Supplemental Consolidating Data (Tables)

6 Months Ended

Jun. 30, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Operations

	Three months ended June 30, 2019
	HDMC Entities		HDFS Entities		Eliminations			Consolidated
Revenue:
Motorcycles and Related Products	$	1,439,685	$	—	$	(5,681	)	$	1,434,004
Financial Services	—		196,197		2,418			198,615
Total revenue	1,439,685		196,197		(3,263		)	1,632,619
Costs and expenses:
Motorcycles and Related Products cost of goods sold	978,761		—		505			979,266
Financial Services interest expense	—		52,673		—			52,673
Financial Services provision for credit losses	—		26,383		—			26,383
Selling, administrative and engineering expense	267,777		43,586		(3,746		)	307,617
Restructuring expense	10,423		—		—			10,423
Total costs and expenses	1,256,961		122,642		(3,241		)	1,376,362
Operating income	182,724		73,555		(22		)	256,257
Other income (expense), net	4,037		—		—			4,037
Investment income	48,571		—		(45,000		)	3,571
Interest expense	7,784		—		—			7,784
Income before provision for income taxes	227,548		73,555		(45,022		)	256,081
Provision for income taxes	43,348		17,102		—			60,450
Net income	$	184,200	$	56,453	$	(45,022	)	$	195,631

	Six months ended June 30, 2019
	HDMC Entities		HDFS Entities		Eliminations			Consolidated
Revenue:
Motorcycles and Related Products	$	2,639,694	$	—	$	(10,053	)	$	2,629,641
Financial Services	—		382,950		4,408			387,358
Total revenue	2,639,694		382,950		(5,645		)	3,016,999
Costs and expenses:
Motorcycles and Related Products cost of goods sold	1,827,464		—		—			1,827,464
Financial Services interest expense	—		104,997		—			104,997
Financial Services provision for credit losses	—		60,874		—			60,874
Selling, administrative and engineering expense	495,769		86,174		(5,701		)	576,242
Restructuring expense	24,053		—		—			24,053
Total costs and expenses	2,347,286		252,045		(5,701		)	2,593,630
Operating income	292,408		130,905		56			423,369
Other income (expense), net	8,697		—		—			8,697
Investment income	99,929		—		(90,000		)	9,929
Interest expense	15,515		—		—			15,515
Income before provision for income taxes	385,519		130,905		(89,944		)	426,480
Provision for income taxes	71,905		30,999		—			102,904
Net income	$	313,614	$	99,906	$	(89,944	)	$	323,576

	Three months ended July 1, 2018
	HDMC Entities		HDFS Entities		Eliminations			Consolidated
Revenue:
Motorcycles and Related Products	$	1,528,045	$	—	$	(2,924	)	$	1,525,121
Financial Services	—		188,788		(686		)	188,102
Total revenue	1,528,045		188,788		(3,610		)	1,713,223
Costs and expenses:
Motorcycles and Related Products cost of goods sold	993,036		—		—			993,036
Financial Services interest expense	—		51,943		—			51,943
Financial Services provision for credit losses	—		18,880		—			18,880
Selling, administrative and engineering expense	276,827		39,663		(3,443		)	313,047
Restructuring expense	12,370		—		—			12,370
Total costs and expenses	1,282,233		110,486		(3,443		)	1,389,276
Operating income	245,812		78,302		(167		)	323,947
Other income (expense), net	645		—		—			645
Investment income	2,533		—		—			2,533
Interest expense	7,728		—		—			7,728
Income before provision for income taxes	241,262		78,302		(167		)	319,397
Provision for income taxes	59,683		17,376		—			77,059
Net income	$	181,579	$	60,926	$	(167	)	$	242,338
	Six months ended July 1, 2018
	HDMC Entities		HDFS Entities		Eliminations			Consolidated
Revenue:
Motorcycles and Related Products	$	2,894,291	$	—	$	(5,223	)	$	2,889,068
Financial Services	—		367,248		(972		)	366,276
Total revenue	2,894,291		367,248		(6,195		)	3,255,344
Costs and expenses:
Motorcycles and Related Products cost of goods sold	1,883,210		—		—			1,883,210
Financial Services interest expense	—		100,393		—			100,393
Financial Services provision for credit losses	—		48,932		—			48,932
Selling, administrative and engineering expense	531,228		78,054		(6,049		)	603,233
Restructuring expense	59,212		—		—			59,212
Total costs and expenses	2,473,650		227,379		(6,049		)	2,694,980
Operating income	420,641		139,869		(146		)	560,364
Other income (expense), net	865		—		—			865
Investment income	113,736		—		(110,000		)	3,736
Interest expense	15,418		—		—			15,418
Income before provision for income taxes	519,824		139,869		(110,146		)	549,547
Provision for income taxes	99,916		32,530		—			132,446
Net income	$	419,908	$	107,339	$	(110,146	)	$	417,101

Balance Sheet

	June 30, 2019
	HDMC Entities		HDFS Entities		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	560,446	$	364,192	$	—		$	924,638
Accounts receivable, net	671,719		—		(346,413		)	325,306
Finance receivables, net	—		2,362,125		—			2,362,125
Inventories	470,610		—		—			470,610
Restricted cash	—		82,248		—			82,248
Other current assets	102,956		44,278		—			147,234
Total current assets	1,805,731		2,852,843		(346,413		)	4,312,161
Finance receivables, net	—		5,232,280		—			5,232,280
Property, plant and equipment, net	801,871		54,127		—			855,998
Goodwill	64,449		—		—			64,449
Deferred income taxes	96,914		38,928		(1,203		)	134,639
Lease assets	48,415		6,498		—			54,913
Other long-term assets	157,061		20,159		(91,344		)	85,876
	$	2,974,441	$	8,204,835	$	(438,960	)	$	10,740,316
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	302,137	$	368,740	$	(346,413	)	$	324,464
Accrued liabilities	497,019		118,256		630			615,905
Short-term debt	—		405,695		—			405,695
Current portion of long-term debt, net	—		2,396,188		—			2,396,188
Total current liabilities	799,156		3,288,879		(345,783		)	3,742,252
Long-term debt, net	742,959		3,907,217		—			4,650,176
Lease liabilities	31,809		6,556		—			38,365
Pension liability	92,750		—		—			92,750
Postretirement healthcare liability	92,539		—		—			92,539
Other long-term liabilities	171,509		39,314		2,770			213,593
Commitments and contingencies (Note 17)
Shareholders’ equity	1,043,719		962,869		(95,947		)	1,910,641
	$	2,974,441	$	8,204,835	$	(438,960	)	$	10,740,316

	December 31, 2018
	HDMC Entities		HDFS Entities		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	544,548	$	659,218	$	—		$	1,203,766
Marketable securities	10,007		—		—			10,007
Accounts receivable, net	425,727		—		(119,253		)	306,474
Finance receivables, net	—		2,214,424		—			2,214,424
Inventories	556,128		—		—			556,128
Restricted cash	—		49,275		—			49,275
Other current assets	91,172		59,070		(5,874		)	144,368
Total current assets	1,627,582		2,981,987		(125,127		)	4,484,442
Finance receivables, net	—		5,007,507		—			5,007,507
Property, plant and equipment, net	847,176		56,956		—			904,132
Goodwill	55,048		—		—			55,048
Deferred income taxes	105,388		37,603		(1,527		)	141,464
Other long-term assets	144,122		18,680		(89,731		)	73,071
	$	2,779,316	$	8,102,733	$	(216,385	)	$	10,665,664
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	258,587	$	145,527	$	(119,253	)	$	284,861
Accrued liabilities	496,643		110,063		(5,576		)	601,130
Short-term debt	—		1,135,810		—			1,135,810
Current portion of long-term debt, net	—		1,575,799		—			1,575,799
Total current liabilities	755,230		2,967,199		(124,829		)	3,597,600
Long-term debt, net	742,624		4,145,043		—			4,887,667
Pension liability	107,776		—		—			107,776
Postretirement healthcare liability	94,453		—		—			94,453
Other long-term liabilities	164,243		37,142		2,834			204,219
Commitments and contingencies (Note 17)
Shareholders’ equity	914,990		953,349		(94,390		)	1,773,949
	$	2,779,316	$	8,102,733	$	(216,385	)	$	10,665,664

	July 1, 2018
	HDMC Entities		HDFS Entities		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	627,783	$	350,966	$	—		$	978,749
Accounts receivable, net	669,266		—		(333,672		)	335,594
Finance receivables, net	—		2,252,956		—			2,252,956
Inventories	465,373		—		—			465,373
Restricted cash	—		44,386		—			44,386
Other current assets	124,521		41,841		—			166,362
Total current assets	1,886,943		2,690,149		(333,672		)	4,243,420
Finance receivables, net	—		5,060,246		—			5,060,246
Property, plant and equipment, net	854,681		49,432		—			904,113
Prepaid pension costs	131,497		—		—			131,497
Goodwill	55,451		—		—			55,451
Deferred income taxes	27,043		41,696		(1,234		)	67,505
Other long-term assets	151,691		19,999		(87,900		)	83,790
	$	3,107,306	$	7,861,522	$	(422,806	)	$	10,546,022
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	262,562	$	358,324	$	(333,672	)	$	287,214
Accrued liabilities	481,402		90,416		622			572,440
Short-term debt	—		1,327,307		—			1,327,307
Current portion of long-term debt, net	—		945,463		—			945,463
Total current liabilities	743,964		2,721,510		(333,050		)	3,132,424
Long-term debt, net	742,292		4,126,054		—			4,868,346
Pension liability	55,819		—		—			55,819
Postretirement healthcare liability	113,464		—		—			113,464
Other long-term liabilities	174,412		36,997		3,034			214,443
Commitments and contingencies (Note 17)
Shareholders’ equity	1,277,355		976,961		(92,790		)	2,161,526
	$	3,107,306	$	7,861,522	$	(422,806	)	$	10,546,022

Cash Flows

	Six months ended June 30, 2019
	HDMC Entities			HDFS Entities			Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	313,614		$	99,906		$	(89,944	)	$	323,576
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of intangibles	121,026			4,360			—			125,386
Amortization of deferred loan origination costs	—			38,036			—			38,036
Amortization of financing origination fees	335			4,187			—			4,522
Provision for long-term employee benefits	6,936			—			—			6,936
Employee benefit plan contributions and payments	(3,637		)	—			—			(3,637		)
Stock compensation expense	15,672			1,613			—			17,285
Net change in wholesale finance receivables related to sales	—			—			(167,594		)	(167,594		)
Provision for credit losses	—			60,874			—			60,874
Deferred income taxes	5,928			(236		)	(324		)	5,368
Other, net	(8,545		)	(1,876		)	(56		)	(10,477		)
Changes in current assets and liabilities:
Accounts receivable, net	(244,752		)	—			227,160			(17,592		)
Finance receivables - accrued interest and other	—			(4,963		)	—			(4,963		)
Inventories	88,146			—			—			88,146
Accounts payable and accrued liabilities	21,336			221,959			(208,925		)	34,370
Derivative instruments	4,291			61			—			4,352
Other	(15,573		)	13,091			(5,874		)	(8,356		)
Total adjustments	(8,837		)	337,106			(155,613		)	172,656
Net cash provided by operating activities	304,777			437,012			(245,557		)	496,232

	Six months ended June 30, 2019
	HDMC Entities			HDFS Entities			Eliminations			Consolidated
Cash flows from investing activities:
Capital expenditures	(81,698		)	(1,531		)	—			(83,229		)
Origination of finance receivables	—			(3,936,208		)	1,871,309			(2,064,899		)
Collections on finance receivables	—			3,484,581			(1,715,752		)	1,768,829
Sales and redemptions of marketable securities	10,007			—			—			10,007
Acquisition of business	(7,000		)	—			—			(7,000		)
Other	11,717			—			—			11,717
Net cash used by investing activities	(66,974		)	(453,158		)	155,557			(364,575		)
Cash flows from financing activities:
Proceeds from issuance of medium-term notes	—			546,655			—			546,655
Repayments of medium-term notes	—			(750,000		)	—			(750,000		)
Proceeds from securitization debt	—			1,021,353			—			1,021,353
Repayments of securitization debt	—			(113,806		)	—			(113,806		)
Borrowings of asset-backed commercial paper	—			23,373			—			23,373
Repayments of asset-backed commercial paper	—			(155,286		)	—			(155,286		)
Net decrease in credit facilities and unsecured commercial paper	—			(728,606		)	—			(728,606		)
Dividends paid	(120,841		)	(90,000		)	90,000			(120,841		)
Purchase of common stock for treasury	(104,621		)	—			—			(104,621		)
Issuance of common stock under employee stock option plans	833			—			—			833
Net cash used by financing activities	(224,629		)	(246,317		)	90,000			(380,946		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	2,724			715			—			3,439
Net increase (decrease) in cash, cash equivalents and restricted cash	$	15,898		$	(261,748	)	$	—		$	(245,850	)
Cash, cash equivalents and restricted cash:
Cash, cash equivalents and restricted cash—beginning of period	$	544,548		$	715,200		$	—		$	1,259,748
Net increase (decrease) in cash, cash equivalents and restricted cash	15,898			(261,748		)	—			(245,850		)
Cash, cash equivalents and restricted cash—end of period	$	560,446		$	453,452		$	—		$	1,013,898

	Six months ended July 1, 2018
	HDMC Entities			HDFS Entities			Eliminations			Consolidated
Cash flows from operating activities:
Net income	$	419,908		$	107,339		$	(110,146	)	$	417,101
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of intangibles	127,935			2,126			—			130,061
Amortization of deferred loan origination costs	—			39,396			—			39,396
Amortization of financing origination fees	331			3,802			—			4,133
Provision for long-term employee benefits	18,954			—			—			18,954
Employee benefit plan contributions and payments	(6,422		)	—			—			(6,422		)
Stock compensation expense	17,229			1,852			—			19,081
Net change in wholesale finance receivables related to sales	—			—			(171,195		)	(171,195		)
Provision for credit losses	—			48,932			—			48,932
Deferred income taxes	(443		)	2,043			(85		)	1,515
Other, net	20,993			(245		)	146			20,894
Changes in current assets and liabilities:
Accounts receivable, net	(194,831		)	—			179,949			(14,882		)
Finance receivables - accrued interest and other	—			4,228			—			4,228
Inventories	63,957			—			—			63,957
Accounts payable and accrued liabilities	137,644			192,410			(168,953		)	161,101
Derivative instruments	(205		)	69			—			(136		)
Other	2,924			1,884			(5,667		)	(859		)
Total adjustments	188,066			296,497			(165,805		)	318,758
Net cash provided by operating activities	607,974			403,836			(275,951		)	735,859

	Six months ended July 1, 2018
	HDMC Entities			HDFS Entities			Eliminations			Consolidated
Cash flows from investing activities:
Capital expenditures	(63,236		)	(6,057		)	—			(69,293		)
Origination of finance receivables	—			(4,046,125		)	2,046,339			(1,999,786		)
Collections on finance receivables	—			3,593,272			(1,880,388		)	1,712,884
Other	(11,758		)	—			—			(11,758		)
Net cash used by investing activities	(74,994		)	(458,910		)	165,951			(367,953		)
Cash flows from financing activities:
Proceeds from issuance of medium-term notes	—			1,144,018			—			1,144,018
Repayments of medium-term notes	—			(877,488		)	—			(877,488		)
Repayments of securitization debt	—			(183,453		)	—			(183,453		)
Borrowings of asset-backed commercial paper	—			120,903			—			120,903
Repayments of asset-backed commercial paper	—			(100,660		)	—			(100,660		)
Net increase in credit facilities and unsecured commercial paper	—			56,280			—			56,280
Dividends paid	(124,680		)	(110,000		)	110,000			(124,680		)
Purchase of common stock for treasury	(111,227		)	—			—			(111,227		)
Issuance of common stock under employee stock option plans	1,965			—			—			1,965
Net cash (used by) provided by financing activities	(233,942		)	49,600			110,000			(74,342		)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(9,441		)	(650		)	—			(10,091		)
Net increase (decrease) in cash, cash equivalents and restricted cash	$	289,597		$	(6,124	)	$	—		$	283,473
Cash, cash equivalents and restricted cash:
Cash, cash equivalents and restricted cash—beginning of period	$	338,186		$	408,024		$	—		$	746,210
Net increase (decrease) in cash, cash equivalents and restricted cash	289,597			(6,124		)	—			283,473
Cash, cash equivalents and restricted cash—end of period	$	627,783		$	401,900		$	—		$	1,029,683