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Revenue Recognition (Notes)
9 Months Ended
Sep. 30, 2019
Revenue Recognition [Abstract]  
Revenue Recognition, Sales of Goods [Policy Text Block]
Note 2. Revenue Recognition
The following tables disaggregate the Company’s revenue by major product type and geography (in thousands):
 
Three months ended September 30, 2019
 
ORV / Snowmobiles
 
Motorcycles
 
Global Adj. Markets
 
Aftermarket
 
Boats
 
Consolidated
Revenue by product type
 
 
 
 
 
 
 
 
 
 
 
Wholegoods
$
950,024

 
$
127,419

 
$
92,268

 

 
$
119,078

 
$
1,288,789

PG&A
202,381

 
22,481

 
21,735

 
$
236,261

 

 
482,858

Total revenue
$
1,152,405

 
$
149,900

 
$
114,003

 
$
236,261

 
$
119,078

 
$
1,771,647

 
 
 
 
 
 
 
 
 
 
 
 
Revenue by geography
 
 
 
 
 
 
 
 
 
 
 
United States
$
964,052

 
$
105,566

 
$
60,900

 
$
224,090

 
$
117,239

 
$
1,471,847

Canada
91,078

 
7,865

 
380

 
12,171

 
1,839

 
113,333

EMEA
63,436

 
21,668

 
52,294

 

 

 
137,398

APLA
33,839

 
14,801

 
429

 

 

 
49,069

Total revenue
$
1,152,405

 
$
149,900

 
$
114,003

 
$
236,261

 
$
119,078

 
$
1,771,647

 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended September 30, 2018
 
ORV / Snowmobiles
 
Motorcycles
 
Global Adj. Markets
 
Aftermarket
 
Boats
 
Consolidated
Revenue by product type
 
 
 
 
 
 
 
 
 
 
 
Wholegoods
$
851,733

 
$
134,410

 
$
78,312

 

 
$
134,321

 
$
1,198,776

PG&A
183,821

 
20,906

 
17,939

 
$
229,973

 

 
452,639

Total revenue
$
1,035,554

 
$
155,316

 
$
96,251

 
$
229,973

 
$
134,321

 
$
1,651,415

 
 
 
 
 
 
 
 
 
 
 
 
Revenue by geography
 
 
 
 
 
 
 
 
 
 
 
United States
$
866,289

 
$
116,072

 
$
51,363

 
$
217,816

 
$
132,139

 
$
1,383,679

Canada
70,765

 
9,712

 
837

 
12,157

 
2,182

 
95,653

EMEA
64,218

 
15,706

 
42,893

 

 

 
122,817

APLA
34,282

 
13,826

 
1,158

 

 

 
49,266

Total revenue
$
1,035,554

 
$
155,316

 
$
96,251

 
$
229,973

 
$
134,321

 
$
1,651,415


 
Nine months ended September 30, 2019
 
ORV / Snowmobiles
 
Motorcycles
 
Global Adj. Markets
 
Aftermarket
 
Boats
 
Consolidated
Revenue by product type
 
 
 
 
 
 
 
 
 
 
 
Wholegoods
$
2,515,147

 
$
399,189

 
$
275,589

 

 
$
486,313

 
$
3,676,238

PG&A
554,026

 
65,426

 
65,294

 
$
685,668

 

 
1,370,414

Total revenue
$
3,069,173

 
$
464,615

 
$
340,883

 
$
685,668

 
$
486,313

 
$
5,046,652

 
 
 
 
 
 
 
 
 
 
 
 
Revenue by geography
 
 
 
 
 
 
 
 
 
 
 
United States
$
2,544,776

 
$
293,646

 
$
170,729

 
$
654,880

 
$
475,302

 
$
4,139,333

Canada
216,932

 
24,300

 
3,583

 
30,788

 
11,011

 
286,614

EMEA
207,919

 
101,091

 
164,564

 

 

 
473,574

APLA
99,546

 
45,578

 
2,007

 

 

 
147,131

Total revenue
$
3,069,173

 
$
464,615

 
$
340,883

 
$
685,668

 
$
486,313

 
$
5,046,652

 
 
 
 
 
 
 
 
 
 
 
 
 
Nine months ended September 30, 2018
 
ORV / Snowmobiles
 
Motorcycles
 
Global Adj. Markets
 
Aftermarket
 
Boats
 
Consolidated
Revenue by product type
 
 
 
 
 
 
 
 
 
 
 
Wholegoods
$
2,356,086

 
$
395,189

 
$
263,874

 

 
$
134,321

 
$
3,149,470

PG&A
502,873

 
63,096

 
59,122

 
$
676,859

 

 
1,301,950

Total revenue
$
2,858,959

 
$
458,285

 
$
322,996

 
$
676,859

 
$
134,321

 
$
4,451,420

 
 
 
 
 
 
 
 
 
 
 
 
Revenue by geography
 
 
 
 
 
 
 
 
 
 
 
United States
$
2,347,202

 
$
313,530

 
$
151,157

 
$
644,382

 
$
132,139

 
$
3,588,410

Canada
197,096

 
27,421

 
16,422

 
32,477

 
2,182

 
275,598

EMEA
207,779

 
74,044

 
151,982

 

 

 
433,805

APLA
106,882

 
43,290

 
3,435

 

 

 
153,607

Total revenue
$
2,858,959

 
$
458,285

 
$
322,996

 
$
676,859

 
$
134,321

 
$
4,451,420


With respect to wholegood vehicles, boats, parts, garments and accessories, revenue is recognized when the Company transfers control of the product to the customer. With respect to services provided by the Company, revenue is recognized upon completion of the service or over the term of the service agreement in proportion to the costs expected to be incurred in satisfying the obligations over the term of the service period. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Sales, value add, and other taxes the Company collects concurrent with revenue-producing activities are excluded from revenue. Incidental items that are immaterial in the context of the contract are recognized as expense. The expected costs associated with the Company’s limited warranties and field service bulletin actions are recognized as expense when the products are sold. The Company recognizes revenue for vehicle service contracts that extend mechanical and maintenance beyond the Company’s limited warranties over the life of the contract. Revenue from goods and services transferred to customers at a point-in-time accounts for the majority of the Company’s revenue. Revenue from products or services transferred over time is discussed in the deferred revenue section.
ORV/Snowmobiles, Motorcycles and Global Adjacent Markets segments
Wholegood vehicles and parts, garments and accessories. For the majority of wholegood vehicles, parts, garments and accessories (PG&A), the Company transfers control and recognizes a sale when it ships the product from its manufacturing facility, distribution center, or vehicle holding center to its customer (primarily dealers and distributors). The amount of consideration the Company receives and revenue it recognizes varies with changes in marketing incentives and rebates it offers to its dealers and their customers. Sales returns are not material. The Company adjusts its estimate of revenue at the earlier of when the most likely amount of consideration it expects to receive changes or when the consideration becomes fixed.
Depending on the terms of the arrangement, the Company may also defer the recognition of a portion of the consideration received because it has to satisfy a future obligation (e.g., free extended service contracts). The Company uses an observable price to determine the stand-alone selling price for separate performance obligations. The Company has elected to recognize
the cost for freight and shipping when control over vehicles, parts, garments or accessories has transferred to the customer as an expense in cost of sales.
Extended Service Contracts. The Company sells separately-priced service contracts that extend mechanical and maintenance coverages beyond its base limited warranty agreements to vehicle owners. The separately priced service contracts range from 12 months to 84 months. The Company primarily receives payment at the inception of the contract and recognizes revenue over the term of the agreement in proportion to the costs expected to be incurred in satisfying the obligations under the contract. Extended service contract revenue is recorded within PG&A.
Aftermarket segment
The Company’s Aftermarket products are sold through dealer, distributor, retail, and e-commerce channels. The Company transfers control and recognizes a sale when products are shipped or delivered to its customer. The amount of consideration the Company receives and revenue it recognizes varies with changes in marketing incentives and rebates it offers to its customers and their customers. When the Company gives its customers the right to return eligible parts and accessories, it estimates the expected returns based on an analysis of historical experience. The Company adjusts its estimate of revenue at the earlier of when the most likely amount of consideration it expects to receive changes or when the consideration becomes fixed.
Service revenue. The Company offers installation services for parts that it sells. Service revenues are recognized upon completion of the service.
Depending on the terms of the arrangement, the Company may also defer the recognition of a portion of the consideration received because it has to satisfy a future obligation (e.g., extended service contracts). The Company uses an observable price to determine the stand-alone selling price for separate performance obligations. The Company has elected to recognize the cost for freight and shipping when control over parts, garments or accessories has transferred to the customer as an expense in cost of sales.
Boats segment
Boats. The Company transfers control and recognizes a sale when it ships the product from its manufacturing facility or distribution center to its customer (primarily dealers). The amount of consideration the Company receives and revenue it recognizes varies with changes in marketing incentives and rebates it offers to its dealers and their customers. Sales returns are not material. The Company adjusts its estimate of revenue at the earlier of when the most likely amount of consideration it expects to receive changes or when the consideration becomes fixed. The Company has elected to recognize the cost for freight and shipping when control over boats has transferred to the customer as an expense in cost of sales.
Deferred revenue
The Company finances its self-insured risks related to extended service contracts (“ESCs”). The premiums for ESCs are primarily recognized in income in proportion to the costs expected to be incurred over the contract period. Warranty costs are recognized as incurred.
The Company expects to recognize approximately $30,703,000 of the unearned amount over the next 12 months and $41,688,000 thereafter. The activity in the deferred revenue reserve during the periods presented was as follows (in thousands):
 
Three months ended September 30,
 
Nine months ended September 30,
 
2019
 
2018
 
2019
 
2018
Balance at beginning of period
$
67,681

 
$
52,620

 
$
59,915

 
$
45,760

New contracts sold
11,119

 
8,054

 
32,504

 
25,226

Less: reductions for revenue recognized
(6,409
)
 
(5,088
)
 
(20,028
)
 
(15,400
)
Balance at end of period (1)
$
72,391

 
$
55,586

 
$
72,391

 
$
55,586


(1) The unamortized ESC premiums (deferred revenue) recorded in other current liabilities totaled $30,703,000 and $23,893,000 at September 30, 2019 and 2018, respectively, while the amount recorded in other long-term liabilities totaled $41,688,000 and $31,693,000 at September 30, 2019 and 2018, respectively.