Supplemental Consolidating Data

6 Months Ended

Jun. 28, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Supplemental Consolidating Data

Supplemental Consolidating Data

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 June 28, 2020
	HDMC Entities		HDFS Entities		Consolidating Adjustments		Consolidated
Revenue:
Motorcycles and Related Products	$	670,905	$	—	$	(1,631)	$	669,274
Financial Services	—		194,872		1,081		195,953
	670,905		194,872		(550)		865,227
Costs and expenses:
Motorcycles and Related Products cost of goods sold	561,646		—		—		561,646
Financial Services interest expense	—		62,187		—		62,187
Financial Services provision for credit losses	—		91,179		—		91,179
Selling, administrative and engineering expense	190,300		34,690		(625)		224,365
Restructuring expense	41,005		944		—		41,949
	792,951		189,000		(625)		981,326
Operating (loss) income	(122,046)		5,872		75		(116,099)
Other income, net	156		—		—		156
Investment income	5,757		—		—		5,757
Interest expense	7,769		—		—		7,769
(Loss) income before income taxes	(123,902)		5,872		75		(117,955)
Income tax (benefit) provision	(26,938)		1,200		—		(25,738)
Net (loss) income	$	(96,964)	$	4,672	$	75	$	(92,217)
	Six months ended June 28, 2020
	HDMC Entities		HDFS Entities		Consolidating Adjustments		Consolidated
Revenue:
Motorcycles and Related Products	$	1,774,163	$	—	$	(5,101)	$	1,769,062
Financial Services	—		390,758		3,651		394,409
	1,774,163		390,758		(1,450)		2,163,471
Costs and expenses:
Motorcycles and Related Products cost of goods sold	1,342,514		—		—		1,342,514
Financial Services interest expense	—		114,660		—		114,660
Financial Services provision for credit losses	—		170,598		—		170,598
Selling, administrative and engineering expense	428,046		76,129		(1,839)		502,336
Restructuring expense	41,005		944		—		41,949
	1,811,565		362,331		(1,839)		2,172,057
Operating (loss) income	(37,402)		28,427		389		(8,586)
Other income, net	311		—		—		311
Investment income	100,410		—		(100,000)		410
Interest expense	15,524		—				15,524
Income (loss) before income taxes	47,795		28,427		(99,611)		(23,389)
Income tax (benefit) provision	(7,667)		6,800		—		(867)
Net income (loss)	$	55,462	$	21,627	$	(99,611)	$	(22,522)

	Three months ended June 30, 2019
	HDMC Entities		HDFS Entities		Consolidating Adjustments		Consolidated
Revenue:
Motorcycles and Related Products	$	1,439,685	$	—	$	(5,681)	$	1,434,004
Financial Services	—		196,197		2,418		198,615
	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
	1,256,961		122,642		(3,241)		1,376,362
Operating income	182,724		73,555		(22)		256,257
Other income, 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		Consolidating Adjustments		Consolidated
Revenue:
Motorcycles and Related Products	$	2,639,694	$	—	$	(10,053)	$	2,629,641
Financial Services	—		382,950		4,408		387,358
	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
	2,347,286		252,045		(5,701)		2,593,630
Operating income	292,408		130,905		56		423,369
Other income, 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

	June 28, 2020
	HDMC Entities		HDFS Entities		Consolidating Adjustments		Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	446,425	$	3,410,172	$	—	$	3,856,597
Accounts receivable, net	564,922		—		(293,491)		271,431
Finance receivables, net	—		1,901,620		—		1,901,620
Inventories, net	429,339		—		—		429,339
Restricted cash	—		189,712		—		189,712
Other current assets	119,591		66,387		(22,843)		163,135
	1,560,277		5,567,891		(316,334)		6,811,834
Finance receivables, net	—		5,078,371		—		5,078,371
Property, plant and equipment, net	766,546		50,443		—		816,989
Prepaid pension costs	73,589		—		—		73,589
Goodwill	64,192		—		—		64,192
Deferred income taxes	48,326		94,215		(975)		141,566
Lease assets	47,754		5,277		—		53,031
Other long-term assets	176,358		33,840		(93,618)		116,580
	$	2,737,042	$	10,830,037	$	(410,927)	$	13,156,152
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	272,996	$	337,957	$	(293,491)	$	317,462
Accrued liabilities	446,819		179,478		(22,087)		604,210
Short-term debt	—		1,547,388		—		1,547,388
Current portion of long-term debt, net	—		2,186,037		—		2,186,037
	719,815		4,250,860		(315,578)		4,655,097
Long-term debt, net	743,635		5,744,864		—		6,488,499
Lease liabilities	31,652		4,742		—		36,394
Pension liabilities	57,033		—		—		57,033
Postretirement healthcare liabilities	69,964		—		—		69,964
Other long-term liabilities	178,210		44,873		2,377		225,460
Commitments and contingencies (Note 17)
Shareholders’ equity	936,733		784,698		(97,726)		1,623,705
	$	2,737,042	$	10,830,037	$	(410,927)	$	13,156,152

	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

	June 30, 2019
	HDMC Entities		HDFS Entities		Consolidating Adjustments		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, net	470,610		—		—		470,610
Restricted cash	—		82,248		—		82,248
Other current assets	102,956		44,278		—		147,234
	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
	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 liabilities	92,750		—		—		92,750
Postretirement healthcare liabilities	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

	Six months ended June 28, 2020
	HDMC Entities		HDFS Entities		Consolidating Adjustments		Consolidated
Cash flows from operating activities:
Net income (loss)	$	55,462	$	21,627	$	(99,611)	$	(22,522)
Adjustments to reconcile Net income (loss) to Net cash provided by operating activities:
Depreciation and amortization	91,298		4,156		—		95,454
Amortization of deferred loan origination costs	—		33,796		—		33,796
Amortization of financing origination fees	339		6,322		—		6,661
Provision for long-term employee benefits	15,704		—		—		15,704
Employee benefit plan contributions and payments	(3,678)		—		—		(3,678)
Stock compensation expense	4,019		549		—		4,568
Net change in wholesale finance receivables related to sales	—		—		166,049		166,049
Provision for credit losses	—		170,598		—		170,598
Deferred income taxes	5,602		(24,592)		(471)		(19,461)
Other, net	(12,635)		3,730		(389)		(9,294)
Changes in current assets and liabilities:
Accounts receivable, net	(198,855)		—		183,108		(15,747)
Finance receivables - accrued interest and other	—		(2,985)		—		(2,985)
Inventories, net	163,700		—		—		163,700
Accounts payable and accrued liabilities	(1,001)		214,864		(203,199)		10,664
Derivative financial instruments	1,622		(84)		—		1,538
Other	(9,999)		3,150		22,007		15,158
	56,116		409,504		167,105		632,725
Net cash provided by operating activities	111,578		431,131		67,494		610,203
Cash flows from investing activities:
Capital expenditures	(65,677)		(1,349)		—		(67,026)
Origination of finance receivables	—		(3,033,567)		1,163,998		(1,869,569)
Collections on finance receivables	—		3,117,190		(1,331,492)		1,785,698
Other investing activities	(381)		—		—		(381)
Net cash (used) provided by investing activities	(66,058)		82,274		(167,494)		(151,278)

	Six months ended June 28, 2020
	HDMC Entities		HDFS Entities		Consolidating Adjustments		Consolidated
Cash flows from financing activities:
Proceeds from issuance of medium-term notes	—		1,396,602		—		1,396,602
Repayments of medium-term notes	—		(1,400,000)		—		(1,400,000)
Proceeds from securitization debt	—		2,064,450		—		2,064,450
Repayments of securitization debt	—		(369,613)		—		(369,613)
Borrowings of asset-backed commercial paper	—		225,187		—		225,187
Repayments of asset-backed commercial paper	—		(143,306)		—		(143,306)
Net increase in unsecured commercial paper	—		831,354		—		831,354
Net increase in credit facilities	—		150,000		—		150,000
Deposits	—		17,995		—		17,995
Dividends paid	(61,917)		(100,000)		100,000		(61,917)
Repurchase of common stock	(7,156)		—		—		(7,156)
Issuance of common stock under share-based plans	41		—		—		41
Net cash (used) provided by financing activities	(69,032)		2,672,669		100,000		2,703,637
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(712)		330		—		(382)
Net (decrease) increase in cash, cash equivalents and restricted cash	$	(24,224)	$	3,186,404	$	—	$	3,162,180
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	(24,224)		3,186,404		—		3,162,180
Cash, cash equivalents and restricted cash, end of period	$	446,425	$	3,621,121	$	—	$	4,067,546

	Six months ended June 30, 2019
	HDMC Entities		HDFS Entities		Consolidating Adjustments		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	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, net	88,146		—		—		88,146
Accounts payable and accrued liabilities	21,336		221,959		(208,925)		34,370
Derivative financial instruments	4,291		61		—		4,352
Other	(15,573)		13,091		(5,874)		(8,356)
	(8,837)		337,106		(155,613)		172,656
Net cash provided by operating activities	304,777		437,012		(245,557)		496,232
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 investing activities	11,717		—		—		11,717
Net cash used by investing activities	(66,974)		(453,158)		155,557		(364,575)

	Six months ended June 30, 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)
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 unsecured commercial paper	—		(728,606)		—		(728,606)
Dividends paid	(120,841)		(90,000)		90,000		(120,841)
Repurchase of common stock	(104,621)		—		—		(104,621)
Issuance of common stock under share-based 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