ý | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Wisconsin | 39-1382325 | |
(State of organization) | (I.R.S. Employer Identification No.) | |
3700 West Juneau Avenue Milwaukee, Wisconsin | 53208 | |
(Address of principal executive offices) | (Zip code) |
Title of each class | Name of each exchange on which registered | |
COMMON STOCK, $.01 PAR VALUE PER SHARE | NEW YORK STOCK EXCHANGE |
Large accelerated filer | ý | Accelerated filer | ¨ | |||
Non-accelerated filer | ¨ | Smaller reporting company | ¨ |
Page | ||
Part I | ||
Item 1. | ||
Item 1A. | ||
Item 1B. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
Part II | ||
Item 5. | ||
Item 6. | ||
Item 7. | ||
Item 7A. | ||
Item 8. | ||
Item 9. | ||
Item 9A. | ||
Part III | ||
Item 10. | ||
Item 11. | ||
Item 12. | ||
Item 13. | ||
Item 14. | ||
Part IV | ||
Item 15. | ||
2016 | 2015 | 2014 | |||||||
Motorcycles | 78.2 | % | 77.8 | % | 78.8 | % | |||
Parts & Accessories | 16.0 | % | 16.2 | % | 15.7 | % | |||
General Merchandise | 5.4 | % | 5.5 | % | 5.1 | % | |||
Other | 0.4 | % | 0.5 | % | 0.4 | % | |||
100.0 | % | 100.0 | % | 100.0 | % |
• | Cruiser (emphasizes styling and owner customization); |
• | Touring (emphasizes rider comfort and load capacity and incorporates features such as fairings and luggage compartments); |
• | Standard (a basic motorcycle which usually features upright seating for one or two passengers); |
• | Sportbike (incorporates racing technology, aerodynamic styling, low handlebars with a “sport” riding position and high performance tires); and |
• | Dual (designed with the capability for use on public roads as well as for some off-highway recreational use). |
2016 | 2015 | 2014 | |||||||
Total new motorcycle registrations | 311.7 | 328.8 | 313.6 | ||||||
Harley-Davidson new registrations | 159.5 | 165.1 | 167.1 | ||||||
51.2 | % | 50.2 | % | 53.3 | % |
(a) | Data includes on-road 601+cc models. On-road 601+cc models include dual purpose models, three-wheeled vehicles and autocycles. Registration data for Harley-Davidson Street® 500 motorcycles is not included in this table. |
(b) | U.S. industry data is derived from information provided by the Motorcycle Industry Council (MIC). This third party data is subject to revision and update. The retail registration data for Harley-Davidson motorcycles presented in this table will differ from the Harley-Davidson retail sales data presented in Item 7 of this report. The Company’s source for retail sales data in Item 7 of this report is sales and warranty registrations provided by Harley-Davidson dealers as compiled by the Company. The retail sales data in Item 7 includes sales of Street 500 motorcycles which are excluded from the 601+cc units included in the retail registration data in this table. In addition, small differences may arise related to the timing of data submissions to the independent sources. |
2016 | 2015 | 2014 | |||||||
Total new motorcycle registrations | 391.9 | 351.8 | 319.8 | ||||||
Harley-Davidson new registrations | 42.3 | 37.0 | 38.5 | ||||||
10.8 | % | 10.5 | % | 12.0 | % |
(a) | On-road 601+cc models include dual purpose models, three-wheeled vehicles and, beginning in 2015, autocycles. Registration data for Harley-Davidson Street® 500 motorcycles is not included in this table. |
(b) | Europe data includes retail sales in Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. Industry retail motorcycle registration data is derived from information provided by the Association des Constructeurs Europeens de Motocycles (ACEM), an independent agency. This third party data is subject to revision and update. The retail registration data for Harley-Davidson motorcycles presented in this table will differ from the Harley-Davidson retail sales data presented in Item 7 of this report. The Company’s source for retail sales data in Item 7 of this report is sales and warranty registrations provided by Harley-Davidson dealers as compiled by the Company. The retail sales data in Item 7 includes sales of Street 500 motorcycles which are excluded from the 601+cc units included in the retail registration data in this table. In addition, some differences may arise related to the timing of data submissions to the independent sources. |
United States | Canada | Latin America | EMEA | Asia Pacific | Total | |||||||||||||
Dealerships | 701 | 67 | 58 | 386 | 249 | 1,461 |
• | York, Pennsylvania - represented by International Association of Machinist and Aerospace Workers (IAM), and the collective bargaining agreement will expire on October 15, 2022 |
• | Kansas City, Missouri - represented by United Steelworkers of America (USW) and IAM, and the respective collective bargaining agreements will expire on July 31, 2018 |
• | Milwaukee, Wisconsin - represented by USW and IAM, and the respective collective bargaining agreements will expire on March 31, 2019 |
• | Tomahawk, Wisconsin - represented by USW, and the collective bargaining agreement will expire on March 31, 2019 |
• | The Company may not be able to successfully execute its long-term business strategy. There is no assurance that the Company will be able to drive growth to the extent desired through its focus of efforts and resources on its long-term business strategy and the Harley-Davidson brand or to enhance productivity and profitability to the extent desired through pricing and continuous improvement. |
• | Changes in general economic conditions, tightening of credit, political events or other factors may adversely impact dealers’ retail sales. The motorcycle industry is impacted by general economic conditions over which motorcycle manufacturers have little control. These factors can weaken the retail environment and lead to weaker demand for discretionary purchases such as motorcycles. Weakened economic conditions in certain business sectors and geographic areas, such as oil-dependent areas, can also result in reduced demand for the Company's products. Tightening of credit can limit the availability of funds from financial institutions and other lenders and sources of capital which could adversely affect the ability of retail consumers to obtain loans for the purchase of motorcycles from lenders, including HDFS. Should general economic conditions or motorcycle industry demand decline, the Company’s results of operations and financial condition may be substantially adversely affected. The motorcycle industry can also be affected by political conditions and other factors over which motorcycle manufacturers have little control. |
• | The Company’s marketing strategy of appealing to and growing sales to multi-generational and multi-cultural customers worldwide may not continue to be successful. The Company has been successful in marketing its products in large part by promoting the experience of Harley-Davidson motorcycling. To sustain and grow the business over the long-term, the Company must grow the sport of motorcycling and continue to be successful selling products and promoting the experience of motorcycling to a diverse set of customers. The Company must also execute its multi-generational and multi-cultural strategy without adversely impacting the strength of the brand with core customers. Failure to successfully drive demand for the Company's products may have a material adverse effect on the Company's business and results of operations. |
• | The motorcycle industry has become increasingly competitive. Many of the Company’s competitors are more diversified than the Company, and they may compete in all segments of the motorcycle market, other powersports markets and/or the automotive market. Certain competitors appear to be increasing their investment in products that compete with the Company's products. Also, the Company’s manufacturer’s suggested retail price for its motorcycles is generally higher than its competitors, and as price becomes a more important competitive factor for consumers in the markets in which the Company competes, the Company may be at a competitive disadvantage. Furthermore, many competitors headquartered outside the U.S. experience a financial benefit from a strengthening in the U.S. dollar relative to their home currency that can be used to fund discounted prices to U.S. consumers. In addition, the Company’s financial services operations face competition from various banks, insurance companies and other financial institutions that may have access to additional sources of capital at more competitive rates and terms, particularly for borrowers in higher credit tiers. The Company's responses to these competitive pressures, or its failure to adequately address and respond to these competitive pressures, may have a material adverse effect on the Company’s business and results of operations. |
• | Increased supply of and/or declining prices for used motorcycles and excess supply of new motorcycles may adversely impact retail sales of new motorcycles by the Company’s independent dealers. The Company has observed that when the supply of used motorcycles increases or the prices for used Harley-Davidson motorcycles decline, there can be reduced demand among retail purchasers for new Harley-Davidson motorcycles (at or near manufacturer’s suggested retail prices). Further, the Company and its independent dealers can and do take actions that influence the markets for new and used motorcycles. For example, introduction of new motorcycle models with significantly different functionality, technology or other customer satisfiers can result in increased supply of used motorcycles, which could result in declining prices for used motorcycles and prior model-year new motorcycles. Also, while the Company has taken steps designed to balance production volumes for its new motorcycles with demand, those steps may not be effective, or the Company’s competitors could choose to supply new motorcycles to the market in excess of demand at reduced prices which could also have the effect of reducing demand for new Harley-Davidson motorcycles (at or near manufacturer’s suggested retail prices). Ultimately, reduced demand among retail purchasers for new Harley-Davidson motorcycles leads to reduced shipments by the Company. |
• | The Company’s ability to remain competitive is dependent upon its capability to develop and successfully introduce new, innovative and compliant products. The motorcycle market continues to change in terms of styling preferences and advances in new technology and, at the same time, be subject to increasing regulations related to safety and emissions. The Company must continue to distinguish its products from its competitors’ products with unique styling and new technologies. As the Company incorporates new and different features and technology into its products, the Company must protect its intellectual property from imitators and ensure its products do not infringe the intellectual property of other companies. In addition, these new products must comply with applicable regulations worldwide and satisfy the potential demand for products that produce lower emissions and achieve better fuel economy. The Company must make product advancements to respond to changing consumer preferences and market demands while maintaining the classic look, sound and feel associated with Harley-Davidson products. The Company must also be able to design and manufacture these products and deliver them to a global marketplace in an efficient and timely manner and at prices that are attractive to customers. There can be no assurances that the Company will be successful in these endeavors or that existing and prospective customers will like or want the Company’s new products. |
• | The Company sells its products at wholesale and must rely on a network of independent dealers to manage the retail distribution of its products. The Company depends on the capability of its independent dealers to develop and implement effective retail sales plans to create demand among retail purchasers for the motorcycles and related products and services that the dealers purchase from the Company. If the Company’s independent dealers are not successful in these endeavors, then the Company will be unable to maintain or grow its revenues and meet its financial expectations. Further, independent dealers may experience difficulty in funding their day-to-day cash flow needs and paying their obligations resulting from adverse business conditions such as weakened retail sales and tightened credit. If dealers are unsuccessful, they may exit or be forced to exit the business or, in some cases, the Company may seek to terminate relationships with certain dealerships. As a result, the Company could face additional adverse consequences related to the termination of dealer relationships. Additionally, liquidating a former dealer’s inventory of new and used motorcycles can add downward pressure on new and used motorcycle prices. Further, the unplanned loss of any of the Company’s independent dealers may lead to inadequate market coverage for retail sales of new motorcycles and for servicing previously sold motorcycles, create negative impressions of the Company with its retail customers, and adversely impact the Company’s ability to collect wholesale receivables that are associated with that dealer. |
• | A cybersecurity breach may adversely affect the Company’s reputation, revenue and earnings. The Company and certain of its third-party service providers and vendors receive, store, and transmit digital personal information in connection with the Company’s human resources operations, financial services operations, e-commerce, the Harley Owners Group, dealer management, and other aspects of its business. The Company’s information systems, and those of its third-party service providers and vendors, are vulnerable to the increasing threat of continually evolving cybersecurity risks. Unauthorized parties have attempted to and may attempt in the future to gain access to these systems or the information the Company and its third-party service providers and vendors maintain and use through fraud or other means of deceiving our employees and third-party service providers and vendors. Hardware, software or applications the Company develops or obtains from third-parties may contain defects in design or manufacture or other problems that could unexpectedly compromise information security and/or the Company’s operations. The methods used to obtain unauthorized access, disable or degrade service or sabotage systems are constantly evolving and may be difficult to anticipate or detect. The Company has implemented and regularly reviews and updates processes and procedures to protect against unauthorized access to or use of secured data and to prevent data loss. However, the ever-evolving threats mean the Company and third-party service providers and vendors must continually evaluate and adapt systems and processes, and there is no guarantee that they will be adequate to safeguard against all data security |
• | The Company is exposed to market risk from changes in foreign exchange rates, commodity prices and interest rates. The Company sells its products internationally and in most markets those sales are made in the foreign country’s local currency. As a result, a weakening in those foreign currencies relative to the U.S. dollar can adversely affect the Company's revenue and margin, and cause volatility in results of operations. The Company is also subject to risks associated with changes in prices of commodities. Earnings from the Company’s financial services business are affected by changes in interest rates. Although the Company uses derivative financial instruments to some extent to attempt to manage a portion of its exposure to foreign currency exchange rates and commodity prices, the Company does not attempt to manage its entire expected exposure, and these instruments generally do not extend beyond one year and may expose the Company to credit risk in the event of counterparty default to the derivative financial instruments. There can be no assurance that in the future the Company will successfully manage these risks. |
• | The Financial Services operations are exposed to credit risk on its retail and wholesale receivables. Credit risk is the risk of loss arising from a failure by a customer, including the Company's independent dealers, to meet the terms of any contract with the Company’s financial services operations. Credit losses are influenced by general business and economic conditions, including unemployment rates, bankruptcy filings and other factors that negatively affect household incomes, as well as contract terms and customer credit profiles. Credit losses are also influenced by the markets for new and used motorcycles, and the Company and its independent dealers can and do take actions that impact those markets. For example, the introduction of new models by the Company that represent significant upgrades on previous models may result in increased supply or decreased demand in the market for used Harley-Davidson branded motorcycles, including those motorcycles that serve as collateral or security for credit that HDFS has extended. This in turn could adversely impact the prices at which those motorcycles may be sold, which may lead to increased credit losses for HDFS. Negative changes in general business, economic or market factors may have an additional adverse impact on the Company’s financial services credit losses and future earnings. The Company believes HDFS' retail credit losses may continue to 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. Increases in the frequency of loss and decreases in the value of repossessed Harley-Davidson branded motorcycles also adversely impact credit losses. If there are adverse circumstances that involve a material decline in values of Harley-Davidson branded motorcycles, those circumstances or any related decline in resale values for Harley-Davidson branded motorcycles could contribute to increased delinquencies and credit losses. |
• | The Company must prevent and detect issues with its products, components purchased from suppliers, and its suppliers’ manufacturing processes to reduce the risk of recall campaigns, increased warranty costs or litigation, increased product liability claims or litigation, delays in new model launches, and inquiries or investigations by regulatory agencies. The Company must also complete any recall campaigns within cost expectations. The Company must continually improve and adhere to product development and manufacturing processes, and ensure that its suppliers and their sub-tier suppliers adhere to product development and manufacturing processes, to ensure high quality products are sold to retail customers. If product designs or manufacturing processes are defective, the Company could experience delays in new model launches, product recalls, inquiries or investigations from regulatory agencies, warranty claims, and product liability claims, which may involve purported class actions. While the Company uses reasonable methods to estimate the cost of warranty, recall and product liability costs and appropriately reflects those in its financial statements, there is a risk the actual costs could exceed estimates and result in damages that are not covered by insurance. Further, selling products with poor quality, the announcement of recalls, and the filing of product liability claims (whether or not successful), may also adversely affect the Company’s reputation and brand strength. |
• | Expanding international sales and operations subjects the Company to risks that may have a material adverse effect on its business. Expanding international sales and operations is a part of the Company’s long-term business strategy. To support that strategy, the Company must increase its presence outside the U.S., including additional |
• | Weather may impact retail sales of the Company's independent dealers. The Company has observed that abnormally cold and/or wet conditions in a region could have the effect of reducing demand or changing the timing for purchases of new Harley-Davidson motorcycles. Reduced demand for new Harley-Davidson motorcycles ultimately leads to reduced shipments by the Company. |
• | The Company must comply with governmental laws and regulations that are subject to change and involve significant costs. The Company’s sales and operations in areas outside the U.S. may be subject to foreign laws, regulations and the legal systems of foreign courts or tribunals. These laws and policies governing operations of foreign-based companies may result in increased costs or restrictions on the ability of the Company to sell its products in certain countries. U.S. laws and policies affecting foreign trade and taxation may also adversely affect the Company's international sales operations. |
• | The Company relies on third party suppliers to obtain raw materials and provide component parts for use in the manufacture of its motorcycles. The Company may experience supply problems relating to raw materials and components such as unfavorable pricing, poor quality, or untimely delivery. In certain circumstances, the Company relies on a single supplier to provide the entire requirement of a specific part, and a change in this established supply relationship may cause disruption in the Company’s production schedule. In addition, the price and availability of raw materials and component parts from suppliers can be adversely affected by factors outside of the Company’s control such as the supply of a necessary raw material or natural disasters. Further, Company suppliers may experience difficulty in funding their day-to-day cash flow needs because of tightening credit caused by financial market disruption. In addition, adverse economic conditions and related pressure on select suppliers due to difficulties in the global manufacturing arena could adversely affect their ability to supply the Company. Changes in laws and policies relating to trade and taxation may also adversely impact the Company's foreign suppliers. These supplier risks may have a material adverse effect on the Company’s business and results of operations. |
• | The Company must invest in and successfully implement new information systems and technology. The Company is continually modifying and enhancing its systems and technology to increase productivity and efficiency and to mitigate failure risks from older/aged technologies currently in its portfolio. The Company has several large, strategic information system projects in process. As new systems and technologies (and related strategies) are implemented, the Company could experience unanticipated difficulties resulting in unexpected costs and adverse impacts to its manufacturing and other business processes. When implemented, the systems and technology may not provide the benefits anticipated and could add costs and complications to ongoing operations and older technologies may fail, which may have a material adverse effect on the Company’s business and results of operations. |
• | The Company relies on third parties to perform certain operating and administrative functions for the Company. Similar to suppliers of raw materials and components, the Company may experience problems with outsourced services, such as unfavorable pricing, untimely delivery of services, or poor quality. Also, these suppliers may experience adverse economic conditions due to difficulties in the global economy that could lead to difficulties supporting the Company's operations. In light of the amount and types of functions that the Company has outsourced, these service provider risks may have a material adverse effect on the Company's business and results of operations. |
• | The Company is and may in the future become subject to legal proceedings and commercial or contractual disputes. The uncertainty associated with substantial unresolved claims and lawsuits may harm the Company’s business, financial condition, reputation and brand. The defense of the lawsuits may result in the expenditures of significant financial resources and the diversion of management’s time and attention away from business operations. In addition, although the Company is unable to determine the amount, if any, that it may be required to pay in connection with the resolution of the lawsuits by settlement or otherwise, any such payment may have a material adverse effect on the Company’s business and results of operations. Refer to the Company’s disclosures concerning legal proceedings in this Form 10-K and in the other periodic reports that the Company files with the Securities and Exchange Commission (SEC) for additional detail regarding lawsuits and other claims against the Company. |
• | The Company’s success depends upon the continued strength of the Harley-Davidson brand. The Company believes that the Harley-Davidson brand has significantly contributed to the success of its business and that maintaining and enhancing the brand is critical to expanding its customer base. Failure to protect the brand from infringers or to grow the value of the Harley-Davidson brand may have a material adverse effect on the Company’s business and results of operations. |
• | The Company must maintain stakeholder confidence in its operating ethics and corporate governance practices. The Company believes it has a history of good corporate governance and operating ethics.The Company has a Code of Business Conduct that defines how employees interact with various Company stakeholders and addresses issues such as confidentiality, conflict of interest and fair dealing. Failure to maintain its reputation for good corporate governance and strong operating ethics may have a material adverse effect on the Company’s business and results of operations. |
• | The Company’s operations are dependent upon attracting and retaining skilled employees, including skilled labor, executive officers and other senior leaders. The Company’s future success depends on its continuing ability to identify, hire, develop, motivate, retain and promote skilled personnel for all areas of its organization, and to effectively execute reorganization actions within expected costs and realize the expected benefits of those actions. The Company’s current and future total compensation arrangements, which include benefits and incentive awards, may not be successful in attracting new employees and retaining and motivating the Company’s existing employees. In addition, the Company must cultivate and sustain a work environment where employees are engaged and energized in their jobs to maximize their performance, and the Company must effectively execute reorganization actions. If the Company does not succeed in attracting new personnel, retaining existing personnel, implementing effective succession plans and motivating and engaging personnel, including executive officers, the Company may be unable to develop and distribute products and services and effectively execute its plans and strategies. |
• | The Company may not be able to successfully execute its manufacturing strategy. The Company’s manufacturing strategy is designed to continuously improve product quality and increase productivity, while reducing costs and increasing flexibility to respond to ongoing changes in the marketplace. The Company believes flexible manufacturing, including flexible supply chains and flexible labor agreements, is the key element to enable improvements in the Company’s ability to respond to customers in a cost effective manner. To execute this strategy, the Company must be successful in its continuous improvement efforts which are dependent on the involvement of management, production employees and suppliers. Any inability to achieve these objectives could adversely impact the profitability of the Company’s products and its ability to deliver the right product at the right time to the customer. |
• | The Company, its suppliers, and its independent dealers must successfully accommodate a seasonal retail motorcycle sales pattern. The Company records the wholesale sale of a motorcycle when it is shipped to the Company’s independent dealers. The Company's flexible production capability allows it to more closely correlate motorcycle production and wholesale shipments with the retail selling season. Any difficulties in executing flexible production could result in lost production or sales. The Company, its suppliers, and its independent dealers must be able to successfully manage changes in production rates, inventory levels and other business processes associated with flexible production. Failure by the Company, its suppliers, or its independent dealers to make such adjustments may have a material adverse effect on the Company’s business and results of operations. |
• | The Company incurs substantial costs with respect to employee pension and healthcare benefits. The Company’s cash funding requirements and its estimates of liabilities and expenses for pensions and healthcare benefits for both active and retired employees are based on several factors that are outside the Company’s control. These factors include funding requirements of the Pension Protection Act of 2006, the rate used to discount the future estimated liability, the rate of return on plan assets, current and projected healthcare costs, healthcare reform or legislation, retirement age and mortality. Changes in these factors can impact the expense, liabilities and cash requirements associated with these |
• | The ability of the Company to expand international sales may be impacted by existing or new laws and regulations that impose motorcycle licensing restrictions and limit access to roads and highways. Expanding international sales is a part of the Company’s long-term business strategy. A number of countries have tiered motorcycle licensing requirements that limit the ability of new and younger riders to obtain licenses to operate the Company’s motorcycles, and many countries are considering the implementation of such requirements. These requirements only allow new and/or younger riders to operate smaller motorcycles for certain periods of time. Riders typically are only permitted to obtain a license to ride larger motorcycles upon reaching certain ages and/or having been licensed to ride smaller motorcycles for a certain period of time, and only after passing additional tests and paying additional fees. These requirements pose obstacles to large displacement motorcycle ownership. Other countries have laws and regulations that prohibit motorcycles from being operated on certain roads and highways. These types of laws and regulations could adversely impact the Company’s plans to expand international sales. |
• | The Financial Services operations rely on external sources to finance a significant portion of its operations. Liquidity is essential to the Company’s Financial Services business. Disruptions in financial markets may cause lenders and institutional investors to reduce or cease to loan money to borrowers, including financial institutions. The Company’s Financial Services operations may be negatively affected by difficulty in raising capital in the long-term and short-term capital markets. These negative consequences may in turn adversely affect the Company’s business and results of operations in various ways, including through higher costs of capital, reduced funds available through its financial services operations to provide loans to independent dealers and their retail customers, and dilution to existing share value through the use of alternative sources of capital. |
• | The Financial Services operations are highly dependent on accessing capital markets to fund their operations at competitive interest rates, the Company’s access to capital and its cost of capital are highly dependent upon its credit ratings, and any negative credit rating actions will adversely affect its earnings and results of operations. The ability of the Company and its Financial Services operations to access unsecured capital markets is influenced by their short-term and long-term credit ratings. If the Company’s credit ratings are downgraded or its ratings outlook is negatively changed, the Company’s cost of borrowing could increase, resulting in reduced earnings and interest margins, or the Company’s access to capital may be disrupted or impaired. The Company borrowed $750,000,000 in 2015 to fund the repurchase of its Common Stock, which increased the Company's leverage. Having increased leverage increases the risk of a downgrade in the Company's credit ratings. |
• | The Company’s Motorcycles segment is dependent upon unionized labor. Substantially all of the hourly production employees working in the Motorcycles segment are represented by unions and covered by collective bargaining agreements. Harley-Davidson Motor Company is currently a party to five collective bargaining agreements with local affiliates of the International Association of Machinists and Aerospace Workers and the United Steelworkers of America. Current collective bargaining agreements with hourly employees in Missouri, Wisconsin and Pennsylvania will expire in 2018, 2019 and 2022, respectively. There is no certainty that the Company will be successful in negotiating new agreements with these unions that extend beyond the current expiration dates or that these new agreements will be on terms that will allow the Company to be competitive. Failure to renew these agreements when they expire or to establish new collective bargaining agreements on terms acceptable to the Company and the unions could result in the relocation of production facilities, work stoppages or other labor disruptions which may have a material adverse effect on the Company’s business and results of operations. |
• | The Company’s operations may be affected by greenhouse emissions and climate change and related regulations. Climate change is receiving increasing attention worldwide. Many scientists, legislators and others attribute climate change to increased levels of greenhouse gases, including carbon dioxide, which has led to significant legislative and regulatory efforts to limit greenhouse gas emissions. Congress has previously considered and may in the future implement restrictions on greenhouse gas emissions. In addition, several states, including states where the Company has manufacturing plants, have previously considered and may in the future implement greenhouse gas registration and reduction programs. Energy security and availability and its related costs affect all aspects of the Company’s manufacturing operations in the United States, including the Company’s supply chain. The Company’s manufacturing plants use energy, including electricity and natural gas, and certain of the Company’s plants emit |
• | Regulations related to conflict minerals and other materials that the Company purchases to use in its products will cause the Company to incur additional expenses and may have other adverse consequences. The SEC adopted inquiry, diligence and disclosure requirements related to certain minerals sourced from the Democratic Republic of Congo and surrounding countries, or "conflict minerals," that are necessary to the functionality of a product manufactured, or contracted to be manufactured, by an SEC reporting company. Compliance with the disclosure requirements could affect the sourcing and availability of some of the minerals that the Company uses in the manufacturing of its products. The Company's supply chain is complex, and if it is not able to determine the source and chain of custody for all conflict minerals used in its products that are sourced from the Democratic Republic of Congo and surrounding countries or determine that its products are "conflict free," then the Company may face reputational challenges with customers, investors or others. Additionally, as there may be only a limited number of suppliers offering "conflict free" minerals, if the Company chooses to use only conflict minerals that are "conflict free," the Company cannot be sure that it will be able to obtain necessary materials from such suppliers in sufficient quantities or at competitive prices. Accordingly, the Company could incur significant costs related to the compliance process, including potential difficulty or added costs in satisfying the disclosure requirements. Other laws or regulations impacting our supply chain, such as the UK Modern Slavery Act, may have similar consequences. |
Type of Facility | Location | Approximate Square Feet | Status | ||||
Corporate Office | Milwaukee, WI | 515,000 | Owned | ||||
Museum | Milwaukee, WI | 130,000 | Owned | ||||
Manufacturing(1) | Menomonee Falls, WI | 915,000 | Owned | ||||
Product Development Center | Wauwatosa, WI | 409,000 | Owned | ||||
Manufacturing(2) | Tomahawk, WI | 226,000 | Owned | ||||
Manufacturing(3) | York, PA | 571,000 | Owned | ||||
Manufacturing(4) | Kansas City, MO | 456,000 | Owned | ||||
Manufacturing(5) | Manaus, Brazil | 108,000 | Lease expiring 2019 | ||||
Regional Office | Oxford, England | 39,000 | Lease expiring 2021 | ||||
Manufacturing(6) | Bawal, India | 68,000 | Lease expiring 2019 | ||||
Regional Office | Singapore | 24,000 | Lease expiring 2020 | ||||
Manufacturing(7) | Adelaide, Australia | 485,000 | Lease expiring 2017 |
(1) | Motorcycle powertrain production. |
(2) | Plastic parts production and painting. |
(3) | Motorcycle parts fabrication, painting and Softail® and touring model assembly. |
(4) | Motorcycle parts fabrication, painting and Dyna®, Sportster®, Softail® and Street platform assembly. |
(5) | Assembly of select models for the Brazilian market. |
(6) | Assembly of select models for the Indian market and production of the Street platform for non-North American markets. |
(7) | Motorcycle wheel production. |
Type of Facility | Location | Approximate Square Feet | Status | ||||
Office | Chicago, IL | 26,000 | Lease expiring 2022 | ||||
Office | Plano, TX | 69,321 | Lease expiring 2025 | ||||
Office | Carson City, NV | 100,000 | Owned |
Item 5. | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchase of Equity Securities |
2016 | Low | High | 2015 | Low | High | |||||||||||||
First quarter | $ | 36.36 | $ | 49.99 | First quarter | $ | 58.24 | $ | 66.58 | |||||||||
Second quarter | $ | 42.99 | $ | 52.00 | Second quarter | $ | 53.04 | $ | 62.96 | |||||||||
Third quarter | $ | 41.63 | $ | 57.33 | Third quarter | $ | 50.64 | $ | 60.67 | |||||||||
Fourth quarter | $ | 48.55 | $ | 62.35 | Fourth quarter | $ | 45.00 | $ | 57.10 |
2016 | 2015 | 2014 | ||||||||||
First quarter | $ | 0.350 | $ | 0.310 | $ | 0.275 | ||||||
Second quarter | 0.350 | 0.310 | 0.275 | |||||||||
Third quarter | 0.350 | 0.310 | 0.275 | |||||||||
Fourth quarter | 0.350 | 0.310 | 0.275 | |||||||||
Total | $ | 1.400 | $ | 1.240 | $ | 1.100 |
2016 Fiscal Month | Total Number of Shares Purchased (a) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs | |||||||||
September 26 to October 30 | 922,311 | $ | 52 | 922,311 | 20,016,171 | ||||||||
October 31 to November 27 | 660,785 | $ | 57 | 660,785 | 19,355,386 | ||||||||
November 28 to December 31 | 84,262 | $ | 60 | 84,262 | 19,272,516 | ||||||||
Total | 1,667,358 | $ | 55 | 1,667,358 |
(a) | Includes discretionary share repurchases and shares of common stock that employees surrendered to satisfy withholding taxes in connection with the vesting of restricted stock awards. |
2011 ($) | 2012 ($) | 2013 ($) | 2014 ($) | 2015 ($) | 2016 ($) | |||||||||||||
Harley-Davidson, Inc. | 100 | 127 | 183 | 177 | 125 | 165 | ||||||||||||
Standard & Poor’s MidCap 400 Index | 100 | 118 | 155 | 168 | 162 | 195 | ||||||||||||
Standard & Poor’s 500 Index | 100 | 116 | 154 | 175 | 177 | 198 |
(In thousands, except per share amounts) | 2016 | 2015 | 2014 | 2013 | 2012 | |||||||||||||||
Statement of income data: | ||||||||||||||||||||
Revenue: | ||||||||||||||||||||
Motorcycles & Related Products | $ | 5,271,376 | $ | 5,308,744 | $ | 5,567,681 | $ | 5,258,290 | $ | 4,942,582 | ||||||||||
Financial Services | 725,082 | 686,658 | 660,827 | 641,582 | 637,924 | |||||||||||||||
Total revenue | $ | 5,996,458 | $ | 5,995,402 | $ | 6,228,508 | $ | 5,899,872 | $ | 5,580,506 | ||||||||||
Net income | $ | 692,164 | $ | 752,207 | $ | 844,611 | $ | 733,993 | $ | 623,925 | ||||||||||
Weighted-average common shares: | ||||||||||||||||||||
Basic | 179,676 | 202,681 | 216,305 | 222,475 | 227,119 | |||||||||||||||
Diluted | 180,535 | 203,686 | 217,706 | 224,071 | 229,229 | |||||||||||||||
Earnings per common share: | ||||||||||||||||||||
Basic | $ | 3.85 | $ | 3.71 | $ | 3.90 | $ | 3.30 | $ | 2.75 | ||||||||||
Diluted | $ | 3.83 | $ | 3.69 | $ | 3.88 | $ | 3.28 | $ | 2.72 | ||||||||||
Dividends paid per common share | $ | 1.40 | $ | 1.24 | $ | 1.10 | $ | 0.84 | $ | 0.62 | ||||||||||
Balance sheet data: | ||||||||||||||||||||
Total assets(a) | $ | 9,890,240 | $ | 9,972,977 | $ | 9,515,870 | $ | 9,394,765 | $ | 9,156,072 | ||||||||||
Total debt(a) | $ | 6,807,567 | $ | 6,872,198 | $ | 5,492,402 | $ | 5,248,895 | $ | 5,087,948 | ||||||||||
Total equity | $ | 1,920,158 | $ | 1,839,654 | $ | 2,909,286 | $ | 3,009,486 | $ | 2,557,624 |
(a) | The Company adopted ASU No. 2015-03 and ASU No. 2015-15 on January 1, 2016. Upon adoption, the Company reclassified debt issuance cost, other than debt issuance costs related to line of credit arrangements (which include its asset-backed commercial paper and commercial paper programs and its credit facilities), from other assets to debt. Refer to Note 1 of the Notes to Consolidated Financial Statements. |
(1) | Note Regarding Forward-Looking Statements |
• | New product momentum with its model-year 2017 motorcycles and exciting and innovative model-year 2018 motorcycles, and |
(in thousands, except earnings per share) | 2016 | 2015 | (Decrease) Increase | % Change | |||||||||||
Operating income from Motorcycles & Related Products | $ | 773,406 | $ | 875,490 | $ | (102,084 | ) | (11.7 | )% | ||||||
Operating income from Financial Services | 275,530 | 280,205 | (4,675 | ) | (1.7 | )% | |||||||||
Operating income | 1,048,936 | 1,155,695 | (106,759 | ) | (9.2 | )% | |||||||||
Investment income | 4,645 | 6,585 | (1,940 | ) | (29.5 | )% | |||||||||
Interest expense | 29,670 | 12,117 | 17,553 | 144.9 | % | ||||||||||
Income before income taxes | 1,023,911 | 1,150,163 | (126,252 | ) | (11.0 | )% | |||||||||
Provision for income taxes | 331,747 | 397,956 | (66,209 | ) | (16.6 | )% | |||||||||
Net income | $ | 692,164 | $ | 752,207 | $ | (60,043 | ) | (8.0 | )% | ||||||
Diluted earnings per share | $ | 3.83 | $ | 3.69 | $ | 0.14 | 3.8 | % |
2016 | 2015 | (Decrease) Increase | % Change | |||||||||
United States | 161,658 | 168,240 | (6,582 | ) | (3.9 | )% | ||||||
Europe(b) | 39,942 | 36,894 | 3,048 | 8.3 | ||||||||
EMEA - Other | 5,896 | 6,393 | (497 | ) | (7.8 | ) | ||||||
Total EMEA | 45,838 | 43,287 | 2,551 | 5.9 | ||||||||
Japan | 10,279 | 9,700 | 579 | 6.0 | ||||||||
Asia Pacific - Other | 22,610 | 22,558 | 52 | 0.2 | ||||||||
Total Asia Pacific | 32,889 | 32,258 | 631 | 2.0 | ||||||||
Latin America | 9,701 | 11,173 | (1,472 | ) | (13.2 | ) | ||||||
Canada | 10,203 | 9,669 | 534 | 5.5 | ||||||||
Total International Retail Sales | 98,631 | 96,387 | 2,244 | 2.3 | ||||||||
Total Worldwide Retail Sales | 260,289 | 264,627 | (4,338 | ) | (1.6 | )% |
(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 retail sales and this information is subject to revision. |
(b) | Includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. |
2016 | 2015 | (Decrease) Increase | % Change | |||||||||
United States(b) | 311,710 | 328,818 | (17,108 | ) | (5.2 | )% | ||||||
Europe(c) | 391,936 | 351,773 | 40,163 | 11.4 | % |
(a) | Data includes on-road 601+cc models. 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 (MIC). This third-party data is subject to revision and update. |
(c) | 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 (ACEM), an independent agency. This third-party data is subject to revision and update. |
2016 | 2015 | Unit | Unit | |||||||||||||||
Units | Mix % | Units | Mix % | (Decrease) Increase | % Change | |||||||||||||
United States | 161,839 | 61.7 | % | 170,688 | 64.1 | % | (8,849 | ) | (5.2 | )% | ||||||||
International | 100,382 | 38.3 | % | 95,694 | 35.9 | % | 4,688 | 4.9 | ||||||||||
Harley-Davidson motorcycle units | 262,221 | 100.0 | % | 266,382 | 100.0 | % | (4,161 | ) | (1.6 | )% | ||||||||
Touring motorcycle units | 107,410 | 41.0 | % | 114,768 | 43.1 | % | (7,358 | ) | (6.4 | )% | ||||||||
Cruiser motorcycle units | 93,422 | 35.6 | % | 89,207 | 33.5 | % | 4,215 | 4.7 | ||||||||||
Sportster® / Street motorcycle units | 61,389 | 23.4 | % | 62,407 | 23.4 | % | (1,018 | ) | (1.6 | ) | ||||||||
Harley-Davidson motorcycle units | 262,221 | 100.0 | % | 266,382 | 100.0 | % | (4,161 | ) | (1.6 | )% |
2016 | 2015 | (Decrease) Increase | % Change | ||||||||||||
Revenue: | |||||||||||||||
Motorcycles | $ | 4,122,113 | $ | 4,127,739 | $ | (5,626 | ) | (0.1 | )% | ||||||
Parts & Accessories | 842,637 | 862,645 | (20,008 | ) | (2.3 | ) | |||||||||
General Merchandise | 284,583 | 292,310 | (7,727 | ) | (2.6 | ) | |||||||||
Other | 22,043 | 26,050 | (4,007 | ) | (15.4 | ) | |||||||||
Total revenue | 5,271,376 | 5,308,744 | (37,368 | ) | (0.7 | ) | |||||||||
Cost of goods sold | 3,419,710 | 3,356,284 | 63,426 | 1.9 | |||||||||||
Gross profit | 1,851,666 | 1,952,460 | (100,794 | ) | (5.2 | ) | |||||||||
Selling & administrative expense | 907,059 | 916,669 | (9,610 | ) | (1.0 | ) | |||||||||
Engineering expense | 171,201 | 160,301 | 10,900 | 6.8 | |||||||||||
Operating expense | 1,078,260 | 1,076,970 | 1,290 | 0.1 | |||||||||||
Operating income from Motorcycles | $ | 773,406 | $ | 875,490 | $ | (102,084 | ) | (11.7 | )% |
Net Revenue | Cost of Goods Sold | Gross Profit | ||||||||||
2015 | $ | 5,309 | $ | 3,357 | $ | 1,952 | ||||||
Volume | (109 | ) | (62 | ) | (47 | ) | ||||||
Price, net of related costs | 93 | 39 | 54 | |||||||||
Foreign currency exchange rates and hedging | (3 | ) | 45 | (48 | ) | |||||||
Shipment mix | (18 | ) | (5 | ) | (13 | ) | ||||||
Raw material prices | — | (18 | ) | 18 | ||||||||
Manufacturing and other costs | — | 64 | (64 | ) | ||||||||
Total | (37 | ) | 63 | (100 | ) | |||||||
2016 | $ | 5,272 | $ | 3,420 | $ | 1,852 |
• | Volume decreases were driven by lower wholesale motorcycle shipments, as well as decreases in sales of parts and accessories and general merchandise. |
• | On average, wholesale prices on the Company’s 2016 and 2017 model-year motorcycles are higher than the prior model-years resulting in the favorable impact on revenue during the period. The impact of revenue favorability resulting from model-year price increases on gross profit was partially offset by increases in cost related to the additional content added to the 2016 and 2017 model-year motorcycles. |
• | Gross profit was negatively impacted by foreign currency due to lower hedge gains, given the significant gains experienced in the prior year, and lower revenues behind a slightly stronger U.S. dollar relative to its foreign currency exposures. |
• | Shipment mix changes negatively impacted gross profit primarily due to changes in motorcycle family mix, driven by strong customer demand for the Company's model-year 2016 S-model cruiser motorcycles, and model mix within its motorcycle families. |
• | Raw material prices were lower in 2016 compared to 2015. |
• | Manufacturing costs for 2016 were negatively impacted by higher costs related to retooling and start-up costs at its Pilgrim Road manufacturing facility associated with the Milwaukee-EightTM engine, the implementation of the Company's ERP system at the Company's Kansas City manufacturing facility and a higher fixed cost per unit due to lower volumes, partially offset by favorable costs related to parts and accessories. |
2016 | 2015 | Increase (Decrease) | % Change | ||||||||||||
Interest income | $ | 628,432 | $ | 605,770 | $ | 22,662 | 3.7 | % | |||||||
Other income | 85,788 | 80,888 | 4,900 | 6.1 | |||||||||||
Securitization and servicing income | 10,862 | — | 10,862 | — | |||||||||||
Financial services revenue | 725,082 | 686,658 | 38,424 | 5.6 | |||||||||||
Interest expense | 173,756 | 161,983 | 11,773 | 7.3 | |||||||||||
Provision for credit losses | 136,617 | 101,345 | 35,272 | 34.8 | |||||||||||
Operating expenses | 139,179 | 143,125 | (3,946 | ) | (2.8 | ) | |||||||||
Financial Services expense | 449,552 | 406,453 | 43,099 | 10.6 | |||||||||||
Operating income from Financial Services | $ | 275,530 | $ | 280,205 | $ | (4,675 | ) | (1.7 | )% |
2016 | 2015 | |||||||
Balance, beginning of period | $ | 147,178 | $ | 127,364 | ||||
Provision for credit losses | 136,617 | 101,345 | ||||||
Charge-offs, net of recoveries | (107,161 | ) | (81,531 | ) | ||||
Other (a) | (3,291 | ) | — | |||||
Balance, end of period | $ | 173,343 | $ | 147,178 |
(a) | Related to the sale of finance receivables during the second quarter of 2016 with a principal balance of $301.8 million through an off-balance sheet asset-backed securitization transaction (see Note 11 of the Notes to Consolidated Financial Statements for additional information). |
(in thousands, except earnings per share) | 2015 | 2014 | (Decrease) Increase | % Change | |||||||||||
Operating income from Motorcycles & Related Products | $ | 875,490 | $ | 1,003,147 | $ | (127,657 | ) | (12.7 | )% | ||||||
Operating income from Financial Services | 280,205 | 277,836 | 2,369 | 0.9 | % | ||||||||||
Operating income | 1,155,695 | 1,280,983 | (125,288 | ) | (9.8 | )% | |||||||||
Investment income | 6,585 | 6,499 | 86 | 1.3 | % | ||||||||||
Interest expense | 12,117 | 4,162 | 7,955 | 191.1 | % | ||||||||||
Income before income taxes | 1,150,163 | 1,283,320 | (133,157 | ) | (10.4 | )% | |||||||||
Provision for income taxes | 397,956 | 438,709 | (40,753 | ) | (9.3 | )% | |||||||||
Net income | $ | 752,207 | $ | 844,611 | $ | (92,404 | ) | (10.9 | )% | ||||||
Diluted earnings per share | $ | 3.69 | $ | 3.88 | $ | (0.19 | ) | (4.9 | )% |
2015 | 2014 | (Decrease) Increase | % Change | |||||||||
United States | 168,240 | 171,079 | (2,839 | ) | (1.7 | )% | ||||||
Europe(b) | 36,894 | 38,491 | (1,597 | ) | (4.1 | ) | ||||||
EMEA - Other | 6,393 | 6,832 | (439 | ) | (6.4 | ) | ||||||
Total EMEA | 43,287 | 45,323 | (2,036 | ) | (4.5 | ) | ||||||
Japan | 9,700 | 10,775 | (1,075 | ) | (10.0 | ) | ||||||
Asia Pacific - Other | 22,558 | 19,299 | 3,259 | 16.9 | ||||||||
Total Asia Pacific | 32,258 | 30,074 | 2,184 | 7.3 | ||||||||
Latin America | 11,173 | 11,652 | (479 | ) | (4.1 | ) | ||||||
Canada | 9,669 | 9,871 | (202 | ) | (2.0 | ) | ||||||
Total International Retail Sales | 96,387 | 96,920 | (533 | ) | (0.5 | ) | ||||||
Total Worldwide Retail Sales | 264,627 | 267,999 | (3,372 | ) | (1.3 | )% |
(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 retail sales and this information is subject to revision. |
(b) | Includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Luxembourg, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom. |
2015 | 2014 | Increase | % Change | |||||||||
United States(b) | 328,818 | 313,627 | 15,191 | 4.8 | % | |||||||
Europe(c) | 351,773 | 319,801 | 31,972 | 10.0 | % |
(a) | Data includes on-road 601+cc models. On-road 601+cc models include dual purpose models, three-wheeled motorcycles and autocycles. Autocycles were included in the U.S. and Europe data beginning in 2014 and 2015, respectively. 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 (MIC). This third party data is subject to revision and update. |
(c) | 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 (ACEM), an independent agency. This third-party data is subject to revision and update. |
2015 | 2014 | Unit | Unit | |||||||||||||||
Units | Mix % | Units | Mix % | (Decrease) Increase | % Change | |||||||||||||
United States | 170,688 | 64.1 | % | 173,994 | 64.3 | % | (3,306 | ) | (1.9 | )% | ||||||||
International | 95,694 | 35.9 | % | 96,732 | 35.7 | % | (1,038 | ) | (1.1 | ) | ||||||||
Harley-Davidson motorcycle units | 266,382 | 100.0 | % | 270,726 | 100.0 | % | (4,344 | ) | (1.6 | )% | ||||||||
Touring motorcycle units | 114,768 | 43.1 | % | 122,481 | 45.2 | % | (7,713 | ) | (6.3 | )% | ||||||||
Cruiser motorcycle units | 89,207 | 33.5 | % | 91,426 | 33.8 | % | (2,219 | ) | (2.4 | ) | ||||||||
Sportster® / Street motorcycle units(a) | 62,407 | 23.4 | % | 56,819 | 21.0 | % | 5,588 | 9.8 | ||||||||||
Harley-Davidson motorcycle units | 266,382 | 100.0 | % | 270,726 | 100.0 | % | (4,344 | ) | (1.6 | )% |
(a) | Initial shipments of Street motorcycle units began during the first quarter of 2014. |
2015 | 2014 | (Decrease) Increase | % Change | ||||||||||||
Revenue: | |||||||||||||||
Motorcycles | $ | 4,127,739 | $ | 4,385,863 | $ | (258,124 | ) | (5.9 | )% | ||||||
Parts & Accessories | 862,645 | 875,019 | (12,374 | ) | (1.4 | ) | |||||||||
General Merchandise | 292,310 | 284,826 | 7,484 | 2.6 | |||||||||||
Other | 26,050 | 21,973 | 4,077 | 18.6 | |||||||||||
Total revenue | 5,308,744 | 5,567,681 | (258,937 | ) | (4.7 | ) | |||||||||
Cost of goods sold | 3,356,284 | 3,542,601 | (186,317 | ) | (5.3 | ) | |||||||||
Gross profit | 1,952,460 | 2,025,080 | (72,620 | ) | (3.6 | ) | |||||||||
Selling & administrative expense | 916,669 | 887,333 | 29,336 | 3.3 | |||||||||||
Engineering expense | 160,301 | 134,600 | 25,701 | 19.1 | |||||||||||
Operating expense | 1,076,970 | 1,021,933 | 55,037 | 5.4 | |||||||||||
Operating income from Motorcycles | $ | 875,490 | $ | 1,003,147 | $ | (127,657 | ) | (12.7 | )% |
Net Revenue | Cost of Goods Sold | Gross Profit | ||||||||||
2014 | $ | 5,568 | $ | 3,543 | $ | 2,025 | ||||||
Volume | (59 | ) | (29 | ) | (30 | ) | ||||||
Price, net of related costs | 81 | 9 | 72 | |||||||||
Foreign currency exchange rates and hedging | (231 | ) | (110 | ) | (121 | ) | ||||||
Shipment mix | (50 | ) | (20 | ) | (30 | ) | ||||||
Raw material prices | — | (19 | ) | 19 | ||||||||
Manufacturing and other costs | — | (17 | ) | 17 | ||||||||
Total | (259 | ) | (186 | ) | (73 | ) | ||||||
2015 | $ | 5,309 | $ | 3,357 | $ | 1,952 |
• | On average, wholesale prices on the Company’s 2015 and 2016 model-year motorcycles were higher than the prior model-years resulting in the favorable impact on revenue during the period. The impact of revenue favorability resulting from model-year price increases on gross profit was partially offset by increases in cost related to the additional content added to the 2015 and 2016 model-year motorcycles. |
• | Gross profit was negatively impacted by changes in foreign currency exchange rates during 2015 compared to 2014. Revenue was negatively impacted by a weighted-average devaluation in the Euro, Japanese yen, Brazilian real and Australian dollar of 17% compared to 2014. The negative impact to revenue was partially offset by a positive impact to cost of goods sold as a result of natural hedges, benefits of foreign exchange contracts and a decrease in losses from the remeasurement of foreign-denominated assets on the balance sheet. |
• | Shipment mix changes negatively impacted gross profit primarily due to changes in motorcycle family mix, driven by higher shipments of Sportster®/Street motorcycles. The negative motorcycle family mix was partially offset by positive mix changes within parts and accessories and general merchandise. |
• | Raw material prices were lower in 2015 compared to 2014. |
• | Manufacturing costs for 2015 benefited from increased manufacturing efficiencies and the absence of Street motorcycles start-up costs that were incurred in 2014. |
2015 | 2014 | Increase (Decrease) | % Change | ||||||||||||
Interest income | $ | 605,770 | $ | 585,187 | $ | 20,583 | 3.5 | % | |||||||
Other income | 80,888 | 75,640 | 5,248 | 6.9 | |||||||||||
Financial services revenue | 686,658 | 660,827 | 25,831 | 3.9 | |||||||||||
Interest expense | 161,983 | 164,476 | (2,493 | ) | (1.5 | ) | |||||||||
Provision for credit losses | 101,345 | 80,946 | 20,399 | 25.2 | |||||||||||
Operating expenses | 143,125 | 137,569 | 5,556 | 4.0 | |||||||||||
Financial Services expense | 406,453 | 382,991 | 23,462 | 6.1 | |||||||||||
Operating income from Financial Services | $ | 280,205 | $ | 277,836 | $ | 2,369 | 0.9 | % |
2015 | 2014 | |||||||
Balance, beginning of period | $ | 127,364 | $ | 110,693 | ||||
Provision for credit losses | 101,345 | 80,946 | ||||||
Charge-offs, net of recoveries | (81,531 | ) | (64,275 | ) | ||||
Balance, end of period | $ | 147,178 | $ | 127,364 |
Amounts based on current assumptions | Impact of a 1% decrease in the discount rate | Impact of a 1% decrease in the expected return on assets | Impact of a 1% increase in the healthcare cost trend rate | |||||||||||||
2016 Net periodic benefit costs | ||||||||||||||||
Pension and SERPA | $ | 27,316 | $ | 29,850 | $ | 19,443 | n/a | |||||||||
Postretirement healthcare | $ | 10,957 | $ | 881 | $ | 1,609 | $ | 1,564 | ||||||||
2016 Benefit obligations | ||||||||||||||||
Pension and SERPA | $ | 1,986,435 | $ | 335,111 | n/a | n/a | ||||||||||
Postretirement healthcare | $ | 346,431 | $ | 31,837 | n/a | $ | 12,670 |
2017 | 2018-2019 | 2020-2021 | Thereafter | Total | ||||||||||||||||
Principal payments on debt | $ | 2,145,781 | $ | 2,675,694 | $ | 1,258,814 | $ | 750,000 | $ | 6,830,289 | ||||||||||
Interest payments on debt | 175,286 | 208,704 | 87,675 | 396,000 | 867,665 | |||||||||||||||
Operating lease payments | 13,900 | 24,598 | 14,151 | 11,965 | 64,614 | |||||||||||||||
$ | 2,334,967 | $ | 2,908,996 | $ | 1,360,640 | $ | 1,157,965 | $ | 7,762,568 |
December 31, 2016 | ||||
Cash and cash equivalents | $ | 759,984 | ||
Current marketable securities | 5,519 | |||
Total cash and cash equivalents and marketable securities | 765,503 | |||
Credit facilities | 409,292 | |||
Asset-backed U.S. commercial paper conduit facilities (a) | 900,000 | |||
Asset-backed Canadian commercial paper conduit facility (b) | 28,857 | |||
Total availability under credit facilities | 1,338,149 | |||
Total | $ | 2,103,652 |
(a) | The U.S. commercial paper conduit facilities expire on December 13, 2017. The Company anticipates that it will renew these facilities prior to expiration.(1) |
(b) | The Canadian commercial paper conduit facility expires on June 30, 2017 and is limited to Canadian denominated borrowings. The Company anticipates that it will renew this facility prior to expiration.(1) |
2016 | 2015 | 2014 | ||||||||||
Net cash provided by operating activities | $ | 1,174,339 | $ | 1,100,118 | $ | 1,146,677 | ||||||
Net cash used by investing activities | (392,731 | ) | (915,848 | ) | (744,650 | ) | ||||||
Net cash used by financing activities | (734,390 | ) | (354,064 | ) | (536,096 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | (9,443 | ) | (14,677 | ) | (25,863 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | $ | 37,775 | $ | (184,471 | ) | $ | (159,932 | ) |
2016 | 2015 | 2014 | ||||||||||
Unsecured commercial paper | $ | 1,055,708 | $ | 1,201,380 | $ | 731,786 | ||||||
Asset-backed Canadian commercial paper conduit facility | 149,338 | 153,839 | 166,912 | |||||||||
Medium-term notes, net | 4,064,940 | 3,316,949 | 3,325,285 | |||||||||
Senior unsecured notes, net | 741,306 | 740,653 | — | |||||||||
Term asset-backed securitization debt, net | 796,275 | 1,459,377 | 1,268,419 | |||||||||
Total debt | $ | 6,807,567 | $ | 6,872,198 | $ | 5,492,402 |
Short-Term | Long-Term | Outlook | ||||
Moody’s | P2 | A3 | Stable | |||
Standard & Poor’s | A2 | A- | Stable | |||
Fitch | F1 | A | Stable |
Principal Amount | Rate | Issue Date | Maturity Date | |||
$400,000 | 2.70% | January 2012 | March 2017 | |||
$400,000 | 1.55% | November 2014 | November 2017 | |||
$877,488 | 6.80% | May 2008 | June 2018 | |||
$600,000 | 2.25% | January 2016 | January 2019 | |||
$600,000 | 2.40% | September 2014 | September 2019 | |||
$600,000 | 2.15% | February 2015 | February 2020 | |||
$600,000 | 2.85% | January 2016 | January 2021 |
• | assume or incur certain liens; |
• | participate in certain mergers or consolidations; and |
• | purchase or hold margin stock. |
(i) | execute its business strategy, |
(ii) | manage through changes in general economic and business conditions, including changing capital, credit and retail markets, and the changing political environment, |
(iii) | accurately estimate and adjust to fluctuations in foreign currency exchange rates, interest rates and commodity prices, |
(iv) | prevent a cybersecurity breach involving consumer, employee, dealer, supplier, or Company data and respond to evolving regulatory requirements regarding data security, |
(v) | drive demand by executing its marketing strategy of appealing to and growing sales to multi-generational and multi-cultural customers worldwide in an increasingly competitive marketplace, |
(vi) | develop and introduce products, services and experiences that are successful in the marketplace, |
(vii) | manage the credit quality, the loan servicing and collection activities, and the recovery rates of HDFS' loan portfolio, |
(viii) | balance production volumes for its new motorcycles with consumer demand, including in circumstances where competitors may be supplying new motorcycles to the market in excess of demand at reduced prices, |
(ix) | manage the impact that prices for and supply of used motorcycles may have on its business, including on retail sales of new motorcycles, |
(x) | prevent and detect any issues with its motorcycles or any associated 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, |
(xi) | continue to develop the capabilities of its distributors and dealers and manage the risks that its independent dealers may have difficulty obtaining capital and managing through changing economic conditions and consumer demand, |
(xii) | manage risks that arise through expanding international manufacturing, operations and sales, |
(xiii) | adjust to tax reform, healthcare inflation and reform and pension reform, |
(xiv) | manage through the effects inconsistent and unpredictable weather patterns may have on retail sales of motorcycles, |
(xv) | manage supply chain issues, including quality issues and any unexpected interruptions or price increases caused by raw material shortages or natural disasters, |
(xvi) | implement and manage enterprise-wide information technology systems, including systems at its manufacturing facilities, |
(xvii) | manage changes and prepare for requirements in legislative and regulatory environments for its products, services and operations, |
(xviii) | manage its exposure to product liability claims and commercial or contractual disputes, |
(xix) | execute its flexible production strategy, |
(xx) | retain and attract talented employees, |
(xxi) | successfully access the capital and/or credit markets on terms (including interest rates) that are acceptable to the Company and within its expectations, and |
(xxii) | continue to manage the relationships and agreements that the Company has with its labor unions to help drive long-term competitiveness. |
Page | |
Supplementary data | |
Matthew S. Levatich | John A. Olin | |
President and Chief Executive Officer | Senior Vice President and Chief Financial Officer |
2016 | 2015 | 2014 | ||||||||||
Revenue: | ||||||||||||
Motorcycles and Related Products | $ | 5,271,376 | $ | 5,308,744 | $ | 5,567,681 | ||||||
Financial Services | 725,082 | 686,658 | 660,827 | |||||||||
Total revenue | 5,996,458 | 5,995,402 | 6,228,508 | |||||||||
Costs and expenses: | ||||||||||||
Motorcycles and Related Products cost of goods sold | 3,419,710 | 3,356,284 | 3,542,601 | |||||||||
Financial Services interest expense | 173,756 | 161,983 | 164,476 | |||||||||
Financial Services provision for credit losses | 136,617 | 101,345 | 80,946 | |||||||||
Selling, administrative and engineering expense | 1,217,439 | 1,220,095 | 1,159,502 | |||||||||
Total costs and expenses | 4,947,522 | 4,839,707 | 4,947,525 | |||||||||
Operating income | 1,048,936 | 1,155,695 | 1,280,983 | |||||||||
Investment income | 4,645 | 6,585 | 6,499 | |||||||||
Interest expense | 29,670 | 12,117 | 4,162 | |||||||||
Income before provision for income taxes | 1,023,911 | 1,150,163 | 1,283,320 | |||||||||
Provision for income taxes | 331,747 | 397,956 | 438,709 | |||||||||
Net income | $ | 692,164 | $ | 752,207 | $ | 844,611 | ||||||
Earnings per common share: | ||||||||||||
Basic | $ | 3.85 | $ | 3.71 | $ | 3.90 | ||||||
Diluted | $ | 3.83 | $ | 3.69 | $ | 3.88 | ||||||
Cash dividends per common share | $ | 1.40 | $ | 1.24 | $ | 1.10 |
2016 | 2015 | 2014 | ||||||||||
Net income | $ | 692,164 | $ | 752,207 | $ | 844,611 | ||||||
Other comprehensive income (loss), net of tax: | ||||||||||||
Foreign currency translation adjustments | (9,288 | ) | (55,362 | ) | (36,808 | ) | ||||||
Derivative financial instruments | 6,638 | (13,156 | ) | 20,722 | ||||||||
Marketable securities | (100 | ) | (394 | ) | (424 | ) | ||||||
Pension and postretirement benefit plans | 52,574 | (31,350 | ) | (165,757 | ) | |||||||
Total other comprehensive income (loss), net of tax | 49,824 | (100,262 | ) | (182,267 | ) | |||||||
Comprehensive income | $ | 741,988 | $ | 651,945 | $ | 662,344 |
2016 | 2015 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 759,984 | $ | 722,209 | ||||
Marketable securities | 5,519 | 45,192 | ||||||
Accounts receivable, net | 285,106 | 247,405 | ||||||
Finance receivables, net | 2,076,261 | 2,053,582 | ||||||
Inventories | 499,917 | 585,907 | ||||||
Restricted cash | 52,574 | 88,267 | ||||||
Deferred income taxes | — | 102,769 | ||||||
Other current assets | 174,491 | 132,552 | ||||||
Total current assets | 3,853,852 | 3,977,883 | ||||||
Finance receivables, net | 4,759,197 | 4,814,571 | ||||||
Property, plant and equipment, net | 981,593 | 942,418 | ||||||
Goodwill | 53,391 | 54,182 | ||||||
Deferred income taxes | 167,729 | 99,614 | ||||||
Other long-term assets | 74,478 | 84,309 | ||||||
$ | 9,890,240 | $ | 9,972,977 | |||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 235,318 | $ | 235,614 | ||||
Accrued liabilities | 486,652 | 471,964 | ||||||
Short-term debt | 1,055,708 | 1,201,380 | ||||||
Current portion of long-term debt, net | 1,084,884 | 838,349 | ||||||
Total current liabilities | 2,862,562 | 2,747,307 | ||||||
Long-term debt, net | 4,666,975 | 4,832,469 | ||||||
Pension liability | 84,442 | 164,888 | ||||||
Postretirement healthcare liability | 173,267 | 193,659 | ||||||
Other long-term liabilities | 182,836 | 195,000 | ||||||
Commitments and contingencies (Note 15) | ||||||||
Shareholders’ equity: | ||||||||
Preferred stock, none issued | — | — | ||||||
Common stock, 180,595,054 and 344,855,704 shares issued, respectively | 1,806 | 3,449 | ||||||
Additional paid-in-capital | 1,381,862 | 1,328,561 | ||||||
Retained earnings | 1,337,673 | 8,961,985 | ||||||
Accumulated other comprehensive loss | (565,381 | ) | (615,205 | ) | ||||
Treasury stock (4,647,345 and 160,121,966 shares, respectively), at cost | (235,802 | ) | (7,839,136 | ) | ||||
Total shareholders’ equity | 1,920,158 | 1,839,654 | ||||||
$ | 9,890,240 | $ | 9,972,977 |
2016 | 2015 | |||||||
Balances held by consolidated variable interest entities (Note 11) | ||||||||
Current finance receivables, net | $ | 225,289 | $ | 322,768 | ||||
Other assets | $ | 2,781 | $ | 4,706 | ||||
Non-current finance receivables, net | $ | 643,047 | $ | 1,250,919 | ||||
Restricted cash - current and non-current | $ | 57,057 | $ | 100,151 | ||||
Current portion of long-term debt, net | $ | 241,396 | $ | 351,123 | ||||
Long-term debt, net | $ | 554,879 | $ | 1,108,254 |
2016 | 2015 | 2014 | ||||||||||
Net cash provided by operating activities (Note 2) | $ | 1,174,339 | $ | 1,100,118 | $ | 1,146,677 | ||||||
Cash flows from investing activities: | ||||||||||||
Capital expenditures | (256,263 | ) | (259,974 | ) | (232,319 | ) | ||||||
Origination of finance receivables | (3,664,495 | ) | (3,751,830 | ) | (3,568,423 | ) | ||||||
Collections on finance receivables | 3,175,031 | 3,136,885 | 3,013,245 | |||||||||
Proceeds from finance receivables sold | 312,571 | — | — | |||||||||
Sales and redemptions of marketable securities | 40,014 | 11,507 | 41,010 | |||||||||
Acquisition of business | — | (59,910 | ) | — | ||||||||
Other | 411 | 7,474 | 1,837 | |||||||||
Net cash used by investing activities | (392,731 | ) | (915,848 | ) | (744,650 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from issuance of medium-term notes | 1,193,396 | 595,386 | 991,835 | |||||||||
Repayments of medium-term notes | (451,336 | ) | (610,331 | ) | (526,431 | ) | ||||||
Proceeds from issuance of senior unsecured notes | — | 740,385 | — | |||||||||
Repayment of senior unsecured notes | — | — | (303,000 | ) | ||||||||
Proceeds from securitization debt | — | 1,195,668 | 847,126 | |||||||||
Repayments of securitization debt | (665,400 | ) | (1,008,135 | ) | (834,856 | ) | ||||||
Borrowings of asset-backed commercial paper | 62,396 | 87,442 | 84,907 | |||||||||
Repayments of asset-backed commercial paper | (71,500 | ) | (72,727 | ) | (77,800 | ) | ||||||
Net (decrease) increase in credit facilities and unsecured commercial paper | (145,812 | ) | 469,473 | 63,945 | ||||||||
Net change in restricted cash | 43,495 | 11,410 | 22,755 | |||||||||
Dividends paid | (252,321 | ) | (249,262 | ) | (238,300 | ) | ||||||
Purchase of common stock for treasury | (465,341 | ) | (1,537,020 | ) | (615,602 | ) | ||||||
Excess tax benefits from share-based payments | 2,251 | 3,468 | 11,540 | |||||||||
Issuance of common stock under employee stock option plans | 15,782 | 20,179 | 37,785 | |||||||||
Net cash used by financing activities | (734,390 | ) | (354,064 | ) | (536,096 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | (9,443 | ) | (14,677 | ) | (25,863 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | $ | 37,775 | $ | (184,471 | ) | $ | (159,932 | ) | ||||
Cash and cash equivalents: | ||||||||||||
Cash and cash equivalents—beginning of period | $ | 722,209 | $ | 906,680 | $ | 1,066,612 | ||||||
Net increase (decrease) in cash and cash equivalents | 37,775 | (184,471 | ) | (159,932 | ) | |||||||
Cash and cash equivalents—end of period | $ | 759,984 | $ | 722,209 | $ | 906,680 |
Common Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Balance | Total | ||||||||||||||||||||||
Issued Shares | Balance | ||||||||||||||||||||||||||
Balance December 31, 2013 | 343,157,231 | $ | 3,432 | $ | 1,175,052 | $ | 7,852,729 | $ | (332,676 | ) | $ | (5,689,051 | ) | $ | 3,009,486 | ||||||||||||
Net income | — | — | — | 844,611 | — | — | 844,611 | ||||||||||||||||||||
Total other comprehensive loss, net of tax (Note 9) | — | — | — | — | (182,267 | ) | — | (182,267 | ) | ||||||||||||||||||
Dividends | — | — | — | (238,300 | ) | — | — | (238,300 | ) | ||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (615,602 | ) | (615,602 | ) | ||||||||||||||||||
Share-based compensation and 401(k) match made with Treasury shares | — | — | 40,848 | — | — | 1,143 | 41,991 | ||||||||||||||||||||
Issuance of nonvested stock | 15,891 | — | — | — | — | — | — | ||||||||||||||||||||
Exercise of stock options | 1,001,531 | 10 | 37,775 | — | — | — | 37,785 | ||||||||||||||||||||
Tax benefit of equity awards | — | — | 11,582 | — | — | — | 11,582 | ||||||||||||||||||||
Balance December 31, 2014 | 344,174,653 | $ | 3,442 | $ | 1,265,257 | $ | 8,459,040 | $ | (514,943 | ) | $ | (6,303,510 | ) | $ | 2,909,286 | ||||||||||||
Net income | — | — | — | 752,207 | — | — | 752,207 | ||||||||||||||||||||
Total other comprehensive loss, net of tax (Note 9) | — | — | — | — | (100,262 | ) | — | (100,262 | ) | ||||||||||||||||||
Dividends | — | — | — | (249,262 | ) | — | — | (249,262 | ) | ||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (1,537,020 | ) | (1,537,020 | ) | ||||||||||||||||||
Share-based compensation and 401(k) match made with Treasury shares | — | — | 39,457 | — | — | 1,394 | 40,851 | ||||||||||||||||||||
Issuance of nonvested stock | 162,193 | 2 | (2 | ) | — | — | — | — | |||||||||||||||||||
Exercise of stock options | 518,858 | 5 | 20,174 | — | — | — | 20,179 | ||||||||||||||||||||
Tax benefit of equity awards | — | — | 3,675 | — | — | — | 3,675 | ||||||||||||||||||||
Balance December 31, 2015 | 344,855,704 | $ | 3,449 | $ | 1,328,561 | $ | 8,961,985 | $ | (615,205 | ) | $ | (7,839,136 | ) | $ | 1,839,654 | ||||||||||||
Net income | — | — | — | 692,164 | — | — | 692,164 | ||||||||||||||||||||
Total other comprehensive income, net of tax (Note 9) | — | — | — | — | 49,824 | — | 49,824 | ||||||||||||||||||||
Dividends | — | — | — | (252,321 | ) | — | — | (252,321 | ) | ||||||||||||||||||
Repurchase of common stock | — | — | — | — | — | (465,341 | ) | (465,341 | ) | ||||||||||||||||||
Share-based compensation and 401(k) match made with Treasury shares | — | — | 36,956 | — | — | 2,870 | 39,826 | ||||||||||||||||||||
Issuance of nonvested stock | 272,479 | 2 | (2 | ) | — | — | — | — | |||||||||||||||||||
Exercise of stock options | 466,871 | 5 | 15,777 | — | — | — | 15,782 | ||||||||||||||||||||
Tax benefit of equity awards | — | — | 570 | — | — | — | 570 | ||||||||||||||||||||
Retirement of treasury stock | (165,000,000 | ) | (1,650 | ) | — | (8,064,155 | ) | — | 8,065,805 | — | |||||||||||||||||
Balance December 31, 2016 | 180,595,054 | $ | 1,806 | $ | 1,381,862 | $ | 1,337,673 | $ | (565,381 | ) | $ | (235,802 | ) | $ | 1,920,158 |
2016 | 2015 | |||||||
Available-for-sale securities: corporate bonds | $ | 5,519 | $ | 45,192 | ||||
Trading securities: mutual funds | 38,119 | 36,256 | ||||||
Total marketable securities | $ | 43,638 | $ | 81,448 |
2016 | 2015 | 2014 | ||||||||||
Balance, beginning of period | $ | 74,217 | $ | 69,250 | $ | 64,120 | ||||||
Warranties issued during the period | 60,215 | 59,259 | 60,331 | |||||||||
Settlements made during the period | (99,298 | ) | (96,529 | ) | (74,262 | ) | ||||||
Recalls and changes to pre-existing warranty liabilities | 44,348 | 42,237 | 19,061 | |||||||||
Balance, end of period | $ | 79,482 | $ | 74,217 | $ | 69,250 |
2016 | 2015 | |||||||
Components at the lower of FIFO cost or market | ||||||||
Raw materials and work in process | $ | 140,639 | $ | 161,704 | ||||
Motorcycle finished goods | 285,281 | 327,952 | ||||||
Parts and accessories and general merchandise | 122,264 | 145,519 | ||||||
Inventory at lower of FIFO cost or market | 548,184 | 635,175 | ||||||
Excess of FIFO over LIFO cost | (48,267 | ) | (49,268 | ) | ||||
Total inventories, net | $ | 499,917 | $ | 585,907 |
2016 | 2015 | |||||||
Land and related improvements | $ | 65,533 | $ | 56,554 | ||||
Buildings and related improvements | 464,200 | 453,433 | ||||||
Machinery and equipment | 1,887,269 | 1,859,443 | ||||||
Software | 630,114 | 524,076 | ||||||
Construction in progress | 214,409 | 280,147 | ||||||
3,261,525 | 3,173,653 | |||||||
Accumulated depreciation | (2,279,932 | ) | (2,231,235 | ) | ||||
Total property, plant and equipment, net | $ | 981,593 | $ | 942,418 |
2016 | 2015 | |||||||
Payroll, employee benefits and related expenses | $ | 148,221 | $ | 160,971 | ||||
Warranty and recalls | 57,698 | 54,894 | ||||||
Sales incentive programs | 43,218 | 37,568 | ||||||
Tax-related accruals | 26,140 | 18,535 | ||||||
Accrued interest | 42,788 | 33,925 | ||||||
Other | 168,587 | 166,071 | ||||||
Total accrued liabilities | $ | 486,652 | $ | 471,964 |
2016 | 2015 | 2014 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income | $ | 692,164 | $ | 752,207 | $ | 844,611 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Depreciation and amortization of intangibles | 209,555 | 198,074 | 179,300 | |||||||||
Amortization of deferred loan origination costs | 86,681 | 93,546 | 94,429 | |||||||||
Amortization of financing origination fees | 9,252 | 9,975 | 8,442 | |||||||||
Provision for long-term employee benefits | 38,273 | 60,824 | 33,709 | |||||||||
Employee benefit plan contributions and payments | (55,809 | ) | (28,490 | ) | (29,686 | ) | ||||||
Stock compensation expense | 32,336 | 29,433 | 37,929 | |||||||||
Net change in wholesale finance receivables related to sales | (3,233 | ) | (113,970 | ) | (75,210 | ) | ||||||
Provision for credit losses | 136,617 | 101,345 | 80,946 | |||||||||
Gain on off-balance sheet asset-backed securitization | (9,269 | ) | — | — | ||||||||
Loss on debt extinguishment | 118 | 1,099 | 3,942 | |||||||||
Deferred income taxes | (165 | ) | (16,484 | ) | (7,621 | ) | ||||||
Other, net | (6,907 | ) | 20,913 | 20,473 | ||||||||
Changes in current assets and liabilities: | ||||||||||||
Accounts receivable, net | (45,934 | ) | (13,665 | ) | (9,809 | ) | ||||||
Finance receivables – accrued interest and other | (1,489 | ) | (3,046 | ) | (2,515 | ) | ||||||
Inventories | 85,072 | (155,222 | ) | (50,886 | ) | |||||||
Accounts payable and accrued liabilities | 38,237 | 138,823 | 21,309 | |||||||||
Derivative instruments | (3,413 | ) | (5,615 | ) | 703 | |||||||
Other | (27,747 | ) | 30,371 | (3,389 | ) | |||||||
Total adjustments | 482,175 | 347,911 | 302,066 | |||||||||
Net cash provided by operating activities | $ | 1,174,339 | $ | 1,100,118 | $ | 1,146,677 |
2016 | 2015 | 2014 | ||||||||||
Interest | $ | 185,804 | $ | 148,654 | $ | 154,310 | ||||||
Income taxes | $ | 356,553 | $ | 371,547 | $ | 438,840 |
August 4, 2015 | |||
Current assets | $ | 11,088 | |
Property, plant and equipment | 144 | ||
Intangible assets | 20,842 | ||
Goodwill | 28,567 | ||
Total assets | 60,641 | ||
Current liabilities | 731 | ||
Net assets acquired | $ | 59,910 |
2016 | 2015 | 2014 | ||||||||||
Balance, beginning of period | $ | 54,182 | $ | 27,752 | $ | 30,452 | ||||||
Business acquisitions | — | 28,567 | — | |||||||||
Currency translation | (791 | ) | (2,137 | ) | (2,700 | ) | ||||||
Balance, end of period | $ | 53,391 | $ | 54,182 | $ | 27,752 |
2016 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Estimated useful life (years) | |||||||||||
Intangible assets other than goodwill | ||||||||||||||
Reacquired distribution rights | $ | 12,928 | $ | (9,157 | ) | $ | 3,771 | 2 | ||||||
Customer relationships | 7,293 | (517 | ) | 6,776 | 20 | |||||||||
Total other intangible assets | $ | 20,221 | $ | (9,674 | ) | $ | 10,547 |
2015 | ||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Estimated useful life (years) | |||||||||||
Intangible assets other than goodwill | ||||||||||||||
Reacquired distribution rights | $ | 12,614 | $ | (2,628 | ) | $ | 9,986 | 2 | ||||||
Customer relationships | 7,116 | (148 | ) | 6,968 | 20 | |||||||||
Total other intangible assets | $ | 19,730 | $ | (2,776 | ) | $ | 16,954 |
Estimated Amortization | ||||
2017 | 4,143 | |||
2018 | 372 | |||
2019 | 372 | |||
2020 | 372 | |||
2021 | 372 | |||
Thereafter | 4,916 | |||
Total | $ | 10,547 |
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||
Wholesale | ||||||||||||||||||||
United States | $ | 961,150 | $ | 965,379 | $ | 903,380 | $ | 800,491 | $ | 776,633 | ||||||||||
Canada | 65,440 | 58,481 | 48,941 | 44,721 | 39,771 | |||||||||||||||
Total wholesale | 1,026,590 | 1,023,860 | 952,321 | 845,212 | 816,404 | |||||||||||||||
Retail | ||||||||||||||||||||
United States | 5,769,410 | 5,803,071 | 5,398,006 | 5,051,245 | 4,850,450 | |||||||||||||||
Canada | 212,801 | 188,400 | 209,918 | 213,799 | 222,665 | |||||||||||||||
Total retail | 5,982,211 | 5,991,471 | 5,607,924 | 5,265,044 | 5,073,115 | |||||||||||||||
7,008,801 | 7,015,331 | 6,560,245 | 6,110,256 | 5,889,519 | ||||||||||||||||
Allowance for credit losses | (173,343 | ) | (147,178 | ) | (127,364 | ) | (110,693 | ) | (107,667 | ) | ||||||||||
Total finance receivables, net | $ | 6,835,458 | $ | 6,868,153 | $ | 6,432,881 | $ | 5,999,563 | $ | 5,781,852 |
United States | Canada | Total | ||||||||||
2017 | $ | 2,004,454 | $ | 107,658 | $ | 2,112,112 | ||||||
2018 | 1,123,428 | 44,731 | 1,168,159 | |||||||||
2019 | 1,256,972 | 48,806 | 1,305,778 | |||||||||
2020 | 1,217,711 | 53,254 | 1,270,965 | |||||||||
2021 | 1,106,241 | 23,792 | 1,130,033 | |||||||||
Thereafter | 21,754 | — | 21,754 | |||||||||
Total | $ | 6,730,560 | $ | 278,241 | $ | 7,008,801 |
2016 | ||||||||||||
Retail | Wholesale | Total | ||||||||||
Balance, beginning of period | $ | 139,320 | $ | 7,858 | $ | 147,178 | ||||||
Provision for credit losses | 137,893 | (1,276 | ) | 136,617 | ||||||||
Charge-offs | (148,566 | ) | — | (148,566 | ) | |||||||
Recoveries | 41,405 | — | 41,405 | |||||||||
Other (a) | (3,291 | ) | — | (3,291 | ) | |||||||
Balance, end of period | $ | 166,761 | $ | 6,582 | $ | 173,343 |
2015 | ||||||||||||
Retail | Wholesale | Total | ||||||||||
Balance, beginning of period | $ | 122,025 | $ | 5,339 | $ | 127,364 | ||||||
Provision for credit losses | 98,826 | 2,519 | 101,345 | |||||||||
Charge-offs | (123,911 | ) | — | (123,911 | ) | |||||||
Recoveries | 42,380 | — | 42,380 | |||||||||
Balance, end of period | $ | 139,320 | $ | 7,858 | $ | 147,178 |
2014 | ||||||||||||
Retail | Wholesale | Total | ||||||||||
Balance, beginning of period | $ | 106,063 | $ | 4,630 | $ | 110,693 | ||||||
Provision for credit losses | 80,237 | 709 | 80,946 | |||||||||
Charge-offs | (102,831 | ) | — | (102,831 | ) | |||||||
Recoveries | 38,556 | — | 38,556 | |||||||||
Balance, end of period | $ | 122,025 | $ | 5,339 | $ | 127,364 |
(a) | Related to the sale of finance receivables during the second quarter of 2016 with a principal balance of $301.8 million |
2016 | ||||||||||||
Retail | Wholesale | Total | ||||||||||
Allowance for credit losses, ending balance: | ||||||||||||
Individually evaluated for impairment | $ | — | $ | — | $ | — | ||||||
Collectively evaluated for impairment | 166,761 | 6,582 | 173,343 | |||||||||
Total allowance for credit losses | $ | 166,761 | $ | 6,582 | $ | 173,343 | ||||||
Finance receivables, ending balance: | ||||||||||||
Individually evaluated for impairment | $ | — | $ | — | $ | — | ||||||
Collectively evaluated for impairment | 5,982,211 | 1,026,590 | 7,008,801 | |||||||||
Total finance receivables | $ | 5,982,211 | $ | 1,026,590 | $ | 7,008,801 | ||||||
2015 | ||||||||||||
Retail | Wholesale | Total | ||||||||||
Allowance for credit losses, ending balance: | ||||||||||||
Individually evaluated for impairment | $ | — | $ | — | $ | — | ||||||
Collectively evaluated for impairment | 139,320 | 7,858 | 147,178 | |||||||||
Total allowance for credit losses | $ | 139,320 | $ | 7,858 | $ | 147,178 | ||||||
Finance receivables, ending balance: | ||||||||||||
Individually evaluated for impairment | $ | — | $ | — | $ | — | ||||||
Collectively evaluated for impairment | 5,991,471 | 1,023,860 | 7,015,331 | |||||||||
Total finance receivables | $ | 5,991,471 | $ | 1,023,860 | $ | 7,015,331 |
2016 | ||||||||||||||||||||||||
Current | 31-60 Days Past Due | 61-90 Days Past Due | Greater than 90 Days Past Due | Total Past Due | Total Finance Receivables | |||||||||||||||||||
Retail | $ | 5,760,818 | $ | 131,302 | $ | 49,642 | $ | 40,449 | $ | 221,393 | $ | 5,982,211 | ||||||||||||
Wholesale | 1,024,995 | 1,000 | 319 | 276 | 1,595 | 1,026,590 | ||||||||||||||||||
Total | $ | 6,785,813 | $ | 132,302 | $ | 49,961 | $ | 40,725 | $ | 222,988 | $ | 7,008,801 |
2015 | ||||||||||||||||||||||||
Current | 31-60 Days Past Due | 61-90 Days Past Due | Greater than 90 Days Past Due | Total Past Due | Total Finance Receivables | |||||||||||||||||||
Retail | $ | 5,796,003 | $ | 118,996 | $ | 43,680 | $ | 32,792 | $ | 195,468 | $ | 5,991,471 | ||||||||||||
Wholesale | 1,022,365 | 888 | 530 | 77 | 1,495 | 1,023,860 | ||||||||||||||||||
Total | $ | 6,818,368 | $ | 119,884 | $ | 44,210 | $ | 32,869 | $ | 196,963 | $ | 7,015,331 |
2016 | 2015 | 2014 | 2013 | 2012 | ||||||||||||||||
United States | $ | 39,399 | $ | 31,677 | $ | 27,800 | $ | 23,770 | $ | 26,500 | ||||||||||
Canada | 1,326 | 1,192 | 1,118 | 1,031 | 1,533 | |||||||||||||||
Total | $ | 40,725 | $ | 32,869 | $ | 28,918 | $ | 24,801 | $ | 28,033 |
2016 | 2015 | |||||||
Prime | $ | 4,768,420 | $ | 4,777,448 | ||||
Sub-prime | 1,213,791 | 1,214,023 | ||||||
Total | $ | 5,982,211 | $ | 5,991,471 |
2016 | 2015 | |||||||
Doubtful | $ | 1,333 | $ | 5,169 | ||||
Substandard | 1,773 | 21,774 | ||||||
Special Mention | 30,152 | 6,271 | ||||||
Medium Risk | 14,620 | 11,494 | ||||||
Low Risk | 978,712 | 979,152 | ||||||
Total | $ | 1,026,590 | $ | 1,023,860 |
2016 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Cash equivalents | $ | 531,519 | $ | 426,266 | $ | 105,253 | $ | — | ||||||||
Marketable securities | 43,638 | 38,119 | 5,519 | — | ||||||||||||
Derivatives | 29,034 | — | 29,034 | — | ||||||||||||
Total | $ | 604,191 | $ | 464,385 | $ | 139,806 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Derivatives | $ | 142 | $ | — | $ | 142 | $ | — |
2015 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Cash equivalents | $ | 555,910 | $ | 390,706 | $ | 165,204 | $ | — | ||||||||
Marketable securities | 81,448 | 36,256 | 45,192 | — | ||||||||||||
Derivatives | 16,235 | — | 16,235 | — | ||||||||||||
Total | $ | 653,593 | $ | 426,962 | $ | 226,631 | $ | — | ||||||||
Liabilities: | ||||||||||||||||
Derivatives | $ | 1,300 | $ | — | $ | 1,300 | $ | — |
2016 | 2015 | |||||||||||||||
Fair Value | Carrying Value | Fair Value | Carrying Value | |||||||||||||
Assets: | ||||||||||||||||
Cash and cash equivalents | $ | 759,984 | $ | 759,984 | $ | 722,209 | $ | 722,209 | ||||||||
Marketable securities | $ | 43,638 | $ | 43,638 | $ | 81,448 | $ | 81,448 | ||||||||
Derivatives | $ | 29,034 | $ | 29,034 | $ | 16,235 | $ | 16,235 | ||||||||
Finance receivables, net | $ | 6,921,037 | $ | 6,835,458 | $ | 6,937,053 | $ | 6,868,153 | ||||||||
Restricted cash | $ | 67,147 | $ | 67,147 | $ | 110,642 | $ | 110,642 | ||||||||
Liabilities: | ||||||||||||||||
Derivatives | $ | 142 | $ | 142 | $ | 1,300 | $ | 1,300 | ||||||||
Unsecured commercial paper | $ | 1,055,708 | $ | 1,055,708 | $ | 1,201,380 | $ | 1,201,380 | ||||||||
Asset-backed Canadian commercial paper conduit facility | $ | 149,338 | $ | 149,338 | $ | 153,839 | $ | 153,839 | ||||||||
Medium-term notes | $ | 4,139,462 | $ | 4,064,940 | $ | 3,410,966 | $ | 3,316,949 | ||||||||
Senior unsecured notes | $ | 744,552 | $ | 741,306 | $ | 737,435 | $ | 740,653 | ||||||||
Term asset-backed securitization debt | $ | 797,688 | $ | 796,275 | $ | 1,455,776 | $ | 1,459,377 |
2016 | 2015 | ||||||||||||||||||||||||
Derivatives Designated As Hedging Instruments Under ASC Topic 815 | Notional Value | Asset Fair Value(a) | Liability Fair Value(b) | Notional Value | Asset Fair Value(a) | Liability Fair Value(b) | |||||||||||||||||||
Foreign currency contracts(c) | $ | 554,551 | $ | 28,528 | $ | 142 | $ | 436,352 | $ | 16,167 | $ | 181 | |||||||||||||
Commodities contracts(c) | 992 | 177 | — | 968 | — | 159 | |||||||||||||||||||
Total | $ | 555,543 | $ | 28,705 | $ | 142 | $ | 437,320 | $ | 16,167 | $ | 340 | |||||||||||||
2016 | 2015 | ||||||||||||||||||||||||
Derivatives Not Designated As Hedging Instruments Under ASC Topic 815 | Notional Value | Asset Fair Value(a) | Liability Fair Value(b) | Notional Value | Asset Fair Value(a) | Liability Fair Value(b) | |||||||||||||||||||
Commodities contracts | $ | 5,025 | $ | 329 | $ | — | $ | 6,510 | $ | 68 | $ | 960 | |||||||||||||
Total | $ | 5,025 | $ | 329 | $ | — | $ | 6,510 | $ | 68 | $ | 960 |
(a) | Included in other current assets |
(b) | Included in accrued liabilities |
(c) | Derivative designated as a cash flow hedge |
Amount of Gain/(Loss) Recognized in OCI, before tax | ||||||||||||
Cash Flow Hedges | 2016 | 2015 | 2014 | |||||||||
Foreign currency contracts | $ | 28,099 | $ | 45,810 | $ | 47,037 | ||||||
Commodities contracts | 77 | (421 | ) | (262 | ) | |||||||
Treasury rate locks | — | (7,381 | ) | — | ||||||||
Total | $ | 28,176 | $ | 38,008 | $ | 46,775 |
Amount of Gain/(Loss) Reclassified from AOCL into Income | |||||||||||||||||
Cash Flow Hedges | 2016 | 2015 | 2014 | Expected to be Reclassified Over the Next Twelve Months | |||||||||||||
Foreign currency contracts(a) | $ | 18,253 | $ | 59,730 | $ | 13,635 | $ | 26,583 | |||||||||
Commodities contracts(a) | (258 | ) | (677 | ) | 228 | 177 | |||||||||||
Treasury rate locks(b) | (362 | ) | (151 | ) | — | (362 | ) | ||||||||||
Total | $ | 17,633 | $ | 58,902 | $ | 13,863 | $ | 26,398 |
(a) | Gain/(loss) reclassified from accumulated other comprehensive loss (AOCL) to income is included in cost of goods sold |
(b) | Gain/(loss) reclassified from AOCL to income is included in interest expense |
Amount of Gain/(Loss) Recognized in Income on Derivative | ||||||||||||
Derivatives not Designated as Hedges | 2016 | 2015 | 2014 | |||||||||
Commodities contracts(a) | $ | 167 | $ | (648 | ) | $ | (1,969 | ) | ||||
Total | $ | 167 | $ | (648 | ) | $ | (1,969 | ) |
(a) | Gain/(loss) recognized in income is included in cost of goods sold |
2016 | ||||||||||||||||||||
Foreign currency translation adjustments | Marketable securities | Derivative financial instruments | Pension and postretirement benefit plans | Total | ||||||||||||||||
Balance, beginning of period | $ | (58,844 | ) | $ | (1,094 | ) | $ | 5,886 | $ | (561,153 | ) | $ | (615,205 | ) | ||||||
Other comprehensive (loss) income before reclassifications | (7,591 | ) | (159 | ) | 28,176 | 33,937 | 54,363 | |||||||||||||
Income tax | (1,697 | ) | 59 | (10,436 | ) | (12,570 | ) | (24,644 | ) | |||||||||||
Net other comprehensive (loss) income before reclassifications | (9,288 | ) | (100 | ) | 17,740 | 21,367 | 29,719 | |||||||||||||
Reclassifications: | ||||||||||||||||||||
Realized (gains) losses - foreign currency contracts(a) | — | — | (18,253 | ) | — | (18,253 | ) | |||||||||||||
Realized (gains) losses - commodities contracts(a) | — | — | 258 | — | 258 | |||||||||||||||
Realized (gains) losses - treasury rate lock(b) | — | — | 362 | — | 362 | |||||||||||||||
Prior service credits(c) | — | — | — | (1,784 | ) | (1,784 | ) | |||||||||||||
Actuarial losses(c) | — | — | — | 49,888 | 49,888 | |||||||||||||||
Curtailment and settlement losses(c) | — | — | — | 1,463 | 1,463 | |||||||||||||||
Total before tax | — | — | (17,633 | ) | 49,567 | 31,934 | ||||||||||||||
Income tax expense (benefit) | — | — | 6,531 | (18,360 | ) | (11,829 | ) | |||||||||||||
Net reclassifications | — | — | (11,102 | ) | 31,207 | 20,105 | ||||||||||||||
Other comprehensive (loss) income | (9,288 | ) | (100 | ) | 6,638 | 52,574 | 49,824 | |||||||||||||
Balance, end of period | $ | (68,132 | ) | $ | (1,194 | ) | $ | 12,524 | $ | (508,579 | ) | $ | (565,381 | ) |
2015 | ||||||||||||||||||||
Foreign currency translation adjustments | Marketable securities | Derivative financial instruments | Pension and postretirement benefit plans | Total | ||||||||||||||||
Balance, beginning of period | $ | (3,482 | ) | $ | (700 | ) | $ | 19,042 | $ | (529,803 | ) | $ | (514,943 | ) | ||||||
Other comprehensive (loss) income before reclassifications | (48,309 | ) | (626 | ) | 38,008 | (106,059 | ) | (116,986 | ) | |||||||||||
Income tax | (7,053 | ) | 232 | (14,079 | ) | 39,284 | 18,384 | |||||||||||||
Net other comprehensive (loss) income before reclassifications | (55,362 | ) | (394 | ) | 23,929 | (66,775 | ) | (98,602 | ) | |||||||||||
Reclassifications: | ||||||||||||||||||||
Realized (gains) losses - foreign currency contracts(a) | — | — | (59,730 | ) | — | (59,730 | ) | |||||||||||||
Realized (gains) losses - commodities contracts(a) | — | — | 677 | — | 677 | |||||||||||||||
Realized (gains) losses - treasury rate lock(b) | — | — | 151 | — | 151 | |||||||||||||||
Prior service credits(c) | — | — | — | (2,782 | ) | (2,782 | ) | |||||||||||||
Actuarial losses(c) | — | — | — | 58,680 | 58,680 | |||||||||||||||
Curtailment and settlement losses(c) | — | — | — | 368 | 368 | |||||||||||||||
Total before tax | — | — | (58,902 | ) | 56,266 | (2,636 | ) | |||||||||||||
Income tax expense (benefit) | — | — | 21,817 | (20,841 | ) | 976 | ||||||||||||||
Net reclassifications | — | — | (37,085 | ) | 35,425 | (1,660 | ) | |||||||||||||
Other comprehensive loss | (55,362 | ) | (394 | ) | (13,156 | ) | (31,350 | ) | (100,262 | ) | ||||||||||
Balance, end of period | $ | (58,844 | ) | $ | (1,094 | ) | $ | 5,886 | $ | (561,153 | ) | $ | (615,205 | ) |
2014 | ||||||||||||||||||||
Foreign currency translation adjustments | Marketable securities | Derivative financial instruments | Pension and postretirement benefit plans | Total | ||||||||||||||||
Balance, beginning of period | $ | 33,326 | $ | (276 | ) | $ | (1,680 | ) | $ | (364,046 | ) | $ | (332,676 | ) | ||||||
Other comprehensive (loss) income before reclassifications | (50,310 | ) | (673 | ) | 46,775 | (301,832 | ) | (306,040 | ) | |||||||||||
Income tax | 13,502 | 249 | (17,325 | ) | 111,799 | 108,225 | ||||||||||||||
Net other comprehensive (loss) income before reclassifications | (36,808 | ) | (424 | ) | 29,450 | (190,033 | ) | (197,815 | ) | |||||||||||
Reclassifications: | ||||||||||||||||||||
Realized (gains) losses - foreign currency contracts(a) | — | — | (13,635 | ) | — | (13,635 | ) | |||||||||||||
Realized (gains) losses - commodities contracts(a) | — | — | (228 | ) | — | (228 | ) | |||||||||||||
Prior service credits(c) | — | — | — | (2,734 | ) | (2,734 | ) | |||||||||||||
Actuarial losses(c) | — | — | — | 41,292 | 41,292 | |||||||||||||||
Total before tax | — | — | (13,863 | ) | 38,558 | 24,695 | ||||||||||||||
Income tax expense (benefit) | — | — | 5,135 | (14,282 | ) | (9,147 | ) | |||||||||||||
Net reclassifications | — | — | (8,728 | ) | 24,276 | 15,548 | ||||||||||||||
Other comprehensive (loss) income | (36,808 | ) | (424 | ) | 20,722 | (165,757 | ) | (182,267 | ) | |||||||||||
Balance, end of period | $ | (3,482 | ) | $ | (700 | ) | $ | 19,042 | $ | (529,803 | ) | $ | (514,943 | ) |
(a) | Amounts reclassified to net income are included in Motorcycles and Related Products cost of goods sold. |
(b) | Amounts reclassified to net income are presented in interest expense. |
(c) | Amounts reclassified are included in the computation of net periodic cost. See Note 13 for information related to pension and postretirement benefit plans. |
2016 | 2015 | |||||||
Unsecured commercial paper | $ | 1,055,708 | $ | 1,201,380 | ||||
Total short-term debt | $ | 1,055,708 | $ | 1,201,380 |
2016 | 2015 | |||||||
Secured debt (Note 11) | ||||||||
Asset-backed Canadian commercial paper conduit facility | $ | 149,338 | $ | 153,839 | ||||
Asset-backed securitization debt | 797,755 | 1,463,154 | ||||||
Less: unamortized discount and debt issuance costs | (1,480 | ) | (3,777 | ) | ||||
Total secured debt | 945,613 | 1,613,216 | ||||||
Unsecured notes | ||||||||
3.88% Medium-term notes due in 2016 par value, issued March 2011 | — | 450,000 | ||||||
2.70% Medium-term notes due in 2017 par value, issued January 2012 | 400,000 | 400,000 | ||||||
1.55% Medium-term notes due in 2017 par value, issued November 2014 | 400,000 | 400,000 | ||||||
6.80% Medium-term notes due in 2018 par value, issued May 2008 | 877,488 | 878,708 | ||||||
2.40% Medium-term notes due in 2019 par value, issued September 2014 | 600,000 | 600,000 | ||||||
2.25% Medium-term notes due in 2019 par value, issued January 2016 | 600,000 | — | ||||||
2.15% Medium-term notes due in 2020 par value, issued February 2015 | 600,000 | 600,000 | ||||||
2.85% Medium-term notes due in 2021 par value, issued January 2016 | 600,000 | — | ||||||
3.50% Senior unsecured notes due in 2025 par value, issued July 2015 | 450,000 | 450,000 | ||||||
4.625% Senior unsecured notes due in 2045 par value, issued July 2015 | 300,000 | 300,000 | ||||||
Less: unamortized discount and debt issuance costs | (21,242 | ) | (21,106 | ) | ||||
Gross long-term debt | 5,751,859 | 5,670,818 | ||||||
Less: current portion of long-term debt, net of unamortized discount and issuance costs | (1,084,884 | ) | (838,349 | ) | ||||
Total long-term debt | $ | 4,666,975 | $ | 4,832,469 |
2017 | 2018 | 2019 | 2020 | 2021 | Thereafter | Total | ||||||||||||||||||||||
Principal payments on debt | $ | 2,145,781 | $ | 1,192,458 | $ | 1,483,236 | $ | 658,814 | $ | 600,000 | $ | 750,000 | $ | 6,830,289 |
• | assume or incur certain liens; |
• | participate in certain mergers or consolidations; and |
• | purchase or hold margin stock. |
2016 | |||||||||||||||||||||||
Finance receivables | Allowance for credit losses | Restricted cash | Other assets | Total assets | Asset-backed debt | ||||||||||||||||||
On-balance sheet assets and liabilities | |||||||||||||||||||||||
Consolidated VIEs | |||||||||||||||||||||||
Term asset-backed securitizations | $ | 893,804 | $ | (25,468 | ) | $ | 57,057 | $ | 2,452 | $ | 927,845 | $ | 796,275 | ||||||||||
Asset-backed U.S. commercial paper conduit facility | — | — | — | 329 | 329 | — | |||||||||||||||||
Unconsolidated VIEs | |||||||||||||||||||||||
Asset-backed Canadian commercial paper conduit facility | 165,719 | (3,573 | ) | 10,090 | 426 | 172,662 | 149,338 | ||||||||||||||||
Total on-balance sheet assets and liabilities | $ | 1,059,523 | $ | (29,041 | ) | $ | 67,147 | $ | 3,207 | $ | 1,100,836 | $ | 945,613 | ||||||||||
2015 | |||||||||||||||||||||||
Finance receivables | Allowance for credit losses | Restricted cash | Other assets | Total assets | Asset-backed debt | ||||||||||||||||||
On-balance sheet assets and liabilities | |||||||||||||||||||||||
Consolidated VIEs | |||||||||||||||||||||||
Term asset-backed securitizations | $ | 1,611,624 | $ | (37,937 | ) | $ | 100,151 | $ | 4,383 | $ | 1,678,221 | $ | 1,459,377 | ||||||||||
Asset-backed U.S. commercial paper conduit facility | — | — | — | 323 | 323 | — | |||||||||||||||||
Unconsolidated VIEs | |||||||||||||||||||||||
Asset-backed Canadian commercial paper conduit facility | 170,708 | (3,061 | ) | 10,491 | 393 | 178,531 | 153,839 | ||||||||||||||||
Total on-balance sheet assets and liabilities | $ | 1,782,332 | $ | (40,998 | ) | $ | 110,642 | $ | 5,099 | $ | 1,857,075 | $ | 1,613,216 |
Issue Date | Principal Amount at Date of Issuance | Weighted-Average Rate at Date of Issuance | Contractual Maturity Date | |||
May 2015 | $500,000 | 0.88% | May 2016 - December 2022 | |||
January 2015 | $700,000 | 0.89% | February 2016 - August 2022 | |||
April 2014 | $850,000 | 0.66% | April 2015 - October 2021 | |||
April 2013 | $650,000 | 0.57% | May 2014 - December 2020 |
Issue Date | Principal Amount at Date of Issuance | Weighted-Average Rate at Date of Issuance | Contractual Maturity Date | ||||
July 2012 | $675,306 | 0.59% | August 2013 - June 2018 |
2016 | 2015 | ||||||
On-balance sheet retail motorcycle finance receivables | $ | 5,839,467 | $ | 5,843,352 | |||
Off-balance sheet retail motorcycle finance receivables | 236,706 | — | |||||
Total serviced retail motorcycle finance receivables | $ | 6,076,173 | $ | 5,843,352 |
Amount 30 days or more past due: | |||||||
2016 | 2015 | ||||||
On-balance sheet retail motorcycle finance receivables | $ | 221,393 | $ | 195,468 | |||
Off-balance sheet retail motorcycle finance receivables | 1,858 | — | |||||
Total serviced retail motorcycle finance receivables | $ | 223,251 | $ | 195,468 |
2016 | 2015 | ||||||
On-balance sheet retail motorcycle finance receivables | $ | 107,161 | $ | 81,531 | |||
Off-balance sheet retail motorcycle finance receivables | 820 | — | |||||
Total serviced retail motorcycle finance receivables | $ | 107,981 | $ | 81,531 |
2016 | 2015 | 2014 | ||||||||||
Current: | ||||||||||||
Federal | $ | 284,489 | $ | 363,803 | $ | 394,904 | ||||||
State | 28,406 | 37,811 | 30,997 | |||||||||
Foreign | 19,017 | 12,826 | 20,429 | |||||||||
331,912 | 414,440 | 446,330 | ||||||||||
Deferred: | ||||||||||||
Federal | (4,250 | ) | (15,474 | ) | (5,743 | ) | ||||||
State | 7,038 | (2,264 | ) | (3,155 | ) | |||||||
Foreign | (2,953 | ) | 1,254 | 1,277 | ||||||||
(165 | ) | (16,484 | ) | (7,621 | ) | |||||||
Total | $ | 331,747 | $ | 397,956 | $ | 438,709 |
2016 | 2015 | 2014 | ||||||||||
Domestic | $ | 954,138 | $ | 1,101,427 | $ | 1,196,335 | ||||||
Foreign | 69,773 | 48,736 | 86,985 | |||||||||
Total | $ | 1,023,911 | $ | 1,150,163 | $ | 1,283,320 |
2016 | 2015 | 2014 | |||||||
Provision at statutory rate | 35.0 | % | 35.0 | % | 35.0 | % | |||
State taxes, net of federal benefit | 1.8 | 1.8 | 1.7 | ||||||
Foreign rate differential | (0.6 | ) | (0.4 | ) | (0.6 | ) | |||
Domestic manufacturing deduction | (2.1 | ) | (2.1 | ) | (2.1 | ) | |||
Research and development credit | (0.4 | ) | (0.4 | ) | (0.4 | ) | |||
Unrecognized tax benefits including interest and penalties | (1.3 | ) | 1.1 | 0.2 | |||||
Valuation allowance adjustments | 0.1 | (0.1 | ) | (0.1 | ) | ||||
Adjustments for previously accrued taxes | 0.2 | (0.1 | ) | (0.3 | ) | ||||
Other | (0.3 | ) | (0.2 | ) | 0.8 | ||||
Provision for income taxes | 32.4 | % | 34.6 | % | 34.2 | % |
2016 | 2015 | |||||||
Deferred tax assets: | ||||||||
Accruals not yet tax deductible | $ | 141,961 | $ | 129,449 | ||||
Pension and postretirement benefit plan obligations | 88,741 | 126,952 | ||||||
Stock compensation | 19,051 | 20,111 | ||||||
Net operating loss carryforward | 33,587 | 38,250 | ||||||
Valuation allowance | (30,953 | ) | (20,659 | ) | ||||
Other, net | 56,903 | 47,039 | ||||||
309,290 | 341,142 | |||||||
Deferred tax liabilities: | ||||||||
Depreciation, tax in excess of book | (139,268 | ) | (136,340 | ) | ||||
Other | (2,293 | ) | (2,419 | ) | ||||
(141,561 | ) | (138,759 | ) | |||||
Total | $ | 167,729 | $ | 202,383 |
2016 | 2015 | |||||||
Unrecognized tax benefits, beginning of period | $ | 73,100 | $ | 64,200 | ||||
Increase in unrecognized tax benefits for tax positions taken in a prior period | 2,828 | 9,149 | ||||||
Decrease in unrecognized tax benefits for tax positions taken in a prior period | (21,061 | ) | (1,993 | ) | ||||
Increase in unrecognized tax benefits for tax positions taken in the current period | 7,402 | 6,302 | ||||||
Statute lapses | (1,907 | ) | (2,465 | ) | ||||
Settlements with taxing authorities | (4,823 | ) | (2,093 | ) | ||||
Unrecognized tax benefits, end of period | $ | 55,539 | $ | 73,100 |
Pension and SERPA Benefits | Postretirement Healthcare Benefits | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Change in benefit obligation: | ||||||||||||||||
Benefit obligation, beginning of period | $ | 2,009,000 | $ | 2,069,980 | $ | 354,739 | $ | 361,006 | ||||||||
Service cost | 33,437 | 40,039 | 7,478 | 8,259 | ||||||||||||
Interest cost | 90,827 | 87,345 | 14,814 | 14,166 | ||||||||||||
Actuarial losses (gains) | 13,481 | (128,082 | ) | (4,647 | ) | (6,757 | ) | |||||||||
Plan participant contributions | — | — | 2,669 | 2,587 | ||||||||||||
Plan amendments | — | 6,407 | — | — | ||||||||||||
Special early retirement benefits | — | 10,563 | — | 622 | ||||||||||||
Benefits paid, net of Medicare Part D subsidy | (160,310 | ) | (77,252 | ) | (28,622 | ) | (25,144 | ) | ||||||||
Benefit obligation, end of period | 1,986,435 | 2,009,000 | 346,431 | 354,739 | ||||||||||||
Change in plan assets: | ||||||||||||||||
Fair value of plan assets, beginning of period | 1,841,967 | 1,992,646 | 156,765 | 156,840 | ||||||||||||
Actual return on plan assets | 188,376 | (77,980 | ) | 13,327 | (75 | ) | ||||||||||
Company contributions | 25,000 | — | — | — | ||||||||||||
Plan participant contributions | — | — | 2,669 | 2,587 | ||||||||||||
Benefits paid | (155,454 | ) | (72,699 | ) | (2,669 | ) | (2,587 | ) | ||||||||
Fair value of plan assets, end of period | 1,899,889 | 1,841,967 | 170,092 | 156,765 | ||||||||||||
Funded status of the plans, December 31 | $ | (86,546 | ) | $ | (167,033 | ) | $ | (176,339 | ) | $ | (197,974 | ) | ||||
Amounts recognized in the Consolidated Balance Sheets, December 31: | ||||||||||||||||
Accrued benefit liability (current liabilities) | $ | (2,104 | ) | $ | (2,145 | ) | $ | (3,072 | ) | $ | (4,315 | ) | ||||
Accrued benefit liability (long-term liabilities) | (84,442 | ) | (164,888 | ) | (173,267 | ) | (193,659 | ) | ||||||||
Net amount recognized | $ | (86,546 | ) | $ | (167,033 | ) | $ | (176,339 | ) | $ | (197,974 | ) |
Pension and SERPA Benefits | Postretirement Healthcare Benefits | |||||||||||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | 2014 | |||||||||||||||||||
Service cost | $ | 33,437 | $ | 40,039 | $ | 31,498 | $ | 7,478 | $ | 8,259 | $ | 7,015 | ||||||||||||
Interest cost | 90,827 | 87,345 | 86,923 | 14,814 | 14,166 | 16,878 | ||||||||||||||||||
Special early retirement benefits | — | 10,563 | — | — | 622 | — | ||||||||||||||||||
Expected return on plan assets | (145,781 | ) | (144,929 | ) | (136,734 | ) | (12,069 | ) | (11,506 | ) | (10,429 | ) | ||||||||||||
Amortization of unrecognized: | ||||||||||||||||||||||||
Prior service cost (credit) | 1,019 | 435 | 1,119 | (2,803 | ) | (3,217 | ) | (3,853 | ) | |||||||||||||||
Net loss | 46,351 | 54,709 | 36,563 | 3,537 | 3,971 | 4,729 | ||||||||||||||||||
Settlement loss | 1,463 | 368 | — | — | — | — | ||||||||||||||||||
Net periodic benefit cost | $ | 27,316 | $ | 48,530 | $ | 19,369 | $ | 10,957 | $ | 12,295 | $ | 14,340 |
Pension and SERPA Benefits | Postretirement Healthcare Benefits | Total | ||||||||||
Prior service cost (credit) | $ | 4,804 | $ | (7,279 | ) | $ | (2,475 | ) | ||||
Net actuarial loss | 464,804 | 46,250 | 511,054 | |||||||||
Total | $ | 469,608 | $ | 38,971 | $ | 508,579 |
Pension and SERPA Benefits | Postretirement Healthcare Benefits | Total | ||||||||||
Prior service cost (credit) | $ | 641 | $ | (1,367 | ) | $ | (726 | ) | ||||
Net actuarial loss | 27,699 | 2,053 | 29,752 | |||||||||
Total | $ | 28,340 | $ | 686 | $ | 29,026 |
Pension and SERPA Benefits | Postretirement Healthcare Benefits | |||||||||||||||||
2016 | 2015 | 2014 | 2016 | 2015 | 2014 | |||||||||||||
Assumptions for benefit obligations: | ||||||||||||||||||
Discount rate | 4.30 | % | 4.53 | % | 4.21 | % | 4.03 | % | 4.29 | % | 3.99 | % | ||||||
Rate of compensation | 3.50 | % | 3.50 | % | 4.00 | % | n/a | n/a | n/a | |||||||||
Assumptions for net periodic benefit cost: | ||||||||||||||||||
Discount rate | 4.53 | % | 4.21 | % | 5.08 | % | 4.29 | % | 3.99 | % | 4.70 | % | ||||||
Expected return on plan assets | 7.50 | % | 7.75 | % | 7.75 | % | 7.50 | % | 7.70 | % | 7.70 | % | ||||||
Rate of compensation increase | 3.50 | % | 4.00 | % | 4.00 | % | n/a | n/a | n/a |
2016 | 2015 | |||||||
Pension plan with PBOs in excess of fair value of plan assets: | ||||||||
PBO | $ | 1,934.1 | $ | 1,964.0 | ||||
Fair value of plan assets | $ | 1,899.9 | $ | 1,842.0 |
Balance as of December 31, 2016 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | ||||||||||
Cash and cash equivalents | $ | 84,548 | $ | 1,284 | $ | 83,264 | ||||||
Equity holdings: | ||||||||||||
U.S. companies | 603,568 | 586,302 | 17,266 | |||||||||
Foreign companies | 50,256 | 50,256 | — | |||||||||
Harley-Davidson common stock | 74,301 | 74,301 | — | |||||||||
Pooled equity funds | 316,225 | 316,225 | — | |||||||||
Other | 105 | 105 | — | |||||||||
Total equity holdings | 1,044,455 | 1,027,189 | 17,266 | |||||||||
Fixed-income holdings: | ||||||||||||
U.S. Treasuries | 41,089 | 41,089 | — | |||||||||
Federal agencies | 36,210 | — | 36,210 | |||||||||
Corporate bonds | 418,522 | — | 418,522 | |||||||||
Pooled fixed income funds | 170,741 | 57,543 | 113,198 | |||||||||
Foreign bonds | 69,871 | — | 69,871 | |||||||||
Municipal bonds | 12,509 | — | 12,509 | |||||||||
Total fixed-income holdings | 748,942 | 98,632 | 650,310 | |||||||||
Total assets in the fair value hierarchy | 1,877,945 | $ | 1,127,105 | $ | 750,840 | |||||||
Assets measured at net asset value as a practical expedient: | ||||||||||||
Limited partnership interests | 9,321 | |||||||||||
Real estate investment trust | 12,623 | |||||||||||
Total pension plan assets | $ | 1,899,889 |
Balance as of December 31, 2016 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | ||||||||||
Cash and cash equivalents | $ | 4,442 | $ | 1,180 | $ | 3,262 | ||||||
Equity holdings: | ||||||||||||
U.S. companies | 84,643 | 84,643 | — | |||||||||
Foreign companies | 14,190 | 13,995 | 195 | |||||||||
Pooled equity funds | 19,132 | 19,132 | — | |||||||||
Other | 9 | 9 | — | |||||||||
Total equity holdings | 117,974 | 117,779 | 195 | |||||||||
Fixed-income holdings: | ||||||||||||
U.S. Treasuries | 12,262 | 12,262 | — | |||||||||
Federal agencies | 7,364 | — | 7,364 | |||||||||
Corporate bonds | 11,750 | — | 11,750 | |||||||||
Pooled fixed income funds | 9,690 | — | 9,690 | |||||||||
Foreign bonds | 633 | — | 633 | |||||||||
Municipal bonds | 459 | — | 459 | |||||||||
Total fixed-income holdings | 42,158 | 12,262 | 29,896 | |||||||||
Total assets in the fair value hierarchy | 164,574 | $ | 131,221 | $ | 33,353 | |||||||
Assets measured at net asset value as a practical expedient: | ||||||||||||
Real estate investment trust | 5,518 | |||||||||||
Total postretirement healthcare plan assets | $ | 170,092 |
Balance as of December 31, 2015 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | ||||||||||
Cash and cash equivalents | $ | 33,539 | $ | 1,485 | $ | 32,054 | ||||||
Equity holdings: | ||||||||||||
U.S. companies | 574,826 | 571,949 | 2,877 | |||||||||
Foreign companies | 113,803 | 113,803 | — | |||||||||
Harley-Davidson common stock | 57,808 | 57,808 | — | |||||||||
Pooled equity funds | 301,824 | 301,824 | — | |||||||||
Other | 109 | 109 | — | |||||||||
Total equity holdings | 1,048,370 | 1,045,493 | 2,877 | |||||||||
Fixed-income holdings: | ||||||||||||
U.S. Treasuries | 42,827 | 42,827 | — | |||||||||
Federal agencies | 43,695 | — | 43,695 | |||||||||
Corporate bonds | 388,439 | — | 388,439 | |||||||||
Pooled fixed income funds | 184,142 | 49,271 | 134,871 | |||||||||
Foreign bonds | 64,533 | — | 64,533 | |||||||||
Municipal bonds | 13,090 | — | 13,090 | |||||||||
Total fixed-income holdings | 736,726 | 92,098 | 644,628 | |||||||||
Total assets in the fair value hierarchy | 1,818,635 | $ | 1,139,076 | $ | 679,559 | |||||||
Assets measured at net asset value as a practical expedient: | ||||||||||||
Limited partnership interests | 10,530 | |||||||||||
Real estate investment trust | 12,802 | |||||||||||
Total pension plan assets | $ | 1,841,967 |
Balance as of December 31, 2015 | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | ||||||||||
Cash and cash equivalents | $ | 6,068 | $ | 2,980 | $ | 3,088 | ||||||
Equity holdings: | ||||||||||||
U.S. companies | 74,083 | 74,083 | — | |||||||||
Foreign companies | 17,267 | 16,849 | 418 | |||||||||
Pooled equity funds | 17,410 | 17,410 | — | |||||||||
Other | 11 | 11 | — | |||||||||
Total equity holdings | 108,771 | 108,353 | 418 | |||||||||
Fixed-income holdings: | ||||||||||||
U.S. Treasuries | 10,531 | 10,531 | — | |||||||||
Federal agencies | 6,508 | — | 6,508 | |||||||||
Corporate bonds | 10,270 | — | 10,270 | |||||||||
Pooled fixed income funds | 8,305 | — | 8,305 | |||||||||
Foreign bonds | 890 | — | 890 | |||||||||
Municipal bonds | 531 | — | 531 | |||||||||
Total fixed-income holdings | 37,035 | 10,531 | 26,504 | |||||||||
Total assets in the fair value hierarchy | 151,874 | $ | 121,864 | $ | 30,010 | |||||||
Assets measured at net asset value as a practical expedient: | ||||||||||||
Real estate investment trust | 4,891 | |||||||||||
Total postretirement healthcare plan assets | $ | 156,765 |
2016 | 2015 | |||||
Healthcare cost trend rate for next year | 7.25 | % | 7.50 | % | ||
Rate to which the cost trend rate is assumed to decline (the ultimate rate) | 5.00 | % | 5.00 | % | ||
Year that the rate reaches the ultimate trend rate | 2021 | 2021 |
One Percent Increase | One Percent Decrease | |||||||
Total of service and interest cost components in 2016 | $ | 658 | $ | (624 | ) | |||
Accumulated benefit obligation as of December 31, 2016 | $ | 12,670 | $ | (11,443 | ) |
Pension Benefits | SERPA Benefits | Postretirement Healthcare Benefits | ||||||||||
2017 | $ | 79,907 | $ | 2,104 | $ | 30,130 | ||||||
2018 | $ | 81,133 | $ | 2,240 | $ | 29,501 | ||||||
2019 | $ | 82,979 | $ | 2,693 | $ | 28,529 | ||||||
2020 | $ | 85,528 | $ | 3,169 | $ | 27,370 | ||||||
2021 | $ | 88,174 | $ | 3,513 | $ | 26,094 | ||||||
2022-2026 | $ | 499,403 | $ | 25,830 | $ | 124,713 |
2017 | $ | 13,900 | ||
2018 | 12,805 | |||
2019 | 11,793 | |||
2020 | 7,794 | |||
2021 | 6,357 | |||
Thereafter | 11,965 | |||
Total operating lease payments | $ | 64,614 |
Shares Repurchased | Authorization Remaining at December 31, 2016 | |||||||||||
Board of Directors’ Authorization | 2016 | 2015 | 2014 | |||||||||
1997 Authorization | — | 0.9 | 3.2 | — | ||||||||
2007 Authorization | — | 0.9 | 5.8 | — | ||||||||
2014 Authorization | — | 20.0 | — | — | ||||||||
2015 Authorization | 9.0 | 6.0 | — | — | ||||||||
2016 Authorization | 0.7 | — | — | 19.3 | ||||||||
Total | 9.7 | 27.8 | 9.0 | 19.3 |
Shares / Units | Grant Date Fair Value Per Share | ||||||
Nonvested, beginning of period | 850 | $ | 59 | ||||
Granted | 1,054 | $ | 41 | ||||
Vested | (389 | ) | $ | 59 | |||
Forfeited | (144 | ) | $ | 49 | |||
Nonvested, end of period | 1,371 | $ | 46 |
Units | Weighted-Average Grant Date Fair Value Per Share | ||||||
Nonvested, beginning of period | 109 | $ | 52 | ||||
Granted | 94 | $ | 58 | ||||
Vested | (55 | ) | $ | 52 | |||
Forfeited | (24 | ) | $ | 56 | |||
Nonvested, end of period | 124 | $ | 56 |
2015 | 2014 | |||||
Expected average term (in years) | 6.0 | 6.1 | ||||
Expected volatility | 24% - 30% | 25% - 34% | ||||
Weighted average volatility | 28 | % | 32 | % | ||
Expected dividend yield | 2.0 | % | 1.8 | % | ||
Risk-free interest rate | 0.1% - 2.0% | 0.1% - 2.8% |
Options | Weighted- Average Price | ||||||
Options outstanding, beginning of period | 2,503 | $ | 47 | ||||
Options exercised | (468 | ) | $ | 34 | |||
Options forfeited | (157 | ) | $ | 58 | |||
Options outstanding, end of period | 1,878 | $ | 49 | ||||
Exercisable, end of period | 1,599 | $ | 46 |
2016 | 2015 | 2014 | ||||||||||
Exercised | $ | 9,595 | $ | 9,890 | $ | 31,623 | ||||||
Outstanding | $ | 22,383 | $ | 16,605 | $ | 61,947 | ||||||
Exercisable | $ | 22,383 | $ | 16,605 | $ | 54,071 |
Price Range | Weighted-Average Contractual Life | Options | Weighted-Average Exercise Price | ||||||
$10.01 to $20 | 2.2 | 199 | $ | 14 | |||||
$20.01 to $30 | 3.1 | 155 | $ | 24 | |||||
$30.01 to $40 | 1.1 | 112 | $ | 39 | |||||
$40.01 to $50 | 4.5 | 272 | $ | 44 | |||||
$50.01 to $60 | 4.2 | 313 | $ | 52 | |||||
$60.01 to $70 | 5.1 | 827 | $ | 64 | |||||
Options outstanding | 4.2 | 1,878 | $ | 49 | |||||
Options exercisable | 3.5 | 1,599 | $ | 46 |
2016 | 2015 | |||||
Expected average term (in years) | 5.2 - 5.7 | 5.3 - 7.4 | ||||
Expected volatility | 28% - 31% | 28% - 30% | ||||
Expected dividend yield | 2.4 | % | 2.7 | % | ||
Risk-free interest rate | 0.5% - 2.6% | 0.2% - 2.3% |
SARs | Weighted-Average Price | ||||||
Outstanding, beginning of period | 162 | $ | 33 | ||||
Exercised | (84 | ) | $ | 29 | |||
Forfeited | (3 | ) | $ | 63 | |||
Outstanding, end of period | 75 | $ | 37 | ||||
Exercisable, end of period | 65 | $ | 34 |
2016 | 2015 | 2014 | ||||||||||
Numerator: | ||||||||||||
Income used in computing basic and diluted earnings per share | $ | 692,164 | $ | 752,207 | $ | 844,611 | ||||||
Denominator: | ||||||||||||
Denominator for basic earnings per share-weighted-average common shares | 179,676 | 202,681 | 216,305 | |||||||||
Effect of dilutive securities – employee stock compensation plan | 859 | 1,005 | 1,401 | |||||||||
Denominator for diluted earnings per share- adjusted weighted-average shares outstanding | 180,535 | 203,686 | 217,706 | |||||||||
Earnings per common share: | ||||||||||||
Basic | $ | 3.85 | $ | 3.71 | $ | 3.90 | ||||||
Diluted | $ | 3.83 | $ | 3.69 | $ | 3.88 |
2016 | 2015 | 2014 | ||||||||||
Motorcycles net revenue | $ | 5,271,376 | $ | 5,308,744 | $ | 5,567,681 | ||||||
Gross profit | 1,851,666 | 1,952,460 | 2,025,080 | |||||||||
Selling, administrative and engineering expense | 1,078,260 | 1,076,970 | 1,021,933 | |||||||||
Operating income from Motorcycles | $ | 773,406 | $ | 875,490 | $ | 1,003,147 | ||||||
Financial Services revenue | $ | 725,082 | $ | 686,658 | $ | 660,827 | ||||||
Financial Services expense | 449,552 | 406,453 | 382,991 | |||||||||
Operating income from Financial Services | $ | 275,530 | $ | 280,205 | $ | 277,836 |
Motorcycles | Financial Services | Consolidated | ||||||||||
2016 | ||||||||||||
Total assets | $ | 2,490,450 | $ | 7,399,790 | $ | 9,890,240 | ||||||
Depreciation and amortization | $ | 202,122 | $ | 7,433 | $ | 209,555 | ||||||
Capital expenditures | $ | 245,316 | $ | 10,947 | $ | 256,263 | ||||||
2015 | ||||||||||||
Total assets | $ | 2,522,249 | $ | 7,450,728 | $ | 9,972,977 | ||||||
Depreciation and amortization | $ | 188,926 | $ | 9,148 | $ | 198,074 | ||||||
Capital expenditures | $ | 249,772 | $ | 10,202 | $ | 259,974 | ||||||
2014 | ||||||||||||
Total assets | $ | 2,502,190 | $ | 7,013,680 | $ | 9,515,870 | ||||||
Depreciation and amortization | $ | 171,187 | $ | 8,113 | $ | 179,300 | ||||||
Capital expenditures | $ | 224,262 | $ | 8,057 | $ | 232,319 |
2016 | 2015 | 2014 | ||||||||||
Revenue from Motorcycles(a): | ||||||||||||
United States | $ | 3,579,129 | $ | 3,768,069 | $ | 3,773,087 | ||||||
EMEA | 798,489 | 728,198 | 869,690 | |||||||||
Japan | 200,309 | 162,675 | 197,792 | |||||||||
Canada | 212,099 | 178,042 | 194,422 | |||||||||
Australia and New Zealand | 181,809 | 165,854 | 190,029 | |||||||||
Other foreign countries | 299,541 | 305,906 | 342,661 | |||||||||
Total revenue from Motorcycles | $ | 5,271,376 | $ | 5,308,744 | $ | 5,567,681 | ||||||
Revenue from Financial Services(a): | ||||||||||||
United States | $ | 692,784 | $ | 656,888 | $ | 627,317 | ||||||
Europe | 6,528 | 5,373 | 5,684 | |||||||||
Canada | 21,626 | 21,180 | 23,707 | |||||||||
Other foreign countries | 4,144 | 3,217 | 4,119 | |||||||||
Total revenue from Financial Services | $ | 725,082 | $ | 686,658 | $ | 660,827 | ||||||
Long-lived assets(b): | ||||||||||||
United States | $ | 943,479 | $ | 915,509 | $ | 865,617 | ||||||
International | 38,114 | 26,909 | 34,328 | |||||||||
Total long-lived assets | $ | 981,593 | $ | 942,418 | $ | 899,945 |
(a) | Revenue is attributed to geographic regions based on location of customer. |
(b) | Long-lived assets include all long-term assets except those specifically excluded under ASC Topic 280, “Segment Reporting,” such as deferred income taxes and finance receivables. |
Year Ended December 31, 2016 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
Revenue: | ||||||||||||||||
Motorcycles and Related Products | $ | 5,281,355 | $ | — | $ | (9,979 | ) | $ | 5,271,376 | |||||||
Financial Services | — | 726,736 | (1,654 | ) | 725,082 | |||||||||||
Total revenue | 5,281,355 | 726,736 | (11,633 | ) | 5,996,458 | |||||||||||
Costs and expenses: | ||||||||||||||||
Motorcycles and Related Products cost of goods sold | 3,419,710 | — | — | 3,419,710 | ||||||||||||
Financial Services interest expense | — | 173,756 | — | 173,756 | ||||||||||||
Financial Services provision for credit losses | — | 136,617 | — | 136,617 | ||||||||||||
Selling, administrative and engineering expense | 1,080,020 | 149,157 | (11,738 | ) | 1,217,439 | |||||||||||
Total costs and expenses | 4,499,730 | 459,530 | (11,738 | ) | 4,947,522 | |||||||||||
Operating income | 781,625 | 267,206 | 105 | 1,048,936 | ||||||||||||
Investment income | 187,645 | — | (183,000 | ) | 4,645 | |||||||||||
Interest expense | 29,670 | — | — | 29,670 | ||||||||||||
Income before provision for income taxes | 939,600 | 267,206 | (182,895 | ) | 1,023,911 | |||||||||||
Provision for income taxes | 231,986 | 99,761 | — | 331,747 | ||||||||||||
Net income | $ | 707,614 | $ | 167,445 | $ | (182,895 | ) | $ | 692,164 |
Year Ended December 31, 2015 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
Revenue: | ||||||||||||||||
Motorcycles and Related Products | $ | 5,318,850 | $ | — | $ | (10,106 | ) | $ | 5,308,744 | |||||||
Financial Services | — | 688,211 | (1,553 | ) | 686,658 | |||||||||||
Total revenue | 5,318,850 | 688,211 | (11,659 | ) | 5,995,402 | |||||||||||
Costs and expenses: | ||||||||||||||||
Motorcycles and Related Products cost of goods sold | 3,356,284 | — | — | 3,356,284 | ||||||||||||
Financial Services interest expense | — | 161,983 | — | 161,983 | ||||||||||||
Financial Services provision for credit losses | — | 101,345 | — | 101,345 | ||||||||||||
Selling, administrative and engineering expense | 1,078,525 | 153,229 | (11,659 | ) | 1,220,095 | |||||||||||
Total costs and expenses | 4,434,809 | 416,557 | (11,659 | ) | 4,839,707 | |||||||||||
Operating income | 884,041 | 271,654 | — | 1,155,695 | ||||||||||||
Investment income | 106,585 | — | (100,000 | ) | 6,585 | |||||||||||
Interest expense | 12,117 | — | — | 12,117 | ||||||||||||
Income before provision for income taxes | 978,509 | 271,654 | (100,000 | ) | 1,150,163 | |||||||||||
Provision for income taxes | 300,499 | 97,457 | — | 397,956 | ||||||||||||
Net income | $ | 678,010 | $ | 174,197 | $ | (100,000 | ) | $ | 752,207 |
Year Ended December 31, 2014 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
Revenue: | ||||||||||||||||
Motorcycles and Related Products | $ | 5,577,697 | $ | — | $ | (10,016 | ) | $ | 5,567,681 | |||||||
Financial Services | — | 662,345 | (1,518 | ) | 660,827 | |||||||||||
Total revenue | 5,577,697 | 662,345 | (11,534 | ) | 6,228,508 | |||||||||||
Costs and expenses: | ||||||||||||||||
Motorcycles and Related Products cost of goods sold | 3,542,601 | — | — | 3,542,601 | ||||||||||||
Financial Services interest expense | — | 164,476 | — | 164,476 | ||||||||||||
Financial Services provision for credit losses | — | 80,946 | — | 80,946 | ||||||||||||
Selling, administrative and engineering expense | 1,023,450 | 147,586 | (11,534 | ) | 1,159,502 | |||||||||||
Total costs and expenses | 4,566,051 | 393,008 | (11,534 | ) | 4,947,525 | |||||||||||
Operating income | 1,011,646 | 269,337 | — | 1,280,983 | ||||||||||||
Investment income | 126,499 | — | (120,000 | ) | 6,499 | |||||||||||
Interest expense | 4,162 | — | — | 4,162 | ||||||||||||
Income before provision for income taxes | 1,133,983 | 269,337 | (120,000 | ) | 1,283,320 | |||||||||||
Provision for income taxes | 338,453 | 100,256 | — | 438,709 | ||||||||||||
Net income | $ | 795,530 | $ | 169,081 | $ | (120,000 | ) | $ | 844,611 |
December 31, 2016 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 425,540 | $ | 334,444 | $ | — | $ | 759,984 | ||||||||
Marketable securities | 5,019 | 500 | — | 5,519 | ||||||||||||
Accounts receivable, net | 450,186 | — | (165,080 | ) | 285,106 | |||||||||||
Finance receivables, net | — | 2,076,261 | — | 2,076,261 | ||||||||||||
Inventories | 499,917 | — | — | 499,917 | ||||||||||||
Restricted cash | — | 52,574 | — | 52,574 | ||||||||||||
Other current assets | 127,606 | 46,934 | (49 | ) | 174,491 | |||||||||||
Total current assets | 1,508,268 | 2,510,713 | (165,129 | ) | 3,853,852 | |||||||||||
Finance receivables, net | — | 4,759,197 | — | 4,759,197 | ||||||||||||
Property, plant and equipment, net | 942,634 | 38,959 | — | 981,593 | ||||||||||||
Goodwill | 53,391 | — | — | 53,391 | ||||||||||||
Deferred income taxes | 103,487 | 66,152 | (1,910 | ) | 167,729 | |||||||||||
Other long-term assets | 132,835 | 24,769 | (83,126 | ) | 74,478 | |||||||||||
$ | 2,740,615 | $ | 7,399,790 | $ | (250,165 | ) | $ | 9,890,240 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable | $ | 219,353 | $ | 181,045 | $ | (165,080 | ) | $ | 235,318 | |||||||
Accrued liabilities | 395,907 | 90,910 | (165 | ) | 486,652 | |||||||||||
Short-term debt | — | 1,055,708 | — | 1,055,708 | ||||||||||||
Current portion of long-term debt, net | — | 1,084,884 | — | 1,084,884 | ||||||||||||
Total current liabilities | 615,260 | 2,412,547 | (165,245 | ) | 2,862,562 | |||||||||||
Long-term debt, net | 741,306 | 3,925,669 | — | 4,666,975 | ||||||||||||
Pension liability | 84,442 | — | — | 84,442 | ||||||||||||
Postretirement healthcare liability | 173,267 | — | — | 173,267 | ||||||||||||
Other long-term liabilities | 150,391 | 29,697 | 2,748 | 182,836 | ||||||||||||
Commitments and contingencies (Note 15) | ||||||||||||||||
Shareholders’ equity | 975,949 | 1,031,877 | (87,668 | ) | 1,920,158 | |||||||||||
$ | 2,740,615 | $ | 7,399,790 | $ | (250,165 | ) | $ | 9,890,240 |
December 31, 2015 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
ASSETS | ||||||||||||||||
Current assets: | ||||||||||||||||
Cash and cash equivalents | $ | 400,443 | $ | 321,766 | $ | — | $ | 722,209 | ||||||||
Marketable securities | 45,192 | — | — | 45,192 | ||||||||||||
Accounts receivable, net | 390,799 | — | (143,394 | ) | 247,405 | |||||||||||
Finance receivables, net | — | 2,053,582 | — | 2,053,582 | ||||||||||||
Inventories | 585,907 | — | — | 585,907 | ||||||||||||
Restricted cash | — | 88,267 | — | 88,267 | ||||||||||||
Deferred income taxes | 56,319 | 46,450 | — | 102,769 | ||||||||||||
Other current assets | 90,824 | 43,807 | (2,079 | ) | 132,552 | |||||||||||
Total current assets | 1,569,484 | 2,553,872 | (145,473 | ) | 3,977,883 | |||||||||||
Finance receivables, net | — | 4,814,571 | — | 4,814,571 | ||||||||||||
Property, plant and equipment, net | 906,972 | 35,446 | — | 942,418 | ||||||||||||
Goodwill | 54,182 | — | — | 54,182 | ||||||||||||
Deferred income taxes | 86,075 | 15,681 | (2,142 | ) | 99,614 | |||||||||||
Other long-term assets | 133,753 | 31,158 | (80,602 | ) | 84,309 | |||||||||||
$ | 2,750,466 | $ | 7,450,728 | $ | (228,217 | ) | $ | 9,972,977 | ||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||||
Current liabilities: | ||||||||||||||||
Accounts payable | $ | 220,050 | $ | 158,958 | $ | (143,394 | ) | $ | 235,614 | |||||||
Accrued liabilities | 387,137 | 89,048 | (4,221 | ) | 471,964 | |||||||||||
Short-term debt | — | 1,201,380 | — | 1,201,380 | ||||||||||||
Current portion of long-term debt, net | — | 838,349 | — | 838,349 | ||||||||||||
Total current liabilities | 607,187 | 2,287,735 | (147,615 | ) | 2,747,307 | |||||||||||
Long-term debt, net | 740,653 | 4,091,816 | — | 4,832,469 | ||||||||||||
Pension liability | 164,888 | — | — | 164,888 | ||||||||||||
Postretirement healthcare liability | 193,659 | — | — | 193,659 | ||||||||||||
Other long-term liabilities | 166,440 | 28,560 | — | 195,000 | ||||||||||||
Commitments and contingencies (Note 15) | ||||||||||||||||
Shareholders’ equity | 877,639 | 1,042,617 | (80,602 | ) | 1,839,654 | |||||||||||
$ | 2,750,466 | $ | 7,450,728 | $ | (228,217 | ) | $ | 9,972,977 |
Year Ended December 31, 2016 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income | $ | 707,614 | $ | 167,445 | $ | (182,895 | ) | $ | 692,164 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization of intangibles | 202,122 | 7,433 | — | 209,555 | ||||||||||||
Amortization of deferred loan origination costs | — | 86,681 | — | 86,681 | ||||||||||||
Amortization of financing origination fees | 654 | 8,598 | — | 9,252 | ||||||||||||
Provision for long-term employee benefits | 38,273 | — | — | 38,273 | ||||||||||||
Employee benefit plan contributions and payments | (55,809 | ) | — | — | (55,809 | ) | ||||||||||
Stock compensation expense | 29,811 | 2,525 | — | 32,336 | ||||||||||||
Net change in wholesale finance receivables related to sales | — | — | (3,233 | ) | (3,233 | ) | ||||||||||
Provision for credit losses | — | 136,617 | — | 136,617 | ||||||||||||
Gain on off-balance sheet asset-backed securitization | — | (9,269 | ) | — | (9,269 | ) | ||||||||||
Loss on debt extinguishment | — | 118 | — | 118 | ||||||||||||
Deferred income taxes | 7,772 | (7,705 | ) | (232 | ) | (165 | ) | |||||||||
Other, net | (7,041 | ) | 239 | (105 | ) | (6,907 | ) | |||||||||
Changes in current assets and liabilities: | ||||||||||||||||
Accounts receivable, net | (67,621 | ) | — | 21,687 | (45,934 | ) | ||||||||||
Finance receivables—accrued interest and other | — | (1,489 | ) | — | (1,489 | ) | ||||||||||
Inventories | 85,072 | — | — | 85,072 | ||||||||||||
Accounts payable and accrued liabilities | 26,005 | 25,027 | (12,795 | ) | 38,237 | |||||||||||
Derivative instruments | (3,413 | ) | — | — | (3,413 | ) | ||||||||||
Other | (25,415 | ) | (2,332 | ) | — | (27,747 | ) | |||||||||
Total adjustments | 230,410 | 246,443 | 5,322 | 482,175 | ||||||||||||
Net cash provided by operating activities | 938,024 | 413,888 | (177,573 | ) | 1,174,339 | |||||||||||
Cash flows from investing activities: | ||||||||||||||||
Capital expenditures | (245,316 | ) | (10,947 | ) | — | (256,263 | ) | |||||||||
Origination of finance receivables | — | (7,420,177 | ) | 3,755,682 | (3,664,495 | ) | ||||||||||
Collections on finance receivables | — | 6,936,140 | (3,761,109 | ) | 3,175,031 | |||||||||||
Proceeds from finance receivables sold | — | 312,571 | — | 312,571 | ||||||||||||
Sales and redemptions of marketable securities | 40,014 | — | — | 40,014 | ||||||||||||
Other | 411 | — | — | 411 | ||||||||||||
Net cash used by investing activities | (204,891 | ) | (182,413 | ) | (5,427 | ) | (392,731 | ) |
Year Ended December 31, 2016 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Proceeds from issuance of medium-term notes | — | 1,193,396 | — | 1,193,396 | ||||||||||||
Repayments of medium-term notes | — | (451,336 | ) | — | (451,336 | ) | ||||||||||
Repayments of securitization debt | — | (665,400 | ) | — | (665,400 | ) | ||||||||||
Borrowings of asset-backed commercial paper | — | 62,396 | — | 62,396 | ||||||||||||
Repayments of asset-backed commercial paper | — | (71,500 | ) | — | (71,500 | ) | ||||||||||
Net decrease in credit facilities and unsecured commercial paper | — | (145,812 | ) | — | (145,812 | ) | ||||||||||
Net change in restricted cash | — | 43,495 | — | 43,495 | ||||||||||||
Dividends paid | (252,321 | ) | (183,000 | ) | 183,000 | (252,321 | ) | |||||||||
Purchase of common stock for treasury | (465,341 | ) | — | — | (465,341 | ) | ||||||||||
Excess tax benefits from share-based payments | 2,251 | — | — | 2,251 | ||||||||||||
Issuance of common stock under employee stock option plans | 15,782 | — | — | 15,782 | ||||||||||||
Net cash used by financing activities | (699,629 | ) | (217,761 | ) | 183,000 | (734,390 | ) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (8,407 | ) | (1,036 | ) | — | (9,443 | ) | |||||||||
Net increase in cash and cash equivalents | $ | 25,097 | $ | 12,678 | $ | — | $ | 37,775 | ||||||||
Cash and cash equivalents: | ||||||||||||||||
Cash and cash equivalents—beginning of period | $ | 400,443 | $ | 321,766 | $ | — | $ | 722,209 | ||||||||
Net increase in cash and cash equivalents | 25,097 | 12,678 | — | 37,775 | ||||||||||||
Cash and cash equivalents—end of period | $ | 425,540 | $ | 334,444 | $ | — | $ | 759,984 |
Year Ended December 31, 2015 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income | $ | 678,010 | $ | 174,197 | $ | (100,000 | ) | $ | 752,207 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization of intangibles | 188,926 | 9,148 | — | 198,074 | ||||||||||||
Amortization of deferred loan origination costs | — | 93,546 | — | 93,546 | ||||||||||||
Amortization of financing origination fees | 267 | 9,708 | — | 9,975 | ||||||||||||
Provision for long-term employee benefits | 60,824 | — | — | 60,824 | ||||||||||||
Employee benefit plan contributions and payments | (28,490 | ) | — | — | (28,490 | ) | ||||||||||
Stock compensation expense | 26,775 | 2,658 | — | 29,433 | ||||||||||||
Net change in wholesale finance receivables related to sales | — | — | (113,970 | ) | (113,970 | ) | ||||||||||
Provision for credit losses | — | 101,345 | — | 101,345 | ||||||||||||
Loss on debt extinguishment | — | 1,099 | — | 1,099 | ||||||||||||
Deferred income taxes | (4,792 | ) | (11,692 | ) | — | (16,484 | ) | |||||||||
Other, net | 19,625 | 1,288 | — | 20,913 | ||||||||||||
Changes in current assets and liabilities: | ||||||||||||||||
Accounts receivable, net | 4,055 | — | (17,720 | ) | (13,665 | ) | ||||||||||
Finance receivables – accrued interest and other | — | (3,046 | ) | — | (3,046 | ) | ||||||||||
Inventories | (155,222 | ) | — | — | (155,222 | ) | ||||||||||
Accounts payable and accrued liabilities | 81,929 | 18,539 | 38,355 | 138,823 | ||||||||||||
Derivative instruments | (5,615 | ) | — | — | (5,615 | ) | ||||||||||
Other | 33,658 | (3,287 | ) | — | 30,371 | |||||||||||
Total adjustments | 221,940 | 219,306 | (93,335 | ) | 347,911 | |||||||||||
Net cash provided by operating activities | 899,950 | 393,503 | (193,335 | ) | 1,100,118 | |||||||||||
Cash flows from investing activities: | ||||||||||||||||
Capital expenditures | (249,772 | ) | (10,202 | ) | — | (259,974 | ) | |||||||||
Origination of finance receivables | — | (7,836,279 | ) | 4,084,449 | (3,751,830 | ) | ||||||||||
Collections on finance receivables | — | 7,127,999 | (3,991,114 | ) | 3,136,885 | |||||||||||
Sales and redemptions of marketable securities | 11,507 | — | — | 11,507 | ||||||||||||
Acquisition of business | (59,910 | ) | — | — | (59,910 | ) | ||||||||||
Other | 7,474 | — | — | 7,474 | ||||||||||||
Net cash used by investing activities | (290,701 | ) | (718,482 | ) | 93,335 | (915,848 | ) |
Year Ended December 31, 2015 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Proceeds from issuance of medium-term notes | — | 595,386 | — | 595,386 | ||||||||||||
Repayments of medium-term notes | — | (610,331 | ) | — | (610,331 | ) | ||||||||||
Proceeds from issuance of senior unsecured notes | 740,385 | — | — | 740,385 | ||||||||||||
Intercompany borrowing activity | 250,000 | (250,000 | ) | — | — | |||||||||||
Proceeds from securitization debt | — | 1,195,668 | — | 1,195,668 | ||||||||||||
Repayments of securitization debt | — | (1,008,135 | ) | — | (1,008,135 | ) | ||||||||||
Borrowings of asset-backed commercial paper | — | 87,442 | — | 87,442 | ||||||||||||
Repayments of asset-backed commercial paper | — | (72,727 | ) | — | (72,727 | ) | ||||||||||
Net increase in credit facilities and unsecured commercial paper | — | 469,473 | — | 469,473 | ||||||||||||
Net change in restricted cash | — | 11,410 | — | 11,410 | ||||||||||||
Dividends paid | (249,262 | ) | (100,000 | ) | 100,000 | (249,262 | ) | |||||||||
Purchase of common stock for treasury | (1,537,020 | ) | — | — | (1,537,020 | ) | ||||||||||
Excess tax benefits from share-based payments | 3,468 | — | — | 3,468 | ||||||||||||
Issuance of common stock under employee stock option plans | 20,179 | — | — | 20,179 | ||||||||||||
Net cash (used by) provided by financing activities | (772,250 | ) | 318,186 | 100,000 | (354,064 | ) | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | (10,451 | ) | (4,226 | ) | — | (14,677 | ) | |||||||||
Net decrease in cash and cash equivalents | $ | (173,452 | ) | $ | (11,019 | ) | $ | — | $ | (184,471 | ) | |||||
Cash and cash equivalents: | ||||||||||||||||
Cash and cash equivalents – beginning of period | $ | 573,895 | $ | 332,785 | $ | — | $ | 906,680 | ||||||||
Net decrease in cash and cash equivalents | (173,452 | ) | (11,019 | ) | — | (184,471 | ) | |||||||||
Cash and cash equivalents – end of period | $ | 400,443 | $ | 321,766 | $ | — | $ | 722,209 |
Year Ended December 31, 2014 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
Cash flows from operating activities: | ||||||||||||||||
Net income | $ | 795,530 | $ | 169,081 | $ | (120,000 | ) | $ | 844,611 | |||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||||||
Depreciation and amortization of intangibles | 171,187 | 8,113 | — | 179,300 | ||||||||||||
Amortization of deferred loan origination costs | — | 94,429 | — | 94,429 | ||||||||||||
Amortization of financing origination fees | 59 | 8,383 | — | 8,442 | ||||||||||||
Provision for long-term employee benefits | 33,709 | — | — | 33,709 | ||||||||||||
Employee benefit plan contributions and payments | (29,686 | ) | — | — | (29,686 | ) | ||||||||||
Stock compensation expense | 35,064 | 2,865 | — | 37,929 | ||||||||||||
Net change in wholesale finance receivables related to sales | — | — | (75,210 | ) | (75,210 | ) | ||||||||||
Provision for credit losses | — | 80,946 | — | 80,946 | ||||||||||||
Loss on debt extinguishment | — | 3,942 | — | 3,942 | ||||||||||||
Deferred income taxes | (191 | ) | (7,430 | ) | — | (7,621 | ) | |||||||||
Other, net | 42,237 | (21,764 | ) | — | 20,473 | |||||||||||
Changes in current assets and liabilities: | ||||||||||||||||
Accounts receivable, net | (31,740 | ) | — | 21,931 | (9,809 | ) | ||||||||||
Finance receivables – accrued interest and other | — | (2,515 | ) | — | (2,515 | ) | ||||||||||
Inventories | (50,886 | ) | — | — | (50,886 | ) | ||||||||||
Accounts payable and accrued liabilities | 18,255 | 21,629 | (18,575 | ) | 21,309 | |||||||||||
Derivative instruments | 703 | — | — | 703 | ||||||||||||
Other | (17,187 | ) | 13,798 | — | (3,389 | ) | ||||||||||
Total adjustments | 171,524 | 202,396 | (71,854 | ) | 302,066 | |||||||||||
Net cash provided by operating activities | 967,054 | 371,477 | (191,854 | ) | 1,146,677 | |||||||||||
Cash flows from investing activities: | ||||||||||||||||
Capital expenditures | (224,262 | ) | (8,057 | ) | — | (232,319 | ) | |||||||||
Origination of finance receivables | — | (7,693,884 | ) | 4,125,461 | (3,568,423 | ) | ||||||||||
Collections on finance receivables | — | 7,066,852 | (4,053,607 | ) | 3,013,245 | |||||||||||
Sales and redemptions of marketable securities | 41,010 | — | — | 41,010 | ||||||||||||
Other | 1,837 | — | — | 1,837 | ||||||||||||
Net cash used by investing activities | (181,415 | ) | (635,089 | ) | 71,854 | (744,650 | ) |
Year Ended December 31, 2014 | ||||||||||||||||
HDMC Entities | HDFS Entities | Eliminations | Consolidated | |||||||||||||
Cash flows from financing activities: | ||||||||||||||||
Proceeds from issuance of medium-term notes | — | 991,835 | — | 991,835 | ||||||||||||
Repayments of medium-term notes | — | (526,431 | ) | — | (526,431 | ) | ||||||||||
Repayments of senior unsecured notes | (303,000 | ) | — | — | (303,000 | ) | ||||||||||
Intercompany borrowing activity | 200,000 | (200,000 | ) | — | — | |||||||||||
Proceeds from securitization debt | — | 847,126 | — | 847,126 | ||||||||||||
Repayments of securitization debt | — | (834,856 | ) | — | (834,856 | ) | ||||||||||
Borrowings of asset-backed commercial paper | — | 84,907 | — | 84,907 | ||||||||||||
Repayments of asset-backed commercial paper | — | (77,800 | ) | — | (77,800 | ) | ||||||||||
Net increase in credit facilities and unsecured commercial paper | — | 63,945 | — | 63,945 | ||||||||||||
Net change in restricted cash | — | 22,755 | — | 22,755 | ||||||||||||
Dividends paid | (238,300 | ) | (120,000 | ) | 120,000 | (238,300 | ) | |||||||||
Purchase of common stock for treasury | (615,602 | ) | — | — | (615,602 | ) | ||||||||||
Excess tax benefits from share-based payments | 11,540 | — | — | 11,540 | ||||||||||||
Issuance of common stock under employee stock option plans | 37,785 | — | — | 37,785 | ||||||||||||
Net cash (used by) provided by financing activities | (907,577 | ) | 251,481 | 120,000 | (536,096 | ) | ||||||||||
Effect of exchange rate changes on cash and cash equivalents | (23,079 | ) | (2,784 | ) | — | (25,863 | ) | |||||||||
Net decrease in cash and cash equivalents | $ | (145,017 | ) | $ | (14,915 | ) | $ | — | $ | (159,932 | ) | |||||
Cash and cash equivalents: | ||||||||||||||||
Cash and cash equivalents – beginning of period | $ | 718,912 | $ | 347,700 | $ | — | $ | 1,066,612 | ||||||||
Net decrease in cash and cash equivalents | (145,017 | ) | (14,915 | ) | — | (159,932 | ) | |||||||||
Cash and cash equivalents – end of period | $ | 573,895 | $ | 332,785 | $ | — | $ | 906,680 |
1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter | |||||||||||||||||||||||||||||
Mar 27, 2016 | Mar 29, 2015 | June 26, 2016 | June 28, 2015 | Sep 25, 2016 | Sep 27, 2015 | Dec 31, 2016 | Dec 31, 2015 | |||||||||||||||||||||||||
Motorcycles: | ||||||||||||||||||||||||||||||||
Revenue | $ | 1,576.6 | $ | 1,510.6 | $ | 1,670.1 | $ | 1,650.8 | $ | 1,091.6 | $ | 1,140.3 | $ | 933.0 | $ | 1,007.1 | ||||||||||||||||
Operating income | $ | 332.5 | $ | 345.5 | $ | 322.7 | $ | 380.6 | $ | 108.9 | $ | 143.1 | $ | 9.3 | $ | 6.4 | ||||||||||||||||
Financial Services: | ||||||||||||||||||||||||||||||||
Revenue | $ | 173.4 | $ | 162.4 | $ | 191.0 | $ | 173.6 | $ | 183.2 | $ | 177.1 | $ | 177.6 | $ | 173.6 | ||||||||||||||||
Operating income | $ | 56.4 | $ | 64.7 | $ | 89.6 | $ | 81.9 | $ | 69.4 | $ | 72.8 | $ | 60.1 | $ | 60.9 | ||||||||||||||||
Consolidated: | ||||||||||||||||||||||||||||||||
Income before taxes | $ | 382.4 | $ | 411.4 | $ | 405.9 | $ | 464.0 | $ | 173.0 | $ | 214.2 | $ | 62.6 | $ | 60.6 | ||||||||||||||||
Net income | $ | 250.5 | $ | 269.9 | $ | 280.4 | $ | 299.8 | $ | 114.1 | $ | 140.3 | $ | 47.2 | $ | 42.2 | ||||||||||||||||
Earnings per common share: | ||||||||||||||||||||||||||||||||
Basic | $ | 1.37 | $ | 1.28 | $ | 1.55 | $ | 1.44 | $ | 0.64 | $ | 0.69 | $ | 0.27 | $ | 0.22 | ||||||||||||||||
Diluted | $ | 1.36 | $ | 1.27 | $ | 1.55 | $ | 1.44 | $ | 0.64 | $ | 0.69 | $ | 0.27 | $ | 0.22 |
Plan Category | Number of securities to be issued upon the exercise of outstanding options | Weighted- average exercise price of outstanding options | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in the first column) | |||||||
Equity compensation plans approved by shareholders: | ||||||||||
Management employees | 1,878,029 | $ | 48.96 | 11,687,704 | ||||||
Equity compensation plans not approved by shareholders: | ||||||||||
Union employees: | ||||||||||
Kansas City, MO | — | $ | — | 26,718 | ||||||
York, PA | — | $ | — | 96,770 | ||||||
Non employees: | ||||||||||
Board of Directors | — | $ | — | 68,078 | ||||||
— | $ | — | 191,566 | |||||||
Total all plans | 1,878,029 | 11,879,270 |
(1 | ) | Financial Statements | ||
Consolidated statements of income for each of the three years in the period ended December 31, 2016 | ||||
Consolidated statements of comprehensive income for each of the three years in the period ended December 31, 2016 | ||||
Consolidated balance sheets at December 31, 2016 and December 31, 2015 | ||||
Consolidated statements of cash flows for each of the three years in the period ended December 31, 2016 | ||||
Consolidated statements of shareholders’ equity for each of the three years in the period ended December 31, 2016 | ||||
Notes to consolidated financial statements | ||||
(2 | ) | Financial Statement Schedule | ||
Schedule II – Valuation and qualifying accounts | ||||
(3 | ) | Exhibits |
2016 | 2015 | 2014 | ||||||||||
Accounts receivable – allowance for doubtful accounts | ||||||||||||
Balance, beginning of period | $ | 2,905 | $ | 3,458 | $ | 4,960 | ||||||
Provision charged to expense | (101 | ) | 266 | (471 | ) | |||||||
Reserve adjustments | (63 | ) | (276 | ) | (394 | ) | ||||||
Write-offs, net of recoveries | — | (543 | ) | (637 | ) | |||||||
Balance, end of period | $ | 2,741 | $ | 2,905 | $ | 3,458 | ||||||
Finance receivables – allowance for credit losses | ||||||||||||
Balance, beginning of period | $ | 147,178 | $ | 127,364 | $ | 110,693 | ||||||
Provision for credit losses | 136,617 | 101,345 | 80,946 | |||||||||
Charge-offs, net of recoveries | (107,161 | ) | (81,531 | ) | (64,275 | ) | ||||||
Other(a) | (3,291 | ) | — | — | ||||||||
Balance, end of period | $ | 173,343 | $ | 147,178 | $ | 127,364 | ||||||
Inventories – allowance for obsolescence(b) | ||||||||||||
Balance, beginning of period | $ | 26,740 | $ | 17,775 | $ | 17,463 | ||||||
Provision charged to expense | 21,137 | 19,564 | 19,044 | |||||||||
Reserve adjustments | (88 | ) | (1,028 | ) | (399 | ) | ||||||
Write-offs, net of recoveries | (7,916 | ) | (9,571 | ) | (18,333 | ) | ||||||
Balance, end of period | $ | 39,873 | $ | 26,740 | $ | 17,775 | ||||||
Deferred tax assets – valuation allowance | ||||||||||||
Balance, beginning of period | $ | 20,659 | $ | 25,462 | $ | 21,818 | ||||||
Adjustments | 10,294 | (4,803 | ) | 3,644 | ||||||||
Balance, end of period | $ | 30,953 | $ | 20,659 | $ | 25,462 |
(a) | Related to the sale of finance receivables during the second quarter of 2016 with a principal balance of $301.8 million |
(b) | Inventory obsolescence reserves deducted from cost determined on first-in, first-out (FIFO) basis, before deductions for last-in, first-out (LIFO) valuation reserves. |
HARLEY-DAVIDSON, INC. | ||
By: | /S/ Matthew S. Levatich | |
Matthew S. Levatich | ||
President and Chief Executive Officer |
Name | Title | |
/S/ Matthew S. Levatich | President and Chief Executive Officer | |
Matthew S. Levatich | (Principal executive officer) | |
/S/ John A. Olin | Senior Vice President and Chief Financial Officer | |
John A. Olin | (Principal financial officer) | |
/S/ Mark R. Kornetzke | Chief Accounting Officer | |
Mark R. Kornetzke | (Principal accounting officer) | |
/S/ R. John Anderson | Director | |
R. John Anderson | ||
/S/ Michael J. Cave | Non-Executive Chairman | |
Michael J. Cave | ||
/S/ Donald A. James | Director | |
Donald A. James | ||
/S/ Sara L. Levinson | Director | |
Sara L. Levinson | ||
/S/ N. Thomas Linebarger | Director | |
N. Thomas Linebarger | ||
/S/ George L. Miles, Jr. | Director | |
George L. Miles, Jr. | ||
/S/ Brian Niccol | Director | |
Brian Niccol | ||
/S/ James A. Norling | Director | |
James A. Norling | ||
/S/ Maryrose Sylvester | Director | |
Maryrose Sylvester | ||
/S/ Jochen Zeitz | Director | |
Jochen Zeitz |
INDEX TO EXHIBITS [Items 15(a)(3) and 15(c)] | ||
Exhibit No | Description | |
2.1 | Asset Purchase Agreement, dated April 30, 2015, among Harley-Davidson Canada LP, Fred Deeley Imports Ltd. and Harley-Davidson Motor Company, Inc., as amended (incorporated herein by reference to Exhibit 2.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 28, 2015 (File No. 1-9183)) | |
3.1 | Restated Articles of Incorporation as amended through April 27, 2015 (incorporated herein by reference to Exhibit 3.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2015 (File No. 1-9183)) | |
3.2 | Harley-Davidson, Inc. By-Laws, as amended through April 27, 2015 (incorporated herein by reference by reference to Exhibit 3.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 29, 2015 (File No. 1-9183)) | |
4.1 | Indenture to provide for the issuance of indebtedness dated as of November 21, 2003 between Harley-Davidson Funding Corp., Issuer, Harley-Davidson Financial Services, Inc. and Harley-Davidson Credit Corp., Guarantors, to BNY Midwest Trust Company, Trustee (incorporated herein by reference to Exhibit 4.4 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2005 (File No. 1-9183)) | |
4.2 | 5-Year Credit Agreement, dated as of April 7, 2014, among the Company, certain subsidiaries of the Company, the financial institutions parties thereto and JPMorgan Chase Bank, N.A., as among other things, global administrative agent (incorporated herein by reference to Exhibit 4.1 to the Registrant’s Quarterly Current on Form 10-Q for the quarter ended March 30, 2014 (File No. 1-9183)) | |
4.3 | Indenture to provide for the issuance of indebtedness dated as of November 21, 2003 between Harley-Davidson Funding Corp., Issuer, Harley-Davidson Financial Services, Inc. and Harley-Davidson Credit Corp., Guarantors, to Bank of New York Midwest Trust Company, N.A. (successor to BNY Midwest Trust Company),Trustee (incorporated herein by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated May 15, 2008 (File No. 1-9183)) | |
4.4 | Officers’ Certificate, dated May 22, 2008, pursuant to Sections 102 and 301 of the Indenture, dated November 21, 2003, with the forms of 6.80% Medium-Term Notes, Series C due 2018 (incorporated herein by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated May 22, 2008 (File No. 1-9183)) | |
4.5 | Indenture, dated as of March 4, 2011, among Harley-Davidson Financial Services, Inc., Issuer, Harley-Davidson Credit Corp., Guarantor, and Bank of New York Mellon Trust Company, N.A., Trustee (incorporated herein by reference to Exhibit 4.1 to the Registrant’s Current Report on Form 8-K dated March 1, 2011 (File No. 1-9183)) | |
4.6 | Officers’ Certificate, dated January 31, 2012, pursuant to Sections 102 and 301 of the Indenture, dated March 4, 2011, with the forms of 2.700% Medium-Term Notes due 2017 (incorporated herein by reference to Exhibit 4.2 to the Registrant’s Current Report on Form 8-K dated January 26, 2012 (File No. 1-9183)) | |
4.7 | Officers' Certificate, dated September 16, 2014, pursuant to Sections 102 and 301 of the Indenture, dated March 4, 2011, with the forms of 2.400% Medium-Term Notes due 2019 (incorporated herein by reference to Exhibit 4.14 to the Registrant’s Annual Report of Form 10-K for the year ended December 31, 2014 (File No. 1-9183)) | |
4.8 | Officers' Certificate, dated November 18, 2014, pursuant to Sections 102 and 301 of the Indenture, dated March 4, 2011, with the forms of 1.550% Medium-Term Notes due 2017 (incorporated herein by reference to Exhibit 4.15 to the Registrant’s Annual Report of Form 10-K for the year ended December 31, 2014 (File No. 1-9183)) | |
4.9 | Officers' Certificate, dated February 26, 2015, pursuant to Sections 102 and 301 of the Indenture, dated March 4, 2011, with the form of 2.150% Medium-Term Notes due 2020 (incorporated herein by reference to Exhibit 4.10 to the Registrant’s Annual Report of Form 10-K for the year ended December 31, 2015 (File No. 1-9183)) | |
4.10 | Indenture, dated July 28, 2015, by and between Harley-Davidson, Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee. (incorporated herein by reference to Exhibit 4.1 to the Registrant's Current Report on Form 8-K dated July 28, 2015 (File No. 1-9183)) | |
4.11 | Officers' Certificate, dated July 28, 2015 establishing the form of 3.500% Senior Notes due 2025 and 4.625% Senior Notes due 2045 (incorporated herein by reference to Exhibit 4.2 to the Registrant's Current Report on From 8-K dates July 28, 2015 (File No. 1-9183)) | |
4.12 | Officers' Certificate dated January 8, 2016, pursuant to Sections 102 and 301 of the Indenture, dated March 4, 2011, with the form of 2.250% Medium-Term Notes due 2019 (incorporated herein by reference to Exhibit 4.2 to the Registrant's Current Report on Form 8-K dated January 5, 2016 (File No. 1-9183)) | |
4.13 | Officers' certificate dated January 8, 2016, pursuant to Sections 102 and 301 of the Indenture, dated March 4, 2011, with the form of 2.850% Medium-Term Notes due 2021 (incorporated herein by reference to Exhibit 4.3 to the Registrant's Current Report on Form 8-K dated January 5, 2016 (File No. 1-9183)) |
* | Represents a management contract or compensatory plan, contract or arrangement in which a director or named executive officer of the Company participated. |
INDEX TO EXHIBITS [Items 15(a)(3) and 15(c)] | ||
Exhibit No | Description | |
4.14 | Amendment No. 2 to 5-Year Credit Agreement, dated as of April 7, 2014, among the Company, certain subsidiaries of the Company, the financial institutions parties thereto and JPMorgan Chase Bank, N.A., as, among other things, global administrative agent, relating to the 5-Year Credit Agreement, dates as of April 13, 2012, among the Company, certain subsidiaries of the Company, the financial institutions parties thereto and JPMorgan Chase Bank, N.A., as among other things, global administrative agent. (incorporated herein by reference to Exhibit 4.15 to the Registrant’s Annual Report of Form 10-K for the year ended December 31, 2015 (File No. 1-9183)) | |
4.15 | 5-Year Credit Agreement, dated as of April 7, 2016 among the Company, certain subsidiaries of the Company, the financial institutions parties thereto and JPMorgan Chase Bank, N.A., as among other things, global administrative agent (incorporated herein by reference to Exhibit 4.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 27, 2016 (File No. 1-9183)) | |
4.16 | Amendment No. 1 5-year Credit Agreement, dated as of April 7, 2016, among the Company, certain subsidiaries of the Company, the financial institutions parties thereto, and JPMorgan Chase Bank, N.A., as, among other things, global administrative agent, relating to the 5-year Credit Agreement, dated as of April 7, 2014 among the Company, certain subsidiaries of the Company, the financial institutions parties thereto and JPMorgan Chase Bank, N.A., as among other things, global administrative agent (incorporated herein by reference to Exhibit 4.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 27, 2016 (File No. 1-9183)) | |
10.1* | Harley-Davidson, Inc. 2004 Incentive Stock Plan as amended through April 28, 2007 (incorporated herein by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended April 1, 2007 (File No. 1-9183)) | |
10.2* | Harley-Davidson, Inc. 2009 Incentive Stock Plan (incorporated herein by reference to Appendix A to the Company’s definitive proxy statement on Schedule 14A for the Company’s Annual Meeting of Shareholders held on April 25, 2009 filed on April 3, 2009 (File No. 1-9183)) | |
10.3* | Harley-Davidson, Inc. 2014 Incentive Stock Plan (incorporated herein by reference to Appendix A to the Company’s definitive proxy statement on Schedule 14A for the Company’s Annual Meeting of Shareholders held on April 26, 2014 filed on March 14, 2014 (File No. 1-9183)) | |
10.4* | Amended and Restated Harley-Davidson, Inc. Director Stock Plan as amended effective December 1, 2014 (incorporated herein by reference to Exhibit 10.6 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2014 (File No. 1-9183)) | |
10.5* | Director Compensation Policy approved April 29, 2016 (incorporated herein by reference from Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 26, 2016 (File No. 1-9183)) | |
10.6* | Deferred Compensation Plan for Nonemployee Directors as amended and restated effective January 1, 2009 (incorporated herein by reference to Exhibit 10.14 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 1-9183)) | |
10.7* | Harley-Davidson Management Deferred Compensation Plan as amended and restated effective January 1, 2017 (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 25, 2016 (File No. 1-9183)) | |
10.8* | Harley-Davidson, Inc. Employee Incentive Plan (incorporated herein by reference to the Appendix to the Company’s definitive proxy statement on Schedule 14A for the Company’s Annual Meeting of Shareholders held April 25, 2015 (File No. 1-9183)) | |
10.9* | Harley-Davidson, Inc. Short-Term Incentive Plan for Senior Executives (incorporated herein by reference to Appendix D to the Company’s definitive proxy statement on Schedule 14A for the Company’s Annual Meeting of Shareholders held April 30, 2011 (File No. 1-9183)) | |
10.10* | Harley-Davidson Pension Benefit Restoration Plan as amended and restated effective January 1, 2009 (incorporated herein by reference to Exhibit 10.9 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2008 (File No. 1-9183)) | |
10.11* | Form of Notice of Grant of Stock Options and Option Agreement of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2009 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 28, 2010 (File No. 1-9183)) | |
10.12* | Form of Notice of Grant of Stock Options and Option Agreement (Transition Agreement) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2009 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 28, 2010 (File No. 1-9183)) | |
10.13* | Form of Notice of Special Grant of Stock Options and Option Agreement (Transition Agreement) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2009 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 28, 2010 (File No. 1-9183)) |
* | Represents a management contract or compensatory plan, contract or arrangement in which a director or named executive officer of the Company participated. |
INDEX TO EXHIBITS [Items 15(a)(3) and 15(c)] | ||
Exhibit No | Description | |
10.14* | Form of Notice of Award of Restricted Stock and Restricted Stock Agreement of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2009 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 28, 2010 (File No. 1-9183)) | |
10.15* | Form of Notice of Award of Restricted Stock and Restricted Stock Agreement (Transition Agreement) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2009 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 28, 2010 (File No. 1-9183)) | |
10.16* | Form of Notice of Grant of Stock Appreciation Rights and Stock Appreciation Rights Agreement of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2009 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.10 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 28, 2010 (File No. 1-9183)) | |
10.17* | Form of Notice of Award of Restricted Stock Units and Restricted Stock Unit Agreement of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2009 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 28, 2010 (File No. 1-9183)) | |
10.18* | Form of Notice of Award of Restricted Stock Units and Restricted Stock Unit Agreement (Transition Agreement) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2009 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.8 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 28, 2010 (File No. 1-9183)) | |
10.19* | Form of Notice of Award of Restricted Stock Units and Restricted Stock Unit Agreement (International) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2009 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.9 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 28, 2010 (File No. 1-9183)) | |
10.20* | Form of Notice of Grant of Stock Options and Option Agreement of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2009 Incentive Stock Plan to each of Messrs. Hund, Levatich, Olin and Wandell (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K dated May 1, 2009 (File No. 1-9183)) | |
10.21* | Form of Notice of Grant of Restricted Stock and Restricted Stock Agreement of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2009 Incentive Stock Plan to Mr. Hund (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K dated May 1, 2009 (File No. 1-9183)) | |
10.22* | Form of Notice of Grant of Stock Options and Option Agreement of Harley-Davidson, Inc. under the Harley-Davidson Inc. 1995 Stock Option Plan and the Harley-Davidson, Inc. 2004 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.21 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2005 (File No. 1-9183)) | |
10.23* | Form of Notice of Special Grant of Stock Options and Option Agreement of Harley-Davidson, Inc. under the Harley-Davidson Inc. 1995 Stock Option Plan and the Harley-Davidson, Inc. 2004 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.22 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2005 (File No. 1-9183)) | |
10.24* | Form of Notice of Award of Restricted Stock and Restricted Stock Agreement of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2004 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2009 (File No. 1-9183)) | |
10.25* | Form of Notice of Special Award of Restricted Stock and Restricted Stock Agreement of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2004 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended April 1, 2007 (File No. 1-9183)) | |
10.26* | Form of Notice of Award of Restricted Stock Unit and Restricted Stock Unit Agreement of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2004 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended April 1, 2007 (File No. 1-9183)) | |
10.27* | Form of Notice of Grant Award of Stock Options and Stock Option Agreement (Standard) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2014 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2015 (File No. 1-9183)) |
* | Represents a management contract or compensatory plan, contract or arrangement in which a director or named executive officer of the Company participated. |
INDEX TO EXHIBITS [Items 15(a)(3) and 15(c)] | ||
Exhibit No | Description | |
10.28* | Form of Notice of Grant Award of Stock Options and Stock Option Agreement (Transition Agreement) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2014 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2015 (File No. 1-9183)) | |
10.29* | Form of Notice of Grant Award of Restricted Stock Units and Restricted Stock Unit Agreement (Deferred) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2014 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2015 (File No. 1-9183)) | |
10.30* | Form of Notice of Grant Award of Restricted Stock Units and Restricted Stock Unit Agreement (International) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2014 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2015 (File No. 1-9183)) | |
10.31* | Form of Notice of Grant Award of Restricted Stock Units and Restricted Stock Unit Agreement (Special) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2014 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2015 (File No. 1-9183)) | |
10.32* | Form of Notice of Grant Award of Restricted Stock Units and Restricted Stock Unit Agreement (Standard) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2014 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2015 (File No. 1-9183)) | |
10.33* | Form of Notice of Grant Award of Restricted Stock Units and Restricted Stock Unit Agreement (Transition Agreement) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2014 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2015 (File No. 1-9183)) | |
10.34* | Form of Notice of Grant Award of Restricted Stock Units and Restricted Stock Unit Agreement (Deferred) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2014 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.8 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2015 (File No. 1-9183)) | |
10.35* | Form of Notice of Grant Award of Stock Appreciation Rights and Stock Appreciation Rights Agreement of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2014 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.9 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 29, 2015 (File No. 1-9183)) | |
10.36.* | Form of Severance Benefits Agreement between the Registrant and each of Messrs. Hund, Jones, Levatich and Olin (incorporated herein by reference to Exhibit 10.9 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 1-9183)) | |
10.37* | Form of Transition Agreement between the Registrant and each of Messrs. Levatich and Olin (incorporated herein by reference to Exhibit 10.4 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 1-9183)) | |
10.38* | Transition Agreement between the Registrant and Mr. Hund dated November 30, 2009 (incorporated herein by reference to Exhibit 10.5 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009 (File No. 1-9183)) | |
10.39* | Form of Aircraft Time Sharing Agreement between the Registrant and each of Messrs. Levatich, Olin, Jones and Hund and Madame Bischmann (incorporated herein by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2012 (File No. 1-9183)) | |
10.40* | Form of Non-competition and Non-solicitation Agreement between Harley-Davidson Canada LP, Fred Deeley Imports Ltd. and Harley-Davidson Motor Company, Inc., as amended (incorporated herein by reference to exhibit 2.1 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended June 28,2015 (File No. 1-9183)) | |
10.41* | Form of Notice of Award of Performance Shares and Performance Shares Agreement (Standard) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2014 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.43 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2016 (File No. 1-9183)) |
* | Represents a management contract or compensatory plan, contract or arrangement in which a director or named executive officer of the Company participated. |
INDEX TO EXHIBITS [Items 15(a)(3) and 15(c)] | ||
Exhibit No | Description | |
10.42* | Form of Notice of Award of Performance Share Units and Performance Share Unit Agreement (Standard International) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2014 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.44 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2016 (File No. 1-9183)) | |
10.43* | Form of Notice of Award of Performance Shares and Performance Shares Agreement (Transition Agreement) of Harley-Davidson, Inc. under the Harley-Davidson, Inc. 2014 Incentive Stock Plan (incorporated herein by reference to Exhibit 10.45 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2016 (File No. 1-9183)) | |
10.44* | Harley-Davidson Retiree Insurance Allowance Plan, as amended and restated effective January 1, 2016 | |
21 | List of Subsidiaries | |
23 | Consent of Independent Registered Public Accounting Firm | |
31.1 | Chief Executive Officer Certification pursuant to Rule 13a-14(a) | |
31.2 | Chief Financial Officer Certification pursuant to Rule 13a-14(a) | |
32 | Written Statement of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. §1350 | |
101 | Financial statements from the annual report on Form 10-K of Harley-Davidson, Inc. for the year ended December 31, 2016, filed on February 21, 2017 formatted in XBRL: (i) the Consolidated Statements of Income; (ii) the Consolidated Statements of Comprehensive Income; (iii) the Consolidated Balance Sheets; (iv) the Consolidated Statements of Cash Flows; (v) the Consolidated Statements of Shareholders' Equity; and (vi) the Notes to Consolidated Financial Statements. |
* | Represents a management contract or compensatory plan, contract or arrangement in which a director or named executive officer of the Company participated. |
TABLE OF CONTENTS | ||
Page | ||
ARTICLE I. DEFINITIONS AND CONSTRUCTION | 2 | |
Section 1.01. Definitions | 2 | |
Section 1.02. Construction and Applicable Law. | 5 | |
ARTICLE II. PARTICIPATION AND ELIGIBILITY FOR RETIREE INSURANCE ALLOWANCE | 6 | |
Section 2.01. Participation | 6 | |
Section 2.02. Eligibility for the Separation Allowance Benefit. | 6 | |
ARTICLE III. CALCULATION AND PAYMENT OF RETIREE INSURANCE ALLOWANCE | 8 | |
Section 3.01. Amount of Retiree Insurance Allowance | 8 | |
Section 3.02. Payment | 8 | |
ARTICLE IV. GENERAL PROVISIONS | 9 | |
Section 4.01. Administration | 9 | |
Section 4.02. Claims Procedures. | 9 | |
Section 4.03. Participant Rights Unsecured. | 11 | |
Section 4.04. Distributions for Tax Withholding and Payment. | 11 | |
Section 4.05. Amendment or Termination of Plan. | 12 | |
Section 4.06. Administrative Expenses | 13 | |
Section 4.07. Successors and Assigns | 13 | |
Section 4.08. Right of Offset | 13 | |
Section 4.09. Not a Contract of Employment | 13 | |
Section 4.10. Miscellaneous Distribution Rules. | 13 | |
(i) | The Participant is employed at the S80 career band or above (or its equivalent under any subsequent employee classification structure) immediately prior to his or her retirement for reasons other than death; and |
(ii) | The Participant retires from active employment with the Company and its Affiliates on or after attainment of age fifty-five (55) and completion of five (5) or more years of service. For this purpose, a Participant’s service means (i) in the case of a Participant hired prior to August 1, 2006, the Participant’s vesting service that is recognized under Part A of the Harley-Davidson Retirement Plan, and (ii) in the case of a Participant hired on or after August 1, 2006, the Participant’s vesting service that is recognized under (or the vesting service that would be recognized if the Participant were eligible for) the Retirement Savings Plan for Salaried Employees of Harley-Davidson, or any successor to such plans. |
State/Country | |
Of | |
Name | Incorporation |
H-D U.S.A., LLC | Wisconsin |
Harley-Davidson Motor Company Group, LLC | Wisconsin |
Harley-Davidson Motor Company Operations, Inc. | Wisconsin |
H-D Franklin, LLC | Wisconsin |
H-D Tomahawk Somo, LLC | Wisconsin |
H-D Tomahawk Industrial Park, LLC | Wisconsin |
H-D Tomahawk Kaphaem Road, LLC | Wisconsin |
H-D Capitol Drive, LLC | Wisconsin |
H-D Pilgrim Road, LLC | Wisconsin |
Harley-Davidson Motor Company, Inc. | Wisconsin |
Harley-Davidson Museum, LLC | Wisconsin |
Buell Distribution Company, LLC | Wisconsin |
H-D F&R, LLC | Wisconsin |
Harley-Davidson Latin America, LLC | Wisconsin |
Harley-Davidson Asia Pacific, LLC | Wisconsin |
Buell Motorcycle Company, LLC | Wisconsin |
HDWA, LLC | Wisconsin |
Harley-Davidson Dealer Systems, Inc. | Ohio |
H-D International Holding Co., Inc. | Wisconsin |
Harley-Davidson Holding Co., Inc. | Delaware |
Harley-Davidson Benelux B.V. | Netherlands |
Harley-Davidson France SAS | France |
Harley-Davidson Germany GmbH | Germany |
Harley-Davidson Italia S.r.l. | Italy |
Harley-Davidson Japan KK | Japan |
Harley-Davidson Europe Limited | England |
Harley-Davidson do Brazil Ltda. | Brazil |
Harley-Davidson do Brazil Fabricacao De Componentes Ltda. | Brazil |
Harley-Davidson Australia Pty. Limited | Australia |
Harley-Davidson (Shanghai) Commercial and Trading Co., Ltd. | China |
H-D Hong Kong Limited | Hong Kong |
Harley-Davidson Espana S.L. | Spain |
Harley-Davidson Switzerland GmbH | Switzerland |
New Castalloy Pty. Limited | Australia |
Harley-Davidson De Mexico, S. De R.L. De C.V. | Mexico |
Harley-Davidson De Mexico Management, S. De R.L. De C.V. | Mexico |
Harley-Davidson Africa (Pty) Limited | South Africa |
Harley-Davidson Asia Pacific Pte. Ltd. | Singapore |
Harley-Davidson Central and Eastern Europe s.r.o. | Czech Republic |
H-D Motor Company India Private Limited | India |
Harley-Davidson Austria GmbH | Austria |
Harley-Davidson RUS LLC | Russia |
Harley-Davidson MENA DMCC | Dubai |
Harley-Davidson South East Europe Single Member E.P.E. | Greece |
Harley-Davidson (Thailand) Company Limited | Thailand |
HDMC (Thailand) Ltd. | Thailand |
Harley-Davidson Canada GP Inc. | Canada |
Harley-Davidson Canada Holdings ULC | Canada |
Harley-Davidson Canada LP | Canada |
Renovation Realty Investment Services, Inc. | Wisconsin |
HR, LLC | Indiana |
HR Holding Corp. | Wisconsin |
Harley-Davidson Financial Services, Inc. | Delaware |
Harley-Davidson Insurance Services, Inc. | Nevada |
Harley-Davidson Credit Corp. | Nevada |
Harley-Davidson Insurance Services of Illinois, Inc. | Illinois |
Harley-Davidson Customer Funding Corp | Nevada |
Harley-Davidson Motorcycle Trust 2013-1 | Delaware |
Harley-Davidson Motorcycle Trust 2014-1 | Delaware |
Harley-Davidson Motorcycle Trust 2015-1 | Delaware |
Harley-Davidson Motorcycle Trust 2015-2 | Delaware |
Eaglemark Savings Bank | Nevada |
Harley-Davidson Leasing, Inc. | Nevada |
Harley-Davidson Warehouse Funding Corp. | Nevada |
Harley-Davidson Financial Services International, Inc. | Delaware |
Harley-Davidson Financial Services Europe Limited | England |
Harley-Davidson Financial Services Canada, Inc. | Canada |
(1) | Registration Statement (Form S-8 No. 333-51741) pertaining to the Harley-Davidson, Inc. Director Stock Plan; |
(2) | Registration Statement (Form S-8 No. 333-75347) pertaining to the Harley-Davidson, Inc. 1998 Non-Exempt Employee Stock Option Plan; |
(3) | Registration Statement (Form S-8 No. 333-60840) pertaining to the Harley-Davidson, Inc. 2001 York Hourly-Paid Employees Stock Option Plan; |
(4) | Registration Statement (Form S-8 No. 333-123405) pertaining to the Harley-Davidson, Inc. 2004 Incentive Stock Plan; |
(5) | Registration Statement (Form S-8 No. 333-166549) pertaining to the Harley-Davidson, Inc. 2009 Incentive Stock Plan; |
(6) | Registration Statement (Form S-8 No. 333-171813) pertaining to the Harley-Davidson, Inc. Stock Purchase Plan; |
(7) | Registration Statement (Form S-8 Nos. 333-181761) of Harley-Davidson, Inc. pertaining to the Harley-Davidson Retirement Savings Plan for Salaried Employees, the Harley-Davidson Retirement Savings Plan for Milwaukee and Tomahawk Hourly Bargaining Unit Employees, the Harley-Davidson Retirement Savings Plan for Kansas City Hourly Bargaining Unit Employees, the Harley-Davidson Retirement Savings Plan for York Hourly Bargaining Unit Employees, and the Harley-Davidson Financial Services, Inc. 401(k) Profit Sharing Plan; |
(8) | Registration Statement (Form S-8 No. 333-199972) pertaining to the Harley-Davidson, Inc. 2014 Incentive Stock Plan; and |
(9) | Registration Statement (Form S-3 No. 333-202491) of Harley-Davidson, Inc. and the related Prospectus; |
1. | I have reviewed this annual report on Form 10-K of Harley-Davidson, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors: |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: February 21, 2017 | /S/ Matthew S. Levatich |
Matthew S. Levatich | |
President and Chief Executive Officer | |
1. | I have reviewed this annual report on Form 10-K of Harley-Davidson, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors: |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
Date: February 21, 2017 | /S/ John A. Olin |
John A. Olin | |
Senior Vice President and | |
Chief Financial Officer |
Date: February 21, 2017 | |
/S/ Matthew S. Levatich | |
Matthew S. Levatich | |
President and Chief Executive Officer | |
/S/ John A. Olin | |
John A. Olin | |
Senior Vice President and | |
Chief Financial Officer |
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Document And Entity Information - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Jan. 27, 2017 |
Jun. 26, 2016 |
|
Document and Entity Information [Abstract] | |||
Entity Registrant Name | HARLEY DAVIDSON INC | ||
Entity Central Index Key | 0000793952 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Filer Category | Large Accelerated Filer | ||
Document Type | 10-K | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2016 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Entity Common Stock, Shares Outstanding | 176,343,189 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Public Float | $ 7,779,258,895 |
Consolidated Statements of Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Revenue: | |||
Motorcycles and Related Products | $ 5,271,376 | $ 5,308,744 | $ 5,567,681 |
Financial Services | 725,082 | 686,658 | 660,827 |
Total revenue | 5,996,458 | 5,995,402 | 6,228,508 |
Costs and expenses: | |||
Motorcycles and Related Products cost of goods sold | 3,419,710 | 3,356,284 | 3,542,601 |
Financial Services interest expense | 173,756 | 161,983 | 164,476 |
Financial Services provision for credit losses | 136,617 | 101,345 | 80,946 |
Selling, administrative and engineering expense | 1,217,439 | 1,220,095 | 1,159,502 |
Total costs and expenses | 4,947,522 | 4,839,707 | 4,947,525 |
Operating income | 1,048,936 | 1,155,695 | 1,280,983 |
Investment income | 4,645 | 6,585 | 6,499 |
Interest expense | 29,670 | 12,117 | 4,162 |
Income before provision for income taxes | 1,023,911 | 1,150,163 | 1,283,320 |
Provision for income taxes | 331,747 | 397,956 | 438,709 |
Net income | $ 692,164 | $ 752,207 | $ 844,611 |
Earnings per common share: | |||
Basic (in dollars per share) | $ 3.85 | $ 3.71 | $ 3.90 |
Diluted (in dollars per share) | 3.83 | 3.69 | 3.88 |
Cash dividends per common share (in dollars per share) | $ 1.40 | $ 1.24 | $ 1.10 |
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 692,164 | $ 752,207 | $ 844,611 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | (9,288) | (55,362) | (36,808) |
Derivative financial instruments | 6,638 | (13,156) | 20,722 |
Marketable securities | (100) | (394) | (424) |
Pension and postretirement benefit plans | 52,574 | (31,350) | (165,757) |
Total other comprehensive income (loss), net of tax | 49,824 | (100,262) | (182,267) |
Comprehensive income | $ 741,988 | $ 651,945 | $ 662,344 |
Consolidated Balance Sheets (Parenthetical) - shares |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Preferred stock, shares issued | 0 | 0 |
Common stock, shares issued | 180,595,054 | 344,855,704 |
Treasury stock, shares | 4,647,345 | 160,121,966 |
Summary of Significant Accounting Policies |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Principles of Consolidation and Basis of Presentation – The consolidated financial statements include the accounts of Harley-Davidson, Inc. and its wholly-owned subsidiaries (the Company), including the accounts of the groups of companies doing business as Harley-Davidson Motor Company (HDMC) and Harley-Davidson Financial Services (HDFS). In addition, certain variable interest entities (VIEs) related to secured financing are consolidated as the Company is the primary beneficiary. All intercompany accounts and transactions are eliminated. All of the Company’s subsidiaries are wholly owned and are included in the consolidated financial statements. Substantially all of the Company’s international subsidiaries use their respective local currency as their functional currency. Assets and liabilities of international subsidiaries have been translated at period-end exchange rates, and revenues and expenses have been translated using average exchange rates for the period. Monetary assets and liabilities denominated in a currency that is different from an entity's functional currency are remeasured from the transactional currency to the entity's functional currency on a monthly basis. The effect of this remeasurement is reported in Motorcycle and Related Products cost of goods sold. The pre-tax loss for foreign currency remeasurements was $15.1 million, $21.5 million and $28.4 million, for the years ended 2016, 2015 and 2014, respectively. The Company operates in two reportable segments: Motorcycles & Related Products (Motorcycles) and Financial Services. Use of Estimates – The preparation of financial statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents – The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Marketable Securities – The Company’s marketable securities consisted of the following at December 31 (in thousands):
The Company’s available-for-sale securities are carried at fair value with any unrealized gains or losses reported in other comprehensive income. During 2016 and 2015, the Company recognized gross unrealized losses of $0.2 million and $0.6 million, respectively, or losses of $0.1 million and $0.4 million, net of tax, respectively, to adjust amortized cost to fair value. The marketable securities have contractual maturities that come due over the next 4 months. The Company's trading securities relate to investments held by the Company to fund certain deferred compensation obligations. The trading securities are carried at fair value with gains and losses recorded in net income and investments are included in other long-term assets on the consolidated balance sheets. Accounts Receivable, Net – The Company’s motorcycles and related products are sold to independent dealers outside the U.S. and Canada generally on open account and the resulting receivables are included in accounts receivable in the Company’s consolidated balance sheets. The allowance for doubtful accounts deducted from total accounts receivable was $2.7 million and $2.9 million as of December 31, 2016 and 2015, respectively. Accounts receivable are written down once management determines that the specific customer does not have the ability to repay the balance in full. The Company’s sales of motorcycles and related products in the U.S. and Canada are financed by the purchasing dealers through HDFS and the related receivables are included in finance receivables in the consolidated balance sheets. Finance Receivables, Net – Finance receivables include both retail and wholesale finance receivables, net, including amounts held by VIEs. Finance receivables are recorded in the financial statements at amortized cost net of an allowance for credit losses. The provision for credit losses on finance receivables is charged to earnings in amounts sufficient to maintain the allowance for credit losses at a level that is adequate to cover estimated losses of principal inherent in the existing portfolio. Portions of the allowance for credit losses are specified to cover estimated losses on finance receivables specifically identified for impairment. The unspecified portion of the allowance covers estimated losses on finance receivables which are collectively reviewed for impairment. Finance receivables are considered impaired when management determines it is probable that the Company will be unable to collect all amounts due according to the terms of the loan agreement. The retail portfolio primarily consists of a large number of small balance, homogeneous finance receivables. The Company performs a periodic and systematic collective evaluation of the adequacy of the retail allowance for credit losses. The Company utilizes loss forecast models which consider a variety of factors including, but not limited to, historical loss trends, origination or vintage analysis, known and inherent risks in the portfolio, the value of the underlying collateral, recovery rates and current economic conditions including items such as unemployment rates. Retail finance receivables are not evaluated individually for impairment prior to charge-off and therefore are not reported as impaired loans. The wholesale portfolio is primarily composed of large balance, non-homogeneous loans. The Company’s wholesale allowance evaluation is first based on a loan-by-loan review. A specific allowance for credit losses is established for wholesale finance receivables determined to be individually impaired when management concludes that the borrower will not be able to make full payment of contractual amounts due based on the original terms of the loan agreement. The impairment is determined based on the cash that the Company expects to receive discounted at the loan’s original interest rate or the fair value of the collateral, if the loan is collateral-dependent. Finance receivables in the wholesale portfolio that are not individually evaluated for impairment are segregated, based on similar risk characteristics, according to the Company’s internal risk rating system and collectively evaluated for impairment. The related allowance is based on factors such as the Company’s past loan loss experience, the specific borrower’s financial performance as well as ability to repay, current economic conditions as well as the value of the underlying collateral. Impaired finance receivables also include loans that have been modified in troubled debt restructurings as a concession to borrowers experiencing financial difficulty. Generally, it is the Company’s policy not to change the terms and conditions of finance receivables. However, to minimize the economic loss, the Company may modify certain impaired finance receivables in troubled debt restructurings. Total restructured finance receivables are not significant. Repossessed inventory representing recovered collateral on impaired finance receivables is recorded at the lower of cost or net realizable value. In the period during which the collateral is repossessed, the related finance receivable is adjusted to the fair value of the collateral through a charge to the allowance for credit losses and reclassified to repossessed inventory. Repossessed inventory is included in other current assets and was $19.3 million and $17.7 million at December 31, 2016 and 2015, respectively. Asset-Backed Financing – The Company participates in asset-backed financing both through asset-backed securitization transactions and through asset-backed commercial paper conduit facilities. In the Company's asset-backed financing programs, the Company transfers retail motorcycle finance receivables to special purpose entities (SPE), which are considered VIEs under U.S. GAAP. Each SPE then converts those assets into cash, through the issuance of debt. The Company retains servicing rights for all of the retail motorcycle finance receivables transferred to SPEs as part of an asset-backed financing. The accounting treatment for asset-backed financings depends on the terms of the related transaction and the Company’s continuing involvement with the VIE. In transactions where the Company has power over the significant activities of the VIE and has an obligation to absorb losses or the right to receive benefits from the VIE that are potentially significant to the VIE, the Company is the primary beneficiary of the VIE and consolidates the VIE within its consolidated financial statements. On a consolidated basis, the asset-backed financing is treated as a secured borrowing in this type of transaction and is referred to as an on-balance sheet asset-backed financing. In transactions where the Company is not the primary beneficiary of the VIE, the Company must determine whether it can achieve a sale for accounting purposes under ASC Topic 860, "Transfers and Servicing." To achieve a sale for accounting purposes, the assets being transferred must be legally isolated, not be constrained by restrictions from further transfer, and be deemed to be beyond the Company’s control. If the Company does not meet all these criteria for sale accounting, then the transaction is accounted for as a secured borrowing and is referred to as an on-balance sheet asset-backed financing. If the Company meets all three of the sale criteria above, the transaction is recorded as a sale for accounting purposes and is referred to as an off-balance sheet asset-backed financing. Upon sale, the retail motorcycle finance receivables are removed from the Company’s balance sheet and a gain or loss is recognized for the difference between the cash proceeds received, the assets derecognized, and the liabilities recognized as part of the transaction. The gain or loss on sale is included in Financial Services revenue in the Consolidated Statement of Income. The Company is not required, and does not currently intend, to provide any additional financial support to the on or off-balance sheet VIEs associated with these transactions. Investors and creditors in these transactions only have recourse to the assets held by the VIEs. Inventories – Inventories are valued at the lower of cost or market. Substantially all inventories located in the United States are valued using the last-in, first-out (LIFO) method. Other inventories totaling $221.7 million at December 31, 2016 and $266.6 million at December 31, 2015 are valued at the lower of cost or market using the first-in, first-out (FIFO) method. Property, Plant and Equipment – Property, plant and equipment is recorded at cost. Depreciation is determined on the straight-line basis over the estimated useful lives of the assets. The following useful lives are used to depreciate the various classes of property, plant and equipment: buildings – 30 years; building equipment and land improvements – 7 years; machinery and equipment – 3 to 10 years; furniture and fixtures – 5 years; and software – 3 to 7 years. Accelerated methods of depreciation are used for income tax purposes. Goodwill – Goodwill represents the excess of acquisition cost over the fair value of the net assets purchased. Goodwill is tested for impairment, based on financial data related to the reporting unit to which it has been assigned, at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The impairment test involves comparing the estimated fair value of the reporting unit associated with the goodwill to its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, goodwill must be adjusted to its implied fair value. During 2016 and 2015, the Company performed a quantitative test on its goodwill balances for impairment and no adjustments were recorded to goodwill as a result of those reviews. Long-lived Assets – The Company periodically evaluates the carrying value of long-lived assets to be held and used when events and circumstances warrant such review. If the carrying value of a long-lived asset is considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset for assets to be held and used. The Company also reviews the useful life of its long-lived assets when events and circumstances indicate that the actual useful life may be shorter than originally estimated. In the event that the actual useful life is deemed to be shorter than the original useful life, depreciation is adjusted prospectively so that the remaining book value is depreciated over the revised useful life. Asset groups classified as held for sale are measured at the lower of carrying amount or fair value less cost to sell, and a loss is recognized for any initial adjustment required to reduce the carrying amount to the fair value less cost to sell in the period the held for sale criteria are met. The fair value less cost to sell must be assessed each reporting period the asset group remains classified as held for sale. Gains or losses not previously recognized resulting from the sale of an asset group will be recognized on the date of sale. Product Warranty and Recall Campaigns – The Company currently provides a standard two-year limited warranty on all new motorcycles sold worldwide, except for Japan, where the Company provides a standard three-year limited warranty on all new motorcycles sold. In addition, the Company offers a one-year warranty for Parts & Accessories (P&A). The warranty coverage for the retail customer generally begins when the product is sold to a retail customer. The Company maintains reserves for future warranty claims using an estimated cost, which are based primarily on historical Company claim information. Additionally, the Company has from time to time initiated certain voluntary recall campaigns. The Company reserves for all estimated costs associated with recalls in the period that management approves and commits to the recall. Changes in the Company’s warranty and recall liability were as follows (in thousands):
The liability for recall campaigns was $13.6 million, $10.2 million and $9.8 million at December 31, 2016, 2015 and 2014, respectively. Derivative Financial Instruments – The Company is exposed to certain risks such as foreign currency exchange rate risk, interest rate risk and commodity price risk. To reduce its exposure to such risks, the Company selectively uses derivative financial instruments. All derivative transactions are authorized and executed pursuant to regularly reviewed policies and procedures, which prohibit the use of financial instruments for speculative trading purposes. All derivative instruments are recognized on the balance sheet at fair value (see Note 7). In accordance with ASC Topic 815, “Derivatives and Hedging,” the accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. Changes in the fair value of derivatives that are designated as fair value hedges, along with the gain or loss on the hedged item, are recorded in current period earnings. For derivative instruments that are designated as cash flow hedges, the effective portion of gains and losses that result from changes in the fair value of derivative instruments is initially recorded in other comprehensive income (OCI) and subsequently reclassified into earnings when the hedged item affects income. The Company assesses, at both the inception of each hedge and on an on-going basis, whether the derivatives that are used in its hedging transactions are highly effective in offsetting changes in cash flows of the hedged items. Any ineffective portion is immediately recognized in earnings. No component of a hedging derivative instrument’s gain or loss is excluded from the assessment of hedge effectiveness. Derivative instruments that do not qualify for hedge accounting are recorded at fair value and any changes in fair value are recorded in current period earnings. Refer to Note 8 for a detailed description of the Company’s derivative instruments. Motorcycles and Related Products Revenue Recognition – Sales are recorded when title and ownership is transferred, which is generally when products are shipped to wholesale customers (independent dealers). The Company may offer sales incentive programs to both wholesale and retail customers designed to promote the sale of motorcycles and related products. The total costs of these programs are generally recognized as revenue reductions and are accrued at the later of the date the related sales are recorded or the date the incentive program is both approved and communicated. Financial Services Revenue Recognition – Interest income on finance receivables is recorded as earned and is based on the average outstanding daily balance for wholesale and retail receivables. Accrued and uncollected interest is classified with finance receivables. Certain loan origination costs related to finance receivables, including payments made to dealers for certain retail loans, are deferred and recorded within finance receivables, and amortized over the estimated life of the contract. Retail finance receivables are contractually delinquent if the minimum payment is not received by the specified due date. Retail finance receivables are generally charged-off when the receivable is 120 days or more delinquent, the related asset is repossessed or the receivable is otherwise deemed uncollectible. All retail finance receivables accrue interest until either collected or charged-off. Accordingly, as of December 31, 2016 and 2015, all retail finance receivables are accounted for as interest-earning receivables. Wholesale finance receivables are delinquent if the minimum payment is not received by the contractual due date. Wholesale finance receivables are written down once management determines that the specific borrower does not have the ability to repay the loan in full. Interest continues to accrue on past due finance receivables until the date the finance receivable becomes uncollectible and the finance receivable is placed on non-accrual status. The Company will resume accruing interest on these accounts when payments are current according to the terms of the loans and future payments are reasonably assured. While on non-accrual status, all cash received is applied to principal or interest as appropriate. Insurance and protection product commissions as well as commissions on the sale of extended service contracts are recognized when contractually earned. Deferred revenue related to extended service contracts was $4.5 million and $4.6 million as of December 31, 2016 and 2015, respectively. Research and Development Expenses – Expenditures for research activities relating to product development and improvement are charged against income as incurred and included within selling, administrative and engineering expenses in the consolidated statement of income. Research and development expenses were $172.3 million, $161.2 million and $138.3 million for 2016, 2015 and 2014, respectively. Advertising Costs – The Company expenses the production cost of advertising the first time the advertising takes place. Advertising costs relate to the Company’s efforts to promote its products and brands through the use of media. During 2016, 2015 and 2014, the Company incurred $137.4 million, $119.8 million and $107.4 million in advertising costs, respectively. Shipping and Handling Costs – The Company classifies shipping and handling costs as a component of cost of goods sold. Share-Based Award Compensation Costs – The Company recognizes the cost of its share-based awards in its statement of income. The cost of each share-based equity award is based on the grant date fair value and the cost of each share-based cash-settled award is based on the settlement date fair value. Share-based award expense is recognized on a straight-line basis over the service or performance periods of the awards. The expense recognized reflects the number of awards that are ultimately expected to vest based on the service and, if applicable, performance requirements of each award. Total share-based award compensation expense recognized by the Company during 2016, 2015 and 2014 was $32.3 million, $29.4 million and $37.9 million, respectively, or $20.4 million, $18.5 million and $23.9 million net of taxes, respectively. Income Tax Expense – The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. New Accounting Standards Accounting Standards Recently Adopted In February 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-02 Amendments to the Consolidation Analysis (ASU 2015-02). ASU 2015-02 amends the guidance within Accounting Standards Codification (ASC) Topic 810, "Consolidation,” to change the analysis that a reporting entity must perform to determine whether it should consolidate certain legal entities. The Company adopted ASU 2015-02 on January 1, 2016. The adoption of ASU 2015-02 had no impact on the Company's consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03 Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03). ASU 2015-03 amends the guidance within ASC Topic 835, "Interest," to require that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt premiums and discounts. In August 2015, the FASB further issued ASU No. 2015-15 Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (ASU 2015-15). ASU 2015-15 amends the guidance within ASC Topic 835, “Interest,” to allow an entity to defer and present debt issuance costs associated with a line of credit arrangement as an asset, regardless of whether there are any outstanding borrowings on the line of credit arrangement. The Company adopted ASU 2015-03 and ASU 2015-15 retrospectively on January 1, 2016. As a result, debt issuance costs related to its medium-term notes, senior unsecured notes, and term asset-backed securitizations are now classified as a reduction to the carrying amount of the related debt on the balance sheet. Debt issuance costs previously recorded in other current assets and other long-term assets totaling $18.2 million as of December 31, 2015 on the balance sheet have been reclassified to current portion of long-term debt, net and long-term debt, net to reflect the adoption of the new guidance. The required new disclosures are also presented in Note 10. The Company will continue to classify debt issuance costs related to line of credit arrangements, which include its asset-backed commercial paper and unsecured commercial paper programs and its credit facilities, as an asset, regardless of whether it has any outstanding borrowings on the line of credit arrangements. In April 2015, the FASB issued ASU No. 2015-05 Customer's Accounting for Fees Paid in a Cloud Computing Arrangement, which amends ASC 350-40, "Intangibles-Goodwill and Other Internal-Use Software" (ASU 2015-05). ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes a software license. If an arrangement includes a software license, the accounting for the license will be consistent with the licenses of other intangible assets. If the arrangement does not include a license, the arrangement will be accounted for as a service contract. The Company adopted ASU 2015-05 prospectively on January 1, 2016. The adoption of ASU 2015-05 had no material impact on the Company's consolidated financial statements. In May 2015, the FASB issued ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or its Equivalent) that eliminates the requirement to classify investments measured using the NAV practical expedient in the fair value hierarchy table. Instead, entities will be required to disclose the fair values of such investments so that the financial statement users can reconcile amounts reported in the fair value hierarchy table with the amounts reported in the balance sheet. The Company adopted this new guidance on a retrospective basis in 2016 which resulted in a change to the presentation of pension and postretirement plan assets in Note 13 of the Notes to Consolidated Financial Statements. In November 2015, the FASB issued ASU No. 2015-17 Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (ASU 2015-17). ASU 2015-17 eliminates the requirement for a Company to separate deferred income tax liabilities and assets into current and noncurrent amounts on a classified statement of financial position and requires that deferred tax liabilities and assets be classified as noncurrent. The Company adopted ASU 2015-17 on December 31, 2016 on a prospective basis and prior period balances were not adjusted. Accounting Standards Not Yet Adopted In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09 Revenue from Contracts with Customers (ASU 2014-09). ASU 2014-09 is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14 Revenue from Contracts with Customers: Deferral of Effective Date (ASU 2015-14) to defer the effective date of the new revenue recognition standard by one year to fiscal years beginning after December 15, 2017 and interim periods therein. The guidance may be adopted using either a full retrospective or modified retrospective approach. The Company expects to adopt the new revenue recognition guidance using the modified retrospective method. The Company's efforts to evaluate the impact and to prepare for its adoption on January 1, 2018 are well underway. Based on the work completed to date (which includes the review of significant domestic revenue sources), the Company expects that the recognition of revenue for domestic sales of motorcycles, parts and accessories and general merchandise products under the new revenue recognition guidance will occur at a point in time, which is consistent with current practice. The Company is continuing to evaluate its international revenue sources for potential impact, but based on the work completed to date, expects its conclusions will be consistent with those reached for domestic revenue sources. Interest income, which makes up the vast majority of revenue in the Financial Services segment, is not within the scope of the new standard. In July 2015, the FASB issued ASU No. 2015-11 Inventory (Topic 330): Simplifying the Measurement of Inventory (ASU 2015-11). ASU 2015-11 simplifies the subsequent measurement of inventory by using only the lower of cost or net realizable value. ASU 2015-11 does not apply to inventory measured using the last-in, first-out method. The Company is required to adopt ASU 2015-11 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016 on a prospective basis. Early adoption will be permitted. The adoption of ASU 2015-11 will not have a material effect on the Company’s consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01 Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01). ASU 2016-01 enhances the existing financial instruments reporting model by modifying fair value measurement tools, simplifying impairment assessments for certain equity instruments, and modifying overall presentation and disclosure requirements. The Company is required to adopt ASU 2016-01 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017 on a prospective basis. The Company is currently evaluating the impact of adoption of ASU 2016-01. In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842) (ASU 2016-02). ASU 2016-02 amends the existing lease accounting model by requiring a lessee to recognize the rights and obligations resulting from certain leases as assets and liabilities on the balance sheet. ASU 2016-02 also requires a company to disclose key information about their leasing arrangements. The Company is required to adopt ASU 2016-02 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018 using a modified retrospective approach. Early adoption is permitted. The Company is currently evaluating the impact of adoption of ASU 2016-02. In March 2016, the FASB issued ASU No. 2016-09 Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). ASU 2016-09 amends the guidance on several aspects of accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, accounting for forfeitures, and classification on the statement of cash flows. The Company is required to adopt ASU 2016-09 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016 on both a retrospective and prospective basis dependent upon the nature of the subtopic. Early adoption is permitted, including adoption in an interim period. The Company does not expect the adoption of ASU 2016-09 to have a material impact on its financial statements. In July 2016, the FASB issued ASU No. 2016-13 Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13). ASU 2016-13 changes how to recognize expected credit losses on financial assets. The standard requires a more timely recognition of credit losses on loans and other financial assets and also provides additional transparency about credit risk. The current credit loss standard generally requires that a loss actually be incurred before it is recognized, while the new standard will require recognition of full lifetime expected losses upon initial recognition of the financial instrument. The Company is required to adopt ASU 2016-13 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019 on a modified retrospective basis. Early adoption is permitted for fiscal years beginning after December 15, 2018. An entity should apply the standard by recording a cumulative effect adjustment to retained earnings upon adoption. Adoption of this standard will impact how the Company recognizes credit losses on its financial instruments. The Company is currently evaluating the impact of adoption of ASU 2016-13 but anticipates the adoption of ASU 2016-13 will result in an increase in the annual provision for credit losses and the related allowance for credit losses. In August 2016, the FASB issued ASU No. 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15). ASU 2016-15 addresses eight specific cash flow issues with the objective of reducing diversity in practice regarding how certain cash receipts and cash payments are presented in the statement of cash flows. The standard provides guidance on the classification of the following items: (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance policies, (6) distributions received from equity method investments, (7) beneficial interests in securitization transactions, and (8) separately identifiable cash flows. The Company is required to adopt ASU 2016-15 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017 on a retrospective basis. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of adoption of ASU 2016-15. In October 2016, the FASB issued ASU No. 2016-16 Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (ASU 2016-16). ASU 2016-16 states that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Two common assets included in the scope of the ASU are intellectual property and property, plant and equipment. The Company is required to adopt ASU 2016-16 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017 using a modified retrospective approach with a cumulative-effect adjustment to retained earnings. Early adoption is permitted as of the beginning of an annual reporting period. The Company does not expect the adoption of ASU 2016-16 to have a material impact on its financial statements. In November 2016, the FASB issued ASU No. 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As such, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and ending-of-period total amounts shown on the statement of cash flows. The Company is required to adopt ASU 2016-18 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017 on a retrospective basis. Early adoption is permitted, including adoption in an interim period. The Company reported a $43.5 million financing cash inflow related to a change in restricted cash for the period ended December 31, 2016. Subsequent to the adoption of ASU 2016-18 the change in restricted cash would be excluded from the change in cash flows from financing activities and included in the change in total cash, restricted cash and cash equivalents as reported in the statement of cash flows. |
Additional Balance Sheet and Cash Flow Information |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Additional Balance Sheet and Cash Flow Information | Additional Balance Sheet and Cash Flow Information The following information represents additional detail for selected line items included in the consolidated balance sheets at December 31, and the statements of cash flows for the years ended December 31. Balance Sheet Information: Inventories, net (in thousands):
Inventory obsolescence reserves deducted from FIFO cost were $39.9 million and $26.7 million as of December 31, 2016 and 2015, respectively. Property, plant and equipment, at cost (in thousands):
Accrued liabilities (in thousands):
Cash Flow Information: The reconciliation of net income to net cash provided by operating activities of continuing operations is as follows (in thousands):
Cash paid during the period for interest and income taxes (in thousands):
Interest paid represents interest payments of HDFS (included in financial services interest expense) and interest payments of the Company (included in interest expense). |
Acquisition |
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Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Acquisition | Acquisition On August 4, 2015, the Company completed its purchase of certain assets and liabilities from Fred Deeley Imports, Ltd. (Deeley Imports) including, among other things, the acquisition of the exclusive right to distribute the Company's motorcycles and other products in Canada (Transaction) for total consideration of $59.9 million. The majority equity owner of Deeley Imports prior to the transaction closing is a member of the Board of Directors of the Company. The acquisition of the Canadian distribution rights allowed the Company to align its distribution in Canada with its global go-to-market approach. The financial impact of the acquisition, which was part of the Motorcycles segment, has been included in the Company's consolidated financial statements from the date of acquisition. Proforma information reflecting this acquisition has not been disclosed as the proforma impact on consolidated net income was not material. The following table summarizes the fair values of the Deeley Imports assets acquired and liabilities assumed at the date of acquisition (in thousands):
As noted above, in conjunction with the acquisition of certain assets and assumption of certain liabilities of Deeley Imports, the Company recorded goodwill of $28.6 million, all of which the Company believes is tax deductible, and intangible assets with an initial fair value of $20.8 million. Of the total intangible assets acquired, $13.3 million was assigned to reacquired distribution rights with a useful life of two years and $7.5 million was assigned to customer relationships with a useful life of twenty years. The Company agreed to reimburse Deeley Imports for certain severance costs associated with the Transaction resulting in $3.3 million of expense included in selling, administrative and engineering expense in the third quarter of 2015. The Company did not acquire any cash as part of the Transaction. |
Goodwill and Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets | Goodwill and Intangible Assets The following table summarizes changes in the carrying amount of goodwill in the Motorcycles segment for the following years ended December 31 (in thousands):
The following table summarizes the Motorcycles segment intangible assets other than goodwill at December 31 (in thousands):
Intangible assets other than goodwill are included in other long-term assets on the Company's consolidated balance sheets. The gross carrying amounts at December 31 differ from the acquisition date amounts due to changes in foreign currency exchange rates. Total amortization expense of other intangible assets was $7.0 million and $2.8 million for 2016 and 2015, respectively. There was no amortization expense of other intangible assets for 2014. The Company estimates future amortization to be as follows (in thousands):
The Financial Services segment had no goodwill or intangible assets at December 31, 2016 and December 31, 2015. |
Finance Receivables |
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Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finance Receivables | Finance Receivables Finance receivables, net at December 31 for the past five years were as follows (in thousands):
The Company offers wholesale financing to the Company’s independent dealers. Wholesale loans to dealers are generally secured by financed inventory or property and are originated in the U.S. and Canada. Wholesale finance receivables are related primarily to motorcycles and related parts and accessories sales. The Company provides retail financial services to customers of the Company’s independent dealers in the U.S. and Canada. The origination of retail loans is a separate and distinct transaction between the Company and the retail customer, unrelated to the Company’s sale of product to its dealers. Retail finance receivables consist of secured promissory notes and secured installment contracts and are primarily related to sales of motorcycles to the dealers’ customers. The Company holds either titles or liens on titles to vehicles financed by promissory notes and installment sales contracts. As of December 31, 2016 and 2015, approximately 11% and 12% of gross outstanding retail finance receivables were originated in Texas, respectively; there were no other states that accounted for more than 10% of gross outstanding retail finance receivables. Unused lines of credit extended to the Company's wholesale finance customers totaled $1.32 billion and $1.27 billion at December 31, 2016 and 2015, respectively. Approved but unfunded retail finance loans totaled $177.9 million and $169.6 million at December 31, 2016 and 2015, respectively. Wholesale finance receivables are generally contractually due within one year. On December 31, 2016, contractual maturities of finance receivables were as follows (in thousands):
The allowance for credit losses on finance receivables is comprised of individual components relating to wholesale and retail finance receivables. Changes in the allowance for credit losses on finance receivables by portfolio for the year ended December 31 were as follows (in thousands):
through an off-balance sheet asset-backed securitization transaction (see Note 11 for additional information). There were no finance receivables individually evaluated for impairment on December 31, 2016 or 2015. The allowance for credit losses and finance receivables by portfolio, collectively evaluated for impairment, at December 31 was as follows (in thousands):
Finance receivables are considered impaired when management determines it is probable that the Company will be unable to collect all amounts due according to the loan agreement. As retail finance receivables are collectively and not individually reviewed for impairment, this portfolio does not have specifically impaired finance receivables. At December 31, 2016 and 2015, there were no wholesale finance receivables that were on non-accrual status or individually deemed to be impaired under ASC Topic 310, “Receivables.” An analysis of the aging of past due finance receivables at December 31 was as follows (in thousands):
The recorded investment of retail and wholesale finance receivables, excluding non-accrual status finance receivables, that were contractually past due 90 days or more at December 31 for the past five years was as follows (in thousands):
A significant part of managing the Company's finance receivable portfolios includes the assessment of credit risk associated with each borrower. As the credit risk varies between the retail and wholesale portfolios, the Company utilizes different credit risk indicators for each portfolio. The Company manages retail credit risk through its credit approval policy and ongoing collection efforts. The Company uses FICO scores, a standard credit rating measurement, to differentiate the expected default rates of retail credit applicants, enabling the Company to better evaluate credit applicants for approval and to tailor pricing according to this assessment. Retail loans with a FICO score of 640 or above at origination are considered prime, and loans with a FICO score below 640 are considered sub-prime. These credit quality indicators are determined at the time of loan origination and are not updated subsequent to the loan origination date. The recorded investment of retail finance receivables, by credit quality indicator, at December 31 was as follows (in thousands):
The Company's credit risk on the wholesale portfolio is different from that of the retail portfolio. Whereas the retail portfolio represents a relatively homogeneous pool of retail finance receivables that exhibit more consistent loss patterns, the wholesale portfolio exposures are less consistent. The Company utilizes an internal credit risk rating system to manage credit risk exposure consistently across wholesale borrowers and evaluates credit risk factors for each borrower. The Company uses the following internal credit quality indicators, based on an internal risk rating system, listed from highest level of risk to lowest level of risk, for the wholesale portfolio: Doubtful, Substandard, Special Mention, Medium Risk and Low Risk. Based upon management’s review, the dealers classified in the Doubtful category are the dealers with the greatest likelihood of being charged-off, while the dealers classified as Low Risk are least likely to be charged-off. The internal rating system considers factors such as the specific borrower's ability to repay and the estimated value of any collateral. Dealer risk rating classifications are reviewed and updated on a quarterly basis. The recorded investment of wholesale finance receivables, by internal credit quality indicator, at December 31 was as follows (in thousands):
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Fair Value Measurements |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements Certain assets and liabilities are recorded at fair value in the financial statements; some of these are measured on a recurring basis while others are measured on a non-recurring basis. Assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when required by particular events or circumstances. In determining the fair value of assets and liabilities, the Company uses various valuation techniques. The availability of inputs observable in the market varies from instrument to instrument and depends on a variety of factors including the type of instrument, whether the instrument is actively traded, and other characteristics particular to the transaction. For many financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management discretion. For other financial instruments, pricing inputs are less observable in the market and may require management judgment. The Company assesses the inputs used to measure fair value using a three-tier hierarchy. The hierarchy indicates the extent to which inputs used in measuring fair value are observable in the market. Level 1 inputs include quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, foreign currency exchange rates, and commodity prices. The Company uses the market approach to derive the fair value for its level 2 fair value measurements. Forward contracts for foreign currency and commodities are valued using current quoted forward rates and prices; and investments in marketable securities and cash equivalents are valued using publicly quoted prices. Level 3 inputs are not observable in the market and include management's judgments about the assumptions market participants would use in pricing the asset or liability. Recurring Fair Value Measurements The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31 (in thousands):
Nonrecurring Fair Value Measurements Repossessed inventory is recorded at the lower of cost or net realizable value through a nonrecurring fair value measurement. Repossessed inventory was $19.3 million and $17.7 million at December 31, 2016 and 2015, for which the fair value adjustment was $9.3 million and $8.6 million at December 31, 2016 and 2015, respectively. Fair value is estimated using Level 2 inputs based on the recent market values of repossessed inventory. |
Fair Value of Financial Instruments |
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Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist primarily of cash and cash equivalents, marketable securities, finance receivables, net, debt, foreign currency exchange and commodity contracts (derivative instruments are discussed further in Note 8). The following table summarizes the fair value and carrying value of the Company’s financial instruments at December 31 (in thousands):
Cash and Cash Equivalents and Restricted Cash – With the exception of certain cash equivalents, the carrying value of these items in the financial statements is based on historical cost. The historical cost basis for these amounts is estimated to approximate their respective fair values due to the short maturity of these instruments. Fair value is based on Level 1 or Level 2 inputs. Marketable Securities – The carrying value of marketable securities in the financial statements is based on fair value. The fair value of marketable securities is determined primarily based on quoted prices for identical instruments or on quoted market prices of similar financial assets. Fair value is based on Level 1 or Level 2 inputs. Finance Receivables, Net – The carrying value of retail and wholesale finance receivables in the financial statements is amortized cost less an allowance for credit losses. The fair value of retail finance receivables is generally calculated by discounting future cash flows using an estimated discount rate that reflects current credit, interest rate and prepayment risks associated with similar types of instruments. Fair value is determined based on Level 3 inputs. The amortized cost basis of wholesale finance receivables approximates fair value because they either are short-term or have interest rates that adjust with changes in market interest rates. Derivatives – Forward contracts for foreign currency exchange and commodities are derivative financial instruments and are carried at fair value on the balance sheet. The fair value of these contracts is determined using quoted forward rates and prices. Fair value is calculated using Level 2 inputs. Debt – The carrying value of debt in the financial statements is generally amortized cost. The carrying value of unsecured commercial paper approximates fair value due to its short maturity. Fair value is calculated using Level 2 inputs. The carrying value of debt provided under the Canadian Conduit approximates fair value since the interest rates charged under the facility are tied directly to market rates and fluctuate as market rates change. Fair value is calculated using Level 2 inputs. The fair values of the medium-term notes and senior unsecured notes are estimated based upon rates currently available for debt with similar terms and remaining maturities. Fair value is calculated using Level 2 inputs. The fair value of the debt related to term asset-backed securitization transactions is estimated based on pricing currently available for transactions with similar terms and maturities. Fair value is calculated using Level 2 inputs. |
Derivative Instruments and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities The Company is exposed to certain risks such as foreign currency exchange rate risk, interest rate risk and commodity price risk. To reduce its exposure to such risks, the Company selectively uses derivative financial instruments. All derivative transactions are authorized and executed pursuant to regularly reviewed policies and procedures, which prohibit the use of financial instruments for speculative trading purposes. All derivative instruments are recognized on the balance sheet at fair value (see Note 7). In accordance with ASC Topic 815, "Derivatives and Hedging," the accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. Changes in the fair value of derivatives that are designated as fair value hedges, along with the gain or loss on the hedged item, are recorded in current period earnings. For derivative instruments that are designated as cash flow hedges, the effective portion of gains and losses that result from changes in the fair value of derivative instruments is initially recorded in other comprehensive income (OCI) and subsequently reclassified into earnings when the hedged item affects income. The Company assesses, both at the inception of each hedge and on an on-going basis, whether the derivatives that are used in its hedging transactions are highly effective in offsetting changes in cash flows of the hedged items. Any ineffective portion is immediately recognized in earnings. No component of a hedging derivative instrument’s gain or loss is excluded from the assessment of hedge effectiveness. Derivative instruments that do not qualify for hedge accounting are recorded at fair value and any changes in fair value are recorded in current period earnings. The Company sells its products internationally, and in most markets those sales are made in the foreign country’s local currency. As a result, the Company’s earnings can be affected by fluctuations in the value of the U.S. dollar relative to foreign currency. The Company utilizes foreign currency exchange contracts to mitigate the effects of the Euro, the Australian dollar, the Japanese yen, the Brazilian real, the Canadian dollar and the Mexican peso. The foreign currency exchange contracts are entered into with banks and allow the Company to exchange a specified amount of foreign currency for U.S. dollars at a future date, based on a fixed exchange rate. The Company utilizes commodity contracts to hedge portions of the cost of certain commodities consumed in the Company’s motorcycle production and distribution operations. The Company’s foreign currency exchange contracts and commodity contracts generally have maturities of less than one year. During the second quarter of 2015, the Company entered into treasury rate locks to fix the interest rate on a portion of the principal related to its anticipated issuance of senior unsecured debt during the third quarter of 2015. The treasury rate lock contracts were settled in July 2015. The loss at settlement was recorded in accumulated other comprehensive loss and will be reclassified into earnings over the life of the debt. The following tables summarize the fair value of the Company’s derivative financial instruments at December 31 (in thousands):
The following tables summarize the amount of gains and losses for the following years ended December 31 related to derivative financial instruments designated as cash flow hedges (in thousands):
For the years ended December 31, 2016 and 2015, the cash flow hedges were highly effective and, as a result, the amount of hedge ineffectiveness was not material. No amounts were excluded from effectiveness testing. The following table summarizes the amount of gains and losses for the years ended December 31 related to derivative financial instruments not designated as hedging instruments (in thousands):
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Accumulated Other Comprehensive Loss |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Loss The following table sets forth the changes in accumulated other comprehensive loss (AOCL) for the years ended December 31 (in thousands):
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Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Debt with a contractual term less than one year is generally classified as short-term debt and consisted of the following as of December 31 (in thousands):
Debt with a contractual term greater than one year is generally classified as long-term debt and consisted of the following as of December 31 (in thousands):
A summary of the Company’s expected principal payments for debt obligations as of December 31, 2016 is as follows (in thousands):
Commercial paper maturities may range up to 365 days from the issuance date. The weighted-average interest rate of outstanding commercial paper balances was 0.93% and 0.56% at December 31, 2016 and 2015, respectively. In April 2016, the Company entered into a new $765.0 million five-year credit facility to refinance and replace a $675.0 million five-year credit facility that was due to mature in April 2017. The new five-year credit facility matures in April 2021. The Company also has a $675.0 million five-year credit facility which matures in April 2019. The new five-year credit facility and the existing five-year credit facility (together, the Global Credit Facilities) bear interest at variable interest 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 under the Global Credit Facilities. The Global Credit Facilities are committed facilities and primarily used to support the Company's unsecured commercial paper program. During July 2015, the Company borrowed C$20 million under the Global Credit Facilities, and the Company repaid the borrowings in August 2015. No borrowings were outstanding at December 31, 2016 and 2015. In May 2016, the Company entered into an additional $25.0 million credit facility which expires May 24, 2017. The $25.0 million credit facility bears interest at variable interest rates, and the Company must pay a fee based on the unused portion of the $25.0 million commitment. No borrowings were outstanding as of December 31, 2016. All of the Company's medium-term notes (collectively, the Notes) provide for semi-annual interest payments and principal due at maturity. At December 31, 2016 and 2015, unamortized discounts and debt issuance costs on the Notes reduced the balance by $12.5 million and $11.8 million, respectively. During 2016, 2015 and 2014, the Company repurchased an aggregate of $1.2 million, $9.3 million, and $22.6 million, respectively, of its 6.80% medium-term notes which mature in June 2018. As a result, the Company recognized in financial services interest expense $0.1 million, $1.1 million, and $3.9 million of loss on extinguishment of debt, respectively, which included unamortized discounts and fees. During March 2016, $450.0 million of 3.88% medium-term notes matured, and the principal and accrued interest were paid in full. During September 2015, $600.0 million of 1.15% medium-term notes matured, and the principal and accrued interest were paid in full. The Company's senior unsecured notes provide for semi-annual interest payments and principal due at maturity. The Company used the proceeds from the issuance to repurchase shares of its common stock in 2015. Unamortized discounts and debt issuance costs on the senior unsecured notes at December 31, 2016 and 2015 reduced the balance by $8.7 million and $9.3 million, respectively. HDFS and the Company are subject to various operating and financial covenants related to the credit facilities and various operating covenants under the 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 HDFS’ ability to:
Under the current financial covenants of the Global Credit Facilities, the consolidated debt to equity ratio of HDFS cannot exceed 10.00 to 1.00 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 equity, in each case excluding the debt of HDFS and its subsidiaries, cannot exceed 0.70 to 1.00 as of the end of any fiscal quarter. No financial covenants are required under the Notes or the U.S. or Canadian asset-backed commercial paper conduit facilities. At December 31, 2016 and 2015, HDFS and the Company remained in compliance with all of these covenants. |
Asset-Backed Financing |
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Transfers and Servicing [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset-Backed Financing | Asset-Backed Financing The Company participates in asset-backed financing both through asset-backed securitization transactions and through asset-backed commercial paper conduit facilities. See Note 1 for more information on the Company's accounting for asset-backed financings and VIEs. The following table shows the assets and liabilities related to the on-balance sheet asset-backed financings included in the financial statements at December 31 (in thousands):
On-Balance Sheet Asset-Backed Securitization VIEs The Company transfers U.S. retail motorcycle finance receivables to SPEs which in turn issue secured notes to investors, with various maturities and interest rates, secured by future collections of the purchased U.S. retail motorcycle finance receivables. Each on-balance sheet asset-backed securitization SPE is a separate legal entity and the U.S. retail motorcycle finance receivables included in the asset-backed securitizations are only available for payment of the secured debt and other obligations arising from the asset-backed securitization transactions and are not available to pay other obligations or claims of the Company’s creditors until the associated secured debt and other obligations are satisfied. Restricted cash balances held by the SPEs are used only to support the securitizations. There are no amortization schedules for the secured notes; however, the debt is reduced monthly as available collections on the related U.S. retail motorcycle finance receivables are applied to outstanding principal. The secured notes’ contractual lives have various maturities ranging from 2019 to 2022. The Company is the primary beneficiary of its on-balance sheet asset-backed securitization VIEs because it retains servicing rights and a residual interest in the VIEs in the form of a debt security. As the servicer, the Company is the variable interest holder with the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance. As a residual interest holder, the Company has the obligation to absorb losses and the right to receive benefits which could potentially be significant to the VIE. There were no on-balance sheet asset-backed securitization transactions during 2016. In 2015, the Company transferred $1.3 billion of U.S. retail motorcycle finance receivables to SPEs. The SPEs in turn issued $700.0 million and $500.0 million ($697.6 million and $498.1 million net of discount and issuance costs), respectively, of secured notes through on-balance sheet asset-backed securitization transactions. At December 31, 2016, the Company's consolidated balance sheet included outstanding balances related to the following secured notes with the related maturity dates and interest rates (in thousands):
In addition, outstanding balances related to the following secured notes were included in the Company's consolidated balance sheet at December 31, 2015 and the Company completed repayment of those balances during 2016 (in thousands):
For the years ended December 31, 2016 and 2015, interest expense on the secured notes was $13.1 million and $17.2 million, respectively, which is included in financial services interest expense. The weighted average interest rate of the outstanding on-balance sheet asset-backed securitization transactions was 1.31% and 1.04% at December 31, 2016 and 2015, respectively. On-Balance Sheet Asset-Backed U.S. Commercial Paper Conduit Facilities VIE On December 14, 2016, the Company entered into a new revolving facility agreement with a third party bank-sponsored asset-backed U.S. commercial paper conduit, which provides for a total commitment of up to $300.0 million. Also on that date, the Company renewed its existing $600.0 million revolving facility agreement, which had expired on December 14, 2016, with the same third party bank-sponsored asset-backed U.S. commercial paper conduit. Availability under the revolving facilities (together, the U.S. Conduit Facilities) is based on, among other things, the amount of eligible U.S. retail motorcycle finance receivables held by the SPE as collateral. Under the U.S. Conduit Facilities, the Company may transfer U.S. retail motorcycle finance receivables to an SPE, which in turn may issue debt to the third party bank-sponsored asset-backed commercial paper conduit. The assets of the SPE are restricted as collateral for the payment of the debt or other obligations arising in the transaction and are not available to pay other obligations or claims of the Company’s creditors. The terms for this debt provide for interest on the outstanding principal based on prevailing commercial paper rates or LIBOR to the extent the advance is not funded by a conduit lender through the issuance of commercial paper plus, in each case, a program fee based on outstanding principal. The U.S. Conduit Facilities also provide for an unused commitment fee based on the unused portion of the total aggregate commitment of $900 million. There is no amortization schedule; however, the debt will be reduced monthly as available collections on the related finance receivables are applied to outstanding principal. Upon expiration of the U.S. Conduit Facilities, any outstanding principal will continue to be reduced monthly through available collections. Unless earlier terminated or extended by mutual agreement of the Company and the lenders, the U.S. Conduit Facilities have an expiration date of December 13, 2017. The Company is the primary beneficiary of its U.S. Conduit Facilities VIE because it retains servicing rights and a residual interest in the VIE in the form of a debt security. As the servicer, the Company is the variable interest holder with the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance. As a residual interest holder, the Company has the obligation to absorb losses and the right to receive benefits which could potentially be significant to the VIE. The VIE had no borrowings outstanding under the U.S. Conduit Facilities at December 31, 2016 or 2015; therefore, assets that the U.S. Conduit Facilities hold are restricted as collateral for the payment of fees associated with the unused portion of the total aggregate commitment. For the year ended December 31, 2016 and 2015, the interest expense was $1.3 million and $1.1 million, respectively, related to the unused portion of the total aggregate commitment. Interest expense on the U.S. Conduit Facilities is included in financial services interest expense. There was no weighted average interest rate at December 31, 2016 or 2015 as the Company had no outstanding borrowings under the U.S. Conduit Facilities during 2016 or 2015. On-Balance Sheet Asset-Backed Canadian Commercial Paper Conduit Facility In June 2016, the Company amended its facility agreement (Canadian Conduit) with a Canadian bank-sponsored asset-backed commercial paper conduit. Under the agreement, the Canadian Conduit is contractually committed, at the Company's option, to purchase eligible Canadian retail motorcycle finance receivables for proceeds up to C$240 million. The transferred assets are restricted as collateral for the payment of debt. The terms for this debt provide for interest on the outstanding principal based on prevailing market interest rates plus a specified margin. The Canadian Conduit also provides for a program fee and an unused commitment fee based on the unused portion of the total aggregate commitment of C$240 million. There is no amortization schedule; however, the debt is reduced monthly as available collections on the related finance receivables are applied to outstanding principal. Upon expiration of the Canadian Conduit, any outstanding principal will continue to be reduced monthly through available collections. The contractual maturity of the debt is approximately 5 years. Unless earlier terminated or extended by mutual agreement of the Company and the lenders, the Canadian Conduit expires on June 30, 2017. During 2016 and 2015, the Company transferred $71.1 million and $100.0 million, respectively, of Canadian retail motorcycle finance receivables to the Canadian Conduit for proceeds of $62.4 million and $87.5 million, respectively. For the years ended December 31, 2016 and 2015, the Company recorded interest expense of $2.7 million and $3.0 million, respectively, on the secured notes. Interest expense on the Canadian Conduit is included in financial services interest expense. The weighted average interest rate of the outstanding Canadian Conduit was 1.84% and 1.80% at December 31, 2016 and 2015. The Company is not the primary beneficiary of the Canadian bank-sponsored, multi-seller conduit VIE; therefore, the Company doesn’t consolidate the VIE. However, the Company treats the conduit facility as a secured borrowing as it maintains effective control over the assets transferred to the VIE and therefore doesn’t meet the requirements for sale accounting. As the Company participates in and does not consolidate the Canadian bank-sponsored, multi-seller conduit VIE, the maximum exposure to loss associated with this VIE, which would only be incurred in the unlikely event that all the finance receivables and underlying collateral have no residual value, is $23.3 million at December 31, 2016. The maximum exposure is not an indication of the Company's expected loss exposure. Off-Balance Sheet Asset-Backed Securitization VIE During the second quarter of 2016, the Company sold retail motorcycle finance receivables with a principal balance of $301.8 million into a securitization VIE that was not consolidated, recognized a gain of $9.3 million and received cash proceeds of $312.6 million. Similar to an on-balance sheet asset-backed securitization, the Company transferred U.S. retail motorcycle finance receivables to an SPE which in turn issued secured notes to investors, with various maturities and interest rates, secured by future collections of the purchased U.S. retail motorcycle finance receivables. The off-balance sheet asset-backed securitization SPE is a separate legal entity, and the U.S. retail motorcycle finance receivables included in the term asset-backed securitization are only available for payment of the secured debt and other obligations arising from the asset-backed securitization transaction and are not available to pay other obligations or claims of the Company’s creditors. In an on-balance sheet asset-backed securitization, the Company retains a financial interest in the VIE in the form of a debt security. As part of this off-balance sheet securitization, the Company did not retain any financial interest in the VIE beyond servicing rights and ordinary representations and warranties and related covenants. The Company is not the primary beneficiary of the off-balance sheet asset-backed securitization VIE because it only retained servicing rights and does not have the obligation to absorb losses or the right to receive benefits from the VIE which could potentially be significant to the VIE. Accordingly, this transaction met the accounting sale requirements under ASC Topic 860 and was recorded as a sale for accounting purposes. Upon the sale, the retail motorcycle finance receivables were removed from the Company’s balance sheet and a gain was recognized for the difference between the cash proceeds received, the assets derecognized and the liabilities recognized as part of the transaction. The gain on sale was included in financial services revenue in the Consolidated Statement of Income. At December 31, 2016, the assets of this off-balance sheet asset-backed securitization VIE were $236.7 million and represented the current unpaid principal balance of the retail motorcycle finance receivables, which was the Company’s maximum exposure to loss in the off-balance sheet VIE at December 31, 2016. This is based on the unlikely event that all the receivables have underwriting defects or other defects that trigger a violation of certain covenants and that the underlying collateral has no residual value. This maximum exposure is not an indication of expected losses. Servicing Activities The Company services all retail motorcycle finance receivables that it originates. When the Company transfers retail motorcycle finance receivables to SPEs through asset-backed financings, the Company retains the right to service the finance receivables and receives servicing fees based on the securitized finance receivables balance and certain ancillary fees. In on-balance sheet asset-backed financing, servicing fees are eliminated in consolidation and therefore are not recorded on a consolidated basis. In off-balance sheet asset-backed financings, servicing fees and ancillary fees are recorded in Financial Services revenue in the Consolidated Statement of Income. The fees the Company is paid for servicing represent adequate compensation, and, consequently, the Company does not recognize a servicing asset or liability. The Company recognized servicing fee income of $1.6 million during the year ended December 31, 2016. The unpaid principal balance of serviced retail motorcycle finance receivables at December 31 was as follows (in thousands):
The balance of serviced finance receivables 30 days or more delinquent at December 31 was as follows (in thousands):
Credit losses, net of recoveries for the serviced finance receivables for the years ended December 31 were as follows (in thousands):
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Income Taxes |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Taxes | Income Taxes Provision for income taxes for the years ended December 31 consists of the following (in thousands):
The components of income before income taxes for the years ended December 31 were as follows (in thousands):
The provision for income taxes differs from the amount that would be provided by applying the statutory U.S. corporate income tax rate due to the following items for the years ended December 31:
The principal components of the Company’s deferred tax assets and liabilities as of December 31 include the following (in thousands):
The Company reviews its deferred tax asset valuation allowances on a quarterly basis, or whenever events or changes in circumstances indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or consolidated group recording the net deferred tax asset is considered, along with any positive or negative evidence such as tax law changes. Since future financial results and tax law may differ from previous estimates, periodic adjustments to the Company’s valuation allowances may be necessary. At December 31, 2016, the Company had approximately $316.6 million state net operating loss carry-forwards expiring in 2031. At December 31, 2016 the Company also had Wisconsin research and development credit carryforwards of $12.7 million expiring in 2028. The Company had a deferred tax asset of $24.6 million as of December 31, 2016 for the benefit of these losses and credits. A valuation allowance of $4.6 million has been established against the deferred tax asset. The Company has foreign net operating losses (NOL) totaling $9.0 million as of December 31, 2016. It has a valuation allowance of $26.3 million against both the NOLs and other deferred tax assets of $17.3 million. The valuation allowance on foreign net operating losses increased by $5.7 million, reflecting movement related to realizability assessment on additional earnings and loss, as well as movements related to foreign currency rates. The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. Changes in the Company’s gross liability for unrecognized tax benefits, excluding interest and penalties, were as follows (in thousands):
The amount of unrecognized tax benefits as of December 31, 2016 that, if recognized, would affect the effective tax rate was $39.9 million. The total gross amount of expense related to interest and penalties associated with unrecognized tax benefits recognized during 2016 in the Company’s Consolidated Statements of Income was $0.5 million. The total gross amount of interest and penalties associated with unrecognized tax benefits recognized at December 31, 2016 in the Company’s Consolidated Balance Sheets was $28.1 million. The Company does not expect a significant increase or decrease to the total amounts of unrecognized tax benefits related to continuing operations during the fiscal year ending December 31, 2017. However, the Company is under regular audit by tax authorities. The Company believes that it has appropriate support for the positions taken on its tax returns and that its annual tax provision includes amounts sufficient to pay any assessments. Nonetheless, the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year. The Company or one of its subsidiaries files income tax returns in the United States federal and Wisconsin state jurisdictions and various other state and foreign jurisdictions. The Company is no longer subject to income tax examinations for Wisconsin state income taxes before 2012 or for United States federal income taxes before 2014. |
Employee Benefit Plans and Other Postretirement Benefits |
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans and Other Postretirement Benefits | Employee Benefit Plans and Other Postretirement Benefits The Company has a qualified defined benefit pension plan and several postretirement healthcare benefit plans, which cover employees of the Motorcycles segment. The Company also has unfunded supplemental employee retirement plan agreements (SERPA) with certain employees which were instituted to replace benefits lost under the Tax Revenue Reconciliation Act of 1993. Pension benefits are based primarily on years of service and, for certain plans, levels of compensation. Employees are eligible to receive postretirement healthcare benefits upon attaining age 55 after rendering at least 10 years of service to the Company. Some of the plans require employee contributions to partially offset benefit costs. Obligations and Funded Status: The following table provides the changes in the benefit obligations, fair value of plan assets and funded status of the Company’s pension, SERPA and postretirement healthcare plans as of the Company’s December 31, 2016 and 2015 measurement dates (in thousands):
Plan asset contributions and payments for 2015 have been adjusted to exclude benefits paid from general Company assets. Benefit Costs: Components of net periodic benefit costs for the years ended December 31 (in thousands):
Net periodic benefit costs are allocated among selling, administrative and engineering expense, cost of goods sold and inventory. The expected return on plan assets is calculated based on the market-related value of plan assets. The market-related value of plan assets is different from the fair value in that asset gains/losses are smoothed over a five year period. Unrecognized gains and losses related to plan obligations and assets are initially recorded in other comprehensive income and result from actual experience that differs from assumed or expected results, and the impacts of changes in assumptions. Unrecognized plan asset gains and losses not yet reflected in the market-related value of plan assets are not subject to amortization. Remaining unrecognized gains and losses that exceed 10% of the greater of the projected benefit obligation or the market-related value of plan assets are amortized to earnings over the estimated future service period of active plan participants. The impacts of plan amendments, if any, are amortized over the estimated future service period of plan participants at the time of the amendment. Amounts included in accumulated other comprehensive income, net of tax, at December 31, 2016 which have not yet been recognized in net periodic benefit cost are as follows (in thousands):
Amounts expected to be recognized in net periodic benefit cost, net of tax, during the year ended December 31, 2017 are as follows (in thousands):
Assumptions: Weighted-average assumptions used to determine benefit obligations and net periodic benefit cost at December 31 were as follows:
Pension and SERPA Accumulated Benefit Obligation: The Company’s pension and SERPA plans have a separately determined accumulated benefit obligation (ABO) and plan asset value. The ABO is the actuarial present value of benefits based on service rendered and current and past compensation levels. This differs from the projected benefit obligation (PBO) in that it includes no assumption about future compensation levels. The total ABO for all the Company’s pension and SERPA plans combined was $1.90 billion and $1.92 billion as of December 31, 2016 and 2015, respectively. The following table summarizes information related to the Company's qualified pension plan which had a PBO in excess of the fair value of plan assets at December 31 (in millions):
The fair value of the qualified pension plan assets was greater than the plan's ABO at December 31, 2016 and 2015. The Company’s SERPA plans, which can only be funded as claims are paid, had projected and accumulated benefit obligations of $52.3 million and $38.4 million, respectively, as of December 31, 2016 and $45.0 million and $35.8 million, respectively, as of December 31, 2015. Plan Assets: Pension Plan Assets - The Company’s investment objective is to ensure assets are sufficient to pay benefits while mitigating the volatility of retirement plan assets or liabilities recorded in the balance sheet. The Company mitigates volatility through asset diversification and partial asset/liability matching. The investment portfolio for the Company's pension plan assets contains a diversified blend of equity and fixed-income investments. The Company’s current overall targeted asset allocation as a percentage of total market value was approximately 63% equities and 37% fixed-income and cash. Assets are rebalanced regularly to keep the actual allocation in line with targets. Equity holdings primarily include investments in small-, medium- and large-cap companies in the U.S. (including Company stock), investments in developed and emerging foreign markets and other investments such as private equity and real estate. Fixed-income holdings consist of U.S. government and agency securities, state and municipal bonds, corporate bonds from diversified industries and foreign obligations. In addition, cash equivalent balances are maintained at levels adequate to meet near-term plan expenses and benefit payments. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews. Postretirement Healthcare Plan Assets - The Company's investment objective is to maximize the return on assets to help pay the benefits by prudently investing in equities, fixed income and alternative assets. The Company's current overall targeted asset allocation as a percentage of total market value was approximately 69% equities and 31% fixed-income and cash. Equity holdings primarily include investments in small-, medium-, and large-cap companies in the U.S., investments in developed and emerging foreign markets and other investments such as private equity and real estate. Fixed-income holdings consist of U.S. government and agency securities, state and municipal bonds, corporate bonds from diversified industries and foreign obligations. In addition, cash equivalent balances are maintained at levels adequate to meet near-term plan expenses and benefit payments. Investment risk is measured and monitored on an ongoing basis through quarterly investment portfolio reviews. The following tables present the fair values of the plan assets related to the Company’s pension and postretirement healthcare plans within the fair value hierarchy as defined in Note 6. The fair values of the Company’s pension plan assets as of December 31, 2016 were as follows (in thousands):
Included in the pension plan assets are 1,273,592 shares of the Company’s common stock with a market value of $74.3 million at December 31, 2016. The fair values of the Company’s postretirement healthcare plan assets as of December 31, 2016 were as follows (in thousands):
The fair values of the Company’s pension plan assets as of December 31, 2015 were as follows (in thousands):
Included in the pension plan assets are 1,273,592 shares of the Company’s common stock with a market value of $57.8 million at December 31, 2015. The fair values of the Company’s postretirement healthcare plan assets as of December 31, 2015 were as follows (in thousands):
No plan assets are expected to be returned to the Company during the fiscal year ending December 31, 2017. For 2017, the Company’s overall expected long-term rate of return is 7.25% for pension assets and 7.25% for postretirement healthcare plan assets. The expected long-term rate of return is based on the portfolio as a whole and not on the sum of the returns on individual asset categories. The return is based on historical returns adjusted to reflect the current view of the long-term investment market. Postretirement Healthcare Cost: The weighted-average healthcare cost trend rate used in determining the accumulated postretirement benefit obligation of the healthcare plans was as follows:
This healthcare cost trend rate assumption can have a significant effect on the amounts reported. A one-percentage-point change in the assumed healthcare cost trend rate would have the following effects (in thousands):
Future Contributions and Benefit Payments: In January 2017, the Company voluntarily contributed $25.0 million to further fund its qualified pension plan. No pension plan contributions are required in 2017. The Company expects it will continue to make on-going payments related to current benefits for SERPA and postretirement healthcare plans in 2017. The expected benefit payments for the next five years and thereafter were as follows (in thousands):
Defined Contribution Plans: The Company has various defined contribution benefit plans that in total cover substantially all full-time employees. Employees can make voluntary contributions in accordance with the provisions of their respective plan, which includes a 401(k) tax deferral option. The Company expensed $18.2 million, $18.0 million and $18.1 million for Company contributions during 2016, 2015 and 2014, respectively. |
Leases |
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Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases The Company operates certain administrative, manufacturing, warehouse and testing facilities and equipment under lease arrangements that are accounted for as operating leases. Total rental expense was $14.4 million, $15.0 million and $12.0 million for 2016, 2015 and 2014, respectively. Future minimum operating lease payments at December 31, 2016 were as follows (in thousands):
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Commitments and Contingencies |
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Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies The Company is subject to lawsuits and other claims related to environmental, product and other matters. In determining required reserves related to these items, the Company carefully analyzes cases and considers the likelihood of adverse judgments or outcomes, as well as the potential range of possible loss. The required reserves are monitored on an ongoing basis and are updated based on new developments or new information in each matter. Environmental Protection Agency Notice: In December 2009, the Company received formal, written requests for information from the United States Environmental Protection Agency (EPA) regarding: (i) certificates of conformity for motorcycle emissions and related designations and labels, (ii) aftermarket parts, and (iii) warranty claims on emissions related components. The Company promptly submitted written responses to the EPA’s inquiry and has engaged in discussions with the EPA. Since that time, the EPA delivered various additional requests for information to which the Company responded. More recently, in August 2016, the Company entered into a consent decree with the EPA regarding these issues (the Settlement). In the Settlement the Company agreed to, among other things, pay a fine, fund a three-year emissions mitigation project, and not sell tuning products unless they are approved by the EPA or California Air Resources Board. The Company anticipates the EPA will move the court to finalize the Settlement in the coming months. The Company has a reserve associated with this matter which is included in accrued liabilities in the Consolidated Balance Sheet, and as a result, if it is finalized, the Settlement would not have a material adverse effect on the Company's financial condition or results of operations. The Settlement is not final until it is approved by the court, and if it is not approved by the court, the Company cannot reasonably estimate the impact of any remedies the EPA might seek beyond the Company's current reserve for this matter. York Environmental Matters: The Company is involved with government agencies and groups of potentially responsible parties related to a matter involving the cleanup of soil and groundwater contamination at its York, Pennsylvania facility. The York facility was formerly used by the U.S. Navy and AMF prior to the purchase of the York facility by the Company from AMF in 1981. Although the Company is not certain as to the full extent of the environmental contamination at the York facility, it has been working with the Pennsylvania Department of Environmental Protection (PADEP) since 1986 in undertaking environmental investigation and remediation activities, including a site-wide remedial investigation/feasibility study (RI/FS). In January 1995, the Company entered into a settlement agreement (the Agreement) with the Navy, and the parties amended the Agreement in 2013 to address ordnance and explosive waste. The Agreement calls for the Navy and the Company to contribute amounts into a trust equal to 53% and 47%, respectively, of costs associated with environmental investigation and remediation activities at the York facility (Response Costs). The trust administers the payment of the Response Costs incurred at the York facility as covered by the Agreement. The Company has a reserve for its estimate of its share of the future Response Costs at the York facility which is included in accrued liabilities in the Consolidated Balance Sheets. While much of the work on the RI/FS is complete, it is still under agency review and given the uncertainty that exists concerning the nature and scope of additional environmental investigation and remediation that may ultimately be required under the RI/FS that is finally approved or otherwise at the York facility, the Company is unable to make a reasonable estimate of those additional costs, if any, that may result. The estimate of the Company's future Response Costs that will be incurred at the York facility is based on reports of independent environmental consultants retained by the Company, the actual costs incurred to date and the estimated costs to complete the necessary investigation and remediation activities. Product Liability Matters: The Company is involved in product liability suits related to the operation of its business. The Company accrues for claim exposures that are probable of occurrence and can be reasonably estimated. The Company also maintains insurance coverage for product liability exposures. The Company believes that its accruals and insurance coverage are adequate and that product liability suits will not have a material adverse effect on the Company’s consolidated financial statements. National Highway Traffic Safety Administration Matters: In July 2016, the National Highway Traffic Safety Administration (NHTSA) began an investigation into certain of the Company's model-year 2008-2011 motorcycles equipped with anti-lock braking systems (ABS). NHTSA’s investigation is in response to rider complaints related to brake failures. NHTSA noted that Harley-Davidson has a two-year brake fluid replacement interval that owners either are unaware of or ignore. The Company does not believe that a loss related to this matter is probable and no reserve has been established. However, it is possible that the outcome of NHTSA’s investigation could result in future costs to the Company. Given the uncertainty that still exists concerning the resolution of this matter, the Company cannot reasonably estimate these possible future costs, if any. |
Capital Stock |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Capital Stock | Capital Stock Common Stock: The Company is authorized to issue 800,000,000 shares of common stock of $0.01 par value. There were 175.9 million and 184.7 million common shares outstanding as of December 31, 2016 and 2015, respectively. During 2016, the Company retired 165.0 million shares of its treasury stock. During 2016, the Company repurchased 9.9 million shares of its common stock at a weighted-average price of $47. This includes 0.1 million shares of common stock that were repurchased from employees that surrendered stock to satisfy withholding taxes in connection with the vesting of restricted stock awards. The remaining repurchases were made pursuant to the following authorizations (in millions of shares):
1997 Authorization – The Company had an authorization from its Board of Directors (originally adopted December 1997) to repurchase shares of its outstanding common stock under which the cumulative number of shares repurchased, at the time of any repurchase, shall not exceed the sum of (1) the number of shares issued in connection with the exercise of stock options occurring on or after January 1, 2004, and (2) 1% of the issued and outstanding common stock of the Company on January 1 of the current year, adjusted for any stock split. 2007 Authorization – In December 2007, the Company’s Board of Directors separately authorized the Company to buy back up to 20.0 million shares of its common stock with no dollar limit or expiration date. 2014 Authorization – In February 2014, the Company’s Board of Directors separately authorized the Company to buy back up to 20.0 million shares of its common stock with no dollar limit or expiration date. 2015 Authorization – In June 2015, the Company’s Board of Directors separately authorized the Company to buy back up to 15.0 million shares of its common stock with no dollar limit or expiration date. 2016 Authorization – In February 2016, the Company’s Board of Directors separately authorized the Company to buy back up to 20.0 million shares of its common stock with no dollar limit or expiration date. Preferred Stock: The Company is authorized to issue 2,000,000 shares of preferred stock of $1.00 par value, none of which is outstanding. |
Share-Based Awards |
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-Based Awards | Share-Based Awards The Company has a share-based compensation plan which was approved by its Shareholders in April 2014 (Plan) under which the Board of Directors may grant to employees share-based awards including nonqualified stock options, stock appreciation rights (SARs), shares of restricted stock, restricted stock units (RSUs) and performance restricted stock units (PRSUs). PRSUs include a three-year performance period with vesting based 42.5% on achievement of net income targets, 42.5% on achievement of return on invested capital targets and 15.0% on achievement of new rider targets. Shares of restricted stock and RSUs granted under the Plan vest ratably over a three-year period with the first one-third of the grant vesting one year after the date of grant. Dividends are paid on shares of restricted stock, RSUs settled with stock and PRSUs settled with stock. Dividend equivalents are paid on RSUs and PRSUs settled with cash. The options and SARs granted under the Plan have an exercise price equal to the fair market value of the underlying stock at the date of grant and vest ratably over a three-year period with the first one-third of the grant becoming exercisable one year after the date of grant. The options and SARs expire 10 years from the date of grant. At December 31, 2016, there were 11.7 million shares of common stock available for future awards under the Plan. Restricted Stock and Performance Restricted Stock Awards Settled in Stock: Beginning in 2016, the Company granted certain eligible U.S. employees PRSUs that settle in Company stock. Beginning in 2014, the Company granted certain eligible U.S. employees RSUs that settle in Company stock. Prior to 2014, the Company granted restricted, nonvested stock. The fair value of RSUs and PRSUs settled in stock and restricted stock is determined based on the market price of the Company’s shares on the grant date. There were no outstanding restricted stock awards at December 31, 2016. The following table summarizes the RSUs and PRSUs settled in stock and restricted stock transactions for the year ended December 31, 2016 (in thousands except for per share amounts):
As of December 31, 2016, there was $23.7 million of unrecognized compensation cost related to RSUs and PRSUs settled in stock that is expected to be recognized over a weighted-average period of 1.9 years. Restricted Stock Awards Settled in Cash: Restricted stock units (RSUIs) and performance restricted stock units (PRSUIs) granted to certain eligible international employees vest under the same terms and conditions as RSUs and PRSUs settled in stock and restricted stock; however, they are settled in cash equal to their settlement date fair value. As a result, RSUIs and PRSUIs are recorded in the Company’s consolidated balance sheets as a liability until the date of vesting. The fair value of RSUIs and PRSUIs is determined based on the market price of the Company’s shares on the grant date. The following table summarizes the RSUI and PRSUI transactions for the year ended December 31, 2016 (in thousands except for per share amounts):
Stock Options: There were no stock options granted in 2016. In 2015 and 2014, the Company estimated the grant date fair value of its option awards granted using a lattice-based option valuation model. The Company believes that the lattice-based option valuation model provides a more precise estimate of fair value than the Black-Scholes option pricing model. Lattice-based option valuation models utilize ranges of assumptions over the expected term of the options. The Company used implied volatility to determine the expected volatility of its stock. The Company used historical data to estimate option exercise and employee termination within the valuation model. The expected term of options granted was derived from the output of the option valuation model and represents the average period of time that options granted are expected to be outstanding. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant. There were no stock options granted in 2016. Assumptions used in calculating the lattice-based fair value of options granted during 2015 and 2014 were as follows:
The following table summarizes the stock option transactions for the year ended December 31, 2016 (in thousands except for per share amounts):
The weighted-average fair value of options granted during the years ended December 31, 2015 and 2014 was $13 and $14, respectively. As of December 31, 2016, there was $1.0 million of unrecognized compensation cost related to stock options that is expected to be recognized over a weighted-average period of 1.0 year. The following table summarizes the aggregate intrinsic value related to options outstanding, exercisable and exercised as of and for the years ended December 31 (in thousands):
The Company’s policy is to issue new shares of common stock upon the exercise of employee stock options. Stock options outstanding at December 31, 2016 were as follows (options in thousands):
Stock Appreciation Rights (SARs): SARs vest under the same terms and conditions as options; however, they are settled in cash equal to their settlement date fair value. As a result, SARs are recorded in the Company’s consolidated balance sheets as a liability until the date of exercise. The fair value of each SAR award is estimated using a lattice-based valuation model. In accordance with ASC Topic 718, “Stock Compensation,” the fair value of each SAR award is recalculated at the end of each reporting period and the liability and expense adjusted based on the new fair value and the percent vested. No SARs were granted in 2016. The assumptions used to determine the fair value of the SAR awards at December 31, 2016 and 2015 were as follows:
The following table summarizes the SAR transactions for the year ended December 31, 2016 (in thousands except for per share amounts):
The weighted-average fair value of SARs granted during the years ended December 31, 2015 and 2014 was $13 and $14, respectively. |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share from continuing operations for the years ended December 31 (in thousands except per share amounts):
Options to purchase 1.4 million, 1.0 million and 0.5 million weighted-average shares of common stock outstanding during 2016, 2015 and 2014, respectively, were not included in the Company’s computation of dilutive securities because the exercise price was greater than the market price and therefore the effect would have been anti-dilutive. The Company has a share-based compensation plan under which employees may be granted share-based awards, including shares of restricted stock and restricted stock units (RSUs). Non-forfeitable dividends are paid on unvested shares of restricted stock and non-forfeitable dividend equivalents are paid on unvested RSUs. As such, shares of restricted stock and RSUs are considered participating securities under the two-class method of calculating earnings per share as described in ASC Topic 260, “Earnings per Share.” The two-class method of calculating earnings per share did not have a material impact on the Company’s earnings per share calculation as of December 31, 2016, 2015 and 2014. |
Reportable Segments and Geographic Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reportable Segments and Geographic Information | Reportable Segments and Geographic Information Reportable Segments: Harley-Davidson, Inc. is the parent company for the groups of companies doing business as Harley-Davidson Motor Company (HDMC) and Harley-Davidson Financial Services (HDFS). The Company operates in two segments: the Motorcycles & Related Products (Motorcycles) segment and the Financial Services segment. The Company’s reportable segments are strategic business units that offer different products and services and are managed separately based on the fundamental differences in their operations. The Motorcycles segment consists of HDMC which designs, manufactures and sells at wholesale on-road Harley-Davidson motorcycles as well as motorcycle parts, accessories, general merchandise and related services. The Company’s products are sold to retail customers through a network of independent dealers. The Company conducts business on a global basis, with sales in the United States, Canada, Latin America, Europe/Middle East/Africa (EMEA) and the Asia Pacific region. The Financial Services reportable segment consists of HDFS which provides wholesale and retail financing and provides insurance and insurance-related programs primarily to Harley-Davidson dealers and their retail customers. HDFS conducts business principally in the United States and Canada. Information by segment is set forth below for the years ended December 31 (in thousands):
Financial Services revenue includes $4.4 million, $6.9 million and $8.1 million of interest that HDMC paid to HDFS on wholesale finance receivables in 2016, 2015 and 2014, respectively. The offsetting cost of these interest incentives was recorded as a reduction to Motorcycles revenue. Information by segment is set forth below as of December 31 (in thousands):
Geographic Information: Included in the consolidated financial statements are the following amounts relating to geographic locations for the years ended December 31 (in thousands):
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Related Party Transactions |
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Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions A director of the Company is Chairman and Chief Executive Officer and an equity owner of Fred Deeley Imports Ltd. (Deeley Imports), the exclusive distributor of the Company’s motorcycles in Canada until August 2015. On August 4, 2015, the Company completed its purchase of certain assets and liabilities from Deeley Imports including, among other things, the acquisition of the exclusive right to distribute the Company's motorcycles and other products in Canada. As a result of the acquisition, the Company no longer does business with Deeley Imports. Refer to Note 3 for further details. The Company recorded Motorcycles and Related Products revenue and Financial Services revenue from Deeley Imports during 2015 and 2014 of $117.3 million and $194.8 million, respectively. The Company recorded no revenue from Deeley Imports during 2016. The Company had no finance receivables balances due from Deeley Imports at December 31, 2016 and 2015. Upon the termination of the distribution agreement between the Company and Deeley Imports, the Company entered into dealer agreements with approximately 66 dealers in Canada, all of which had preexisting dealer agreements with Deeley Imports. These new Canadian dealer agreements included an agreement with Trev Deeley Motorcycles for the operation of a Harley-Davidson dealership located in Richmond, British Columbia. Trev Deeley Motorcycles is owned by the Darren James 2014 Trust, of which a director of the Company is the sole trustee and his son is the beneficiary. The Company recorded Motorcycles and Related Products revenue and Financial Services revenue from Trev Deeley Motorcycles during 2016 and 2015 of $5.3 million and $1.4 million, respectively, and had finance receivables balances due from Trev Deeley Motorcycles of $0.5 million and $0.3 million at December 31, 2016 and 2015, respectively. |
Supplemental Consolidating Data |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Supplemental Consolidating Data | Supplemental Consolidating Data The supplemental consolidating data for the periods noted is presented for informational purposes. The supplemental consolidating data may be different than segment information presented elsewhere due to the allocation of intercompany eliminations to reporting segments. All supplemental data is presented in thousands.
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Subsequent Events |
12 Months Ended |
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Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events In January 2017, the Company transferred $333.4 million of U.S. retail motorcycle finance receivables to an SPE which, in turn, issued $300.0 million of debt to the U.S. Conduit Facilities. |
Consolidated Valuation and Qualifying Accounts |
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Valuation and Qualifying Accounts [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidated Valuation And Qualifying Accounts | CONSOLIDATED VALUATION AND QUALIFYING ACCOUNTS Years ended December 31, 2016, 2015 and 2014 (In thousands)
through an off-balance sheet asset-backed securitization transaction (see Note 11 for additional information).
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Summary of Significant Accounting Policies (Policies) |
12 Months Ended |
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Dec. 31, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Principles of Consolidation and Basis of Presentation | The consolidated financial statements include the accounts of Harley-Davidson, Inc. and its wholly-owned subsidiaries (the Company), including the accounts of the groups of companies doing business as Harley-Davidson Motor Company (HDMC) and Harley-Davidson Financial Services (HDFS). In addition, certain variable interest entities (VIEs) related to secured financing are consolidated as the Company is the primary beneficiary. All intercompany accounts and transactions are eliminated. All of the Company’s subsidiaries are wholly owned and are included in the consolidated financial statements. Substantially all of the Company’s international subsidiaries use their respective local currency as their functional currency. Assets and liabilities of international subsidiaries have been translated at period-end exchange rates, and revenues and expenses have been translated using average exchange rates for the period. Monetary assets and liabilities denominated in a currency that is different from an entity's functional currency are remeasured from the transactional currency to the entity's functional currency on a monthly basis. The effect of this remeasurement is reported in Motorcycle and Related Products cost of goods sold. |
Use of Estimates | The preparation of financial statements in conformity with U.S. generally accepted accounting principles (U.S. GAAP) requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. |
Cash and Cash Equivalents | The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. |
Marketable Securities | The Company’s available-for-sale securities are carried at fair value with any unrealized gains or losses reported in other comprehensive income. During 2016 and 2015, the Company recognized gross unrealized losses of $0.2 million and $0.6 million, respectively, or losses of $0.1 million and $0.4 million, net of tax, respectively, to adjust amortized cost to fair value. The marketable securities have contractual maturities that come due over the next 4 months. The Company's trading securities relate to investments held by the Company to fund certain deferred compensation obligations. The trading securities are carried at fair value with gains and losses recorded in net income and investments are included in other long-term assets on the consolidated balance sheets. |
Accounts Receivable, Net | The Company’s motorcycles and related products are sold to independent dealers outside the U.S. and Canada generally on open account and the resulting receivables are included in accounts receivable in the Company’s consolidated balance sheets. The allowance for doubtful accounts deducted from total accounts receivable was $2.7 million and $2.9 million as of December 31, 2016 and 2015, respectively. Accounts receivable are written down once management determines that the specific customer does not have the ability to repay the balance in full. The Company’s sales of motorcycles and related products in the U.S. and Canada are financed by the purchasing dealers through HDFS and the related receivables are included in finance receivables in the consolidated balance sheets. |
Finance Receivables, Net | Finance receivables include both retail and wholesale finance receivables, net, including amounts held by VIEs. Finance receivables are recorded in the financial statements at amortized cost net of an allowance for credit losses. The provision for credit losses on finance receivables is charged to earnings in amounts sufficient to maintain the allowance for credit losses at a level that is adequate to cover estimated losses of principal inherent in the existing portfolio. Portions of the allowance for credit losses are specified to cover estimated losses on finance receivables specifically identified for impairment. The unspecified portion of the allowance covers estimated losses on finance receivables which are collectively reviewed for impairment. Finance receivables are considered impaired when management determines it is probable that the Company will be unable to collect all amounts due according to the terms of the loan agreement. The retail portfolio primarily consists of a large number of small balance, homogeneous finance receivables. The Company performs a periodic and systematic collective evaluation of the adequacy of the retail allowance for credit losses. The Company utilizes loss forecast models which consider a variety of factors including, but not limited to, historical loss trends, origination or vintage analysis, known and inherent risks in the portfolio, the value of the underlying collateral, recovery rates and current economic conditions including items such as unemployment rates. Retail finance receivables are not evaluated individually for impairment prior to charge-off and therefore are not reported as impaired loans. The wholesale portfolio is primarily composed of large balance, non-homogeneous loans. The Company’s wholesale allowance evaluation is first based on a loan-by-loan review. A specific allowance for credit losses is established for wholesale finance receivables determined to be individually impaired when management concludes that the borrower will not be able to make full payment of contractual amounts due based on the original terms of the loan agreement. The impairment is determined based on the cash that the Company expects to receive discounted at the loan’s original interest rate or the fair value of the collateral, if the loan is collateral-dependent. Finance receivables in the wholesale portfolio that are not individually evaluated for impairment are segregated, based on similar risk characteristics, according to the Company’s internal risk rating system and collectively evaluated for impairment. The related allowance is based on factors such as the Company’s past loan loss experience, the specific borrower’s financial performance as well as ability to repay, current economic conditions as well as the value of the underlying collateral. Impaired finance receivables also include loans that have been modified in troubled debt restructurings as a concession to borrowers experiencing financial difficulty. Generally, it is the Company’s policy not to change the terms and conditions of finance receivables. However, to minimize the economic loss, the Company may modify certain impaired finance receivables in troubled debt restructurings. Total restructured finance receivables are not significant. Repossessed inventory representing recovered collateral on impaired finance receivables is recorded at the lower of cost or net realizable value. In the period during which the collateral is repossessed, the related finance receivable is adjusted to the fair value of the collateral through a charge to the allowance for credit losses and reclassified to repossessed inventory. |
Asset-Backed Financing | The Company participates in asset-backed financing both through asset-backed securitization transactions and through asset-backed commercial paper conduit facilities. In the Company's asset-backed financing programs, the Company transfers retail motorcycle finance receivables to special purpose entities (SPE), which are considered VIEs under U.S. GAAP. Each SPE then converts those assets into cash, through the issuance of debt. The Company retains servicing rights for all of the retail motorcycle finance receivables transferred to SPEs as part of an asset-backed financing. The accounting treatment for asset-backed financings depends on the terms of the related transaction and the Company’s continuing involvement with the VIE. In transactions where the Company has power over the significant activities of the VIE and has an obligation to absorb losses or the right to receive benefits from the VIE that are potentially significant to the VIE, the Company is the primary beneficiary of the VIE and consolidates the VIE within its consolidated financial statements. On a consolidated basis, the asset-backed financing is treated as a secured borrowing in this type of transaction and is referred to as an on-balance sheet asset-backed financing. In transactions where the Company is not the primary beneficiary of the VIE, the Company must determine whether it can achieve a sale for accounting purposes under ASC Topic 860, "Transfers and Servicing." To achieve a sale for accounting purposes, the assets being transferred must be legally isolated, not be constrained by restrictions from further transfer, and be deemed to be beyond the Company’s control. If the Company does not meet all these criteria for sale accounting, then the transaction is accounted for as a secured borrowing and is referred to as an on-balance sheet asset-backed financing. If the Company meets all three of the sale criteria above, the transaction is recorded as a sale for accounting purposes and is referred to as an off-balance sheet asset-backed financing. Upon sale, the retail motorcycle finance receivables are removed from the Company’s balance sheet and a gain or loss is recognized for the difference between the cash proceeds received, the assets derecognized, and the liabilities recognized as part of the transaction. The gain or loss on sale is included in Financial Services revenue in the Consolidated Statement of Income. The Company is not required, and does not currently intend, to provide any additional financial support to the on or off-balance sheet VIEs associated with these transactions. Investors and creditors in these transactions only have recourse to the assets held by the VIEs. |
Inventories | Inventories are valued at the lower of cost or market. Substantially all inventories located in the United States are valued using the last-in, first-out (LIFO) method. Other inventories totaling $221.7 million at December 31, 2016 and $266.6 million at December 31, 2015 are valued at the lower of cost or market using the first-in, first-out (FIFO) method. |
Property, Plant and Equipment | Property, plant and equipment is recorded at cost. Depreciation is determined on the straight-line basis over the estimated useful lives of the assets. The following useful lives are used to depreciate the various classes of property, plant and equipment: buildings – 30 years; building equipment and land improvements – 7 years; machinery and equipment – 3 to 10 years; furniture and fixtures – 5 years; and software – 3 to 7 years. Accelerated methods of depreciation are used for income tax purposes. |
Goodwill | Goodwill represents the excess of acquisition cost over the fair value of the net assets purchased. Goodwill is tested for impairment, based on financial data related to the reporting unit to which it has been assigned, at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The impairment test involves comparing the estimated fair value of the reporting unit associated with the goodwill to its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, goodwill must be adjusted to its implied fair value. |
Long-lived Assets | The Company periodically evaluates the carrying value of long-lived assets to be held and used when events and circumstances warrant such review. If the carrying value of a long-lived asset is considered impaired, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset for assets to be held and used. The Company also reviews the useful life of its long-lived assets when events and circumstances indicate that the actual useful life may be shorter than originally estimated. In the event that the actual useful life is deemed to be shorter than the original useful life, depreciation is adjusted prospectively so that the remaining book value is depreciated over the revised useful life. Asset groups classified as held for sale are measured at the lower of carrying amount or fair value less cost to sell, and a loss is recognized for any initial adjustment required to reduce the carrying amount to the fair value less cost to sell in the period the held for sale criteria are met. The fair value less cost to sell must be assessed each reporting period the asset group remains classified as held for sale. Gains or losses not previously recognized resulting from the sale of an asset group will be recognized on the date of sale. |
Product Warranty and Recall Campaigns | The Company currently provides a standard two-year limited warranty on all new motorcycles sold worldwide, except for Japan, where the Company provides a standard three-year limited warranty on all new motorcycles sold. In addition, the Company offers a one-year warranty for Parts & Accessories (P&A). The warranty coverage for the retail customer generally begins when the product is sold to a retail customer. The Company maintains reserves for future warranty claims using an estimated cost, which are based primarily on historical Company claim information. Additionally, the Company has from time to time initiated certain voluntary recall campaigns. The Company reserves for all estimated costs associated with recalls in the period that management approves and commits to the recall. |
Derivative Financial Instruments | The Company is exposed to certain risks such as foreign currency exchange rate risk, interest rate risk and commodity price risk. To reduce its exposure to such risks, the Company selectively uses derivative financial instruments. All derivative transactions are authorized and executed pursuant to regularly reviewed policies and procedures, which prohibit the use of financial instruments for speculative trading purposes. All derivative instruments are recognized on the balance sheet at fair value (see Note 7). In accordance with ASC Topic 815, “Derivatives and Hedging,” the accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. Changes in the fair value of derivatives that are designated as fair value hedges, along with the gain or loss on the hedged item, are recorded in current period earnings. For derivative instruments that are designated as cash flow hedges, the effective portion of gains and losses that result from changes in the fair value of derivative instruments is initially recorded in other comprehensive income (OCI) and subsequently reclassified into earnings when the hedged item affects income. The Company assesses, at both the inception of each hedge and on an on-going basis, whether the derivatives that are used in its hedging transactions are highly effective in offsetting changes in cash flows of the hedged items. Any ineffective portion is immediately recognized in earnings. No component of a hedging derivative instrument’s gain or loss is excluded from the assessment of hedge effectiveness. Derivative instruments that do not qualify for hedge accounting are recorded at fair value and any changes in fair value are recorded in current period earnings. |
Revenue Recognition | Motorcycles and Related Products Revenue Recognition – Sales are recorded when title and ownership is transferred, which is generally when products are shipped to wholesale customers (independent dealers). The Company may offer sales incentive programs to both wholesale and retail customers designed to promote the sale of motorcycles and related products. The total costs of these programs are generally recognized as revenue reductions and are accrued at the later of the date the related sales are recorded or the date the incentive program is both approved and communicated. Financial Services Revenue Recognition – Interest income on finance receivables is recorded as earned and is based on the average outstanding daily balance for wholesale and retail receivables. Accrued and uncollected interest is classified with finance receivables. Certain loan origination costs related to finance receivables, including payments made to dealers for certain retail loans, are deferred and recorded within finance receivables, and amortized over the estimated life of the contract. Retail finance receivables are contractually delinquent if the minimum payment is not received by the specified due date. Retail finance receivables are generally charged-off when the receivable is 120 days or more delinquent, the related asset is repossessed or the receivable is otherwise deemed uncollectible. All retail finance receivables accrue interest until either collected or charged-off. Accordingly, as of December 31, 2016 and 2015, all retail finance receivables are accounted for as interest-earning receivables. Wholesale finance receivables are delinquent if the minimum payment is not received by the contractual due date. Wholesale finance receivables are written down once management determines that the specific borrower does not have the ability to repay the loan in full. Interest continues to accrue on past due finance receivables until the date the finance receivable becomes uncollectible and the finance receivable is placed on non-accrual status. The Company will resume accruing interest on these accounts when payments are current according to the terms of the loans and future payments are reasonably assured. While on non-accrual status, all cash received is applied to principal or interest as appropriate. Insurance and protection product commissions as well as commissions on the sale of extended service contracts are recognized when contractually earned. |
Research and Development Expenses | Expenditures for research activities relating to product development and improvement are charged against income as incurred and included within selling, administrative and engineering expenses in the consolidated statement of income. |
Advertising Costs | The Company expenses the production cost of advertising the first time the advertising takes place. Advertising costs relate to the Company’s efforts to promote its products and brands through the use of media. |
Shipping and Handling Costs | The Company classifies shipping and handling costs as a component of cost of goods sold. |
Share-Based Award Compensation Costs | The Company recognizes the cost of its share-based awards in its statement of income. The cost of each share-based equity award is based on the grant date fair value and the cost of each share-based cash-settled award is based on the settlement date fair value. Share-based award expense is recognized on a straight-line basis over the service or performance periods of the awards. The expense recognized reflects the number of awards that are ultimately expected to vest based on the service and, if applicable, performance requirements of each award. |
Income Tax Expense | The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. |
New Accounting Standards | Accounting Standards Recently Adopted In February 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-02 Amendments to the Consolidation Analysis (ASU 2015-02). ASU 2015-02 amends the guidance within Accounting Standards Codification (ASC) Topic 810, "Consolidation,” to change the analysis that a reporting entity must perform to determine whether it should consolidate certain legal entities. The Company adopted ASU 2015-02 on January 1, 2016. The adoption of ASU 2015-02 had no impact on the Company's consolidated financial statements. In April 2015, the FASB issued ASU No. 2015-03 Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03). ASU 2015-03 amends the guidance within ASC Topic 835, "Interest," to require that debt issuance costs related to a recognized debt liability be presented on the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt premiums and discounts. In August 2015, the FASB further issued ASU No. 2015-15 Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements (ASU 2015-15). ASU 2015-15 amends the guidance within ASC Topic 835, “Interest,” to allow an entity to defer and present debt issuance costs associated with a line of credit arrangement as an asset, regardless of whether there are any outstanding borrowings on the line of credit arrangement. The Company adopted ASU 2015-03 and ASU 2015-15 retrospectively on January 1, 2016. As a result, debt issuance costs related to its medium-term notes, senior unsecured notes, and term asset-backed securitizations are now classified as a reduction to the carrying amount of the related debt on the balance sheet. Debt issuance costs previously recorded in other current assets and other long-term assets totaling $18.2 million as of December 31, 2015 on the balance sheet have been reclassified to current portion of long-term debt, net and long-term debt, net to reflect the adoption of the new guidance. The required new disclosures are also presented in Note 10. The Company will continue to classify debt issuance costs related to line of credit arrangements, which include its asset-backed commercial paper and unsecured commercial paper programs and its credit facilities, as an asset, regardless of whether it has any outstanding borrowings on the line of credit arrangements. In April 2015, the FASB issued ASU No. 2015-05 Customer's Accounting for Fees Paid in a Cloud Computing Arrangement, which amends ASC 350-40, "Intangibles-Goodwill and Other Internal-Use Software" (ASU 2015-05). ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes a software license. If an arrangement includes a software license, the accounting for the license will be consistent with the licenses of other intangible assets. If the arrangement does not include a license, the arrangement will be accounted for as a service contract. The Company adopted ASU 2015-05 prospectively on January 1, 2016. The adoption of ASU 2015-05 had no material impact on the Company's consolidated financial statements. In May 2015, the FASB issued ASU No. 2015-07, Fair Value Measurement (Topic 820): Disclosures for Investments in Certain Entities that Calculate Net Asset Value per Share (or its Equivalent) that eliminates the requirement to classify investments measured using the NAV practical expedient in the fair value hierarchy table. Instead, entities will be required to disclose the fair values of such investments so that the financial statement users can reconcile amounts reported in the fair value hierarchy table with the amounts reported in the balance sheet. The Company adopted this new guidance on a retrospective basis in 2016 which resulted in a change to the presentation of pension and postretirement plan assets in Note 13 of the Notes to Consolidated Financial Statements. In November 2015, the FASB issued ASU No. 2015-17 Income Taxes (Topic 740): Balance Sheet Classification of Deferred Taxes (ASU 2015-17). ASU 2015-17 eliminates the requirement for a Company to separate deferred income tax liabilities and assets into current and noncurrent amounts on a classified statement of financial position and requires that deferred tax liabilities and assets be classified as noncurrent. The Company adopted ASU 2015-17 on December 31, 2016 on a prospective basis and prior period balances were not adjusted. Accounting Standards Not Yet Adopted In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09 Revenue from Contracts with Customers (ASU 2014-09). ASU 2014-09 is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In August 2015, the FASB issued ASU No. 2015-14 Revenue from Contracts with Customers: Deferral of Effective Date (ASU 2015-14) to defer the effective date of the new revenue recognition standard by one year to fiscal years beginning after December 15, 2017 and interim periods therein. The guidance may be adopted using either a full retrospective or modified retrospective approach. The Company expects to adopt the new revenue recognition guidance using the modified retrospective method. The Company's efforts to evaluate the impact and to prepare for its adoption on January 1, 2018 are well underway. Based on the work completed to date (which includes the review of significant domestic revenue sources), the Company expects that the recognition of revenue for domestic sales of motorcycles, parts and accessories and general merchandise products under the new revenue recognition guidance will occur at a point in time, which is consistent with current practice. The Company is continuing to evaluate its international revenue sources for potential impact, but based on the work completed to date, expects its conclusions will be consistent with those reached for domestic revenue sources. Interest income, which makes up the vast majority of revenue in the Financial Services segment, is not within the scope of the new standard. In July 2015, the FASB issued ASU No. 2015-11 Inventory (Topic 330): Simplifying the Measurement of Inventory (ASU 2015-11). ASU 2015-11 simplifies the subsequent measurement of inventory by using only the lower of cost or net realizable value. ASU 2015-11 does not apply to inventory measured using the last-in, first-out method. The Company is required to adopt ASU 2015-11 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016 on a prospective basis. Early adoption will be permitted. The adoption of ASU 2015-11 will not have a material effect on the Company’s consolidated financial statements. In January 2016, the FASB issued ASU No. 2016-01 Financial Instruments-Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities (ASU 2016-01). ASU 2016-01 enhances the existing financial instruments reporting model by modifying fair value measurement tools, simplifying impairment assessments for certain equity instruments, and modifying overall presentation and disclosure requirements. The Company is required to adopt ASU 2016-01 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017 on a prospective basis. The Company is currently evaluating the impact of adoption of ASU 2016-01. In February 2016, the FASB issued ASU No. 2016-02 Leases (Topic 842) (ASU 2016-02). ASU 2016-02 amends the existing lease accounting model by requiring a lessee to recognize the rights and obligations resulting from certain leases as assets and liabilities on the balance sheet. ASU 2016-02 also requires a company to disclose key information about their leasing arrangements. The Company is required to adopt ASU 2016-02 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2018 using a modified retrospective approach. Early adoption is permitted. The Company is currently evaluating the impact of adoption of ASU 2016-02. In March 2016, the FASB issued ASU No. 2016-09 Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting (ASU 2016-09). ASU 2016-09 amends the guidance on several aspects of accounting for share-based payment transactions, including income tax consequences, classification of awards as either equity or liabilities, accounting for forfeitures, and classification on the statement of cash flows. The Company is required to adopt ASU 2016-09 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016 on both a retrospective and prospective basis dependent upon the nature of the subtopic. Early adoption is permitted, including adoption in an interim period. The Company does not expect the adoption of ASU 2016-09 to have a material impact on its financial statements. In July 2016, the FASB issued ASU No. 2016-13 Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13). ASU 2016-13 changes how to recognize expected credit losses on financial assets. The standard requires a more timely recognition of credit losses on loans and other financial assets and also provides additional transparency about credit risk. The current credit loss standard generally requires that a loss actually be incurred before it is recognized, while the new standard will require recognition of full lifetime expected losses upon initial recognition of the financial instrument. The Company is required to adopt ASU 2016-13 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2019 on a modified retrospective basis. Early adoption is permitted for fiscal years beginning after December 15, 2018. An entity should apply the standard by recording a cumulative effect adjustment to retained earnings upon adoption. Adoption of this standard will impact how the Company recognizes credit losses on its financial instruments. The Company is currently evaluating the impact of adoption of ASU 2016-13 but anticipates the adoption of ASU 2016-13 will result in an increase in the annual provision for credit losses and the related allowance for credit losses. In August 2016, the FASB issued ASU No. 2016-15 Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments (ASU 2016-15). ASU 2016-15 addresses eight specific cash flow issues with the objective of reducing diversity in practice regarding how certain cash receipts and cash payments are presented in the statement of cash flows. The standard provides guidance on the classification of the following items: (1) debt prepayment or debt extinguishment costs, (2) settlement of zero-coupon debt instruments, (3) contingent consideration payments made after a business combination, (4) proceeds from the settlement of insurance claims, (5) proceeds from the settlement of corporate-owned life insurance policies, (6) distributions received from equity method investments, (7) beneficial interests in securitization transactions, and (8) separately identifiable cash flows. The Company is required to adopt ASU 2016-15 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017 on a retrospective basis. Early adoption is permitted, including adoption in an interim period. The Company is currently evaluating the impact of adoption of ASU 2016-15. In October 2016, the FASB issued ASU No. 2016-16 Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory (ASU 2016-16). ASU 2016-16 states that an entity should recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Two common assets included in the scope of the ASU are intellectual property and property, plant and equipment. The Company is required to adopt ASU 2016-16 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017 using a modified retrospective approach with a cumulative-effect adjustment to retained earnings. Early adoption is permitted as of the beginning of an annual reporting period. The Company does not expect the adoption of ASU 2016-16 to have a material impact on its financial statements. In November 2016, the FASB issued ASU No. 2016-18 Statement of Cash Flows (Topic 230): Restricted Cash (ASU 2016-18). ASU 2016-18 requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As such, restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and ending-of-period total amounts shown on the statement of cash flows. The Company is required to adopt ASU 2016-18 for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017 on a retrospective basis. Early adoption is permitted, including adoption in an interim period. The Company reported a $43.5 million financing cash inflow related to a change in restricted cash for the period ended December 31, 2016. Subsequent to the adoption of ASU 2016-18 the change in restricted cash would be excluded from the change in cash flows from financing activities and included in the change in total cash, restricted cash and cash equivalents as reported in the statement of cash flows. |
Fair Value of Financial Instruments | Cash and Cash Equivalents and Restricted Cash – With the exception of certain cash equivalents, the carrying value of these items in the financial statements is based on historical cost. The historical cost basis for these amounts is estimated to approximate their respective fair values due to the short maturity of these instruments. Fair value is based on Level 1 or Level 2 inputs. Marketable Securities – The carrying value of marketable securities in the financial statements is based on fair value. The fair value of marketable securities is determined primarily based on quoted prices for identical instruments or on quoted market prices of similar financial assets. Fair value is based on Level 1 or Level 2 inputs. Finance Receivables, Net – The carrying value of retail and wholesale finance receivables in the financial statements is amortized cost less an allowance for credit losses. The fair value of retail finance receivables is generally calculated by discounting future cash flows using an estimated discount rate that reflects current credit, interest rate and prepayment risks associated with similar types of instruments. Fair value is determined based on Level 3 inputs. The amortized cost basis of wholesale finance receivables approximates fair value because they either are short-term or have interest rates that adjust with changes in market interest rates. Derivatives – Forward contracts for foreign currency exchange and commodities are derivative financial instruments and are carried at fair value on the balance sheet. The fair value of these contracts is determined using quoted forward rates and prices. Fair value is calculated using Level 2 inputs. Debt – The carrying value of debt in the financial statements is generally amortized cost. The carrying value of unsecured commercial paper approximates fair value due to its short maturity. Fair value is calculated using Level 2 inputs. The carrying value of debt provided under the Canadian Conduit approximates fair value since the interest rates charged under the facility are tied directly to market rates and fluctuate as market rates change. Fair value is calculated using Level 2 inputs. The fair values of the medium-term notes and senior unsecured notes are estimated based upon rates currently available for debt with similar terms and remaining maturities. Fair value is calculated using Level 2 inputs. The fair value of the debt related to term asset-backed securitization transactions is estimated based on pricing currently available for transactions with similar terms and maturities. Fair value is calculated using Level 2 inputs. |
Summary of Significant Accounting Policies (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Marketable Securities | Marketable Securities – The Company’s marketable securities consisted of the following at December 31 (in thousands):
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Changes In Warranty And Safety Recall Liability | Changes in the Company’s warranty and recall liability were as follows (in thousands):
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Additional Balance Sheet and Cash Flow Information (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories, Net | Inventories, net (in thousands):
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Property, Plant And Equipment, At Cost | Property, plant and equipment, at cost (in thousands):
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Accrued Liabilities | Accrued liabilities (in thousands):
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Schedule of Cash Flow, Supplemental Disclosures | The reconciliation of net income to net cash provided by operating activities of continuing operations is as follows (in thousands):
Cash paid during the period for interest and income taxes (in thousands):
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Acquisition (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||
Summary of Fair Values of Assets Acquired and Liabilities Assumed | The following table summarizes the fair values of the Deeley Imports assets acquired and liabilities assumed at the date of acquisition (in thousands):
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Goodwill and Intangible Assets Goodwill and Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Goodwill | The following table summarizes changes in the carrying amount of goodwill in the Motorcycles segment for the following years ended December 31 (in thousands):
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Schedule of Finite-Lived Intangible Assets Other than Goodwill | The following table summarizes the Motorcycles segment intangible assets other than goodwill at December 31 (in thousands):
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Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | The Company estimates future amortization to be as follows (in thousands):
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Finance Receivables (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Finance Receivables | Finance receivables, net at December 31 for the past five years were as follows (in thousands):
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Contractual Maturities Of Finance Receivables | On December 31, 2016, contractual maturities of finance receivables were as follows (in thousands):
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Changes In The Allowance For Finance Credit Losses On Finance Receivables | Changes in the allowance for credit losses on finance receivables by portfolio for the year ended December 31 were as follows (in thousands):
through an off-balance sheet asset-backed securitization transaction (see Note 11 for additional information). There were no finance receivables individually evaluated for impairment on December 31, 2016 or 2015. The allowance for credit losses and finance receivables by portfolio, collectively evaluated for impairment, at December 31 was as follows (in thousands):
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Past Due Financing Receivables | An analysis of the aging of past due finance receivables at December 31 was as follows (in thousands):
The recorded investment of retail and wholesale finance receivables, excluding non-accrual status finance receivables, that were contractually past due 90 days or more at December 31 for the past five years was as follows (in thousands):
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Financing Receivable Credit Quality Indicators | The recorded investment of retail finance receivables, by credit quality indicator, at December 31 was as follows (in thousands):
The recorded investment of wholesale finance receivables, by internal credit quality indicator, at December 31 was as follows (in thousands):
|
Fair Value Measurements (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Assets and Liabilities Measured at Fair Value on a Recurring Basis | The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis as of December 31 (in thousands):
|
Fair Value of Financial Instruments (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary Of The Fair Value And Carrying Value Of The Company's Financial Instruments | The following table summarizes the fair value and carrying value of the Company’s financial instruments at December 31 (in thousands):
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Derivative Instruments and Hedging Activities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Derivative Instrument Fair Value | The following tables summarize the fair value of the Company’s derivative financial instruments at December 31 (in thousands):
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Gain/(Loss) On Derivative Cash Flow Hedges Reclassified From AOCI Into Income | The following tables summarize the amount of gains and losses for the following years ended December 31 related to derivative financial instruments designated as cash flow hedges (in thousands):
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Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The following table summarizes the amount of gains and losses for the years ended December 31 related to derivative financial instruments not designated as hedging instruments (in thousands):
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Accumulated Other Comprehensive Loss (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Loss | The following table sets forth the changes in accumulated other comprehensive loss (AOCL) for the years ended December 31 (in thousands):
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Debt (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt With Contractual Term Less Than One Year | Debt with a contractual term less than one year is generally classified as short-term debt and consisted of the following as of December 31 (in thousands):
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Debt With A Contractual Term Greater Than One Year | Debt with a contractual term greater than one year is generally classified as long-term debt and consisted of the following as of December 31 (in thousands):
At December 31, 2016, the Company's consolidated balance sheet included outstanding balances related to the following secured notes with the related maturity dates and interest rates (in thousands):
In addition, outstanding balances related to the following secured notes were included in the Company's consolidated balance sheet at December 31, 2015 and the Company completed repayment of those balances during 2016 (in thousands):
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Schedule of Maturities of Long-term Debt | A summary of the Company’s expected principal payments for debt obligations as of December 31, 2016 is as follows (in thousands):
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Asset-Backed Financing (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers and Servicing [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Assets And Liabilities Of Variable Interest Entities | The following table shows the assets and liabilities related to the on-balance sheet asset-backed financings included in the financial statements at December 31 (in thousands):
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Schedule Of Secured Notes With Related Maturity | Debt with a contractual term greater than one year is generally classified as long-term debt and consisted of the following as of December 31 (in thousands):
At December 31, 2016, the Company's consolidated balance sheet included outstanding balances related to the following secured notes with the related maturity dates and interest rates (in thousands):
In addition, outstanding balances related to the following secured notes were included in the Company's consolidated balance sheet at December 31, 2015 and the Company completed repayment of those balances during 2016 (in thousands):
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Schedule of Unpaid Principal Balance of Serviced Retail Motorcycle Finance Receivables | The unpaid principal balance of serviced retail motorcycle finance receivables at December 31 was as follows (in thousands):
The balance of serviced finance receivables 30 days or more delinquent at December 31 was as follows (in thousands):
Credit losses, net of recoveries for the serviced finance receivables for the years ended December 31 were as follows (in thousands):
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Income Taxes (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Provision For Income Taxes | Provision for income taxes for the years ended December 31 consists of the following (in thousands):
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Components Of Income Before Taxes | The components of income before income taxes for the years ended December 31 were as follows (in thousands):
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Provision For Income Tax Rate To Statutory Rate Reconciliation | The provision for income taxes differs from the amount that would be provided by applying the statutory U.S. corporate income tax rate due to the following items for the years ended December 31:
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Principal Components Of The Company's Deferred Tax Assets And Liabilities | The principal components of the Company’s deferred tax assets and liabilities as of December 31 include the following (in thousands):
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Changes In Gross Liability For Unrecognized Tax Benefits Excluding Interest And Penalties | The Company recognizes interest and penalties related to unrecognized tax benefits in the provision for income taxes. Changes in the Company’s gross liability for unrecognized tax benefits, excluding interest and penalties, were as follows (in thousands):
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Employee Benefit Plans and Other Postretirement Benefits (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Obligation And Funded Status | The following table provides the changes in the benefit obligations, fair value of plan assets and funded status of the Company’s pension, SERPA and postretirement healthcare plans as of the Company’s December 31, 2016 and 2015 measurement dates (in thousands):
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Schedule of Amounts Recognized in Balance Sheet | The following table provides the changes in the benefit obligations, fair value of plan assets and funded status of the Company’s pension, SERPA and postretirement healthcare plans as of the Company’s December 31, 2016 and 2015 measurement dates (in thousands):
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Components Of Net Periodic Benefit Costs | Components of net periodic benefit costs for the years ended December 31 (in thousands):
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Schedule Of Net Periodic Benefit Cost Recognized In Accumulated And Other Comprehensive Income | Amounts included in accumulated other comprehensive income, net of tax, at December 31, 2016 which have not yet been recognized in net periodic benefit cost are as follows (in thousands):
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Schedule Of Net Periodic Benefit Cost Expected To Be Recognized | Amounts expected to be recognized in net periodic benefit cost, net of tax, during the year ended December 31, 2017 are as follows (in thousands):
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Schedule Of Assumptions Used To Determine Net Periodic Benefit Cost | Weighted-average assumptions used to determine benefit obligations and net periodic benefit cost at December 31 were as follows:
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Schedule Of PBO In Excess Of Fair Value Of Plan Assets | The following table summarizes information related to the Company's qualified pension plan which had a PBO in excess of the fair value of plan assets at December 31 (in millions):
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Schedule of Allocation of Plan Assets | The fair values of the Company’s postretirement healthcare plan assets as of December 31, 2015 were as follows (in thousands):
The fair values of the Company’s postretirement healthcare plan assets as of December 31, 2016 were as follows (in thousands):
The fair values of the Company’s pension plan assets as of December 31, 2016 were as follows (in thousands):
The fair values of the Company’s pension plan assets as of December 31, 2015 were as follows (in thousands):
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Schedule Of Weighted Average Health Care Cost Trend Rate | The weighted-average healthcare cost trend rate used in determining the accumulated postretirement benefit obligation of the healthcare plans was as follows:
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Schedule Of Weighted Average Health Care Cost Trend Rate Assumption | This healthcare cost trend rate assumption can have a significant effect on the amounts reported. A one-percentage-point change in the assumed healthcare cost trend rate would have the following effects (in thousands):
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Schedule Of Expected Benefit Payments And Medicare Subsidy Receipts For Next Five Years And Thereafter | The expected benefit payments for the next five years and thereafter were as follows (in thousands):
|
Leases (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||
Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||
Future Minimum Operating Lease Payments, Maturity Schedule | Future minimum operating lease payments at December 31, 2016 were as follows (in thousands):
|
Capital Stock (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Repurchases Pursuant To Board Of Director Authorizations | The remaining repurchases were made pursuant to the following authorizations (in millions of shares):
|
Share-Based Awards (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of RSU and PRSU Settled in Stock and Restricted Stock Transactions | The following table summarizes the RSUs and PRSUs settled in stock and restricted stock transactions for the year ended December 31, 2016 (in thousands except for per share amounts):
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Summary of Restricted Stock Unit Transactions | The following table summarizes the RSUI and PRSUI transactions for the year ended December 31, 2016 (in thousands except for per share amounts):
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Assumptions used in calculating the lattice-based fair value of options granted during 2015 and 2014 were as follows:
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Summary of Stock Option Transactions | The following table summarizes the stock option transactions for the year ended December 31, 2016 (in thousands except for per share amounts):
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Summary of Aggregate Intrinsic Value Related to Options Outstanding, Exercisable and Exercised | The following table summarizes the aggregate intrinsic value related to options outstanding, exercisable and exercised as of and for the years ended December 31 (in thousands):
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Stock Options Outstanding By Price Range | Stock options outstanding at December 31, 2016 were as follows (options in thousands):
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Assumptions Used In Calculating Fair Value of Options | The assumptions used to determine the fair value of the SAR awards at December 31, 2016 and 2015 were as follows:
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Summary of Stock Appreciation Right Transactions | The following table summarizes the SAR transactions for the year ended December 31, 2016 (in thousands except for per share amounts):
|
Earnings Per Share (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation Of Earnings Per Share Basic And Diluted | The following table sets forth the computation of basic and diluted earnings per share from continuing operations for the years ended December 31 (in thousands except per share amounts):
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Reportable Segments and Geographic Information (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information By Industry Segment | Information by segment is set forth below for the years ended December 31 (in thousands):
Information by segment is set forth below as of December 31 (in thousands):
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Segment Information By Geographical Locations | Included in the consolidated financial statements are the following amounts relating to geographic locations for the years ended December 31 (in thousands):
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Supplemental Consolidating Data (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operations | The supplemental consolidating data for the periods noted is presented for informational purposes. The supplemental consolidating data may be different than segment information presented elsewhere due to the allocation of intercompany eliminations to reporting segments. All supplemental data is presented in thousands.
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Balance Sheet |
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Cash Flows |
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Summary of Significant Accounting Policies (Marketable Securities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Available-for-sale securities: corporate bonds | $ 5,519 | $ 45,192 |
Trading securities: mutual funds | 38,119 | 36,256 |
Marketable Securities | $ 43,638 | $ 81,448 |
Summary of Significant Accounting Policies (Changes In Warranty And Safety Recall Liability) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Movement in Standard Product Warranty Accrual [Roll Forward] | |||
Balance, beginning of period | $ 74,217 | $ 69,250 | $ 64,120 |
Warranties issued during the period | 60,215 | 59,259 | 60,331 |
Settlements made during the period | (99,298) | (96,529) | (74,262) |
Recalls and changes to pre-existing warranty liabilities | 44,348 | 42,237 | 19,061 |
Balance, end of period | $ 79,482 | $ 74,217 | $ 69,250 |
Additional Balance Sheet and Cash Flow Information (Inventories, Net) (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Inventory [Line Items] | ||
Raw materials and work in process | $ 140,639 | $ 161,704 |
Inventory at lower of FIFO cost or market | 548,184 | 635,175 |
Excess of FIFO over LIFO cost | (48,267) | (49,268) |
Inventories, net | 499,917 | 585,907 |
Obsolescence reserves deducted from FIFO cost | 39,900 | 26,700 |
Motorcycles | ||
Inventory [Line Items] | ||
Inventory, finished goods, net of inventory valuation adjustment | 285,281 | 327,952 |
Parts And Accessories And General Merchandise | ||
Inventory [Line Items] | ||
Inventory, finished goods, net of inventory valuation adjustment | $ 122,264 | $ 145,519 |
Additional Balance Sheet and Cash Flow Information (Property, Plant And Equipment, At Cost) (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 3,261,525 | $ 3,173,653 |
Accumulated depreciation | (2,279,932) | (2,231,235) |
Total property, plant and equipment, net | 981,593 | 942,418 |
Land and related improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 65,533 | 56,554 |
Buildings and related improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 464,200 | 453,433 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 1,887,269 | 1,859,443 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 630,114 | 524,076 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 214,409 | $ 280,147 |
Additional Balance Sheet and Cash Flow Information (Accrued Liabilities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Accrued Liabilities, Current [Abstract] | ||
Payroll, employee benefits and related expenses | $ 148,221 | $ 160,971 |
Warranty and recalls | 57,698 | 54,894 |
Sales incentive programs | 43,218 | 37,568 |
Tax-related accruals | 26,140 | 18,535 |
Accrued interest | 42,788 | 33,925 |
Other | 168,587 | 166,071 |
Total accrued liabilities | $ 486,652 | $ 471,964 |
Acquisition (Narrative) (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Aug. 04, 2015 |
Sep. 27, 2015 |
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Business Acquisition [Line Items] | ||||
Goodwill | $ 53,391 | $ 54,182 | ||
Fred Deeley Imports, Ltd. | ||||
Business Acquisition [Line Items] | ||||
Total consideration | $ 59,900 | |||
Goodwill | 28,567 | |||
Goodwill, expected tax deductible amount | 28,600 | |||
Intangible assets, fair value | 20,842 | |||
Integration related costs | $ 3,300 | |||
Fred Deeley Imports, Ltd. | Distribution Rights | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, fair value | $ 13,300 | |||
Intangible asset, weighted average useful life (in years) | 2 years | |||
Fred Deeley Imports, Ltd. | Customer Relationships | ||||
Business Acquisition [Line Items] | ||||
Intangible assets, fair value | $ 7,500 | |||
Intangible asset, weighted average useful life (in years) | 20 years |
Acquisition (Summary of Fair Values of Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
Aug. 04, 2015 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 53,391 | $ 54,182 | |
Fred Deeley Imports, Ltd. | |||
Business Acquisition [Line Items] | |||
Current assets | $ 11,088 | ||
Property, plant and equipment | 144 | ||
Intangible assets | 20,842 | ||
Goodwill | 28,567 | ||
Total assets | 60,641 | ||
Current liabilities | 731 | ||
Net assets acquired | $ 59,910 |
Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Goodwill [Roll Forward] | |||
Balance, beginning of period | $ 54,182 | ||
Balance, end of period | 53,391 | $ 54,182 | |
Motorcycles | |||
Goodwill [Roll Forward] | |||
Balance, beginning of period | 54,182 | 27,752 | $ 30,452 |
Business acquisitions | 0 | 28,567 | 0 |
Currency translation | (791) | (2,137) | (2,700) |
Balance, end of period | $ 53,391 | $ 54,182 | $ 27,752 |
Goodwill and Intangible Assets (Schedule of Intangible Assets) (Details) - Motorcycles - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 20,221 | $ 19,730 |
Accumulated Amortization | (9,674) | (2,776) |
Total other intangible assets | 10,547 | 16,954 |
Distribution Rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 12,928 | 12,614 |
Accumulated Amortization | (9,157) | (2,628) |
Total other intangible assets | $ 3,771 | $ 9,986 |
Estimated useful life (years) | 2 years | 2 years |
Customer Relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 7,293 | $ 7,116 |
Accumulated Amortization | (517) | (148) |
Total other intangible assets | $ 6,776 | $ 6,968 |
Estimated useful life (years) | 20 years | 20 years |
Goodwill and Intangible Assets (Schedule of Finite-Lived Intangible Assets Future Amortization Expense) (Details) - USD ($) |
12 Months Ended | |||
---|---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
Finite-Lived Intangible Assets [Line Items] | ||||
Amortization of Intangible Assets | $ 7,000,000 | $ 2,800,000 | $ 0 | |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||
Goodwill | 53,391,000 | 54,182,000 | ||
Motorcycles | ||||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||
2017 | 4,143,000 | |||
2018 | 372,000 | |||
2019 | 372,000 | |||
2020 | 372,000 | |||
2021 | 372,000 | |||
Thereafter | 4,916,000 | |||
Total other intangible assets | 10,547,000 | 16,954,000 | ||
Goodwill | 53,391,000 | 54,182,000 | $ 27,752,000 | $ 30,452,000 |
Financial Services | ||||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||
Total other intangible assets | 0 | 0 | ||
Goodwill | $ 0 | $ 0 |
Finance Receivables (Narrative) (Details) - USD ($) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Jun. 26, 2016 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Individually evaluated for impairment | $ 0 | $ 0 | |
Unconsolidated VIEs | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Principal balance of finance receivable | $ 301,800,000 | ||
Wholesale | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Unused lines of credit, wholesale | 1,320,000,000 | 1,270,000,000 | |
Individually evaluated for impairment | 0 | 0 | |
Financing receivable on non-accrual status | 0 | 0 | |
Retail | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Approved but unfunded retail loans | 177,900,000 | 169,600,000 | |
Individually evaluated for impairment | $ 0 | $ 0 | |
Finance receivables | Geographic Concentration Risk | Texas | |||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Concentration risk (as a percent) | 11.00% | 12.00% |
Finance Receivables (Contractual Maturities Of Finance Receivables) (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2012 |
---|---|---|---|---|---|
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
2017 | $ 2,112,112 | ||||
2018 | 1,168,159 | ||||
2019 | 1,305,778 | ||||
2020 | 1,270,965 | ||||
2021 | 1,130,033 | ||||
Thereafter | 21,754 | ||||
Total finance receivables | 7,008,801 | $ 7,015,331 | $ 6,560,245 | $ 6,110,256 | $ 5,889,519 |
United States | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
2017 | 2,004,454 | ||||
2018 | 1,123,428 | ||||
2019 | 1,256,972 | ||||
2020 | 1,217,711 | ||||
2021 | 1,106,241 | ||||
Thereafter | 21,754 | ||||
Total finance receivables | 6,730,560 | ||||
Canada | |||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||||
2017 | 107,658 | ||||
2018 | 44,731 | ||||
2019 | 48,806 | ||||
2020 | 53,254 | ||||
2021 | 23,792 | ||||
Thereafter | 0 | ||||
Total finance receivables | $ 278,241 |
Finance Receivables (Changes In The Allowance For Finance Credit Losses On Finance Receivables) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Balance, beginning of period | $ 147,178 | $ 127,364 | $ 110,693 |
Provision for credit losses | 136,617 | 101,345 | 80,946 |
Charge-offs | (148,566) | (123,911) | (102,831) |
Recoveries | 41,405 | 42,380 | 38,556 |
Other | (3,291) | ||
Balance, end of period | 173,343 | 147,178 | 127,364 |
Retail | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Balance, beginning of period | 139,320 | 122,025 | 106,063 |
Provision for credit losses | 137,893 | 98,826 | 80,237 |
Charge-offs | (148,566) | (123,911) | (102,831) |
Recoveries | 41,405 | 42,380 | 38,556 |
Other | (3,291) | ||
Balance, end of period | 166,761 | 139,320 | 122,025 |
Wholesale | |||
Financing Receivable, Allowance for Credit Losses [Roll Forward] | |||
Balance, beginning of period | 7,858 | 5,339 | 4,630 |
Provision for credit losses | (1,276) | 2,519 | 709 |
Charge-offs | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 |
Other | 0 | ||
Balance, end of period | $ 6,582 | $ 7,858 | $ 5,339 |
Finance Receivables (Wholesale And Retail Receivables Accruing Interest And Are Past Due) (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
Dec. 31, 2012 |
---|---|---|---|---|---|
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||||
Receivables past due and accruing interest | $ 40,725 | $ 32,869 | $ 28,918 | $ 24,801 | $ 28,033 |
United States | |||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||||
Receivables past due and accruing interest | 39,399 | 31,677 | 27,800 | 23,770 | 26,500 |
Canada | |||||
Financing Receivable, Recorded Investment, Past Due [Line Items] | |||||
Receivables past due and accruing interest | $ 1,326 | $ 1,192 | $ 1,118 | $ 1,031 | $ 1,533 |
Derivative Instruments and Hedging Activities (Gain Loss Recognized In Income On Hedged Derivatives) (Details) - Derivatives Not Designated As Hedging Instruments Under ASC Topic 815 - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain/(Loss) Recognized in Income on Derivative | $ 167 | $ (648) | $ (1,969) |
Commodities contracts | Cost of Sales | |||
Derivative Instruments, Gain (Loss) [Line Items] | |||
Amount of Gain/(Loss) Recognized in Income on Derivative | $ 167 | $ (648) | $ (1,969) |
Debt (Debt With Contractual Term Less Than One Year) (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Short-term Debt [Line Items] | ||
Short-term debt | $ 1,055,708 | $ 1,201,380 |
Unsecured Commercial Paper | ||
Short-term Debt [Line Items] | ||
Short-term debt | $ 1,055,708 | $ 1,201,380 |
Debt (Schedule of Maturities of Long-term debt) (Details) $ in Thousands |
Dec. 31, 2016
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
2017 | $ 2,145,781 |
2018 | 1,192,458 |
2019 | 1,483,236 |
2020 | 658,814 |
2021 | 600,000 |
Thereafter | 750,000 |
Total | $ 6,830,289 |
Asset-Backed Financing (Schedule Of Secured Notes With Related Maturity) (Details) - Variable Interest Entity, Primary Beneficiary - Secured Debt - USD ($) |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Debt Instrument [Line Items] | ||
Weighted average interest rate at date of issuance | 1.31% | 1.04% |
Secured Notes Issued May 2015 | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate at date of issuance | 0.88% | |
Secured Notes Issued January 2015 | ||
Debt Instrument [Line Items] | ||
Weighted average interest rate at date of issuance | 0.89% | |
Secured Notes Issued April 2014 | ||
Debt Instrument [Line Items] | ||
Company issued secured notes | $ 850,000,000 | |
Weighted average interest rate at date of issuance | 0.66% | |
Secured Notes Issued April 2013 | ||
Debt Instrument [Line Items] | ||
Company issued secured notes | $ 650,000,000 | |
Weighted average interest rate at date of issuance | 0.57% | |
Secured Notes Issued July 2012 | ||
Debt Instrument [Line Items] | ||
Company issued secured notes | $ 675,306,000 | |
Weighted average interest rate at date of issuance | 0.59% |
Income Taxes (Provision For Income Taxes) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Current Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||
Current, Federal | $ 284,489 | $ 363,803 | $ 394,904 |
Current, State | 28,406 | 37,811 | 30,997 |
Current, Foreign | 19,017 | 12,826 | 20,429 |
Total Current | 331,912 | 414,440 | 446,330 |
Deferred Income Tax Expense (Benefit), Continuing Operations [Abstract] | |||
Deferred, Federal | (4,250) | (15,474) | (5,743) |
Deferred, State | 7,038 | (2,264) | (3,155) |
Deferred, Foreign | (2,953) | 1,254 | 1,277 |
Total, Deferred | (165) | (16,484) | (7,621) |
Total Current and Deferred | $ 331,747 | $ 397,956 | $ 438,709 |
Income Taxes (Components Of Income Before Taxes) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Income Tax Disclosure [Abstract] | |||
Domestic | $ 954,138 | $ 1,101,427 | $ 1,196,335 |
Foreign | 69,773 | 48,736 | 86,985 |
Income before provision for income taxes | $ 1,023,911 | $ 1,150,163 | $ 1,283,320 |
Income Taxes (Provision For Income Tax Rate To Statutory Rate Reconciliation) (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Effective Income Tax Rate Reconciliation, Percent [Abstract] | |||
Provision at statutory rate | 35.00% | 35.00% | 35.00% |
State taxes, net of federal benefit | 1.80% | 1.80% | 1.70% |
Foreign rate differential | (0.60%) | (0.40%) | (0.60%) |
Domestic manufacturing deduction | (2.10%) | (2.10%) | (2.10%) |
Research and development credit | (0.40%) | (0.40%) | (0.40%) |
Unrecognized tax benefits including interest and penalties | (1.30%) | 1.10% | 0.20% |
Valuation allowance adjustments | 0.10% | (0.10%) | (0.10%) |
Adjustments for previously accrued taxes | 0.20% | (0.10%) | (0.30%) |
Other | (0.30%) | (0.20%) | 0.80% |
Provision for income taxes | 32.40% | 34.60% | 34.20% |
Income Taxes (Principal Components Of The Company's Deferred Tax Assets And Liabilities) (Details) - USD ($) $ in Thousands |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Deferred tax assets: | ||
Accruals not yet tax deductible | $ 141,961 | $ 129,449 |
Pension and postretirement benefit plan obligations | 88,741 | 126,952 |
Stock compensation | 19,051 | 20,111 |
Net operating loss carryforward | 33,587 | 38,250 |
Valuation allowance | (30,953) | (20,659) |
Other, net | 56,903 | 47,039 |
Deferred tax assets, net | 309,290 | 341,142 |
Deferred tax liabilities: | ||
Depreciation, tax in excess of book | (139,268) | (136,340) |
Other | (2,293) | (2,419) |
Deferred tax liabilities, net | (141,561) | (138,759) |
Total | $ 167,729 | $ 202,383 |
Income Taxes (Changes In Gross Liability For Unrecognized Tax Benefits Excluding Interest And Penalties) (Details) - USD ($) $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Unrecognized tax benefits, beginning of period | $ 73,100 | $ 64,200 |
Increase in unrecognized tax benefits for tax positions taken in a prior period | 2,828 | 9,149 |
Decrease in unrecognized tax benefits for tax positions taken in a prior period | (21,061) | (1,993) |
Increase in unrecognized tax benefits for tax positions taken in the current period | 7,402 | 6,302 |
Statute lapses | (1,907) | (2,465) |
Settlements with taxing authorities | (4,823) | (2,093) |
Unrecognized tax benefits, end of period | $ 55,539 | $ 73,100 |
Employee Benefit Plans and Other Postretirement Benefits (Components Of Net Periodic Benefit Costs) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Postretirement Health Coverage | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | $ 7,478 | $ 8,259 | $ 7,015 |
Interest cost | 14,814 | 14,166 | 16,878 |
Special early retirement benefits | 0 | 622 | 0 |
Expected return on plan assets | (12,069) | (11,506) | (10,429) |
Prior service cost (credit) | (2,803) | (3,217) | (3,853) |
Net loss | 3,537 | 3,971 | 4,729 |
Settlement loss | 0 | 0 | 0 |
Net periodic benefit cost | 10,957 | 12,295 | 14,340 |
Pension and SERPA Benefits | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Service cost | 33,437 | 40,039 | 31,498 |
Interest cost | 90,827 | 87,345 | 86,923 |
Special early retirement benefits | 0 | 10,563 | 0 |
Expected return on plan assets | (145,781) | (144,929) | (136,734) |
Prior service cost (credit) | 1,019 | 435 | 1,119 |
Net loss | 46,351 | 54,709 | 36,563 |
Settlement loss | 1,463 | 368 | 0 |
Net periodic benefit cost | $ 27,316 | $ 48,530 | $ 19,369 |
Employee Benefit Plans and Other Postretirement Benefits (Schedule Of Net Periodic Benefit Cost Recognized In Accumulated And Other Comprehensive Income) (Details) $ in Thousands |
Dec. 31, 2016
USD ($)
|
---|---|
Defined Benefit Plan Disclosure [Line Items] | |
Prior service cost (credit) | $ (2,475) |
Net actuarial loss | 511,054 |
Amounts included in other comprehensive income, net of tax | 508,579 |
Postretirement Health Coverage | |
Defined Benefit Plan Disclosure [Line Items] | |
Prior service cost (credit) | (7,279) |
Net actuarial loss | 46,250 |
Amounts included in other comprehensive income, net of tax | 38,971 |
Pension and SERPA Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
Prior service cost (credit) | 4,804 |
Net actuarial loss | 464,804 |
Amounts included in other comprehensive income, net of tax | $ 469,608 |
Employee Benefit Plans and Other Postretirement Benefits (Schedule Of Net Periodic Benefit Cost Expected To Be Recognized) (Details) $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
| |
Defined Benefit Plan Disclosure [Line Items] | |
Prior service cost (credit) | $ (726) |
Net actuarial loss | 29,752 |
Amounts expected to be recognized in net periodic benefit cost, net of tax | 29,026 |
Pension and SERPA Benefits | |
Defined Benefit Plan Disclosure [Line Items] | |
Prior service cost (credit) | 641 |
Net actuarial loss | 27,699 |
Amounts expected to be recognized in net periodic benefit cost, net of tax | 28,340 |
Postretirement Health Coverage | |
Defined Benefit Plan Disclosure [Line Items] | |
Prior service cost (credit) | (1,367) |
Net actuarial loss | 2,053 |
Amounts expected to be recognized in net periodic benefit cost, net of tax | $ 686 |
Employee Benefit Plans and Other Postretirement Benefits (Schedule Of Assumptions Used To Determine Net Periodic Benefit Cost) (Details) |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Pension and SERPA Benefits | |||
Assumptions for benefit obligations: | |||
Discount rate | 4.30% | 4.53% | 4.21% |
Rate of compensation | 3.50% | 3.50% | 4.00% |
Assumptions for net periodic benefit cost: | |||
Discount rate | 4.53% | 4.21% | 5.08% |
Expected return on plan assets | 7.50% | 7.75% | 7.75% |
Rate of compensation increase | 3.50% | 4.00% | 4.00% |
Postretirement Health Coverage | |||
Assumptions for benefit obligations: | |||
Discount rate | 4.03% | 4.29% | 3.99% |
Assumptions for net periodic benefit cost: | |||
Discount rate | 4.29% | 3.99% | 4.70% |
Expected return on plan assets | 7.50% | 7.70% | 7.70% |
Employee Benefit Plans and Other Postretirement Benefits (Schedule Of Pension Plans With PBO And ABO In Excess Of Fair value Of Plan Assets) (Details) - Pension Plan Assets - USD ($) $ in Millions |
Dec. 31, 2016 |
Dec. 31, 2015 |
---|---|---|
Defined Benefit Plan, Plans with Benefit Obligations in Excess of Plan Assets [Abstract] | ||
PBO | $ 1,934.1 | $ 1,964.0 |
Fair value of plan assets | $ 1,899.9 | $ 1,842.0 |
Employee Benefit Plans and Other Postretirement Benefits (Schedule Of Weighted-Average Health Care Cost Trend Rate) (Details) - Postretirement Health Coverage |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Defined Benefit Plan, Assumed Health Care Cost Trend Rates [Abstract] | ||
Healthcare cost trend rate for next year | 7.25% | 7.50% |
Rate to which the cost trend rate is assumed to decline (the ultimate rate) | 5.00% | 5.00% |
Year that the rate reaches the ultimate trend rate | 2021 | 2021 |
Employee Benefit Plans and Other Postretirement Benefits (Schedule Of-Weighted Average Health Care Cost Trend Rate Assumption) (Details) - Postretirement Health Coverage $ in Thousands |
12 Months Ended |
---|---|
Dec. 31, 2016
USD ($)
| |
Defined Benefit Plan, Effect of One-Percentage Point Change in Assumed Health Care Cost Trend Rates [Abstract] | |
Total of service and interest cost components in 2016, One Percent Increase | $ 658 |
Total of service and interest cost components in 2016, One Percent Decrease | (624) |
Accumulated benefit obligation as of December 31, 2016, One Percent Increase | 12,670 |
Accumulated benefit obligation as of December 31, 2016, One Percent Decrease | $ (11,443) |
Leases (Schedule Of Future Minimum Operating Lease Payments) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Leases [Abstract] | |||
Total rental expense | $ 14,400 | $ 15,000 | $ 12,000 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
2017 | 13,900 | ||
2018 | 12,805 | ||
2019 | 11,793 | ||
2020 | 7,794 | ||
2021 | 6,357 | ||
Thereafter | 11,965 | ||
Total operating lease payments | $ 64,614 |
Commitments and Contingencies (Details) - York, Pennsylvania Facility |
12 Months Ended |
---|---|
Dec. 31, 2016 | |
Site Contingency [Line Items] | |
Site contingency, portion of total cost | 47.00% |
Navy | |
Site Contingency [Line Items] | |
Site contingency, portion of total cost | 53.00% |
Share-Based Awards (Assumptions Used In Calculating Fair Value Of Options) (Details) - Stock Options |
12 Months Ended | |
---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected average term (in years) | 6 years | 6 years 1 month 18 days |
Expected volatility (minimum) | 24.00% | 25.00% |
Expected volatility (maximum) | 30.00% | 34.00% |
Weighted average volatility | 28.00% | 32.00% |
Expected dividend yield | 2.00% | 1.80% |
Risk-free interest rate (minimum) | 0.10% | 0.10% |
Risk-free interest rate (maximum) | 2.00% | 2.80% |
Share-Based Awards (Stock Options) (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Options granted during period (in shares) | 0 | ||
Weighted-average Aggregate weighted-average fair value of options (in dollars per share) | $ 13 | $ 14 | |
Unrecognized share-based compensation expense | $ 1.0 | ||
Unrecognized share-based compensation expense recognition period (in years) | 1 year 7 days |
Share-Based Awards (Aggregate Intrinsic Value) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Exercised | $ 9,595 | $ 9,890 | $ 31,623 |
Outstanding | 22,383 | 16,605 | 61,947 |
Exercisable | $ 22,383 | $ 16,605 | $ 54,071 |
Share-Based Awards (Assumptions Used In Calculating Fair Value Of Stock Appreciation Rights) (Details) - Stock Appreciation Rights (SARs) |
12 Months Ended | |
---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected volatility (minimum) | 28.00% | 28.00% |
Expected volatility (maximum) | 31.00% | 30.00% |
Expected dividend yield | 2.40% | 2.70% |
Risk-free interest rate (minimum) | 0.50% | 0.20% |
Risk-free interest rate (maximum) | 2.60% | 2.30% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected average term (in years) | 5 years 2 months 12 days | 5 years 3 months 18 days |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected average term (in years) | 5 years 8 months 12 days | 7 years 4 months 24 days |
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Numerator: | |||
Income used in computing basic and diluted earnings per share | $ 692,164 | $ 752,207 | $ 844,611 |
Denominator: | |||
Denominator for basic earnings per share-weighted-average common shares (in shares) | 179,676 | 202,681 | 216,305 |
Effect of dilutive securities – employee stock compensation plan (in shares) | 859 | 1,005 | 1,401 |
Denominator for diluted earnings per share- adjusted weighted-average shares outstanding (in shares) | 180,535 | 203,686 | 217,706 |
Basic (in dollars per share) | $ 3.85 | $ 3.71 | $ 3.90 |
Diluted (in dollars per share) | $ 3.83 | $ 3.69 | $ 3.88 |
Earnings Per Share (Narrative) (Details) - shares shares in Millions |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Stock Options | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities | 1.4 | 1.0 | 0.5 |
Reportable Segments and Geographic Information (Information By Industry Segment) (Details) - USD ($) $ in Thousands |
12 Months Ended | ||
---|---|---|---|
Dec. 31, 2016 |
Dec. 31, 2015 |
Dec. 31, 2014 |
|
Segment Reporting Information [Line Items] | |||
Total assets | $ 9,890,240 | $ 9,972,977 | $ 9,515,870 |
Depreciation and amortization | 209,555 | 198,074 | 179,300 |
Capital expenditures | 256,263 | 259,974 | 232,319 |
Motorcycles | |||
Segment Reporting Information [Line Items] | |||
Total assets | 2,490,450 | 2,522,249 | 2,502,190 |
Depreciation and amortization | 202,122 | 188,926 | 171,187 |
Capital expenditures | 245,316 | 249,772 | 224,262 |
Financial Services | |||
Segment Reporting Information [Line Items] | |||
Total assets | 7,399,790 | 7,450,728 | 7,013,680 |
Depreciation and amortization | 7,433 | 9,148 | 8,113 |
Capital expenditures | $ 10,947 | $ 10,202 | $ 8,057 |
Related Party Transactions (Details) |
12 Months Ended | |||
---|---|---|---|---|
Aug. 04, 2015
dealer
|
Dec. 31, 2016
USD ($)
|
Dec. 31, 2015
USD ($)
|
Dec. 31, 2014
USD ($)
|
|
Canada | ||||
Related Party Transaction [Line Items] | ||||
Number of dealers establishing distribution agreements | dealer | 66 | |||
Affiliated Entity | Deeley Imports | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related party | $ 0 | $ 117,300,000 | $ 194,800,000 | |
Amounts due from related parties | 0 | 0 | ||
Affiliated Entity | Trev Deeley Motorcycles | ||||
Related Party Transaction [Line Items] | ||||
Revenue from related party | 5,300,000 | 1,400,000 | ||
Amounts due from related parties | $ 500,000 | $ 300,000 |
Subsequent Events (Details) - Variable Interest Entity, Primary Beneficiary - USD ($) |
Jan. 31, 2017 |
Dec. 31, 2015 |
---|---|---|
Subsequent Event [Line Items] | ||
Receivables transferred to Special Purpose Entities | $ 1,300,000,000 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Receivables transferred to Special Purpose Entities | $ 333,400,000 | |
Subsequent Event | Secured Debt | ||
Subsequent Event [Line Items] | ||
Company issued secured notes | $ 300,000,000 |
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