credit Losses | |||
2023 | 3,650 | ||
2022 | 14,850 | 4,228 | 16,094 |
2021 | 9,711 | 15,842 | 10,705 |
2020 | 6,482 | 11,513 | 7,283 |
2019 | 4,439 | 8,349 | 5,098 |
2018 & Prior | 3,917 | 5,454 | 3,068 |
2017 & Prior | 4,391 | 1,787 | |
Total | 43,049 | 49,777 | 44,035 |
Retail | Sub-prime | UNITED STATES | |||
Financing Receivable, Allowance for Credit Losses | |||
2023 | 86,541 | ||
2022 | 379,206 | 125,280 | 420,660 |
2021 | 264,358 | 427,813 | 298,153 |
2020 | 145,132 | 240,999 | 164,946 |
2019 | 94,898 | 159,968 | 108,372 |
2018 & Prior | 85,829 | 91,444 | 57,993 |
2017 & Prior | 91,610 | 46,827 | |
Total | 1,055,964 | 1,137,114 | 1,096,951 |
Retail | Sub-prime | CANADA | |||
Financing Receivable, Allowance for Credit Losses | |||
2023 | 579 | ||
2022 | 2,013 | 506 | 2,223 |
2021 | 1,237 | 2,180 | 1,402 |
2020 | 1,033 | 1,961 | 1,173 |
2019 | 754 | 1,401 | 869 |
2018 & Prior | 619 | 861 | 475 |
2017 & Prior | 773 | 315 | |
Total | $ 6,235 | $ 7,682 | $ 6,457 |
Finance Receivables - Recorde_2
Finance Receivables - Recorded Investment Of Retail and Wholesale Finance Receivables By Credit Quality Indicator (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 27, 2022 |
Financing Receivable, Recorded Investment | |||
Total | $ 7,932,154 | $ 7,497,149 | $ 7,162,026 |
Wholesale | |||
Financing Receivable, Recorded Investment | |||
2023 | 857,152 | ||
2022 | 335,247 | 714,238 | 489,283 |
2021 | 9,123 | 11,478 | 127,797 |
2020 | 6,191 | 6,646 | 9,108 |
2019 | 11,130 | 8,457 | 11,147 |
2018 & Prior | 5,208 | 7,938 | 9,893 |
2017 & Prior | 191 | 2,953 | |
Total | 1,224,051 | 748,948 | 650,181 |
Wholesale | Non-Performing | |||
Financing Receivable, Recorded Investment | |||
2023 | 0 | ||
2022 | 0 | 0 | 0 |
2021 | 0 | 0 | 0 |
2020 | 0 | 0 | 0 |
2019 | 0 | 0 | 0 |
2018 & Prior | 0 | 0 | 0 |
2017 & Prior | 0 | 0 | |
Total | 0 | 0 | 0 |
Wholesale | Doubtful | |||
Financing Receivable, Recorded Investment | |||
2023 | 0 | ||
2022 | 0 | 0 | 0 |
2021 | 0 | 0 | 0 |
2020 | 0 | 0 | 0 |
2019 | 0 | 0 | 0 |
2018 & Prior | 0 | 0 | 0 |
2017 & Prior | 0 | 0 | |
Total | 0 | 0 | 0 |
Wholesale | Substandard | |||
Financing Receivable, Recorded Investment | |||
2023 | 0 | ||
2022 | 0 | 0 | 0 |
2021 | 0 | 0 | 0 |
2020 | 0 | 0 | 0 |
2019 | 0 | 0 | 0 |
2018 & Prior | 0 | 0 | 0 |
2017 & Prior | 0 | 0 | |
Total | 0 | 0 | 0 |
Wholesale | Special Mention | |||
Financing Receivable, Recorded Investment | |||
2023 | 0 | ||
2022 | 0 | 0 | 0 |
2021 | 0 | 0 | 0 |
2020 | 0 | 0 | 0 |
2019 | 0 | 0 | 0 |
2018 & Prior | 0 | 0 | 0 |
2017 & Prior | 0 | 0 | |
Total | 0 | 0 | 0 |
Wholesale | Medium Risk | |||
Financing Receivable, Recorded Investment | |||
2023 | 0 | ||
2022 | 0 | 0 | 0 |
2021 | 0 | 0 | 0 |
2020 | 0 | 0 | 0 |
2019 | 0 | 0 | 0 |
2018 & Prior | 0 | 0 | 0 |
2017 & Prior | 0 | 0 | |
Total | 0 | 0 | 0 |
Wholesale | Low Risk | |||
Financing Receivable, Recorded Investment | |||
2023 | 857,152 | ||
2022 | 335,247 | 714,238 | 489,283 |
2021 | 9,123 | 11,478 | 127,797 |
2020 | 6,191 | 6,646 | 9,108 |
2019 | 11,130 | 8,457 | 11,147 |
2018 & Prior | 5,208 | 7,938 | 9,893 |
2017 & Prior | 191 | 2,953 | |
Total | $ 1,224,051 | $ 748,948 | $ 650,181 |
Finance Receivables - Aging Of
Finance Receivables - Aging Of Past Due Finance Receivables Including Non Accrual Status Finance Receivables (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 27, 2022 |
Financing Receivable, Recorded Investment, Past Due | |||
Financing receivable, gross | $ 7,932,154 | $ 7,497,149 | $ 7,162,026 |
Current | |||
Financing Receivable, Recorded Investment, Past Due | |||
Financing receivable, gross | 7,712,644 | 7,222,144 | 6,993,621 |
Total Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Financing receivable, gross | 219,510 | 275,005 | 168,405 |
30-59 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Financing receivable, gross | 125,625 | 152,565 | 99,883 |
60 To 89 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Financing receivable, gross | 44,748 | 60,490 | 32,548 |
Greater than 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Financing receivable, gross | 49,137 | 61,950 | 35,974 |
Retail | |||
Financing Receivable, Recorded Investment, Past Due | |||
Financing receivable, gross | 6,708,103 | 6,748,201 | 6,511,845 |
Retail | Current | |||
Financing Receivable, Recorded Investment, Past Due | |||
Financing receivable, gross | 6,488,892 | 6,473,462 | 6,343,673 |
Retail | Total Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Financing receivable, gross | 219,211 | 274,739 | 168,172 |
Retail | 30-59 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Financing receivable, gross | 125,327 | 152,343 | 99,705 |
Retail | 60 To 89 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Financing receivable, gross | 44,748 | 60,446 | 32,521 |
Retail | Greater than 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Financing receivable, gross | 49,136 | 61,950 | 35,946 |
Wholesale | |||
Financing Receivable, Recorded Investment, Past Due | |||
Financing receivable, gross | 1,224,051 | 748,948 | 650,181 |
Wholesale | Current | |||
Financing Receivable, Recorded Investment, Past Due | |||
Financing receivable, gross | 1,223,752 | 748,682 | 649,948 |
Wholesale | Total Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Financing receivable, gross | 299 | 266 | 233 |
Wholesale | 30-59 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Financing receivable, gross | 298 | 222 | 178 |
Wholesale | 60 To 89 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Financing receivable, gross | 0 | 44 | 27 |
Wholesale | Greater than 90 Days Past Due | |||
Financing Receivable, Recorded Investment, Past Due | |||
Financing receivable, gross | $ 1 | $ 0 | $ 28 |
Derivative Financial Instrume_3
Derivative Financial Instruments and Hedging Activities - Derivative Instrument Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 27, 2022 |
Cash Flow Hedging | Cross-currency swaps | Other long-term liabilities | |||
Derivatives, Fair Value | |||
Liabilities | $ 27,900 | $ 24,200 | |
Cash Flow Hedging | Interest rate caps | Other long-term assets | |||
Derivatives, Fair Value | |||
Assets | 1,400 | 2,400 | |
Designated as Hedging Instrument | Cash Flow Hedging | |||
Derivatives, Fair Value | |||
Notional Value | 2,983,164 | 1,918,981 | $ 1,953,875 |
Assets | 3,134 | 6,054 | 37,983 |
Liabilities | 49,463 | 49,951 | 3,576 |
Designated as Hedging Instrument | Cash Flow Hedging | Foreign currency contracts | |||
Derivatives, Fair Value | |||
Notional Value | 530,175 | 550,160 | 585,451 |
Assets | 3,134 | 6,054 | 18,832 |
Liabilities | 12,659 | 13,440 | 3,576 |
Designated as Hedging Instrument | Cash Flow Hedging | Commodity contracts | |||
Derivatives, Fair Value | |||
Notional Value | 906 | 1,361 | 964 |
Assets | 0 | 0 | 316 |
Liabilities | 339 | 410 | 0 |
Designated as Hedging Instrument | Cash Flow Hedging | Cross-currency swaps | |||
Derivatives, Fair Value | |||
Notional Value | 2,127,240 | 1,367,460 | 1,367,460 |
Assets | 0 | 0 | 18,835 |
Liabilities | 34,685 | 36,101 | 0 |
Designated as Hedging Instrument | Cash Flow Hedging | Swap rate lock contracts | |||
Derivatives, Fair Value | |||
Notional Value | 324,843 | 0 | 0 |
Assets | 0 | 0 | 0 |
Liabilities | 1,780 | 0 | 0 |
Not Designated as Hedging Instrument | |||
Derivatives, Fair Value | |||
Notional Value | 949,997 | 1,069,630 | 654,680 |
Assets | 1,513 | 2,683 | 5,082 |
Liabilities | 755 | 310 | 722 |
Not Designated as Hedging Instrument | Foreign currency contracts | |||
Derivatives, Fair Value | |||
Notional Value | 0 | 0 | 230,336 |
Assets | 0 | 0 | 587 |
Liabilities | 0 | 0 | 722 |
Not Designated as Hedging Instrument | Commodity contracts | |||
Derivatives, Fair Value | |||
Notional Value | 11,229 | 10,803 | 11,866 |
Assets | 99 | 310 | 2,435 |
Liabilities | 755 | 310 | 0 |
Not Designated as Hedging Instrument | Interest rate caps | |||
Derivatives, Fair Value | |||
Notional Value | 938,768 | 1,058,827 | 412,478 |
Assets | 1,414 | 2,373 | 2,060 |
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. 31, 2023 | Mar. 27, 2022 | |
Derivative Instruments, Gain (Loss) | ||
Gain/(Loss) Recognized in OCI | $ (1,240) | $ (7,230) |
Gain/(Loss) Reclassified from AOCL into Income | 27,465 | (20,046) |
Foreign currency contracts | ||
Derivative Instruments, Gain (Loss) | ||
Gain/(Loss) Recognized in OCI | (1,706) | 8,444 |
Gain/(Loss) Reclassified from AOCL into Income | 6,290 | 5,655 |
Commodity contracts | ||
Derivative Instruments, Gain (Loss) | ||
Gain/(Loss) Recognized in OCI | (309) | 562 |
Gain/(Loss) Reclassified from AOCL into Income | (379) | 226 |
Cross-currency swaps | ||
Derivative Instruments, Gain (Loss) | ||
Gain/(Loss) Recognized in OCI | 1,416 | (16,236) |
Gain/(Loss) Reclassified from AOCL into Income | 21,625 | (25,800) |
Treasury rate lock contracts | ||
Derivative Instruments, Gain (Loss) | ||
Gain/(Loss) Recognized in OCI | 1,139 | 0 |
Gain/(Loss) Reclassified from AOCL into Income | (66) | (127) |
Swap rate lock contracts | ||
Derivative Instruments, Gain (Loss) | ||
Gain/(Loss) Recognized in OCI | (1,780) | 0 |
Gain/(Loss) Reclassified from AOCL into Income | $ (5) | $ 0 |
Derivative Financial Instrume_5
Derivative Financial Instruments and Hedging Activities - Amount Of Gains And Losses Recognized In Income Related To Derivative Financial Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 27, 2022 | |
Derivative | ||
Motorcycles and related products cost of goods sold | $ 1,007,301 | $ 895,536 |
Selling, administrative and engineering expense | 285,863 | 239,625 |
Interest expense | 7,720 | 7,711 |
Financial services interest expense | 73,549 | 42,099 |
Expected income to be reclassified in next twelve months | 17,600 | |
Cash Flow Hedging | Designated as Hedging Instrument | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | 27,465 | (20,046) |
Cash Flow Hedging | Designated as Hedging Instrument | Foreign currency contracts | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | 6,290 | 5,655 |
Cash Flow Hedging | Designated as Hedging Instrument | Foreign currency contracts | Motorcycles and related products cost of goods sold | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | 6,290 | 5,655 |
Cash Flow Hedging | Designated as Hedging Instrument | Commodity contracts | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | (379) | 226 |
Cash Flow Hedging | Designated as Hedging Instrument | Commodity contracts | Motorcycles and related products cost of goods sold | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | (379) | 226 |
Cash Flow Hedging | Designated as Hedging Instrument | Cross-currency swaps | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | 21,625 | (25,800) |
Cash Flow Hedging | Designated as Hedging Instrument | Cross-currency swaps | Selling, administrative & engineering expense | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | 21,625 | (25,800) |
Cash Flow Hedging | Designated as Hedging Instrument | Treasury rate lock contracts | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | (66) | (127) |
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 | 25 | (36) |
Cash Flow Hedging | Designated as Hedging Instrument | Swap rate lock contracts | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | (5) | $ 0 |
Cash Flow Hedging | Designated as Hedging Instrument | Swap rate lock contracts | Financial services interest expense | ||
Derivative | ||
Gain/(Loss) Reclassified from AOCL into Income | $ (5) |
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. 31, 2023 | Mar. 27, 2022 | |
Derivative | ||
Amount of Gain/(Loss) Recognized in Income | $ (1,684) | $ 581 |
Foreign currency contracts | Cost of Sales | ||
Derivative | ||
Amount of Gain/(Loss) Recognized in Income | (627) | (3,506) |
Commodity contracts | Cost of Sales | ||
Derivative | ||
Amount of Gain/(Loss) Recognized in Income | (99) | 2,387 |
Interest rate caps | Cost of Sales | ||
Derivative | ||
Amount of Gain/(Loss) Recognized in Income | $ (958) | $ 1,700 |
Debt - Debt With Contractual Te
Debt - Debt With Contractual Term Less Than One Year (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 27, 2022 |
Short-term Debt | |||
Short-term debt | $ 501,243 | $ 770,468 | $ 816,016 |
Unsecured commercial paper | |||
Short-term Debt | |||
Short-term debt | $ 501,243 | $ 770,468 | $ 816,016 |
Debt - Debt With A Contractual
Debt - Debt With A Contractual Term Greater Than One Year (Details) $ in Thousands, € in Millions | Mar. 31, 2023 USD ($) | Mar. 31, 2023 EUR (€) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 EUR (€) | Mar. 27, 2022 USD ($) | Mar. 27, 2022 EUR (€) |
Debt Instrument | ||||||
Unamortized discounts and debt issuance costs | $ (28,143) | |||||
Long-term debt | 6,683,946 | $ 6,141,834 | $ 5,797,443 | |||
Current portion of long-term debt, net | (1,408,777) | (1,684,782) | (1,327,357) | |||
Long-term debt, net | 5,275,169 | 4,457,052 | 4,470,086 | |||
Secured Debt | ||||||
Debt Instrument | ||||||
Unamortized discounts and debt issuance costs | (9,717) | (8,741) | (5,696) | |||
Long-term debt | 2,692,810 | 2,516,993 | 1,722,756 | |||
Secured Debt | Asset-backed Canadian commercial paper conduit facility | ||||||
Debt Instrument | ||||||
Long-term debt, gross | 62,195 | 71,785 | 95,664 | |||
Secured Debt | Asset-backed U.S. commercial paper conduit facility | ||||||
Debt Instrument | ||||||
Long-term debt, gross | 372,816 | 425,794 | 269,534 | |||
Secured Debt | Asset-backed securitization debt | ||||||
Debt Instrument | ||||||
Long-term debt, gross | 2,267,516 | 2,028,155 | 1,363,254 | |||
Medium-term notes | ||||||
Debt Instrument | ||||||
Long-term debt, gross | 3,245,591 | 2,879,473 | 3,329,845 | |||
Unamortized discounts and debt issuance costs | $ (13,971) | (8,464) | (12,243) | |||
Medium-term notes | Due in 2022, issued June 2017 | ||||||
Debt Instrument | ||||||
Debt instrument, stated percentage | 2.55% | 2.55% | ||||
Long-term debt, gross | $ 0 | 0 | 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 | $ 0 | 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 | $ 706,972 | € 650 | 695,727 | € 650 | 723,886 | € 650 |
Medium-term notes | Due in 2024, issued November 2019 | ||||||
Debt Instrument | ||||||
Debt instrument, stated percentage | 3.14% | 3.14% | ||||
Long-term debt, gross | $ 652,590 | € 600 | 642,210 | € 600 | 668,202 | € 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 | 500,000 | 500,000 | |||
Medium-term notes | Due in 2028, issued March 2023 | ||||||
Debt Instrument | ||||||
Debt instrument, stated percentage | 6.50% | 6.50% | ||||
Long-term debt, gross | $ 700,000 | 0 | 0 | |||
Senior notes | ||||||
Debt Instrument | ||||||
Unamortized discounts and debt issuance costs | (4,455) | (4,632) | (5,158) | |||
Long-term debt | $ 745,545 | 745,368 | 744,842 | |||
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 | $ 3,991,136 | $ 3,624,841 | $ 4,074,687 |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Long-term debt (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2023 | $ 1,783,948 |
2024 | 1,302,020 |
2025 | 1,857,244 |
2026 | 606,941 |
2027 | 663,172 |
Thereafter | 1,000,007 |
Future principal payments | 7,213,332 |
Unamortized discounts and debt issuance costs | (28,143) |
Total future payments | $ 7,185,189 |
Asset-Backed Financing - Assets
Asset-Backed Financing - Assets And Liabilities Of Variable Interest Entities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 27, 2022 |
Finance receivables | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, assets, carrying amount | $ 3,296,899 | $ 3,114,992 | $ 2,153,979 |
Transfers accounted for as secured borrowings, assets, allowance for credit losses, carrying amount | (168,347) | (158,462) | (107,096) |
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 | 2,815,885 | 2,558,450 | 1,755,446 |
Transfers accounted for as secured borrowings, assets, allowance for credit losses, carrying amount | (144,336) | (130,774) | (88,090) |
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 | 410,529 | 474,167 | 290,481 |
Transfers accounted for as secured borrowings, assets, allowance for credit losses, carrying amount | (21,031) | (24,236) | (14,549) |
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 | 70,485 | 82,375 | 108,052 |
Transfers accounted for as secured borrowings, assets, allowance for credit losses, carrying amount | (2,980) | (3,452) | (4,457) |
Restricted cash | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, assets, carrying amount | 176,478 | 146,001 | 164,426 |
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 | 142,265 | 114,254 | 131,992 |
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 | 29,020 | 26,874 | 24,305 |
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 | 5,193 | 4,873 | 8,129 |
Other assets | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, assets, carrying amount | 10,889 | 9,935 | 4,416 |
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 | 8,799 | 7,899 | 3,724 |
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 | 1,939 | 1,906 | 649 |
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 | 151 | 130 | 43 |
Total assets | |||
Assets and Associated Liabilities of Transfers Accounted for as Secured Borrowings | |||
Transfers accounts for as secured borrowings, assets, carrying amount | 3,315,919 | 3,112,466 | 2,215,725 |
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 | 2,822,613 | 2,549,829 | 1,803,072 |
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 | 420,457 | 478,711 | 300,886 |
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 | 72,849 | 83,926 | 111,767 |
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 | 2,692,810 | 2,516,993 | 1,722,756 |
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 | 2,257,799 | 2,019,414 | 1,357,558 |
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 | 372,816 | 425,794 | 269,534 |
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 | $ 62,195 | $ 71,785 | $ 95,664 |
Asset-Backed Financing - Additi
Asset-Backed Financing - Additional Information (Details) | 3 Months Ended | |||
Mar. 31, 2023 USD ($) | Mar. 27, 2022 USD ($) | Nov. 30, 2022 CAD ($) | Jun. 30, 2022 CAD ($) | |
Variable Interest Entity | ||||
Proceeds from securitization debt | $ 547,706,000 | $ 0 | ||
Asset Backed Securitization 1 | Consolidated VIEs | Secured Debt | SPE | Asset-backed Securities, Securitized Loans and Receivables | ||||
Variable Interest Entity | ||||
Secured notes issued | 550,000,000 | |||
Proceeds from securitization debt | 547,700,000 | |||
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 | 1,500,000,000 | |||
Line of credit facility, remaining borrowing capacity | $ 300,000,000 | |||
Long-Term line of credit | 72,800,000 | |||
U.S. Line of Credit | Asset-Backed U.S. Commercial Paper Conduit Facility VIE, Combined Facilities | Unconsolidated VIEs | Secured Debt | ||||
Variable Interest Entity | ||||
Line of credit, maximum borrowing capacity | $ 1,500,000,000 | |||
U.S. Line of Credit | Asset Backed Securitization 1 | ||||
Variable Interest Entity | ||||
Transfers of finance receivables | $ 628,500,000 | |||
U.S. Line of Credit | Asset-backed U.S. commercial paper conduit facility | Consolidated VIEs | Secured Debt | ||||
Variable Interest Entity | ||||
Length of option | 4 years | |||
Amount transferred to receivables | 47,100,000 | |||
Proceeds from transfer of finance receivables | 41,300,000 | |||
Global credit facility borrowings | Asset-backed Canadian commercial paper conduit facility | Unconsolidated VIEs | Secured Debt | ||||
Variable Interest Entity | ||||
Line of credit, maximum borrowing capacity | $ 125,000,000 | |||
Length of option | 4 years | |||
Amount transferred to receivables | 25,300,000 | |||
Proceeds from transfer of finance receivables | $ 21,200,000 | |||
VIE, maximum loss exposure, amount | $ 10,700,000 |
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. 31, 2023 | Dec. 31, 2022 | Mar. 27, 2022 |
Assets: | |||
Cash equivalents | $ 1,030,696 | $ 805,629 | $ 968,395 |
Marketable securities | 34,017 | 33,071 | 45,189 |
Derivative financial instruments | 4,647 | 8,737 | 43,065 |
Assets, fair value | 1,069,360 | 847,437 | 1,056,649 |
Liabilities: | |||
Derivative financial instruments | 50,218 | 50,261 | 4,298 |
LiveWire warrants | 7,320 | 8,388 | 0 |
Liabilities, Fair Value Disclosure | 57,538 | 58,649 | 4,298 |
Level 1 | |||
Assets: | |||
Cash equivalents | 858,000 | 594,000 | 803,400 |
Marketable securities | 34,017 | 33,071 | 45,189 |
Derivative financial instruments | 0 | 0 | 0 |
Assets, fair value | 892,017 | 627,071 | 848,589 |
Liabilities: | |||
Derivative financial instruments | 0 | 0 | 0 |
LiveWire warrants | 4,800 | 5,500 | 0 |
Liabilities, Fair Value Disclosure | 4,800 | 5,500 | 0 |
Level 2 | |||
Assets: | |||
Cash equivalents | 172,696 | 211,629 | 164,995 |
Marketable securities | 0 | 0 | 0 |
Derivative financial instruments | 4,647 | 8,737 | 43,065 |
Assets, fair value | 177,343 | 220,366 | 208,060 |
Liabilities: | |||
Derivative financial instruments | 50,218 | 50,261 | 4,298 |
LiveWire warrants | 2,520 | 2,888 | 0 |
Liabilities, Fair Value Disclosure | $ 52,738 | $ 53,149 | $ 4,298 |
Fair Value - Additional Informa
Fair Value - Additional Information (Details) - Fair Value, Measurements, Nonrecurring - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 27, 2022 |
Fair Value Adjustment | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Repossessed inventory adjustment | $ 6.8 | $ 7.5 | $ 0.6 |
Level 2 | Estimate of Fair Value Measurement | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis | |||
Repossessed inventory adjustment | $ 24.9 | $ 20.7 | $ 17.9 |
Fair Value - Summary of Fair Va
Fair Value - Summary of Fair Value and Carrying Value of Company Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 27, 2022 |
Fair Value | |||
Assets: | |||
Finance receivables, net | $ 7,611,579 | $ 7,248,353 | $ 6,920,395 |
Liabilities: | |||
Deposits, net | 391,238 | 339,981 | 359,995 |
Fair Value | Medium-term notes | |||
Debt: | |||
Long-term debt, fair value | 3,153,175 | 2,760,093 | 3,326,310 |
Fair Value | Senior notes | |||
Debt: | |||
Long-term debt, fair value | 665,665 | 661,630 | 724,089 |
Fair Value | Asset-backed U.S. commercial paper conduit facility | Secured Debt | |||
Debt: | |||
Long-term debt, fair value | 372,816 | 425,794 | 269,534 |
Fair Value | Asset-backed Canadian commercial paper conduit facility | Secured Debt | |||
Debt: | |||
Long-term debt, fair value | 62,195 | 71,785 | 95,664 |
Fair Value | Asset-backed securitization debt | Secured Debt | |||
Debt: | |||
Long-term debt, fair value | 2,240,966 | 1,996,550 | 1,343,706 |
Fair Value | Unsecured commercial paper | |||
Debt: | |||
Short-term debt, fair value | 501,243 | 770,468 | 816,016 |
Carrying Value | |||
Assets: | |||
Finance receivables, net | 7,573,723 | 7,138,438 | 6,821,553 |
Liabilities: | |||
Deposits, net | 369,311 | 317,375 | 348,083 |
Carrying Value | Medium-term notes | |||
Debt: | |||
Long-term debt, fair value | 3,245,591 | 2,879,473 | 3,329,845 |
Carrying Value | Senior notes | |||
Debt: | |||
Long-term debt, fair value | 745,545 | 745,368 | 744,842 |
Carrying Value | Asset-backed U.S. commercial paper conduit facility | Secured Debt | |||
Debt: | |||
Long-term debt, fair value | 372,816 | 425,794 | 269,534 |
Carrying Value | Asset-backed Canadian commercial paper conduit facility | Secured Debt | |||
Debt: | |||
Long-term debt, fair value | 62,195 | 71,785 | 95,664 |
Carrying Value | Asset-backed securitization debt | Secured Debt | |||
Debt: | |||
Long-term debt, fair value | 2,257,799 | 2,019,414 | 1,357,558 |
Carrying Value | Unsecured commercial paper | |||
Debt: | |||
Short-term debt, fair value | $ 501,243 | $ 770,468 | $ 816,016 |
Product Warranty and Recall C_3
Product Warranty and Recall Campaigns - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2023 | Dec. 31, 2022 | Mar. 27, 2022 | Dec. 31, 2021 | |
Product Information | ||||
Liability for recall campaigns | $ 74,668 | $ 75,960 | $ 65,095 | $ 61,621 |
Recall Campaign | ||||
Product Information | ||||
Liability for recall campaigns | $ 26,600 | $ 29,700 | $ 16,700 | |
Motorcycle finished goods | ||||
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 | Motorcycle finished goods | ||||
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. 31, 2023 | Mar. 27, 2022 | |
Movement in Standard Product Warranty Accrual | ||
Balance, beginning of period | $ 75,960 | $ 61,621 |
Warranties issued during the period | 11,927 | 10,711 |
Settlements made during the period | (12,051) | (7,096) |
Recalls and changes to pre-existing warranty liabilities | (1,168) | (141) |
Balance, end of period | $ 74,668 | $ 65,095 |
Employee Benefit Plans - Compon
Employee Benefit Plans - Components Of Net Periodic Benefit Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 27, 2022 | |
Pension and SERPA Benefits: | ||
Defined Benefit Plan Disclosure | ||
Service cost | $ 1,294 | $ 4,763 |
Interest cost | 20,476 | 15,472 |
Expected return on plan assets | (36,519) | (31,476) |
Amortization of unrecognized: Prior service cost (credit) | 188 | (328) |
Amortization of unrecognized: Net (gain) loss | (181) | 7,978 |
Settlement gain | (222) | (256) |
Net periodic benefit income | (14,964) | (3,847) |
Postretirement Healthcare Benefits: | ||
Defined Benefit Plan Disclosure | ||
Service cost | 797 | 1,161 |
Interest cost | 2,772 | 1,904 |
Expected return on plan assets | (4,281) | (3,809) |
Amortization of unrecognized: Prior service cost (credit) | (166) | (581) |
Amortization of unrecognized: Net (gain) loss | (1,097) | 122 |
Net periodic benefit income | $ (1,975) | $ (1,203) |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Mar. 31, 2023 USD ($) |
Minimum | |
Schedule Of Loss Contingencies [Line Items] | |
Estimate cost | $ 200 |
Maximum | |
Schedule Of Loss Contingencies [Line Items] | |
Estimate cost | $ 400 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 27, 2022 | |
AOCI Attributable to Parent, Net of Tax | ||
Balance, beginning of period | $ 2,903,519 | |
Other comprehensive income (loss), before reclassifications | 9,736 | $ (11,034) |
Income tax (expense) benefit | (481) | 1,176 |
Net other comprehensive income (loss) before reclassifications | 9,255 | (9,858) |
Total reclassifications before tax | (28,721) | 27,237 |
Income tax expense (benefit) | 6,743 | (6,070) |
Net reclassifications | (21,978) | 21,167 |
Other comprehensive (loss) income | (12,723) | 11,309 |
Balance, end of period | 3,093,058 | 2,509,101 |
Accumulated Other Comprehensive Loss | ||
AOCI Attributable to Parent, Net of Tax | ||
Balance, beginning of period | (341,929) | (240,919) |
Balance, end of period | (354,652) | (229,610) |
Foreign currency translation adjustments | ||
AOCI Attributable to Parent, Net of Tax | ||
Balance, beginning of period | (80,271) | (44,401) |
Other comprehensive income (loss), before reclassifications | 10,976 | (3,804) |
Income tax (expense) benefit | (855) | (317) |
Net other comprehensive income (loss) before reclassifications | 10,121 | (4,121) |
Other comprehensive (loss) income | 10,121 | (4,121) |
Balance, end of period | (70,150) | (48,522) |
Derivative financial instruments | ||
AOCI Attributable to Parent, Net of Tax | ||
Balance, beginning of period | (10,440) | (2,005) |
Other comprehensive income (loss), before reclassifications | (1,240) | (7,230) |
Income tax (expense) benefit | 374 | 1,493 |
Net other comprehensive income (loss) before reclassifications | (866) | (5,737) |
Total reclassifications before tax | (27,465) | 20,046 |
Income tax expense (benefit) | 6,449 | (4,381) |
Net reclassifications | (21,016) | 15,665 |
Other comprehensive (loss) income | (21,882) | 9,928 |
Balance, end of period | (32,322) | 7,923 |
Pension and postretirement benefit plans | ||
AOCI Attributable to Parent, Net of Tax | ||
Balance, beginning of period | (251,218) | (194,513) |
Total reclassifications before tax | (1,256) | 7,191 |
Income tax expense (benefit) | 294 | (1,689) |
Net reclassifications | (962) | 5,502 |
Other comprehensive (loss) income | (962) | 5,502 |
Balance, end of period | (252,180) | (189,011) |
Pension and Postretirement Benefit Plans - Prior Service Credits | ||
AOCI Attributable to Parent, Net of Tax | ||
Total reclassifications before tax | 22 | (909) |
Pension and Postretirement Benefit Plans - Actuarial Losses (Gains) | ||
AOCI Attributable to Parent, Net of Tax | ||
Total reclassifications before tax | $ (1,278) | $ 8,100 |
Reportable Segments (Details)
Reportable Segments (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 USD ($) segment | Mar. 27, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Segment Reporting [Abstract] | |||
Number of reportable segments | segment | 3 | ||
Segment Reporting Information | |||
Revenue from contract with customer, excluding assessed tax | $ 1,565,591 | $ 1,303,171 | |
Selling, administrative and engineering expense | 285,863 | 239,625 | |
Restructuring benefit | 0 | (128) | |
Operating income | 369,609 | 289,232 | |
Financial services revenue | 223,095 | 192,015 | |
Financial services expense | 1,007,301 | 895,536 | |
Assets | 12,029,585 | 10,894,640 | $ 11,492,476 |
HDMC | |||
Segment Reporting Information | |||
Revenue from contract with customer, excluding assessed tax | 1,557,829 | 1,292,770 | |
Gross profit | 557,026 | 407,582 | |
Selling, administrative and engineering expense | 221,290 | 188,776 | |
Restructuring benefit | 0 | (128) | |
Operating income | 335,736 | 218,934 | |
Assets | 3,100,000 | 2,900,000 | 3,300,000 |
LiveWire | |||
Segment Reporting Information | |||
Revenue from contract with customer, excluding assessed tax | 7,762 | 10,401 | |
Gross profit | 1,264 | 53 | |
Selling, administrative and engineering expense | 25,811 | 16,112 | |
Operating income | (24,547) | (16,059) | |
Assets | 325,800 | 75,700 | 351,400 |
HDFS | |||
Segment Reporting Information | |||
Operating income | 58,420 | 86,357 | |
Financial services revenue | 223,095 | 192,015 | |
Financial services expense | 164,675 | 105,658 | |
Assets | $ 8,600,000 | $ 7,900,000 | $ 7,900,000 |
Supplemental Consolidating Da_3
Supplemental Consolidating Data - Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 27, 2022 | |
Revenue: | ||
Motorcycles and related products | $ 1,565,591 | $ 1,303,171 |
Financial services revenue | 223,095 | 192,015 |
Total revenue | 1,788,686 | 1,495,186 |
Costs and expenses: | ||
Motorcycles and related products cost of goods sold | 1,007,301 | 895,536 |
Financial services interest expense | 73,549 | 42,099 |
Financial services provision for credit losses | 52,364 | 28,822 |
Selling, administrative and engineering expense | 285,863 | 239,625 |
Restructuring benefit | 0 | (128) |
Total costs and expenses | 1,419,077 | 1,205,954 |
Operating income | 369,609 | 289,232 |
Other income, net | 20,096 | 11,030 |
Investment income (loss) | 10,025 | (1,979) |
Interest expense | 7,720 | 7,711 |
Income before income taxes | 392,010 | 290,572 |
Provision for income taxes | 90,181 | 68,070 |
Net income | 301,829 | 222,502 |
Less: Loss attributable to noncontrolling interests | 2,261 | 0 |
Net income attributable to Harley-Davidson, Inc. | 304,090 | 222,502 |
Reportable Legal Entities | Non-Financial Services Entities | ||
Revenue: | ||
Motorcycles and related products | 1,567,709 | 1,306,293 |
Financial services revenue | 0 | 0 |
Total revenue | 1,567,709 | 1,306,293 |
Costs and expenses: | ||
Motorcycles and related products cost of goods sold | 1,007,301 | 895,536 |
Financial services interest expense | 0 | 0 |
Financial services provision for credit losses | 0 | 0 |
Selling, administrative and engineering expense | 247,695 | 205,417 |
Restructuring benefit | (128) | |
Total costs and expenses | 1,254,996 | 1,100,825 |
Operating income | 312,713 | 205,468 |
Other income, net | 20,096 | 11,030 |
Investment income (loss) | 10,025 | (1,979) |
Interest expense | 7,720 | 7,711 |
Income before income taxes | 335,114 | 206,808 |
Provision for income taxes | 78,729 | 47,847 |
Net income | 256,385 | 158,961 |
Less: Loss attributable to noncontrolling interests | 2,261 | 0 |
Net income attributable to Harley-Davidson, Inc. | 258,646 | 158,961 |
Reportable Legal Entities | Financial Services Entities | ||
Revenue: | ||
Motorcycles and related products | 0 | 0 |
Financial services revenue | 223,523 | 192,390 |
Total revenue | 223,523 | 192,390 |
Costs and expenses: | ||
Motorcycles and related products cost of goods sold | 0 | 0 |
Financial services interest expense | 73,549 | 42,099 |
Financial services provision for credit losses | 52,364 | 28,822 |
Selling, administrative and engineering expense | 40,880 | 37,858 |
Restructuring benefit | 0 | |
Total costs and expenses | 166,793 | 108,779 |
Operating income | 56,730 | 83,611 |
Other income, net | 0 | 0 |
Investment income (loss) | 0 | 0 |
Interest expense | 0 | 0 |
Income before income taxes | 56,730 | 83,611 |
Provision for income taxes | 11,452 | 20,223 |
Net income | 45,278 | 63,388 |
Less: Loss attributable to noncontrolling interests | 0 | 0 |
Net income attributable to Harley-Davidson, Inc. | 45,278 | 63,388 |
Consolidating Adjustments | ||
Revenue: | ||
Motorcycles and related products | (2,118) | (3,122) |
Financial services revenue | (428) | (375) |
Total revenue | (2,546) | (3,497) |
Costs and expenses: | ||
Motorcycles and related products cost of goods sold | 0 | 0 |
Financial services interest expense | 0 | 0 |
Financial services provision for credit losses | 0 | 0 |
Selling, administrative and engineering expense | (2,712) | (3,650) |
Restructuring benefit | 0 | |
Total costs and expenses | (2,712) | (3,650) |
Operating income | 166 | 153 |
Other income, net | 0 | 0 |
Investment income (loss) | 0 | 0 |
Interest expense | 0 | 0 |
Income before income taxes | 166 | 153 |
Provision for income taxes | 0 | 0 |
Net income | 166 | 153 |
Less: Loss attributable to noncontrolling interests | 0 | 0 |
Net income attributable to Harley-Davidson, Inc. | $ 166 | $ 153 |
Supplemental Consolidating Da_4
Supplemental Consolidating Data - Balance Sheet (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 27, 2022 | Dec. 31, 2021 |
Current assets: | ||||
Cash and cash equivalents | $ 1,561,200 | $ 1,433,175 | $ 1,393,731 | |
Accounts receivable, net | 333,533 | 252,225 | 254,286 | |
Finance receivables, net - current | 2,245,628 | 1,782,631 | 1,699,642 | |
Inventories, net | 830,521 | 950,960 | 714,259 | |
Restricted cash | 164,965 | 135,424 | 142,812 | |
Other current assets | 154,660 | 196,238 | 182,527 | |
Total current assets | 5,290,507 | 4,750,653 | 4,387,257 | |
Finance receivables, net | 5,328,095 | 5,355,807 | 5,121,911 | |
Property, plant and equipment, net | 690,051 | 689,886 | 663,807 | |
Pension and postretirement assets | 336,569 | 320,133 | 399,029 | |
Goodwill | 62,426 | 62,090 | 62,607 | |
Deferred income taxes | 141,208 | 135,041 | 71,926 | |
Lease assets | 43,540 | 43,931 | 45,073 | |
Other long-term assets | 137,189 | 134,935 | 143,030 | |
Assets | 12,029,585 | 11,492,476 | 10,894,640 | |
Current liabilities: | ||||
Accounts payable | 404,414 | 378,002 | 476,917 | |
Accrued liabilities | 625,296 | 620,945 | 597,924 | |
Short-term deposits, net | 144,854 | 79,710 | 65,049 | |
Short-term debt | 501,243 | 770,468 | 816,016 | |
Current portion of long-term debt, net | 1,408,777 | 1,684,782 | 1,327,357 | |
Total current liabilities | 3,084,584 | 3,533,907 | 3,283,263 | |
Long-term deposits, net | 224,457 | 237,665 | 283,034 | |
Long-term debt, net | 5,275,169 | 4,457,052 | 4,470,086 | |
Lease liabilities | 26,674 | 26,777 | 27,633 | |
Pension and postretirement liabilities | 66,968 | 93,792 | ||
Deferred income taxes | 31,032 | 29,528 | 9,578 | |
Other long-term liabilities | 224,852 | 232,784 | 218,153 | |
Commitments and contingencies | ||||
Total equity | 3,095,849 | 2,906,808 | 2,509,101 | $ 2,553,244 |
Total liabilities and shareholders' equity | 12,029,585 | $ 11,492,476 | 10,894,640 | |
Reportable Legal Entities | Non-Financial Services Entities | ||||
Current assets: | ||||
Cash and cash equivalents | 876,248 | 678,616 | ||
Accounts receivable, net | 798,728 | 601,148 | ||
Finance receivables, net - current | 0 | 0 | ||
Inventories, net | 830,521 | 714,259 | ||
Restricted cash | 0 | 0 | ||
Other current assets | 110,559 | 149,955 | ||
Total current assets | 2,616,056 | 2,143,978 | ||
Finance receivables, net | 0 | 0 | ||
Property, plant and equipment, net | 667,474 | 636,216 | ||
Pension and postretirement assets | 336,569 | 399,029 | ||
Goodwill | 62,426 | 62,607 | ||
Deferred income taxes | 58,175 | 0 | ||
Lease assets | 37,868 | 38,126 | ||
Other long-term assets | 217,124 | 210,157 | ||
Assets | 3,995,692 | 3,490,113 | ||
Current liabilities: | ||||
Accounts payable | 375,395 | 434,731 | ||
Accrued liabilities | 488,814 | 495,921 | ||
Short-term deposits, net | 0 | 0 | ||
Short-term debt | 0 | 0 | ||
Current portion of long-term debt, net | 0 | 0 | ||
Total current liabilities | 864,209 | 930,652 | ||
Long-term deposits, net | 0 | 0 | ||
Long-term debt, net | 745,545 | 744,842 | ||
Lease liabilities | 21,160 | 20,544 | ||
Pension and postretirement liabilities | 66,968 | 93,792 | ||
Deferred income taxes | 28,180 | 10,478 | ||
Other long-term liabilities | 155,487 | 165,990 | ||
Commitments and contingencies | ||||
Total equity | 2,114,143 | 1,523,815 | ||
Total liabilities and shareholders' equity | 3,995,692 | 3,490,113 | ||
Reportable Legal Entities | Financial Services Entities | ||||
Current assets: | ||||
Cash and cash equivalents | 684,952 | 715,115 | ||
Accounts receivable, net | 0 | 0 | ||
Finance receivables, net - current | 2,245,628 | 1,699,642 | ||
Inventories, net | 0 | 0 | ||
Restricted cash | 164,965 | 142,812 | ||
Other current assets | 50,727 | 61,455 | ||
Total current assets | 3,146,272 | 2,619,024 | ||
Finance receivables, net | 5,328,095 | 5,121,911 | ||
Property, plant and equipment, net | 22,577 | 27,591 | ||
Pension and postretirement assets | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Deferred income taxes | 83,725 | 75,185 | ||
Lease assets | 5,672 | 6,947 | ||
Other long-term assets | 28,650 | 37,595 | ||
Assets | 8,614,991 | 7,888,253 | ||
Current liabilities: | ||||
Accounts payable | 494,214 | 389,048 | ||
Accrued liabilities | 142,192 | 129,581 | ||
Short-term deposits, net | 144,854 | 65,049 | ||
Short-term debt | 501,243 | 816,016 | ||
Current portion of long-term debt, net | 1,408,777 | 1,327,357 | ||
Total current liabilities | 2,691,280 | 2,727,051 | ||
Long-term deposits, net | 224,457 | 283,034 | ||
Long-term debt, net | 4,529,624 | 3,725,244 | ||
Lease liabilities | 5,514 | 7,089 | ||
Pension and postretirement liabilities | 0 | 0 | ||
Deferred income taxes | 2,852 | 1,848 | ||
Other long-term liabilities | 67,626 | 50,190 | ||
Commitments and contingencies | ||||
Total equity | 1,093,638 | 1,093,797 | ||
Total liabilities and shareholders' equity | 8,614,991 | 7,888,253 | ||
Consolidating Adjustments | ||||
Current assets: | ||||
Cash and cash equivalents | 0 | 0 | ||
Accounts receivable, net | (465,195) | (346,862) | ||
Finance receivables, net - current | 0 | 0 | ||
Inventories, net | 0 | 0 | ||
Restricted cash | 0 | 0 | ||
Other current assets | (6,626) | (28,883) | ||
Total current assets | (471,821) | (375,745) | ||
Finance receivables, net | 0 | 0 | ||
Property, plant and equipment, net | 0 | 0 | ||
Pension and postretirement assets | 0 | 0 | ||
Goodwill | 0 | 0 | ||
Deferred income taxes | (692) | (3,259) | ||
Lease assets | 0 | 0 | ||
Other long-term assets | (108,585) | (104,722) | ||
Assets | (581,098) | (483,726) | ||
Current liabilities: | ||||
Accounts payable | (465,195) | (346,862) | ||
Accrued liabilities | (5,710) | (27,578) | ||
Short-term deposits, net | 0 | 0 | ||
Short-term debt | 0 | 0 | ||
Current portion of long-term debt, net | 0 | 0 | ||
Total current liabilities | (470,905) | (374,440) | ||
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 | 0 | (2,748) | ||
Other long-term liabilities | 1,739 | 1,973 | ||
Commitments and contingencies | ||||
Total equity | (111,932) | (108,511) | ||
Total liabilities and shareholders' equity | $ (581,098) | $ (483,726) |
Supplemental Consolidating Da_5
Supplemental Consolidating Data - Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 27, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 301,829 | $ 222,502 |
Adjustments to reconcile Net income to Net cash provided by operating activities: | ||
Depreciation and amortization | 34,352 | 39,258 |
Amortization of deferred loan origination costs | 21,858 | 22,995 |
Amortization of financing origination fees | 3,011 | 3,701 |
Provision for long-term employee benefits | (16,939) | (5,050) |
Employee benefit plan contributions and payments | (1,739) | (2,143) |
Stock compensation expense | 23,628 | 8,903 |
Net change in wholesale finance receivables related to sales | (487,314) | (205,727) |
Provision for credit losses | 52,364 | 28,822 |
Deferred income taxes | 5,648 | 6,307 |
Other, net | (21,671) | (5,408) |
Changes in current assets and liabilities: | ||
Accounts receivable, net | (77,993) | (74,993) |
Finance receivables – accrued interest and other | 2,252 | 3,115 |
Inventories, net | 123,047 | (2,630) |
Accounts payable and accrued liabilities | 43,787 | 106,969 |
Other current assets | 40,557 | (7,300) |
Total adjustments | (255,152) | (83,181) |
Net cash provided by operating activities | 46,677 | 139,321 |
Cash flows from investing activities: | ||
Capital expenditures | (45,114) | (27,999) |
Origination of finance receivables | (917,145) | (1,058,461) |
Collections on finance receivables | 890,852 | 965,190 |
Other investing activities | 821 | 135 |
Net cash used by investing activities | (70,586) | (121,135) |
Cash flows from financing activities: | ||
Proceeds from issuance of medium-term notes | 693,276 | 495,785 |
Repayments of medium-term notes | (350,000) | (550,000) |
Proceeds from securitization debt | 547,706 | 0 |
Repayments of securitization debt | (310,640) | (271,499) |
Borrowings of asset-backed commercial paper | 0 | 62,455 |
Repayments of asset-backed commercial paper | (62,634) | (56,634) |
Net (decrease) increase in unsecured commercial paper | (270,119) | 64,521 |
Net increase in deposits | 51,822 | 57,660 |
Dividends paid | (24,123) | (24,056) |
Repurchase of common stock | (96,767) | (261,737) |
Other financing activities | 69 | 0 |
Net cash provided (used) by financing activities | 178,590 | (483,505) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 3,820 | (1,743) |
Cash, cash equivalents and restricted cash: | ||
Cash, cash equivalents and restricted cash, beginning of period | 1,579,177 | 2,025,219 |
Net (decrease) increase in cash, cash equivalents and restricted cash | 158,501 | (467,062) |
Cash, cash equivalents and restricted cash, end of period | 1,737,678 | 1,558,157 |
Non-Financial Services Entities | ||
Cash flows from financing activities: | ||
Proceeds from securitization debt | 0 | |
Financial Services Entities | ||
Cash flows from financing activities: | ||
Proceeds from securitization debt | 547,706 | |
Reportable Legal Entities | Non-Financial Services Entities | ||
Cash flows from operating activities: | ||
Net income | 256,385 | 158,961 |
Adjustments to reconcile Net income to Net cash provided by operating activities: | ||
Depreciation and amortization | 32,120 | 37,106 |
Amortization of deferred loan origination costs | 0 | 0 |
Amortization of financing origination fees | 177 | 174 |
Provision for long-term employee benefits | (16,939) | (5,050) |
Employee benefit plan contributions and payments | (1,739) | (2,143) |
Stock compensation expense | 22,494 | 8,233 |
Net change in wholesale finance receivables related to sales | 0 | 0 |
Provision for credit losses | 0 | 0 |
Deferred income taxes | 4,261 | 6,176 |
Other, net | (18,087) | (5,322) |
Changes in current assets and liabilities: | ||
Accounts receivable, net | (426,221) | (319,329) |
Finance receivables – accrued interest and other | 0 | 0 |
Inventories, net | 123,047 | (2,630) |
Accounts payable and accrued liabilities | 14,610 | 86,546 |
Other current assets | 25,342 | (47,418) |
Total adjustments | (240,935) | (243,657) |
Net cash provided by operating activities | 15,450 | (84,696) |
Cash flows from investing activities: | ||
Capital expenditures | (44,894) | (27,149) |
Origination of finance receivables | 0 | 0 |
Collections on finance receivables | 0 | 0 |
Other investing activities | 821 | 135 |
Net cash used by investing activities | (44,073) | (27,014) |
Cash flows from financing activities: | ||
Proceeds from issuance of medium-term notes | 0 | 0 |
Repayments of medium-term notes | 0 | 0 |
Repayments of securitization debt | 0 | 0 |
Borrowings of asset-backed commercial paper | 0 | |
Repayments of asset-backed commercial paper | 0 | 0 |
Net (decrease) increase in unsecured commercial paper | 0 | 0 |
Net increase in deposits | 0 | 0 |
Dividends paid | (24,123) | (24,056) |
Repurchase of common stock | (96,767) | (261,737) |
Other financing activities | 69 | |
Net cash provided (used) by financing activities | (120,821) | (285,793) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 3,894 | (2,086) |
Cash, cash equivalents and restricted cash: | ||
Cash, cash equivalents and restricted cash, beginning of period | 1,021,798 | 1,078,205 |
Net (decrease) increase in cash, cash equivalents and restricted cash | (145,550) | (399,589) |
Cash, cash equivalents and restricted cash, end of period | 876,248 | 678,616 |
Reportable Legal Entities | Financial Services Entities | ||
Cash flows from operating activities: | ||
Net income | 45,278 | 63,388 |
Adjustments to reconcile Net income to Net cash provided by operating activities: | ||
Depreciation and amortization | 2,232 | 2,152 |
Amortization of deferred loan origination costs | 21,858 | 22,995 |
Amortization of financing origination fees | 2,834 | 3,527 |
Provision for long-term employee benefits | 0 | 0 |
Employee benefit plan contributions and payments | 0 | 0 |
Stock compensation expense | 1,134 | 670 |
Net change in wholesale finance receivables related to sales | 0 | 0 |
Provision for credit losses | 52,364 | 28,822 |
Deferred income taxes | 1,717 | 665 |
Other, net | (3,418) | 67 |
Changes in current assets and liabilities: | ||
Accounts receivable, net | 0 | 0 |
Finance receivables – accrued interest and other | 2,252 | 3,115 |
Inventories, net | 0 | 0 |
Accounts payable and accrued liabilities | 379,094 | 289,876 |
Other current assets | 13,131 | 14,467 |
Total adjustments | 473,198 | 366,356 |
Net cash provided by operating activities | 518,476 | 429,744 |
Cash flows from investing activities: | ||
Capital expenditures | (220) | (850) |
Origination of finance receivables | (2,100,019) | (2,023,861) |
Collections on finance receivables | 1,586,477 | 1,724,863 |
Other investing activities | 0 | 0 |
Net cash used by investing activities | (513,762) | (299,848) |
Cash flows from financing activities: | ||
Proceeds from issuance of medium-term notes | 693,276 | 495,785 |
Repayments of medium-term notes | (350,000) | (550,000) |
Repayments of securitization debt | (310,640) | (271,499) |
Borrowings of asset-backed commercial paper | 62,455 | |
Repayments of asset-backed commercial paper | (62,634) | (56,634) |
Net (decrease) increase in unsecured commercial paper | (270,119) | 64,521 |
Net increase in deposits | 51,822 | 57,660 |
Dividends paid | 0 | 0 |
Repurchase of common stock | 0 | 0 |
Other financing activities | 0 | |
Net cash provided (used) by financing activities | 299,411 | (197,712) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (74) | 343 |
Cash, cash equivalents and restricted cash: | ||
Cash, cash equivalents and restricted cash, beginning of period | 557,379 | 947,014 |
Net (decrease) increase in cash, cash equivalents and restricted cash | 304,051 | (67,473) |
Cash, cash equivalents and restricted cash, end of period | 861,430 | 879,541 |
Consolidating Adjustments | ||
Cash flows from operating activities: | ||
Net income | 166 | 153 |
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 | (487,314) | (205,727) |
Provision for credit losses | 0 | 0 |
Deferred income taxes | (330) | (534) |
Other, net | (166) | (153) |
Changes in current assets and liabilities: | ||
Accounts receivable, net | 348,228 | 244,336 |
Finance receivables – accrued interest and other | 0 | 0 |
Inventories, net | 0 | 0 |
Accounts payable and accrued liabilities | (349,917) | (269,453) |
Other current assets | 2,084 | 25,651 |
Total adjustments | (487,415) | (205,880) |
Net cash provided by operating activities | (487,249) | (205,727) |
Cash flows from investing activities: | ||
Capital expenditures | 0 | 0 |
Origination of finance receivables | 1,182,874 | 965,400 |
Collections on finance receivables | (695,625) | (759,673) |
Other investing activities | 0 | 0 |
Net cash used by investing activities | 487,249 | 205,727 |
Cash flows from financing activities: | ||
Proceeds from issuance of medium-term notes | 0 | 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 (decrease) increase in unsecured commercial paper | 0 | 0 |
Net increase in deposits | 0 | 0 |
Dividends paid | 0 | 0 |
Repurchase of common stock | 0 | 0 |
Other financing activities | 0 | |
Net cash provided (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) increase 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) - Subsequent Event - Medium-term notes € in Millions | 1 Months Ended |
Apr. 30, 2023 EUR (€) | |
Subsequent Event | |
Notes issued | € 700 |
Interest rate | 6.36% |