HOG
$40.89
Harley-Davidson
($.10)
(.24%)
Earnings Details
3rd Quarter September 2020
Tuesday, October 27, 2020 7:00:00 AM
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Summary

Harley-Davidson Beats

Harley-Davidson (HOG) reported 3rd Quarter September 2020 earnings of $1.05 per share on revenue of $1.2 billion. The consensus earnings estimate was $0.32 per share on revenue of $904.2 million. The Earnings Whisper number was $0.46 per share. Revenue fell 8.4% compared to the same quarter a year ago.

Harley-Davidson Inc produces and sells heavyweight motorcycles, as well as offers motorcycle parts, accessories, and related services. It operates in two segments, Motorcycles and Related Products, and Financial Services.

Results
Reported Earnings
$1.05
Earnings Whisper
$0.46
Consensus Estimate
$0.32
Reported Revenue
$1.17 Bil
Revenue Estimate
$904.2 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Harley-Davidson Sharpens Focus and Reignites Culture; Delivers Best Third Quarter Net Income Since 2015

MILWAUKEE, Oct. 27, 2020 /PRNewswire/ -- Harley-Davidson, Inc. ("Harley-Davidson") (NYSE: HOG) today announced further progress implementing The Rewire, a critical overhaul of its business, setting a strong foundation for the company including a new operating model that realigns the organization for performance, reduces costs and sharpens focus on profitable products and markets. The end of The Rewire will be the foundation for The Hardwire, the company's forthcoming 5-year strategic plan (2021-2025), to deliver profitable growth and shareholder value based on expanding the desirability of Harley-Davidson. Harley-Davidson also reported third quarter 2020 financial results, including the strongest third quarter net income since 2015, reflecting initial positive impacts of The Rewire efforts.

"We have driven significant progress across each key element of The Rewire playbook, and we believe the positive changes we have executed are setting our course for a winning future," said Jochen Zeitz, chairman, president and CEO, Harley-Davidson. "We have started on our journey to become a high-performance company where business structure, leadership principles and our culture are all aligned. The platform we are creating will support the work ahead as we continue to develop and execute our new 5-year strategic plan, The Hardwire."

Driving A High-Performance Culture
Harley-Davidson is evolving its culture to drive a high-performing, winning organization. The company is ramping up the competitive spirit of its employees and dealers to promote the heritage and value of the Harley-Davidson brand. Earlier this year, the company revealed a new vision and mission that are guiding and defining the company's roadmap.

Vision:  Building our legend and leading our industry through innovation, evolution and emotion.

Mission: More than building machines, we stand for the timeless pursuit of adventure. Freedom for the soul.

The Rewire
The Rewire efforts to date have strengthened the company's focus on customers and dealers and reinforced desirability for the company's brand and products, setting the foundation for its 2021-2025 strategic plan.

Highlights as of the end of the Third Quarter:

  • $250 million cash savings including SG&A and capital reductions expected in 2020
  • $115 million annual savings from restructuring actions taken expected starting in 2021
  • $3.6 billion cash and cash equivalents compared to $862 million in 2019
  • $1.1 billion of cash generated from operating activities compared to $849 million in 2019
  • Global dealer inventory down over 30 percent compared to third quarter 2019
  • 2020 motorcycles selling at full MSRP (avg. U.S. during the third quarter)
  • Used Harley-Davidson prices up significantly (U.S.)

Progress made across all five key elements of The Rewire include:

New Operating Model: Reduced Complexity and Increased Speed
The company's new operating model eliminated duplication and complexity across global operations, resulting in significant expected ongoing SG&A savings and vast improvements in agility and efficiency.

The company also refreshed the leadership structure and team with most of the leaders being new to their roles and many bringing new perspectives and capabilities from outside the company.

Reset Global Business and Focus on High-Potential Markets
Harley-Davidson plans to concentrate on approximately 50 markets, primarily in North America, Europe and parts of Asia Pacific, that represent a high percentage of the company's expected volume and growth potential. The company's international business has been significantly reset and refocused with investment and resources aligned with projected market potential. Under the new participation model, approximately:

  • 36 highest potential markets will remain, with the resources and autonomy within a clearly defined framework, to best drive growth and profitability.
  • 17 markets will transition to more cost-effective distributor models. This includes India, where Hero MotoCorp will be the exclusive Harley-Davidson distributor and licensed to develop and sell a range of Harley-Davidson motorcycles.
  • 39 markets will be exited due to volume, profitability or potential that does not support continued investment.

Refined Motorcycle Line-Up and High-Impact Product Launches
The company has streamlined its planned product portfolio by 30 percent and overhauled launch timing and go-to-market practices for maximum impact and success.

Highlights of the new approach include:

  • Further streamlining - Eliminating optional offerings in the product portfolio with low customer uptake
  • Sharper focus - Reducing complexity and directing resources toward the highest priority and core stronghold products
    • Priority - Deliver Harley-Davidson's first Adventure Touring motorcycle in 2021
    • Outsource - New venture created for eBicycles with minority equity participation for Harley-Davidson; marketed as Serial 1, Powered by Harley-Davidson
  • Seasonal alignment - Plans underway for a virtual, new model year launch for dealers and consumers in first quarter (shifted from August to be closer to the start of the riding season)
  • Marketing that drives desirability - The company executed new marketing campaigns featuring Jason Momoa and Ewan McGregor and Charley Boorman, stars of The Long Way Up, generating significant leads and growing awareness, excitement and desirability for the Harley-Davidson brand and products.
    • 500 million+ views of 'United We Will Ride' video by Jason Momoa
    • 56 million+ views of The Long Way Up trailer
    • 92,000 visits to The Long Way Up page on H-D.com
    • 105 million+ positive media impressions of Long Way Up

Growth through Parts & Accessories (P&A) and General Merchandise (GM)
To drive growth, Harley-Davidson established new business units for P&A and GM that enable each to invest resources to establish new channel strategies and better product assortments.

P&A Strategy

  • Better leverage opportunity to inspire riders through customization
  • Synergize with motorcycle product strategy
  • Improve pricing and inventory strategy; reduce SKUs by 15 percent for 2021
  • Enhance training and field support to drive sales growth

GM Strategy

  • Realign product in critical categories; build category management plans
  • Reestablish design principles centered around authenticity, brand heritage and quality
  • Sharpen focus on most profitable SKUs; reduce SKUs by 25 percent for 2021

Protecting Value
The company is operating with a remodeled approach to supply and inventory management with a focus on a powerful dealer network to better preserve the value and desirability of Harley-Davidson motorcycles for customers. Some initial outcomes of this approach as of the end of the third quarter include:

  • Reduced price gap between new and used Harley-Davidson motorcycles in the U.S.
  • Global dealer inventory down over 30 percent
  • Essentially eliminated promotions and discounting with a focus on brand building

A strong network of profitable dealers is essential to delivering the most desirable Harley-Davidson experience. The company continues to optimize its network to strengthen priority markets and provide an improved and integrated customer experience.

COVID-19 Response and Recovery
The company continues to proactively manage its business through the pandemic and has maintained robust protocols to keep workers safe in its factories. Most non-production workers will continue to work from home at least until the end of the year.

Included in the company's broad cost and cash savings measures are SG&A reductions, curtailed capital spending, suspended discretionary share repurchases and a prudent approach to dividend payments. The company will pay a fourth quarter cash dividend of $0.02 per share, in line with its second and third quarter dividends. The dividend is payable December 18, 2020 to the shareholders of record of the company's common stock as of December 4, 2020.

The company has also maintained its strong liquidity position with $4.7 billion in liquidity at the end of the quarter.

Third Quarter 2020 Results

 Harley-Davidson, Inc. Consolidated Financial Results

$ in millions (except EPS)

3rd quarter

9 months

2020

2019

Change

2020

2019

Change

Revenue

$1,166

$1,273

(8)%

$3,329

$4,290

(22)%

Net Income

$120

$87

39%

$98

$410

(76)%

GAAP Diluted EPS

$0.78

$0.55

42%

$0.64

$2.58

(75)%

Adjusted Diluted EPS

$1.05

$0.70

50%

$1.22

$3.14

(61)%

Net income in Q3 2020 was $120 million, up 39 percent over prior year and the highest Q3 result since 2015. Q3 results reflect the actions taken in the third quarter under the company's The Rewire effort. Q3 GAAP diluted EPS was $0.78 versus $0.55 in Q3 2019. Excluding restructuring plan costs and the impact of tariffs, adjusted Q3 diluted EPS was $1.05 versus $0.70 in Q3 2019.

 Retail Motorcycle Sales

Motorcycles (thousands)

3rd quarter

9 months

2020

2019

Change

2020

2019

Change

U.S.

31.3

34.9

(10)%

86.4

105.8

(18)%

Canada

1.9

2.6

(25)%

5.7

7.8

(27)%

North America

33.2

37.5

(11)%

92.0

113.5

(19)%

EMEA

11.2

10.5

7%

29.9

36.9

(19)%

Asia Pacific

7.6

8.1

(6)%

20.3

21.8

(7)%

Latin America

1.8

2.5

(29)%

4.8

7.3

(34)%

Worldwide Total

53.8

58.5

(8)%

147.0

179.5

(18)%

Global retail motorcycle sales in the third quarter of 2020 were down 8 percent compared to the prior year reflecting, among other things, the company's shift in timing of the launch of new model year motorcycles from August each year to early Q1 to better align with seasonality.

 Motorcycles and Related Products Segment Results

$ in millions

3rd quarter

9 months

2020

2019

Change

2020

2019

Change

Motorcycle Shipments (thousands)

43.0

45.8

(6)%

124.3

173.5

(28)%

Total Revenue

$964

$1,069

(10)%

$2,733

$3,699

(26)%

Motorcycles Revenue

$684

$779

(12)%

$2,030

$2,872

(29)%

Parts & Accessories Revenue

$210

$203

3%

$513

$584

(12)%

General Merchandise Revenue

$49

$60

(18)%

$136

$180

(24)%

Gross Margin

29.8%

29.9%

(0.1) pts.

26.1%

30.3%

(4.2) pts.

Operating Income

$47

$47

(0)%

$10

$336

(97)%

Operating Margin

4.8%

4.4%

0.5 pts.

0.4%

9.1%

(8.7) pts.

Revenue from the Motorcycles and Related Products segment was down in Q3 compared to the prior year due to, among other things, the shift in timing of its motorcycle model year change-over from August to early Q1 annually. Gross margin was flat to prior year and operating margin was up during the quarter compared to Q3 2019 primarily due to aggressive cost management in the face of the COVID-19 pandemic and actions taken under The Rewire.

 Financial Services Segment Results

$ in millions

3rd Quarter

9 months

2020

2019

Change

2020

2019

Change

Revenue

$202

$204

(1)%

$596

$591

1%

Operating Income

$91

$73

25%

$119

$207

(43)%

Financial Services segment third quarter operating income was up 25 percent due primarily to a decrease in the provision for loan losses driven by lower actual losses at the end of Q3 versus the previous quarter.

Other Results
Cash - Cash and cash equivalents were $3.6 billion at the end of Q3 2020, compared to $862 million at the end of Q3 2019. Harley-Davidson generated $1.1 billion of cash from operating activities year-to-date 2020 compared to $849 million year-to-date 2019.

Tax Rate - Harley-Davidson's year-to-date effective tax rate was 10.8 percent in Q3 2020 compared to 24.6 percent in Q3 2019. The decline in the effective tax rate was primarily due to discrete income tax benefits which reduced the Company's income tax expense.

Dividend & Share Repurchase - The company paid a cash dividend of $0.02 per share for the third quarter of 2020. The company did not repurchase shares on a discretionary basis during the first three quarters of 2020. During the quarter, there were 154 million weighted-average diluted common shares outstanding and 18 million shares remained on board-approved share repurchase authorizations.

Outlook            
Given the uncertainty that remains surrounding the impact and duration of the COVID-19 pandemic, the company is not providing 2020 financial guidance.

Harley-Davidson is developing its 2021-2025 strategic plan, The Hardwire. Building on the foundation and principles of The Rewire, the driver of the new plan will be Harley-Davidson as the most desirable motorcycle brand in the world for its customers, employees, community and investors.

Company Background
Harley-Davidson, Inc. is the parent company of Harley-Davidson Motor Company and Harley-Davidson Financial Services. Our vision: Building our legend and leading our industry through innovation, evolution and emotion. Our mission: More than building machines, we stand for the timeless pursuit of adventure. Freedom for the soul. Since 1903, Harley-Davidson has defined motorcycle culture with an expanding range of leading-edge, distinctive and customizable motorcycles in addition to riding experiences and exceptional motorcycle 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 at www.harley-davidson.com.

Webcast Presentation
Harley-Davidson will discuss financial results, developments in the business, a summary of The Rewire efforts and a first look at The Hardwire 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 Disclosure
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 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 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 imported from China. The impact of 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. These non-GAAP measures, as well as a reconciliation of the comparable GAAP measure to these non-GAAP measures, are included later in this press release.

Cautionary Note Regarding Forward-Looking Statements
The company intends that certain matters discussed in this press 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," "is on-track" or words of similar meaning. Similarly, statements that describe or refer to future expectations, 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 press 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 are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this press release are only made as of the date of this press release, and the company disclaims any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

Important factors that could affect future results and cause those results to differ materially from those expressed in the forward-looking statements include, among others, the following: (i) the COVID-19 pandemic, including the length and severity of the pandemic across the globe and the pace of recovery following the pandemic and (ii) the company's ability to: (A) create and execute its business plans and strategies, including developing The Hardwire, successfully executing its remodeled approach to supply and inventory management, and strengthening its existing business while allowing for desirable growth; (B) accurately analyze, predict and react to changing market conditions and successfully adjust to shifting global consumer needs and interests, including successfully implementing and executing plans to exit international markets where volumes and profitability do not support continued investment, in line with The Rewire actions, and successfully transitioning to a distributor model in seventeen markets; (C) successfully access the capital and/or credit markets on terms that are acceptable to the company and within its expectations; (D) successfully carry out its global manufacturing and assembly operations; (E) 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; (F) perform in a manner that enables the company to benefit from market opportunities while competing against existing and new competitors; (G) 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; (H) manage supply chain issues, including quality issues and any unexpected interruptions or price increases caused by raw material shortages or natural disasters; (I) manage the impact that prices for and supply of used motorcycles may have on its business, including on retail sales of new motorcycles; (J) realize expectations concerning market demand for electric models, which will depend in part on the building of necessary infrastructure; (K) successfully manage and reduce costs throughout the business; (L) balance production volumes for its new motorcycles with consumer demand; (M) manage through changes in general economic and business conditions, including changing capital, credit and retail markets, and the changing political environment; (N) 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; (O) develop and maintain a productive relationship with Zhejiang Qianjiang Motorcycle Co., Ltd. and launch related products in a timely manner; (P) manage and predict the impact that new or adjusted tariffs may have on the company's ability to sell products internationally, and the cost of raw materials and components; (Q) successfully determine, implement on a timely basis, and maintain a manner in which to sell motorcycles in the European Union, China, and the company's ASEAN countries that does not subject its motorcycles to incremental tariffs; (R) 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; (S) accurately estimate and adjust to fluctuations in foreign currency exchange rates, interest rates and commodity prices; (T) retain and attract talented employees, and eliminate personnel duplication, inefficiencies and complexity throughout the organization; (U) prevent a cybersecurity breach involving consumer, employee, dealer, supplier, or company data and respond to evolving regulatory requirements regarding data security; (V) manage the credit quality, the loan servicing and collection activities, and the recovery rates of HDFS' loan portfolio; (W) 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; (X) manage through the effects inconsistent and unpredictable weather patterns may have on retail sales of motorcycles; (Y) implement and manage enterprise-wide information technology systems, including systems at its manufacturing facilities; (Z) manage changes and prepare for requirements in legislative and regulatory environments for its products, services and operations; (AA) manage its exposure to product liability claims and commercial or contractual disputes; (BB) continue to manage the relationships and agreements that the company has with its labor unions to help drive long-term competitiveness; and (CC) accurately predict the margins of its Motorcycles and Related Products segment in light of, among other things, tariffs, the cost associated with product development initiatives and the company's complex global supply chain.

The company's operations, demand for its products, and its liquidity could be adversely impacted by work stoppages, facility closures, strikes, natural causes, widespread infectious disease, 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, the impact of COVID-19, 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, 2019 and Part II, Item 1A of any subsequently filed Quarterly Report on Form 10-Q, for a discussion of additional risk factors and a more complete discussion of some of the cautionary statements noted above.

### (HOG-F)

 

Harley-Davidson, Inc.

Condensed Consolidated Statements of Operations

(In thousands, except per share amounts)




(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)



Three months ended


Nine months ended



September 27,


September 29,


September 27,


September 29,



2020


2019


2020


2019










Motorcycles and Related Products revenue


$ 964,029


$           1,068,942


$          2,733,091


$           3,698,583

Gross profit


287,233


320,064


713,781


1,122,241

Selling, administrative and engineering expense


196,912


265,464


618,912


754,479

Restructuring expense 


43,581


7,629


84,586


31,682

  Operating income from Motorcycles and Related Products

46,740


46,971


10,283


336,080










Financial Services revenue


201,655


203,577


596,064


590,935

Financial Services expense


110,177


130,704


475,771


383,802

Financial Services restructuring expense


334


-


1,278


-

  Operating income from Financial Services


91,144


72,873


119,015


207,133










Operating income


137,884


119,844


129,298


543,213

Other income, net


155


3,160


466


11,857

Investment income


2,672


2,041


3,082


11,970

Interest expense


7,783


7,789


23,307


23,304

Income before income taxes


132,928


117,256


109,539


543,736

Provision for income taxes


12,710


30,693


11,843


133,597

Net income


$ 120,218


$              86,563


$             97,696


$             410,139










Earnings per share:









  Basic


$    0.78


$                0.55


$               0.64


$                2.59

  Diluted


$    0.78


$                0.55


$               0.64


$                2.58










Weighted-average shares:









  Basic


153,252


156,239


153,153


158,117

  Diluted


153,915


156,944


153,790


158,794










Cash dividends per share:


$   0.020


$               0.375


$              0.420


$               1.125

 

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 27,


September 29,


September 27,


September 29,



2020


2019


2020


2019

Net income excluding restructuring plan costs and the
impact of tariffs









Net income (GAAP)


$ 120,218


$              86,563


$             97,696


$             410,139

Restructuring plan costs


43,915


10,091


85,864


41,715

Impact of incremental tariffs


2,690


21,594


22,397


76,971

Tax effect of adjustments(a)


(5,477)


(8,063)


(19,486)


(29,160)

Adjustments, net of tax


41,128


23,622


88,775


89,526

Adjusted net income (non-GAAP)


$ 161,346


$             110,185


$            186,471


$             499,665










Diluted EPS excluding restructuring plan costs and the
impact of tariffs









Diluted EPS (GAAP)


$    0.78


$                0.55


$               0.64


$                2.58

Adjustments net of tax, per share


0.27


0.15


0.58


0.56

Adjusted diluted EPS (non-GAAP)


$    1.05


$                0.70


$               1.22


$                3.14










(a) 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 27,


December 31,


September 29,



2020


2019


2019

ASSETS







Current assets:







    Cash and cash equivalents


$           3,560,950


$            833,868


$             862,381

    Accounts receivable, net


232,845


259,334


307,616

    Finance receivables, net


1,701,478


2,272,522


2,210,001

    Inventories, net


322,375


603,571


489,098

    Restricted cash


160,155


64,554


79,115

    Other current assets


178,931


168,974


140,786



6,156,734


4,202,823


4,088,997








Finance receivables, net


5,142,014


5,101,844


5,305,579

Other long-term assets


1,233,527


1,223,492


1,181,654



$          12,532,275


$         10,528,159


$          10,576,230








LIABILITIES AND SHAREHOLDERS' EQUITY







Current liabilities:







    Accounts payable and accrued liabilities


$             880,384


$            876,668


$             905,941

    Short-term debt


1,227,763


571,995


1,013,137

    Current portion of long-term debt, net


2,109,284


1,748,109


1,779,673



4,217,431


3,196,772


3,698,751








Long-term debt, net


6,171,676


5,124,826


4,607,041

Pension and postretirement healthcare liabilities


126,232


128,651


171,593

Other long-term liabilities


247,038


273,911


262,626








Shareholders' equity


1,769,898


1,803,999


1,836,219



$          12,532,275


$         10,528,159


$          10,576,230

 

Harley-Davidson, Inc.

Condensed Consolidated Statements of Cash Flows

 (In thousands)




(Unaudited)


(Unaudited)



Nine months ended



September 27,


September 29,



2020


2019






Net cash provided by operating activities


$          1,135,068


$             848,649






Cash flows from investing activities:





  Capital expenditures


(92,295)


(121,161)

  Finance receivables, net


(143,093)


(445,708)

  Acquisition of business


-


(7,000)

  Other investing activities


334


22,395

Net cash used by investing activities


(235,054)


(551,474)






Cash flows from financing activities:





  Proceeds from issuance of medium-term notes


1,396,602


546,655

  Repayments of medium-term notes


(1,400,000)


(1,350,000)

  Proceeds from securitization debt


2,064,450


1,021,353

  Repayments of securitization debt


(735,885)


(244,250)

  Net increase (decrease) in unsecured commercial paper


509,978


(120,707)

  Net increase in credit facilities


150,000


-

  Borrowings of asset-backed commercial paper


225,187


177,950

  Repayments of asset-backed commercial paper


(236,846)


(240,008)

  Deposits


29,992


-

  Dividends paid


(65,002)


(179,409)

  Repurchase of common stock


(7,895)


(217,454)

  Issuance of common stock under employee stock option plans


96


2,180

Net cash provided (used) by financing activities


1,930,677


(603,690)






Effect of exchange rate changes on cash, cash equivalents and restricted cash


6,071


(4,110)






Net increase (decrease) in cash, cash equivalents and restricted cash


$          2,836,762


$            (310,625)






Cash, cash equivalents and restricted cash:





Cash, cash equivalents and restricted cash, beginning of period


$            905,366


$           1,259,748

Net increase (decrease) in cash, cash equivalents and restricted cash


2,836,762


(310,625)

Cash, cash equivalents and restricted cash, end of period


$          3,742,128


$             949,123






Reconciliation of cash, cash equivalents and restricted cash on the
Consolidated balance sheets to the Consolidated statements of cash flows: 





  Cash and cash equivalents


$          3,560,950


$             862,381

  Restricted cash


160,155


79,115

  Restricted cash included in Other long-term assets


21,023


7,627

  Cash, cash equivalents and restricted cash per the Consolidated statements of cash flows


$          3,742,128


$             949,123

 

Motorcycles and Related Products Revenue

 and Motorcycle Shipment Data

(Revenue in thousands) 



(Unaudited)


(Unaudited)


(Unaudited)


(Unaudited)



Three months ended


Nine months ended



September 27,


September 29,


September 27,


September 29,



2020


2019


2020


2019

MOTORCYCLES AND RELATED PRODUCTS REVENUE









  Motorcycles


$ 684,344


$             779,344


$          2,030,447


$           2,871,982

  Parts & accessories


209,808


203,173


513,201


584,134

  General merchandise


49,356


60,334


136,321


180,379

  Licensing


8,894


8,611


21,826


27,099

  Other


11,627


17,480


31,296


34,989



$ 964,029


$           1,068,942


$          2,733,091


$           3,698,583










U.S. MOTORCYCLE SHIPMENTS


25,284


25,572


69,359


101,481










WORLDWIDE MOTORCYCLE SHIPMENTS









    Touring


16,505


19,905


47,811


75,871

    Cruiser(a)


15,500


16,225


47,505


59,367

    Sportster®/ Street


10,978


9,707


29,009


38,247



42,983


45,837


124,325


173,485










(a) Includes Softail®, CVOTM, and LiveWireTM

 

Worldwide Retail Sales of Harley-Davidson Motorcycles(a)












Three months ended


Nine months ended



September 30,


September 30,


September 30,


September 30,



2020


2019


2020


2019










United States


31,304


34,903


86,376


105,756

Canada


1,915


2,560


5,668


7,787

Total North America


33,219


37,463


92,044


113,543










Europe(b)


9,742


9,018


26,014


31,997

EMEA - Other


1,442


1,465


3,864


4,902

Total EMEA


11,184


10,483


29,878


36,899










Asia Pacific(c)


4,444


4,889


12,517


13,219

Asia Pacific - Other


3,187


3,189


7,754


8,603

Total Asia Pacific


7,631


8,078


20,271


21,822










Latin America


1,768


2,498


4,760


7,255

      Total worldwide retail sales


53,802


58,522


146,953


179,519



(a) 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.


(b)  Includes Austria, Belgium, Denmark, Finland, France, Germany, Italy, Luxembourg, Netherlands, Norway, Spain, Sweden, Switzerland and the United Kingdom. Retail sales for Greece and Portugal were reclassified from Europe to EMEA - Other for 2019 to be consistent with the 2020 presentation.



(c) Includes Japan, Australia, New Zealand and South Korea

 

Motorcycle Registration Data (a)








Nine months ended



September 30,


September 30,



2020


2019

United States(b) 


201,822


213,876

Europe(c)


349,993


360,320



(a) Data includes on-road models with internal combustion engines with displacements greater than 600cc's and electric motorcycles with kilowatt peak power equivalents greater than 600cc's (601+cc). On-road 601+cc models include dual purpose models, three-wheeled motorcycles and autocycles. Registration data for Harley-Davidson Street® 500 motorcycles is not included in this table.


(b) United States industry data is derived from information provided by Motorcycle Industry Council. This third-party data is subject to revision and update.


(c) Europe data includes Austria, Belgium, Denmark, Finland, France, Germany, Italy, Luxembourg, Netherlands, Norway, Spain, Sweden, Switzerland, and the United Kingdom. Industry data is derived from information provided by Management Services Helwig Schmitt GmbH. Prior year registrations have been revised to exclude Greece and Portugal registrations. This third party data is subject to revision and update.

 

Harley-Davidson Motor Company (PRNewsfoto/Harley-Davidson, Inc.)

 

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SOURCE Harley-Davidson, Inc.