Debt

12 Months Ended

Dec. 31, 2022

Debt Disclosure [Abstract]

Debt

Debt

Debt with a contractual term less than 12 months is generally classified as short-term and consisted of the following at December 31, (in thousands):

	2022		2021
Unsecured commercial paper	$	770,468	$	751,286

Debt with a contractual term greater than 12 months is generally classified as long-term and consisted of the following at December 31, (in thousands):

	2022		2021
Secured debt:
Asset-backed Canadian commercial paper conduit facility	$	71,785	$	85,054
Asset-backed U.S. commercial paper conduit facility	425,794		272,589
Asset-backed securitization debt	2,028,155		1,634,753
Unamortized discounts and debt issuance costs	(8,741)		(7,611)
	2,516,993		1,984,785

		2022		2021
Unsecured notes (at par value):
Medium-term notes:
Due in 2022, issued February 2019	4.05%	—		550,000
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%	695,727		737,302
Due in 2024, issued November 2019(b)	3.14%	642,210		680,586
Due in 2025, issued June 2020	3.35%	700,000		700,000
Due in 2027, issued February 2022	3.05%	500,000		—
Unamortized discounts and debt issuance costs		(8,464)		(9,228)
		2,879,473		3,408,660
Senior notes:
Due in 2025, issued July 2015	3.50%	450,000		450,000
Due in 2045, issued July 2015	4.625%	300,000		300,000
Unamortized discounts and debt issuance costs		(4,632)		(5,332)
		745,368		744,668
		3,624,841		4,153,328
Long-term debt		6,141,834		6,138,113
Current portion of long-term debt, net		(1,684,782)		(1,542,496)
Long-term debt, net		$	4,457,052	$	4,595,617

(a)€650.0 million par value remeasured to U.S. dollar at December 31, 2022 and 2021, respectively

(b)€600.0 million par value remeasured to U.S. dollar at December 31, 2022 and 2021, respectively

Future principal payments of the Company's debt obligations as of December 31, 2022 were as follows (in thousands): 

2023	$	2,447,781
2024	1,324,098
2025	1,795,488
2026	493,572
2027	573,200
Thereafter	300,000
Future principal payments	$	6,934,139
Unamortized discounts and debt issuances costs	(21,837)
	$	6,912,302

Unsecured Commercial Paper – Commercial paper maturities may range up to 365 days from the issuance date. The weighted-average interest rate of outstanding commercial paper balances was 5.28% and 0.40% at December 31, 2022 and 2021, respectively.

Credit Facilities – In April 2022, the Company entered into a $710.0 million five-year credit facility to replace the $707.5 million five-year credit facility that was due to mature in April 2023. The new five-year credit facility matures in April 2027. The Company also amended its other $707.5 million five-year credit facility to $710.0 million with no change to the maturity date of April 2025. The five-year credit facilities (together, the Global Credit Facilities) bear interest at variable rates, which may be adjusted upward or downward depending on certain criteria, such as credit ratings. The Global Credit Facilities also require the Company to pay a fee based on the average daily unused portion of the aggregate commitments. The Global Credit Facilities are committed facilities primarily used to support the Company's unsecured commercial paper program.

Unsecured Notes – The fixed-rate U.S. dollar-denominated unsecured notes provide for semi-annual interest payments and the fixed-rate foreign currency-dominated unsecured notes provide for annual interest payments. Principal on the unsecured notes is due at maturity.

During February and June of 2022, $550.0 million of 4.05% and $400.0 million of 2.55% medium-term notes matured, respectively, and the principal and accrued interest were paid in full. During January, March, and May of 2021, $600.0 million of 2.85%, $450.0 million of floating rate, and $350.0 million of 3.55% medium-term notes matured, respectively, and the principal and accrued interest were paid in full.

Operating and Financial Covenants – Harley-Davidson Financial Services, Inc. and the Company are subject to various operating and financial covenants related to the credit facilities and various operating covenants under the medium-term and senior notes and the U.S. and Canadian asset-backed commercial paper conduit facilities. The more significant covenants are described below.

The operating covenants limit the Company’s and Harley-Davidson Financial Services, Inc.'s ability to:

•Assume or incur certain liens;

•Participate in certain mergers or consolidations; and

•Purchase or hold margin stock.

Under the current financial covenants of the Global Credit Facilities, the ratio of Harley-Davidson Financial Services, Inc.’s consolidated debt, excluding secured debt, to Harley-Davidson Financial Services, Inc.'s consolidated allowance for credit losses on finance receivables plus Harley-Davidson Financial Services, Inc.’s consolidated shareholders' equity, excluding AOCL, cannot exceed 10.0 to 1.0 as of the end of any fiscal quarter. In addition, the ratio of the Company's consolidated debt to the Company's consolidated debt and consolidated shareholders’ equity (where the Company's consolidated debt in each case excludes that of Harley-Davidson Financial Services, Inc. and its subsidiaries, and the Company's consolidated shareholders’ equity excludes AOCL), cannot exceed 0.7 to 1.0 as of the end of any fiscal quarter. No financial covenants are required under the medium-term or senior notes or the U.S. or Canadian asset-backed commercial paper conduit facilities.

At December 31, 2022 and 2021, Harley-Davidson Financial Services, Inc. and the Company remained in compliance with all of the then existing covenants.