Document
false0000793952 0000793952 2019-10-22 2019-10-22


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549 
FORM 8-K 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 22, 2019
Harley-Davidson, Inc.
(Exact name of registrant as specified in its charter)

 
 
 
 
 
Wisconsin
 
1-9183
 
39-1382325
(State or other jurisdiction
of incorporation)
 
     (Commission
     File Number)
 
(IRS Employer
Identification No.)
3700 West Juneau Avenue, Milwaukee, Wisconsin 53208
(Address of principal executive offices, including zip code)
(414342-4680
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
  
Trading Symbol
  
Name of exchange on which registered
COMMON STOCK, $0.01 par value per share
  
HOG
  
New York Stock Exchange
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)
 
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o




Item 2.02
Results of Operations and Financial Condition.

On October 22, 2019, Harley-Davidson, Inc. (the “Company”) issued a press release (the “Press Release”) announcing the Company’s third quarter results for the financial period ended September 29, 2019. A copy of the Press Release is being furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01
Financial Statements and Exhibits.

(a)
Not applicable.
(b)
Not applicable.
(c)
Not applicable.
(d)
Exhibits. The following exhibit is being furnished herewith:

    (99.1) Press Release of Harley-Davidson, Inc., dated October 22, 2019
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
 
 
                              HARLEY-DAVIDSON, INC.
 
 
 
 
 
 
 
                                                                       Date: October 22, 2019
 
 
 
By:
 
/s/ Paul J. Krause
 
 
 
 
 
 
Paul J. Krause
 
 
 
 
 
 
Assistant Secretary

2
Exhibit


Harley-Davidson Announces Third Quarter 2019 Results

MILWAUKEE, October 22, 2019 - Harley-Davidson, Inc. (NYSE:HOG) today reported third quarter 2019 results. During the quarter, the company delivered earnings per share and Motorcycles segment operating margin ahead of expectations. The company was encouraged by global retail sales results driven by its actions and tempered U.S. industry rate of decline. The company also advanced its brand amplification efforts and developed capabilities to invigorate the Harley-Davidson experience and build committed riders.

Third Quarter 2019 Highlights

Delivered GAAP diluted EPS of $0.55
Repurchased $112.5 million of shares; paid dividends of $0.375 per share
Improved worldwide year-over-year retail sales rate
Launched new model year 2020 motorcycles, including Low Rider® S, CVO™ Tri Glide® and LiveWire™ - the company’s first electric motorcycle
Introduced the Harley-Davidson IRONe™ electric-powered two-wheelers for kids
Realized significant savings from manufacturing optimization initiative
Progressed More Roads to Harley-Davidson accelerated plan for growth
Activated Amplify Brand as fourth More Roads growth catalyst to build committed riders

Third quarter 2019 GAAP diluted EPS was $0.55. Year-ago GAAP diluted EPS was $0.68. Excluding restructuring plan costs and the impact of recent EU and China tariffs, adjusted third quarter 2019 diluted EPS was $0.70 compared to $0.82 in the third quarter of 2018. Third quarter 2019 net income was $86.6 million on consolidated revenue of $1.27 billion versus net income of $113.9 million on consolidated revenue of $1.32 billion in 2018.
Harley-Davidson international retail sales were up 2.7 percent. The U.S. retail sales rate of decline tempered compared to recent quarters and was down 3.6 percent.

“We are driving stability in our business and bringing data insights and intensified consumer focus to guide our efforts to build committed riders and meet our near and long-term objectives,” said Matt Levatich, president and chief executive officer of Harley-Davidson. “We’ll continue to fuel all aspects of the riding experience and add new solutions to fully develop, engage and retain riders through their journey, starting with the very first spark of interest” said Levatich.

Strategy to Build the Next Generation of Riders

Building committed riders
During the quarter, Harley-Davidson sharpened its U.S. and international objectives through 2027 to better align with its expanded efforts to build committed riders.

Harley-Davidson’s strategic objectives through 2027 are: expand to 4 million total Harley-Davidson riders in the U.S., grow international business to 50 percent of annual HDMC revenue, launch 100 new high impact motorcycles and do so profitably and sustainably.

Accelerated plan for growth
More Roads to Harley-Davidson is the company’s accelerated plan for growth that drives the company’s strategy to deliver sustainable growth and build the next generation of riders from 2018 through 2022. The company is focusing investment and building new capabilities to invigorate the Harley-Davidson brand to spark passion that deepens rider commitment. To reflect this, Amplify Brand was added as a growth catalyst in the More Roads plan and will bolster the other growth catalysts of New Products, Broader Access and Stronger Dealers.
The company plans to maintain its investment and return profile and capital allocation strategy, while it funds strategic opportunities expected to drive revenue growth and expand operating margin, through 2022.
During the third quarter, Harley-Davidson continued to advance its More Roads plan initiatives:

Realized improvements in retail sales, service revenue and website visits for dealers participating in Harley-Davidson performance consulting
Strengthened its leadership in the electrification of motorcycles

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Launched high impact new models and added significant technology to its class-leading model year 2020 motorcycles to inspire new and existing riders
Announced the presenting partnership with 2020 Hella Mega music experience tour

Manufacturing Optimization

Harley-Davidson realized total savings of $16.7 million and incurred costs of $10.0 million in the third quarter from its manufacturing optimization initiative, which was designed to further improve manufacturing operations and cost structure. Since the first quarter of 2018, the company closed its wheel manufacturing facility in Australia and consolidated its motorcycle assembly plant in Kansas City, Mo. into its plant in York, Pa. The company continues to expect 2019 full year costs of $40 million to $50 million, 2019 full year savings of $25 million to $30 million and ongoing annual cash savings of $65 million to $75 million after 2020.

Harley-Davidson Retail Motorcycle Sales

Vehicles
3rd Quarter
9 months
2019
2018
Change
2019
2018
Change
U.S.
 34,903
36,220
(3.6)%
 105,756
112,019
(5.6)%
EMEA
 10,483
10,543
(0.6)%
 36,899
39,249
(6.0)%
Asia Pacific
 8,078
7,433
8.7 %
21,822
21,480
1.6 %
Latin America
 2,498
2,577
(3.1)%
 7,255
7,652
(5.2)%
Canada
2,560
2,453
4.4 %
 7,787
8,340
(6.6)%
International Total
 23,619
23,006
2.7 %
73,763
76,721
(3.9)%
Worldwide Total
58,522
59,226
(1.2)%
179,519
188,740
(4.9)%

The U.S. 601+cc industry was down 1.7 percent in the third quarter compared to the same period in 2018. Harley-Davidson’s third quarter U.S. market share was 49.8 percent. Harley-Davidson’s year-to-date Europe market share was 8.9 percent through September.

Motorcycles and Related Products Segment Results

$ in thousands
3rd Quarter
9 months
2019
2018
Change
2019
2018
Change
Motorcycle Shipments (vehicles)
 45,837
 48,639
(5.8)%
 173,485
 185,176
(6.3)%
Revenue
$1,068,942
$1,123,945
(4.9)%
$3,698,583
$4,013,013
(7.8)%
   Motorcycles
$779,344
$821,670
(5.2)%
$2,871,982
$3,144,796
(8.7)%
   Parts & Accessories
$203,173
$212,406
(4.3)%
$584,134
$612,495
(4.6)%
   General Merchandise
$60,334
$58,266
3.5%
$180,379
$183,520
(1.7)%
Gross Margin
29.9%
30.9%
(1.0) pts.
30.3%
33.7%
(3.4) pts.
Operating Income
$46,971
$65,662
(28.5)%
$336,080
$481,906
(30.3)%
Operating Margin
4.4%
5.8%
(1.4) pts.
9.1%
12.0%
(2.9) pts.

Revenue from the Motorcycles and Related Products (Motorcycles) segment was down in the third quarter behind lower shipments. Operating income decreased primarily due to lower revenues and increased tariff costs, partially offset by savings realized from the company’s manufacturing optimization initiative.

Financial Services Segment Results

$ in thousands
3rd Quarter
9 months
2019
2018
Change
2019
2018
Change
Revenue
$203,577
$191,724
6.2%
$590,935
$558,000
5.9%
Operating Income
$72,873
$83,754
(13.0)%
$207,133
$227,874
(9.1)%


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Financial Services segment third quarter operating income of $72.9 million was down 13.0 percent.

Other Results

Cash and marketable securities were $862.4 million at the end of the third quarter of 2019, compared to $937.0 million in 2018. Through September, Harley-Davidson generated $848.6 million of cash from operating activities in 2019 compared to $1.12 billion in 2018. The company paid a cash dividend of $0.375 per share in the third quarter, and a cumulative total of $1.125 per share for the first nine months of 2019. On a discretionary basis, Harley-Davidson repurchased 3.3 million shares of its common stock during the quarter for $112.5 million. During the quarter, there were approximately 156.9 million weighted-average diluted common shares outstanding. At the end of the quarter, 10.4 million shares remained on a board-approved share repurchase authorization.

Harley-Davidson's year-to-date effective tax rate was 24.6 percent.

2019 Outlook    

For the full year 2019, the company continues to expect:
Motorcycle shipments to be approximately 212,000 to 217,000. In the fourth quarter, the company expects to ship approximately 38,500 to 43,500 motorcycles
Motorcycles segment operating margin as a percent of revenue to be approximately 6 to 7 percent
Financial Services segment operating income to be down year-over-year
Effective tax rate of approximately 24 to 25 percent

Additionally, the company now expects:
Capital expenditures of $205 million to $225 million (including approximately $20 million to support manufacturing optimization); $20 million less than prior quarter guidance

Company Background

Harley-Davidson, Inc. is the parent company of Harley-Davidson Motor Company and Harley-Davidson Financial Services. Since 1903, Harley-Davidson has fulfilled dreams of personal freedom by leading the innovation of two-wheeled mobility. The company offers an expanding range of leading-edge, distinctive and customizable motorcycles and brings the brand to life through Harley-Davidson riding experiences and exceptional motorcycle parts, accessories, riding gear and apparel. Harley-Davidson Financial Services provides financing, insurance and other programs to help get Harley-Davidson riders on the road. Learn more about how Harley-Davidson is Building the Next Generation of Riders at www.harley-davidson.com.

Webcast Presentation

Harley-Davidson will discuss third quarter results and its outlook on an audio webcast at 8:00 a.m. CT today. The webcast login and supporting slides can be accessed at http://investor.harley-davidson.com/news-and-events/events-and-presentations. The audio replay will be available by approximately 10:00 a.m. CT.

Non-GAAP Measures

This press release includes financial measures that have not been calculated in accordance with U.S. generally accepted accounting principles (GAAP) and are therefore referred to as non-GAAP financial measures. The non-GAAP measures described below are intended to be considered by users as supplemental information to the equivalent GAAP measures, to aid investors in better understanding the company’s financial results. The company believes that these non-GAAP measures provide useful perspective on underlying business results and trends, and a means to assess period-over-period results. These non-GAAP measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP measures may not be the same as similarly titled measures used by other companies due to possible differences in method and in items or events being adjusted.
The non-GAAP measures included in this press release are adjusted net income and adjusted diluted EPS excluding restructuring plan costs and the impact of recent EU and China tariffs. Restructuring plan costs include restructuring expenses as presented in the consolidated statements of income and costs associated with temporary inefficiencies incurred in connection with the manufacturing optimization initiative included in Motorcycles and Related Products cost of goods sold. The impact of recent EU and China tariffs includes incremental European Union and China tariffs imposed beginning in 2018 on the company's products shipped from the U.S., as well as incremental U.S. tariffs imposed beginning in 2018 on certain items

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imported from China. The impact of recent EU and China tariffs excludes higher metals cost resulting from the U.S. steel and aluminum tariffs. These adjustments are consistent with the approach used for 2018 to determine performance relative to financial objectives under the company’s incentive compensation plans. A reconciliation of these non-GAAP measures from the comparable GAAP measure is included later in this press release.

Forward-Looking Statements
 
The company intends that certain matters discussed in this release are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include words such as the company "believes," "anticipates," "expects," "plans," “may,” “will,” "estimates," or words of similar meaning. Similarly, statements that describe future plans, strategies, objectives, outlooks, targets, guidance, commitments, or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially, unfavorably or favorably, from those anticipated as of the date of this release. Certain of such risks and uncertainties are described below. Shareholders, potential investors, and other readers are urged to consider these factors in evaluating the forward-looking statements and cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this release are only made as of the date of this release, and the company disclaims any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

The company's ability to meet the targets and expectations noted above depends upon, among other factors, the company's ability to (i) execute its business plans and strategies, including the elements of the More Roads to Harley-Davidson accelerated plan for growth that the company disclosed on July 30, 2018 and updated September 24, 2019, and strengthen its existing business while enabling growth, (ii) manage and predict the impact that new or adjusted tariffs may have on the company’s ability to sell product internationally, and the cost of raw materials and components, (iii) execute its strategy of growing ridership, globally, (iv) effectively execute the company's manufacturing optimization initiative within expected costs and timing and successfully carry out its global manufacturing and assembly operations, (v) accurately analyze, predict and react to changing market conditions and successfully adjust to shifting global consumer needs and interests, (vi) successfully launch a smaller displacement motorcycle in India, (vii) develop and introduce products, services and experiences on a timely basis that the market accepts, that enable the company to generate desired sales levels and that provide the desired financial returns, (viii) perform in a manner that enables the company to benefit from market opportunities while competing against existing and new competitors, (ix) realize expectations concerning market demand for electric models, which will depend in part on the building of necessary infrastructure, (x) prevent, detect, and remediate any issues with its motorcycles or any issues associated with the manufacturing processes to avoid delays in new model launches, recall campaigns, regulatory agency investigations, increased warranty costs or litigation and adverse effects on its reputation and brand strength, and carry out any product programs or recalls within expected costs and timing, (xi) manage supply chain issues, including quality issues and any unexpected interruptions or price increases caused by raw material shortages or natural disasters, (xii) manage the impact that prices for and supply of used motorcycles may have on its business, including on retail sales of new motorcycles, (xiii) reduce other costs to offset costs of the More Roads to Harley-Davidson plan and redirect capital without adversely affecting its existing business, (xiv) balance production volumes for its new motorcycles with consumer demand, (xv) manage risks that arise through expanding international manufacturing, operations and sales, (xvi) manage through changes in general economic and business conditions, including changing capital, credit and retail markets, and the changing political environment, (xvii) successfully determine, implement on a timely basis, and maintain a manner in which to sell motorcycles in the European Union, China, and ASEAN countries that does not subject its motorcycles to incremental tariffs, (xviii) accurately estimate and adjust to fluctuations in foreign currency exchange rates, interest rates and commodity prices, (xix) continue to develop the capabilities of its distributors and dealers, effectively implement changes relating to its dealers and distribution methods and manage the risks that its independent dealers may have difficulty obtaining capital and managing through changing economic conditions and consumer demand, (xx) retain and attract talented employees, (xxi) prevent a cybersecurity breach involving consumer, employee, dealer, supplier, or company data and respond to evolving regulatory requirements regarding data security, (xxii) manage the credit quality, the loan servicing and collection activities, and the recovery rates of HDFS' loan portfolio, (xxiii) adjust to tax reform, healthcare inflation and reform and pension reform, and successfully estimate the impact of any such reform on the company's business, (xxiv) manage through the effects inconsistent and unpredictable weather patterns may have on retail sales of motorcycles, (xxv) implement and manage enterprise-wide information technology systems, including systems at its manufacturing facilities, (xxvi) manage changes and prepare for requirements in legislative and regulatory environments for its products, services and operations, (xxvii) manage its exposure to product liability claims and commercial or contractual disputes, (xxviii) successfully access the capital and/or credit markets on terms (including interest rates) that are acceptable to the company and within its expectations, (xxix) manage its Thailand corporate and manufacturing operation in a manner that allows the company to avail itself of preferential free trade agreements and duty rates, and sufficiently lower prices of its motorcycles in certain markets, (xxx) continue to manage the relationships and agreements that the company has with its labor

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unions to help drive long-term competitiveness, (xxxi) accurately predict the margins of its Motorcycles & Related Products segment in light of, among other things, tariffs, the cost associated with the More Roads to Harley-Davidson plan, the company’s manufacturing optimization plan, and the company’s complex global supply chain, and (xxxii) develop and maintain a productive relationship with Zhejiang Qianjiang Motorcycle Co., Ltd. and launch related products in a timely manner.

The company could experience delays or disruptions in its operations as a result of work stoppages, strikes, natural causes, terrorism or other factors. Other factors are described in risk factors that the company has disclosed in documents previously filed with the Securities and Exchange Commission. Many of these risk factors are impacted by the current changing capital, credit and retail markets and the company's ability to manage through inconsistent economic conditions.

The company's ability to sell its motorcycles and related products and services and to meet its financial expectations also depends on the ability of the company's independent dealers to sell its motorcycles and related products and services to retail customers. The company depends on the capability and financial capacity of its independent dealers to develop and implement effective retail sales plans to create demand for the motorcycles and related products and services they purchase from the company. In addition, the company's independent dealers and distributors may experience difficulties in operating their businesses and selling Harley-Davidson motorcycles and related products and services as a result of weather, economic conditions or other factors. In recent years, HDFS has experienced historically low levels of retail credit losses, but there is no assurance that this will continue. The company believes that HDFS' retail credit losses may increase over time due to changing consumer credit behavior and HDFS' efforts to increase prudently structured loan approvals to sub-prime borrowers, as well as actions that the company has taken and could take that impact motorcycle values. Refer to "Risk Factors" under Item 1A of the company's Annual Report on Form 10-K for the year ended December 31, 2018 for a discussion of additional risk factors and a more complete discussion of some of the cautionary statements noted above.

Media Contact:
Jenni Coats
jenni.coats@Harley-Davidson.com
414.343.7902

Financial Contact:
Shannon Burns
shannon.burns@Harley-Davidson.com
414.343.8002

### (HOG-F)

5



Harley-Davidson, Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
 
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
 
Three months ended
 
Nine months ended
 
 
September 29,
2019
 
September 30,
2018
 
September 29,
2019
 
September 30,
2018
Motorcycles and Related Products revenue
 
$
1,068,942

 
$
1,123,945

 
$
3,698,583

 
$
4,013,013

Gross profit
 
320,064

 
347,415

 
1,122,241

 
1,353,273

Selling, administrative and engineering expense
 
265,464

 
266,921

 
754,479

 
797,323

Restructuring expense
 
7,629

 
14,832

 
31,682

 
74,044

Operating income from Motorcycles and Related Products
 
46,971

 
65,662

 
336,080

 
481,906

 
 
 
 
 
 
 
 
 
Financial Services revenue
 
203,577

 
191,724

 
590,935

 
558,000

Financial Services expense
 
130,704

 
107,970

 
383,802

 
330,126

Operating income from Financial Services
 
72,873

 
83,754

 
207,133

 
227,874

 
 
 
 
 
 
 
 
 
Operating income
 
119,844

 
149,416

 
543,213

 
709,780

Other income (expense), net
 
3,160

 
644

 
11,857

 
1,509

Investment income (loss)
 
2,041

 
(1,106
)
 
11,970

 
2,630

Interest expense
 
7,789

 
7,762

 
23,304

 
23,180

Income before income taxes
 
117,256

 
141,192

 
543,736

 
690,739

Provision for income taxes
 
30,693

 
27,337

 
133,597

 
159,783

Net income
 
$
86,563

 
$
113,855

 
$
410,139

 
$
530,956

 
 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
 
Basic
 
$
0.55

 
$
0.69

 
$
2.59

 
$
3.18

Diluted
 
$
0.55

 
$
0.68

 
$
2.58

 
$
3.17

 
 
 
 
 
 
 
 
 
Weighted-average common shares:
 
 
 
 
 
 
 
 
Basic
 
156,239

 
165,927

 
158,117

 
166,885

Diluted
 
156,944

 
166,664

 
158,794

 
167,681

 
 
 
 
 
 
 
 
 
Cash dividends per share:
 
$
0.375

 
$
0.370

 
$
1.125

 
$
1.110













Harley-Davidson, Inc.
Reconciliation of GAAP Amounts to Non-GAAP Amounts
(In thousands, except per share amounts)
 
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
 
Three months ended
 
Nine months ended
 
 
September 29,
2019
 
September 30,
2018
 
September 29,
2019
 
September 30,
2018
NET INCOME EXCLUDING RESTRUCTURING PLAN COSTS AND THE IMPACT OF RECENT EU AND CHINA TARIFFS
 
 
 
 
 
 
 
 
Net income (GAAP)
 
$
86,563

 
$
113,855

 
$
410,139

 
$
530,956

Restructuring plan costs
 
10,091

 
21,038

 
41,715

 
83,370

Impact of recent EU and China tariffs
 
21,594

 
10,312

 
76,971

 
10,312

Tax effect of adjustments(1)
 
(8,063
)
 
(7,602
)
 
(29,160
)
 
(22,718
)
Adjustments net of tax
 
23,622

 
23,748

 
89,526

 
70,964

Adjusted net income (non-GAAP)
 
$
110,185

 
$
137,603

 
$
499,665

 
$
601,920

 
 
 
 
 
 
 
 
 
DILUTED EPS EXCLUDING RESTRUCTURING PLAN COSTS AND THE IMPACT OF RECENT EU AND CHINA TARIFFS
 
 
 
 
 
 
 
 
Diluted earnings per share (GAAP)
 
$
0.55

 
$
0.68

 
$
2.58

 
$
3.17

Adjustments net of tax, per share
 
0.15

 
0.14

 
0.56

 
0.42

Adjusted diluted earnings per share (non-GAAP)
 
$
0.70

 
$
0.82

 
$
3.14

 
$
3.59

(1) The income tax effect of adjustments has been computed using the company's effective income tax rate





Harley-Davidson, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
 
 
(Unaudited)
 
 
 
(Unaudited)
 
 
September 29,
2019
 
December 31,
2018
 
September 30,
2018
ASSETS
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
Cash and cash equivalents
 
$
862,381

 
$
1,203,766

 
$
926,992

Marketable securities
 

 
10,007

 
10,011

Accounts receivable, net
 
307,616

 
306,474

 
332,309

Finance receivables, net
 
2,210,001

 
2,214,424

 
2,116,386

Inventories
 
489,098

 
556,128

 
516,247

Restricted cash
 
79,115

 
49,275

 
36,471

Other current assets
 
140,786

 
144,368

 
151,042

 
 
4,088,997

 
4,484,442

 
4,089,458

Finance receivables, net
 
5,305,579

 
5,007,507

 
5,187,176

Other long-term assets
 
1,181,654

 
1,173,715

 
1,227,166

 
 
$
10,576,230

 
$
10,665,664

 
$
10,503,800

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
 
 
Current liabilities:
 
 
 
 
 
 
Accounts payable & accrued liabilities
 
$
905,941

 
$
885,991

 
$
875,799

Short-term debt
 
1,013,137

 
1,135,810

 
1,373,859

Current portion of long-term debt, net
 
1,779,673

 
1,575,799

 
1,526,156

 
 
3,698,751

 
3,597,600

 
3,775,814

Long-term debt, net
 
4,607,041

 
4,887,667

 
4,196,517

Pension and postretirement healthcare liabilities
 
171,593

 
202,229

 
166,936

Other long-term liabilities
 
262,626

 
204,219

 
211,561

 
 
 
 
 
 
 
Shareholders’ equity
 
1,836,219

 
1,773,949

 
2,152,972

 
 
$
10,576,230

 
$
10,665,664

 
$
10,503,800








Harley-Davidson, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
 
 
(Unaudited)
 
(Unaudited)
 
 
Nine months ended
 
 
September 29,
2019
 
September 30,
2018
Net cash provided by operating activities
 
$
848,649

 
$
1,122,555

 
 
 
 
 
Cash flows from investing activities:
 
 
 
 
Capital expenditures
 
(121,161
)
 
(119,845
)
Finance receivables, net
 
(445,708
)
 
(474,465
)
Acquisition of business
 
(7,000
)
 

Other investing activities
 
22,395

 
(21,753
)
Net cash used by investing activities
 
(551,474
)
 
(616,063
)
 
 
 
 
 
Cash flows from financing activities:
 
 
 
 
Proceeds from issuance of medium-term notes
 
546,655

 
1,144,018

Repayments of medium-term notes
 
(1,350,000
)
 
(877,488
)
Proceeds from securitization debt
 
1,021,353

 

Repayments of securitization debt
 
(244,250
)
 
(224,507
)
Net (decrease) increase in credit facilities and unsecured commercial paper
 
(120,707
)
 
102,154

Borrowings of asset-backed commercial paper
 
177,950

 
120,903

Repayments of asset-backed commercial paper
 
(240,008
)
 
(156,258
)
Dividends paid
 
(179,409
)
 
(186,105
)
Repurchases of common stock
 
(217,454
)
 
(195,998
)
Issuance of common stock under employee stock option plans
 
2,180

 
3,157

Net cash used by financing activities
 
(603,690
)
 
(270,124
)
 
 
 
 
 
Effect of exchange rate changes on cash, cash equivalents and restricted cash
 
(4,110
)
 
(12,567
)
 
 
 
 
 
Net (decrease) increase in cash, cash equivalents and restricted cash
 
$
(310,625
)
 
$
223,801

 
 
 
 
 
Cash, cash equivalents and restricted cash:
 
 
 
 
Cash, cash equivalents and restricted cash, beginning of period
 
$
1,259,748

 
$
746,210

Net (decrease) increase in cash, cash equivalents and restricted cash
 
(310,625
)
 
223,801

Cash, cash equivalents and restricted cash, end of period
 
$
949,123

 
$
970,011

 
 
 
 
 
Reconciliation of cash, cash equivalents and restricted cash in the Consolidated Balance Sheet to the Consolidated Statements of Cash Flows:
 
 
 
 
Cash and cash equivalents
 
$
862,381

 
$
926,992

Restricted cash
 
79,115

 
36,471

Restricted cash included in Other long-term assets
 
7,627

 
6,548

Cash, cash equivalents and restricted cash per the Consolidated Statements of Cash Flows
 
$
949,123

 
$
970,011


Adoption of New Accounting Standards:
On January 1, 2019, the company adopted accounting standards update 2016-02 Leases using the modified retrospective method. As a result, the company recognized a right-of-use lease asset of approximately $60 million and a corresponding lease liability.





Motorcycles and Related Products Revenue
and Motorcycle Shipment Data
(Revenue in thousands)

 
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
(Unaudited)
 
 
Three months ended
 
Nine months ended
 
 
September 29,
2019
 
September 30,
2018
 
September 29,
2019
 
September 30,
2018
MOTORCYCLES AND RELATED PRODUCTS REVENUE
 
 
 
 
 
 
 
 
Motorcycles
 
$
779,344

 
$
821,670

 
$
2,871,982

 
$
3,144,796

Parts & Accessories
 
203,173

 
212,406

 
584,134

 
612,495

General Merchandise
 
60,334

 
58,266

 
180,379

 
183,520

Licensing
 
8,611

 
10,680

 
27,099

 
29,445

Other
 
17,480

 
20,923

 
34,989

 
42,757

 
 
$
1,068,942

 
$
1,123,945

 
$
3,698,583

 
$
4,013,013

MOTORCYCLE SHIPMENTS
 
 
 
 
 
 
 
 
United States
 
25,572

 
26,213

 
101,481

 
108,057

International
 
20,265

 
22,426

 
72,004

 
77,119

 
 
45,837

 
48,639

 
173,485

 
185,176

MOTORCYCLE PRODUCT MIX
 
 
 
 
 
 
 
 
Touring
 
19,905

 
22,204

 
75,871

 
84,125

Cruiser(1)
 
16,225

 
16,049

 
59,367

 
61,951

Sportster® / Street
 
9,707

 
10,386

 
38,247

 
39,100

 
 
45,837

 
48,639

 
173,485

 
185,176

(1) Includes Softail®, CVOTM, and LiveWireTM 






Worldwide Retail Sales of Harley-Davidson Motorcycles(1) 
 
 
Three months ended
 
Nine months ended
 
 
September 30,
2019
 
September 30,
2018
 
September 30,
2019
 
September 30,
2018
 
 
 
 
 
 
 
 
 
United States
 
34,903

 
36,220

 
105,756

 
112,019

 
 
 
 
 
 
 
 
 
Europe(2)
 
9,115

 
9,239

 
32,326

 
34,967

EMEA - Other
 
1,368

 
1,304

 
4,573

 
4,282

Total EMEA
 
10,483

 
10,543

 
36,899

 
39,249

 
 
 
 
 
 
 
 
 
Asia Pacific(3)
 
4,889

 
4,578

 
13,219

 
14,126

Asia Pacific - Other
 
3,189

 
2,855

 
8,603

 
7,354

Total Asia Pacific
 
8,078

 
7,433

 
21,822

 
21,480

 
 
 
 
 
 
 
 
 
Latin America
 
2,498

 
2,577

 
7,255

 
7,652

Canada
 
2,560

 
2,453

 
7,787

 
8,340

Total international retail sales
 
23,619

 
23,006

 
73,763

 
76,721

Total worldwide retail sales
 
58,522

 
59,226

 
179,519

 
188,740

(1) Data source for retail sales figures shown above is new sales warranty and registration information provided by Harley-Davidson dealers and compiled by the company. The company must rely on information that its dealers supply concerning new retail sales, and the company does not regularly verify the information that its dealers supply. This information is subject to revision.
(2) Europe data includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom
(3)Asia Pacific data includes Japan, Australia, New Zealand and Korea
Motorcycle Registration Data(1) 
 
 
Nine months ended
 
 
September 30,
2019
 
September 30,
2018
United States(2)
 
213,877

 
222,468

Europe(3)
 
371,412

 
347,884

(1) Data includes on-road 601+cc models. On-road 601+cc models include dual purpose models, three-wheeled motorcycles and autocycles.
(2) United States data is derived from information provided by Motorcycle Industry Council. This third-party data is subject to revision and update.
(3) Europe data includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. Industry retail motorcycle registration data includes 601+cc models derived from information provided by Association des Constructeurs Europeens de Motocycles, an independent agency. This third-party data is subject to revision and update.