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Supplemental Consolidating Data

3 Months Ended

Mar. 29, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

The supplemental consolidating data is presented for informational purposes and is different than segment information due to the allocation of consolidating reporting adjustments to the reportable segments. Supplemental consolidating data is as follows (in thousands):


	Three months ended March 29, 2020
	HDMC Entities		HDFS Entities		Consolidating Adjustments		Consolidated
Revenue:
Motorcycles and Related Products	$	1,103,258	$	—	$	(3,470)	$	1,099,788
Financial Services	—		195,886		2,570		198,456
	1,103,258		195,886		(900)		1,298,244
Costs and expenses:
Motorcycles and Related Products cost of goods sold	780,868		—		—		780,868
Financial Services interest expense	—		52,473		—		52,473
Financial Services provision for credit losses	—		79,419		—		79,419
Selling, administrative and engineering expense	237,746		41,439		(1,214)		277,971

	1,018,614		173,331		(1,214)		1,190,731
Operating income	84,644		22,555		314		107,513
Other income, net	155		—		—		155
Investment income (loss)	94,653		—		(100,000)		(5,347)
Interest expense	7,755		—		—		7,755
Income before provision for income taxes	171,697		22,555		(99,686)		94,566
Provision for income taxes	19,271		5,600		—		24,871
Net income	$	152,426	$	16,955	$	(99,686)	$	69,695


	Three months ended March 31, 2019
	HDMC Entities		HDFS Entities		Consolidating Adjustments		Consolidated
Revenue:
Motorcycles and Related Products	$	1,200,009	$	—	$	(4,372)	$	1,195,637
Financial Services	—		186,753		1,990		188,743
	1,200,009		186,753		(2,382)		1,384,380
Costs and expenses:
Motorcycles and Related Products cost of goods sold	848,703		—		(505)		848,198
Financial Services interest expense	—		52,324		—		52,324
Financial Services provision for credit losses	—		34,491		—		34,491
Selling, administrative and engineering expense	227,992		42,588		(1,955)		268,625
Restructuring expense	13,630		—		—		13,630
	1,090,325		129,403		(2,460)		1,217,268
Operating income	109,684		57,350		78		167,112
Other income, net	4,660		—		—		4,660
Investment income	51,358		—		(45,000)		6,358
Interest expense	7,731		—		—		7,731
Income before provision for income taxes	157,971		57,350		(44,922)		170,399
Provision for income taxes	28,557		13,897		—		42,454
Net income	$	129,414	$	43,453	$	(44,922)	$	127,945


	March 29, 2020
	HDMC Entities		HDFS Entities		Consolidating Adjustments		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	415,514	$	1,049,547	$	—	$	1,465,061

Accounts receivable, net	551,786		—		(252,638)		299,148
Finance receivables, net	—		2,358,989		—		2,358,989
Inventories, net	610,924		—		—		610,924
Restricted cash	—		99,903		—		99,903
Other current assets	103,630		43,055		(4,328)		142,357
	1,681,854		3,551,494		(256,966)		4,976,382
Finance receivables, net	—		4,933,418		—		4,933,418
Property, plant and equipment, net	774,985		51,860		—		826,845
Prepaid pension costs	64,802		—		—		64,802
Goodwill	64,063		—		—		64,063
Deferred income taxes	49,906		79,026		(1,076)		127,856
Lease assets	50,907		5,589		—		56,496
Other long-term assets	163,319		20,815		(94,049)		90,085
	$	2,849,836	$	8,642,202	$	(352,091)	$	11,139,947
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	306,677	$	279,372	$	(252,638)	$	333,411
Accrued liabilities	446,792		141,287		(3,544)		584,535
Short-term debt	—		1,335,664		—		1,335,664
Current portion of long-term debt, net	—		2,326,460		—		2,326,460
	753,469		4,082,783		(256,182)		4,580,070
Long-term debt, net	743,466		3,734,612		—		4,478,078
Lease liabilities	34,848		5,205		—		40,053
Pension liabilities	56,900		—		—		56,900
Postretirement healthcare liabilities	71,154		—		—		71,154

Other long-term liabilities	176,109		43,277		2,323		221,709
Commitments and contingencies (Note 17)
Shareholders’ equity	1,013,890		776,325		(98,232)		1,691,983
	$	2,849,836	$	8,642,202	$	(352,091)	$	11,139,947


	December 31, 2019
	HDMC Entities		HDFS Entities		Consolidating Adjustments		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	470,649	$	363,219	$	—	$	833,868

Accounts receivable, net	369,717		—		(110,383)		259,334
Finance receivables, net	—		2,272,522		—		2,272,522
Inventories, net	603,571		—		—		603,571
Restricted cash	—		64,554		—		64,554
Other current assets	110,145		59,665		(836)		168,974
	1,554,082		2,759,960		(111,219)		4,202,823
Finance receivables, net	—		5,101,844		—		5,101,844
Property, plant and equipment, net	794,131		53,251		—		847,382
Prepaid pension costs	56,014		—		—		56,014
Goodwill	64,160		—		—		64,160
Deferred income taxes	62,768		39,882		(1,446)		101,204
Lease assets	55,722		5,896		—		61,618
Other long-term assets	166,972		19,211		(93,069)		93,114
	$	2,753,849	$	7,980,044	$	(205,734)	$	10,528,159
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	266,710	$	138,053	$	(110,383)	$	294,380
Accrued liabilities	463,491		119,186		(389)		582,288
Short-term debt	—		571,995		—		571,995
Current portion of long-term debt, net	—		1,748,109		—		1,748,109
	730,201		2,577,343		(110,772)		3,196,772
Long-term debt, net	743,296		4,381,530		—		5,124,826
Lease liabilities	38,783		5,664		—		44,447
Pension liabilities	56,138		—		—		56,138
Postretirement healthcare liabilities	72,513		—		—		72,513

Other long-term liabilities	186,252		40,609		2,603		229,464
Commitments and contingencies (Note 17)
Shareholders’ equity	926,666		974,898		(97,565)		1,803,999
	$	2,753,849	$	7,980,044	$	(205,734)	$	10,528,159


	March 31, 2019
	HDMC Entities		HDFS Entities		Consolidating Adjustments		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	384,390	$	365,210	$	—	$	749,600
Marketable securities	10,003		—		—		10,003
Accounts receivable, net	666,782		—		(313,241)		353,541
Finance receivables, net	—		2,443,899		—		2,443,899
Inventories, net	595,806		—		—		595,806
Restricted cash	—		43,471		—		43,471
Other current assets	137,167		40,594		—		177,761
	1,794,148		2,893,174		(313,241)		4,374,081
Finance receivables, net	—		4,994,693		—		4,994,693
Property, plant and equipment, net	820,634		55,369		—		876,003

Goodwill	64,131		—		—		64,131
Deferred income taxes	96,500		37,487		(999)		132,988
Lease assets	48,513		6,792		—		55,305
Other long-term assets	154,687		19,149		(90,424)		83,412
	$	2,978,613	$	8,006,664	$	(404,664)	$	10,580,613
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	351,831	$	342,328	$	(313,241)	$	380,918
Accrued liabilities	544,560		98,778		833		644,171
Short-term debt	—		1,192,925		—		1,192,925
Current portion of long-term debt, net	—		1,372,050		—		1,372,050
	896,391		3,006,081		(312,408)		3,590,064
Long-term debt, net	742,791		4,001,903		—		4,744,694
Lease liabilities	32,520		6,996		—		39,516
Pension liabilities	98,862		—		—		98,862
Postretirement healthcare liabilities	93,897		—		—		93,897

Other long-term liabilities	174,150		39,070		2,749		215,969
Commitments and contingencies (Note 17)
Shareholders’ equity	940,002		952,614		(95,005)		1,797,611
	$	2,978,613	$	8,006,664	$	(404,664)	$	10,580,613


	Three months ended March 29, 2020
	HDMC Entities		HDFS Entities		Consolidating Adjustments		Consolidated
Cash flows from operating activities:
Net income	$	152,426	$	16,955	$	(99,686)	$	69,695
Adjustments to reconcile Net income to Net cash provided (used) by operating activities:
Depreciation and amortization	45,383		2,044		—		47,427
Amortization of deferred loan origination costs	—		16,739		—		16,739
Amortization of financing origination fees	170		2,829		—		2,999
Provision for long-term employee benefits	7,852		—		—		7,852
Employee benefit plan contributions and payments	(1,608)		—		—		(1,608)
Stock compensation expense	2,915		981		—		3,896
Net change in wholesale finance receivables related to sales	—		—		(208,183)		(208,183)
Provision for credit losses	—		79,419		—		79,419



Deferred income taxes	5,137		(8,570)		(370)		(3,803)

Other, net	(2,247)		6,139		(313)		3,579
Changes in current assets and liabilities:
Accounts receivable, net	(189,527)		—		142,255		(47,272)
Finance receivables - accrued interest and other	—		4,007		—		4,007
Inventories, net	(23,943)		—		—		(23,943)
Accounts payable and accrued liabilities	32,736		122,438		(144,612)		10,562
Derivative financial instruments	2,779		33		—		2,812
Other	16,200		7,549		3,491		27,240
	(104,153)		233,608		(207,732)		(78,277)
Net cash provided (used) by operating activities	48,273		250,563		(307,418)		(8,582)

Cash flows from investing activities:
Capital expenditures	(32,275)		(653)		—		(32,928)
Origination of finance receivables	—		(1,598,240)		818,179		(780,061)
Collections on finance receivables	—		1,452,022		(610,761)		841,261




Other investing activities	16		—		—		16
Net cash (used) provided by investing activities	(32,259)		(146,871)		207,418		28,288


	Three months ended March 29, 2020
	HDMC Entities		HDFS Entities		Consolidating Adjustments		Consolidated
Cash flows from financing activities:



Repayments of medium-term notes	—		(600,000)		—		(600,000)

Proceeds from securitization debt	—		522,694		—		522,694
Repayments of securitization debt	—		(130,918)		—		(130,918)
Borrowings of asset-backed commercial paper	—		225,187		—		225,187
Repayments of asset-backed commercial paper	—		(67,809)		—		(67,809)
Net increase in unsecured commercial paper	—		772,208		—		772,208

Dividends paid	(58,817)		(100,000)		100,000		(58,817)
Repurchase of common stock	(7,071)		—		—		(7,071)

Issuance of common stock under share-based plans	34		—		—		34
Net cash (used) provided by financing activities	(65,854)		621,362		100,000		655,508
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(5,295)		(437)		—		(5,732)
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(55,135)	$	724,617	$	—	$	669,482

Cash, cash equivalents and restricted cash:
Cash, cash equivalents and restricted cash, beginning of period	$	470,649	$	434,717	$	—	$	905,366
Net (decrease) increase in cash, cash equivalents and restricted cash	(55,135)		724,617		—		669,482
Cash, cash equivalents and restricted cash, end of period	$	415,514	$	1,159,334	$	—	$	1,574,848


	Three months ended March 31, 2019
	HDMC Entities		HDFS Entities		Consolidating Adjustments		Consolidated
Cash flows from operating activities:
Net income	$	129,414	$	43,453	$	(44,922)	$	127,945
Adjustments to reconcile Net income to Net cash provided by operating activities:
Depreciation and amortization	62,187		2,185		—		64,372
Amortization of deferred loan origination costs	—		18,968		—		18,968
Amortization of financing origination fees	167		2,027		—		2,194
Provision for long-term employee benefits	3,156		—		—		3,156
Employee benefit plan contributions and payments	(2,507)		—		—		(2,507)
Stock compensation expense	5,845		692		—		6,537
Net change in wholesale finance receivables related to sales	—		—		(237,569)		(237,569)
Provision for credit losses	—		34,491		—		34,491



Deferred income taxes	6,195		314		(528)		5,981

Other, net	1,886		922		(77)		2,731
Changes in current assets and liabilities:
Accounts receivable, net	(243,734)		—		193,988		(49,746)
Finance receivables - accrued interest and other	—		92		—		92
Inventories, net	(40,600)		—		—		(40,600)
Accounts payable and accrued liabilities	122,462		180,980		(179,467)		123,975

Derivative financial instruments	834		33		—		867
Other	(41,339)		18,997		(5,874)		(28,216)
	(125,448)		259,701		(229,527)		(95,274)
Net cash provided by operating activities	3,966		303,154		(274,449)		32,671
Cash flows from investing activities:
Capital expenditures	(34,657)		(598)		—		(35,255)
Origination of finance receivables	—		(1,691,416)		840,044		(851,372)
Collections on finance receivables	—		1,426,419		(610,595)		815,824



Acquisition of business	(7,000)		—		—		(7,000)
Other investing activities	603		—		—		603
Net cash used by investing activities	(41,054)		(265,595)		229,449		(77,200)


	Three months ended March 31, 2019
	HDMC Entities		HDFS Entities		Consolidating Adjustments		Consolidated
Cash flows from financing activities:


Proceeds from issuance of medium-term notes	—		546,655		—		546,655
Repayments of medium-term notes	—		(750,000)		—		(750,000)


Repayments of securitization debt	—		(76,505)		—		(76,505)

Repayments of asset-backed commercial paper	—		(72,401)		—		(72,401)
Net increase in credit facilities and unsecured commercial paper	—		58,527		—		58,527
Dividends paid	(60,859)		(45,000)		45,000		(60,859)
Repurchase of common stock	(61,712)		—		—		(61,712)

Issuance of common stock under share-based plans	616		—		—		616
Net cash used by financing activities	(121,955)		(338,724)		45,000		(415,679)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(1,115)		706		—		(409)
Net decrease in cash, cash equivalents and restricted cash	$	(160,158)	$	(300,459)	$	—	$	(460,617)

Cash, cash equivalents and restricted cash:
Cash, cash equivalents and restricted cash, beginning of period	$	544,548	$	715,200	$	—	$	1,259,748
Net decrease in cash, cash equivalents and restricted cash	(160,158)		(300,459)		—		(460,617)
Cash, cash equivalents and restricted cash, end of period	$	384,390	$	414,741	$	—	$	799,131