XML 21 R11.htm IDEA: XBRL DOCUMENT v3.22.2.2
Revenue Recognition
 9 Months Ended
Sep. 30, 2022
Revenue Recognition [Abstract]  
Revenue Recognition Revenue RecognitionThe Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or service to a customer (primarily dealers and distributors). Revenue is measured based on the amount of consideration that the Company expects to be entitled to in exchange for the goods or services transferred. Sales, value add, and other taxes that are collected from a customer concurrent with revenue-producing activities are excluded from revenue. 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 contract liabilities section.
The following tables disaggregate the Company's revenue by major product type and geography (in millions):
Three months ended September 30, 2022
Off-RoadOn-RoadMarineCorporateTotal
Revenue by product type
Wholegoods$1,345.7

$282.1$260.2

$—$1,888.0
PG&A400.7

51.9——452.6
Total revenue $1,746.4

$334.0$260.2

$—$2,340.6

Revenue by geography

United States$1,472.2$191.7$251.2$—$1,915.1
Canada127.217.49.0—153.6
EMEA86.5101.9——188.4
APLA60.523.0——83.5
Total revenue $1,746.4$334.0$260.2$—$2,340.6
Three months ended September 30, 2021
Off-RoadOn-RoadMarineCorporateTotal
Revenue by product type
Wholegoods$977.1$213.4$183.6$17.0$1,391.1
PG&A339.144.4—3.1386.6
Total revenue $1,316.2$257.8$183.6$20.1$1,777.7
Revenue by geography
United States$1,057.3$141.0$177.6$18.8$1,394.7
Canada120.810.16.0—136.9
EMEA84.784.2——168.9
APLA53.422.5—1.377.2
Total revenue $1,316.2$257.8$183.6$20.1$1,777.7
Nine months ended September 30, 2022
Off-RoadOn-RoadMarineCorporateTotal
Revenue by product type
Wholegoods$3,527.6

$693.0$744.7

$—$4,965.3
PG&A1,051.3

168.3——1,219.6
Total revenue $4,578.9

$861.3$744.7

$—$6,184.9

Revenue by geography

United States$3,689.0$449.2$723.1$—$4,861.3
Canada388.836.621.5—446.9
EMEA317.3313.80.1—631.2
APLA183.861.7——245.5
Total revenue $4,578.9$861.3$744.7$—$6,184.9
Nine months ended September 30, 2021
Off-RoadOn-RoadMarineCorporateTotal
Revenue by product type
Wholegoods$3,048.0$653.0$579.9$43.2$4,324.1
PG&A967.5145.4—9.61,122.5
Total revenue $4,015.5$798.4$579.9$52.8$5,446.6
Revenue by geography
United States$3,186.6$397.5$562.2$49.7$4,196.0
Canada359.328.417.50.2405.4
EMEA294.4304.30.20.4599.3
APLA175.268.2—2.5245.9
Total revenue $4,015.5$798.4$579.9$52.8$5,446.6

For the majority of wholegood vehicles, boats, and 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. 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. Payment terms vary by customer and most of the Company’s sales are financed by the customer under floorplan financing arrangements whereby the Company receives payment within a few days of shipment of the product.
When the right of return exists, the Company adjusts the consideration for the estimated effect of returns. The Company estimates expected returns based on historical sales levels, the timing and magnitude of historical sales return levels as a percent of sales, type of product, type of customer, and a projection of this experience into the future. 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. 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, boats, parts, garments or accessories has transferred to the customer as an expense in cost of sales.
Financial Products. The Company sells separately-priced extended service contracts (“ESCs”) that extend mechanical coverages beyond the base limited warranty as well as prepaid maintenance agreements to vehicle owners. Each of these separately priced service contracts range from 12 months to 84 months. The Company typically 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.
Contract Liabilities
Contract liabilities relate to deferred revenue recognized for cash consideration received at contract inception in advance of the Company's performance under the respective contract and generally relate to the sale of separately priced ESCs. The Company finances its self-insured risks related to 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 $35.8 million of the unearned amount over the next 12 months and $76.2 million thereafter. The activity in the deferred revenue reserve during the periods presented was as follows (in millions):
Three months ended September 30,Nine months ended September 30,
2022202120222021
Balance at beginning of period$113.6 $105.5 $108.3 $89.1 
New contracts sold10.7 10.7 38.5 43.3 
Less: reductions for revenue recognized(12.3)(8.8)(34.8)(25.0)
Balance at end of period (1)
$112.0 $107.4 $112.0 $107.4 
(1) The unamortized ESC premiums recorded in other current liabilities totaled $35.8 million and $34.4 million as of September 30, 2022 and 2021, respectively, while the amount recorded in other long-term liabilities totaled $76.2 million and $73.0 million as of September 30, 2022 and 2021, respectively.