In the news release, Harley-Davidson Delivers Strong Fourth
Quarter Financial Results Successfully Completing Second Year of
Hardwire Strategic Plan, issued 02-Feb-2023 by Harley-Davidson, Inc. over PR
Newswire, the financial tables at the end of the release were
inadvertently omitted by PR Newswire. The complete, corrected
release follows:
Harley-Davidson Delivers Strong Fourth Quarter Financial Results
Successfully Completing Second Year of Hardwire Strategic Plan
MILWAUKEE, Feb. 2, 2023
/PRNewswire/ -- Harley-Davidson, Inc. ("Harley-Davidson," "HDI," or
the "Company"), (NYSE: HOG) today reported fourth quarter and
full year 2022 results.
"As we conclude the second year of the Hardwire, Harley-Davidson
delivered a strong finish to the year, with solid execution of our
strategic pillars," said Jochen
Zeitz, Chairman and CEO, Harley-Davidson. "Since 1903,
Harley-Davidson has pioneered American motorcycle design,
technology, and performance - this year we'll be marking our 120th
Anniversary with a year-long celebration, at locations across the
globe and our biggest event ever in our hometown, Milwaukee. We are excited about what is going
to be an unforgettable milestone for the company, celebrating the
history, culture and community of Harley-Davidson with our riders,
families and fans, reaching new customers and bringing more people
to the brand."
2022 Highlights and Results
- Delivered full year diluted EPS of $4.96, up 18 percent versus prior year
- Grew HDMC and LiveWire combined revenue by 9 percent behind
higher wholesale shipments and global pricing realization
- Achieved 12% combined operating margin for HDMC and LiveWire,
an increase of 3 points versus prior year as pricing and
productivity offset cost inflation
- HDFS operating income finished down 23 percent and in-line with
expectations as loss rates normalized throughout the year
- Completed carve-out and stand-up of LiveWire as a separate
public company
Fourth Quarter 2022 Summary of Results
- Delivered diluted EPS of $0.28 –
up 100 percent versus prior year
- Grew HDMC global motorcycle shipments by 18 percent vs prior
year as production levels rebounded from the Q2 production
shutdown
- Achieved HDMC revenue growth of 14 percent behind unit growth
and global pricing
- HDFS Operating Income declined 32 percent due primarily to
expected loss rate normalization
2023 Financial Outlook
For the full year 2023, the Company expects:
- HDMC: revenue growth of 4 to 7% and operating income margin of
14.1 to 14.6%
- HDFS: operating income decline of 20 to 25%
- LiveWire: motorcycle wholesale units 750–2,000 and operating
income loss of $115 to $125 million
- Harley-Davidson, Inc: capital investments of $225 to $250
million
New Segment Reporting Structure
LiveWire Group, Inc. ("LiveWire Group") became a separate public
company trading on the New York Stock Exchange (Ticker: LVWR) on
September 27, 2022. Following the
close, Harley-Davidson has an equity interest in LiveWire Group of
approximately 89.4% and will continue to consolidate LiveWire Group
results with adjustments for non-controlling shareholder interests.
Consolidated Net Income attributable to Harley-Davidson, Inc. and
EPS calculations will now reflect these adjustments.
Beginning with the fourth quarter of 2022, new business segment
reporting will now include:
- Harley-Davidson Motor Company (HDMC): Group that is
accountable for the design, manufacturing, marketing and sales of
Harley-Davidson motorcycles and related products
- Harley-Davidson Financial Services (HDFS): Group that
provides motorcycle and related products financing and insurance
products and services for our dealers and retail customers
- LiveWire: Group that is accountable for the design,
marketing and sales of LiveWire electric motorcycles and related
products, including STACYC electric balance bikes
Prior period HDMC segment results have been updated to exclude
LiveWire results. In addition, the consolidated results will
continue to be reflected by:
- Harley-Davidson, Inc. (HDI): Corporate entity for the
overall Company, under which HDMC, HDFS and LiveWire operate
Fourth Quarter and Full Year 2022 Results
Harley-Davidson, Inc. Consolidated Financial
Results
$ in millions
(except EPS)
|
4th
quarter
|
Full
Year
|
2022
|
2021
|
Change
|
2022
|
2021
|
Change
|
Revenue
|
$1,142
|
$1,016
|
12 %
|
$5,755
|
$5,336
|
8 %
|
Operating Income
(Loss)
|
$4
|
($7)
|
nm
|
$909
|
$823
|
10 %
|
Net Income attributable
to
Harley-Davidson, Inc.
|
$42
|
$22
|
94 %
|
$741
|
$ 650
|
14 %
|
Diluted EPS
|
$0.28
|
$0.14
|
100 %
|
$4.96
|
$4.19
|
18 %
|
Consolidated revenue was up 12 percent in the fourth quarter
with growth across HDMC and HDFS and up 8 percent for the full year
behind wholesale unit growth and global pricing actions.
Consolidated operating income in the fourth quarter includes an
improvement in HDMC operating losses ($50
million lower) in the seasonally smaller quarter and
reflects a 32 percent decline in HDFS operating income driven by
the combination of loss rate normalization and a higher cost of
funding.
Consolidated operating income for the full year was driven by
significant operating income improvement at HDMC, planned operating
losses at the new LiveWire segment, and a 23 percent decline in
HDFS operating income as loss rates normalized.
Harley-Davidson Motor Company (HDMC) – Results
$ in millions
(except units)
|
4th
quarter
|
Full
Year
|
2022
|
2021
|
Change
|
2022
|
2021
|
Change
|
Motorcycle Shipments
(thousands)
|
34.0
|
28.9
|
18 %
|
193.5
|
188.0
|
3 %
|
Revenue
|
$919
|
$803
|
14 %
|
$4,888
|
$4,504
|
9 %
|
Motorcycles
|
$666
|
$542
|
23 %
|
$3,787
|
$3,469
|
9 %
|
Parts
& Accessories
|
$151
|
$164
|
(8 %)
|
$732
|
$741
|
(1 %)
|
Apparel
|
$73
|
$73
|
0 %
|
$271
|
$228
|
19 %
|
Licensing
|
$10
|
$15
|
(30 %)
|
$39
|
$38
|
4 %
|
Other
|
$18
|
$9
|
106 %
|
$58
|
$29
|
100 %
|
Gross Margin
|
26.5 %
|
19.7 %
|
6.8 pts.
|
31.3 %
|
28.8 %
|
2.4 pts.
|
Operating Income
(Loss)
|
($32)
|
($82)
|
nm
|
$677
|
$477
|
42 %
|
Operating
Margin
|
(3.5 %)
|
(10.3 %)
|
6.8 pts.
|
13.9 %
|
10.6 %
|
3.3 pts.
|
Fourth quarter global motorcycle shipments increased 18 percent
behind the continued recovery from the Q2 production suspension.
Revenue was up 14 percent driven by the increase in wholesale
shipments and continued global pricing, partially offset by
unfavorable foreign exchange. Parts & Accessories revenue was
down 8 percent driven by unfavorable product mix and lower volumes,
while Apparel revenue was flat.
Fourth quarter gross margin was up 6.8 points behind favorable
units and pricing. Additionally, flat supply chain cost inflation
and lapping of the additional EU tariffs in 2021 contributed to
offsetting foreign exchange headwinds. Fourth quarter operating
margin improved by 6.8 points due to the factors above.
Harley-Davidson Retail Motorcycle Sales
(excludes LiveWire units)
Motorcycles
(thousands)
|
4th
quarter
|
Full
Year
|
2022
|
2021
|
Change
|
2022
|
2021
|
Change
|
North
America
|
19.2
|
19.5
|
(2 %)
|
117.1
|
133.7
|
(12 %)
|
EMEA
|
6.6
|
6.5
|
1 %
|
30.5
|
30.9
|
(1 %)
|
Asia Pacific
|
7.5
|
6.8
|
11 %
|
27.9
|
25.0
|
12 %
|
Latin
America
|
0.6
|
1.0
|
(46 %)
|
2.9
|
3.7
|
(20 %)
|
Worldwide
Total
|
33.8
|
33.8
|
flat
|
178.5
|
193.3
|
(8 %)
|
|
Global retail motorcycle sales in the fourth quarter were flat
versus prior year. North America
retail performance was down 2 percent in the seasonally smaller
quarter. Growth in Asia Pacific
was driven by continued strong demand across key markets, including
Japan and China. Annual global retail sales decline of
8% was adversely impacted by the Q2 production suspension and the
inability to replenish dealer inventories in peak riding
season.
Harley-Davidson Financial Services (HDFS) –
Results
$ in
millions
|
4th
quarter
|
Full
Year
|
2022
|
2021
|
Change
|
2022
|
2021
|
Change
|
Revenue
|
$214
|
$200
|
7 %
|
$821
|
$796
|
3 %
|
Operating
Income
|
$64
|
$95
|
(32 %)
|
$318
|
$415
|
(23 %)
|
|
HDFS' operating income decline of $31
million in the fourth quarter was driven by a higher
provision for credit losses and higher interest expense. The
increase in the provision for credit losses was due to actual
retail credit losses returning to normalized levels and an
unfavorable allowance change. Total quarter ending financing
receivables were $7.5 billion, which
was up 8% versus prior year.
LiveWire - Results
$ in
millions
|
4th
quarter
|
Full
Year
|
2022
|
2021
|
Change
|
2022
|
2021
|
Change
|
Electric Motorcycle
Shipments (units)
|
69
|
186
|
(63 %)
|
597
|
461
|
30 %
|
Revenue
|
$9
|
$13
|
(28 %)
|
$47
|
$36
|
31 %
|
Operating
Loss
|
($29)
|
($20)
|
nm
|
($85)
|
($68)
|
nm
|
LiveWire revenue for the fourth quarter 2022 decreased by 28%
and full year revenue increased 31% driven by higher LiveWire units
and STACYC electric balance bike sales. LiveWire operating losses
in both comparable periods were driven by increased product
development costs and investments in talent & capabilities to
support the new company.
Other 2022 Harley-Davidson, Inc. Results
- Generated $548 million of cash
from operating activities
- Cash and cash equivalents of $1.4
billion at year end, down $442
million vs. prior year
- Effective tax rate was 21 percent in 2022
- Paid cash dividends of $0.63 per
share in 2022
- Repurchased $324 million of
shares (8.4 million shares)
Company Background
Harley-Davidson,
Inc. is the parent company of Harley-Davidson Motor
Company and Harley-Davidson Financial Services. Our
vision: Building our legend and leading our industry through
innovation, evolution and emotion. Our mission: More than building
machines, we stand for the timeless pursuit of adventure. Freedom
for the soul. Our ambition is to maintain our place as the most
desirable motorcycle brand in the world. Since 1903,
Harley-Davidson has defined motorcycle culture by delivering a
motorcycle lifestyle with distinctive and customizable motorcycles,
experiences, motorcycle accessories, riding gear and
apparel. Harley-Davidson Financial Services provides
financing, insurance and other programs to help get riders on the
road. Harley-Davidson also has a controlling interest in
LiveWire Group, Inc., the first publicly traded all-electric
motorcycle company in the United
States. LiveWire is the future in the making for the pursuit
of urban adventure and beyond. Drawing on its DNA as an agile
disruptor from the lineage of Harley-Davidson and capitalizing on a
decade of learnings in the EV sector, LiveWire's ambition is to be
the most desirable electric motorcycle brand in the world. Learn
more at harley-davidson.com and livewire.com.
Webcast
Harley-Davidson will discuss its
financial results and outlook on an audio webcast at 8:00 a.m.
CT today. The webcast login and supporting slides can be accessed
at http://investor.harley-davidson.com/news-and-events/events-and-presentations.
The audio replay will be available by approximately 10:00 a.m. CT.
Cautionary Note Regarding Forward-Looking Statements
The company intends that certain matters discussed in this press
release and our associated comments are "forward-looking
statements" intended to qualify for the safe harbor from liability
established by the Private Securities Litigation Reform Act of
1995. These forward-looking statements can generally be identified
as such because the context of the statement will include words
such as the company "believes," "anticipates," "expects," "plans,"
"may," "will," "estimates," "targets," "intends," "forecasts,"
"sees," "feels," or words of similar meaning. Similarly, statements
that describe or refer to future expectations, future plans,
strategies, objectives, outlooks, targets, guidance, commitments,
or goals are also forward-looking statements. Such forward-looking
statements are subject to certain risks and uncertainties that
could cause actual results to differ materially, unfavorably or
favorably, from those anticipated as of the date of this
presentation. Certain of such risks and uncertainties are described
below. Shareholders, potential investors, and other readers are
urged to consider these factors in evaluating the forward-looking
statements and are cautioned not to place undue reliance on such
forward-looking statements. The forward-looking statements included
in this press release are only made as of the date of this
presentation, and the company disclaims any obligation to publicly
update such forward-looking statements to reflect subsequent events
or circumstances.
Important factors that could affect future results and cause
those results to differ materially from those expressed in the
forward-looking statements include, among others, the following:
(i) the COVID-19 pandemic, including the length and severity of the
pandemic across the globe and the pace of recovery following the
pandemic and (ii) the company's ability to: (A) execute its
business plans and strategies, including The Hardwire, including
each of the pillars and the evolution of LiveWire as a standalone
brand, which includes the risks noted below; (B) manage supply
chain and logistics issues, including quality issues, availability
of semiconductor chip components and the ability to find
alternative sources of those components in a timely manner,
unexpected interruptions or price increases caused by supplier
volatility, raw material shortages, inflation, war or other
hostilities, including the conflict in Ukraine, or natural disasters, and longer
shipping times and increased logistics costs, including by
successfully implementing pricing surcharges; (C) realize the
expected business benefits from the combination of LiveWire with
AEA Bridges Impact Corp. (ABIC), which may be affected by, among
other things: (i) the ability of LiveWire to: (1) execute its plans
to develop, produce, market, and sell its electric vehicles; (2)
achieve profitability, which is dependent on the successful
development and commercial introduction and acceptance of its
electric vehicles, and its services, which may not occur; (3)
adequately control the costs of its operations as a new entrant
into a new space; (4) develop, maintain, and strengthen its brand;
(5) execute its plans to develop, produce, market, and sell its
electric vehicles; and (6) effectively establish and maintain
cooperation from its retail partners, largely drawn from the
company's traditional motorcycle dealer network, to be able to
effectively establish or maintain relationships with customers for
electric vehicles; (ii) competition; and (iii) other risks and
uncertainties indicated in the final prospectus of ABIC, including
those under "Risk Factors" in that prospectus, and other documents
filed with the SEC by the company, LiveWire Group, Inc. or ABIC;
(D) accurately analyze, predict and react to changing market
conditions and successfully adjust to shifting global consumer
needs and interests; (E) successfully access the capital and/or
credit markets on terms that are acceptable to the company and
within its expectations; (F) successfully carry out its global
manufacturing and assembly operations; (G) develop and introduce
products, services and experiences on a timely basis that the
market accepts, that enable the company to generate desired sales
levels and that provide the desired financial returns, including
successfully implementing and executing plans to strengthen and
grow its leadership position in Grand American Touring, large
Cruiser and Trike, and grow its complementary businesses; (H)
perform in a manner that enables the company to benefit from market
opportunities while competing against existing and new competitors;
(I) manage the regulatory compliance matter relating to a
third-party supplier's component part in a manner that avoids
additional costs or recall expenses that are material; (J)
successfully appeal: (i) the revocation of the Binding Origin
Information (BOI) decisions that allowed the company to supply its
European Union (EU) market with certain of its motorcycles produced
at its Thailand operations at a reduced tariff rate and (ii) the
denial of the company's application for temporary relief from the
effect of the revocation of the BOI decisions; (K) manage and
predict the impact that new, reinstated or adjusted tariffs may
have on the company's ability to sell products internationally, and
the cost of raw materials and components, including the temporary
lifting of the Section 232 steel and aluminum tariffs and
incremental tariffs on motorcycles imported into the EU from the
U.S., between the U.S. and EU, which expires on December 31, 2023;
(L) prevent, detect, and remediate any issues with its motorcycles
or any issues associated with the manufacturing processes to avoid
delays in new model launches, recall campaigns, regulatory agency
investigations, increased warranty costs or litigation and adverse
effects on its reputation and brand strength, and carry out any
product programs or recalls within expected costs and timing; (M)
manage the impact that prices for and supply of used motorcycles
may have on its business, including on retail sales of new
motorcycles; (N) successfully manage and reduce costs throughout
the business; (O) manage through changes in general economic and
business conditions, including changing capital, credit and retail
markets, and the changing domestic and international political
environments, including as a result of the conflict in Ukraine; (P)
continue to develop the capabilities of its distributors and
dealers, effectively implement changes relating to its dealers and
distribution methods and manage the risks that its dealers may have
difficulty obtaining capital and managing through changing economic
conditions and consumer demand; (Q) continue to develop and
maintain a productive relationship with Zhejiang Qianjiang
Motorcycle Co., Ltd. and launch related products in a timely
manner; (R) maintain a productive relationship with Hero MotoCorp
as a distributor and licensee of the Harley-Davidson brand name in
India; (S) successfully maintain a manner in which to sell
motorcycles in China and the company's Association of Southeast
Asian Nations (ASEAN) countries that does not subject its
motorcycles to incremental tariffs; (T) manage its Thailand
corporate and manufacturing operation in a manner that allows the
company to avail itself of preferential free trade agreements and
duty rates, and sufficiently lower prices of its motorcycles in
certain markets; (U) accurately estimate and adjust to fluctuations
in foreign currency exchange rates, interest rates and commodity
prices; (V) retain and attract talented employees, and eliminate
personnel duplication, inefficiencies and complexity throughout the
organization; (W) prevent a cybersecurity breach involving
consumer, employee, dealer, supplier, or company data and respond
to evolving regulatory requirements regarding data security; (X)
manage the credit quality, the loan servicing and collection
activities, and the recovery rates of Harley-Davidson Financial
Services Inc.'s loan portfolio; (Y) adjust to tax reform,
healthcare inflation and reform and pension reform, and
successfully estimate the impact of any such reform on the
company's business; (Z) manage through the effects inconsistent and
unpredictable weather patterns may have on retail sales of
motorcycles; (AA) implement and manage enterprise-wide information
technology systems, including systems at its manufacturing
facilities; (BB) manage changes and prepare for requirements in
legislative and regulatory environments for its products, services
and operations; (CC) manage its exposure to product liability
claims and commercial or contractual disputes; (DD) continue to
manage the relationships and agreements that the company has with
its labor unions to help drive long-term competitiveness; (EE)
achieve anticipated results with respect to the company's pre-owned
motorcycle program, Harley-Davidson Certified, and the company's
H-D1 Marketplace; (FF) accurately predict the margins of its
Harley-Davidson Motor Company segment in light of, among other
things, tariffs, inflation, foreign currency exchange rates, the
cost associated with product development initiatives and the
company's complex global supply chain; and (GG) optimize capital
allocation in light of the company's capital allocation
priorities.
The company's ability to sell its motorcycles and related
products and services and to meet its financial expectations also
depends on the ability of the company's dealers to sell its
motorcycles and related products and services to retail customers.
The company depends on the capability and financial capacity of its
dealers to develop and implement effective retail sales plans to
create demand for the motorcycles and related products and services
they purchase from the company. In addition, the company's dealers
and distributors may experience difficulties in operating their
businesses and selling Harley-Davidson motorcycles and related
products and services as a result of weather, economic conditions,
the impact of the COVID-19 pandemic, or other factors.
In recent years, HDFS experienced historically low levels of
retail credit losses, but credit losses have been normalizing in
recent quarters. The company believes that HDFS' retail credit
losses could change over time due to changing consumer credit
behavior, macroeconomic conditions including the impact of
inflation, and HDFS' efforts to adjust underwriting criteria based
on market and economic conditions, as well as actions that the
company has taken and could take that impact motorcycle values. The
company's operations, demand for its products, and its liquidity
could be adversely impacted by work stoppages, facility closures,
strikes, natural causes, widespread infectious disease, terrorism,
war or other hostilities, including the conflict in Ukraine, or other factors. Refer to "Risk
Factors" under Item 1.A of the company's Annual Report on Form 10-K
for the year ended December 31, 2021,
and Part II, Item 1.A of any subsequently filed Quarterly Report on
Form 10-Q, for a discussion of additional risk factors and a more
complete discussion of some of the cautionary statements noted
above.
### (HOG-Earnings)
|
Harley-Davidson,
Inc.
|
Condensed Consolidated
Statements of Operations
|
(In thousands, except
per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
HDMC
revenue(a)
|
|
$
918,683
|
|
$
803,142
|
|
$ 4,887,672
|
|
$ 4,504,434
|
Gross profit
|
|
243,810
|
|
158,449
|
|
1,527,873
|
|
1,299,527
|
Selling, administrative
and engineering expense
|
|
275,966
|
|
238,896
|
|
851,330
|
|
819,979
|
Restructuring (benefit)
expense
|
|
(155)
|
|
2,010
|
|
(544)
|
|
2,741
|
Operating (loss)
income from HDMC
|
|
(32,001)
|
|
(82,457)
|
|
677,087
|
|
476,807
|
|
|
|
|
|
|
|
|
|
LiveWire
revenue(a)
|
|
9,218
|
|
12,873
|
|
46,833
|
|
35,806
|
Gross profit
(loss)
|
|
2,276
|
|
543
|
|
2,904
|
|
(2,574)
|
Selling, administrative
and engineering expense
|
|
30,827
|
|
20,480
|
|
88,219
|
|
65,608
|
Operating loss
from Livewire
|
|
(28,551)
|
|
(19,937)
|
|
(85,315)
|
|
(68,182)
|
|
|
|
|
|
|
|
|
|
HDFS revenue
|
|
214,381
|
|
200,418
|
|
820,625
|
|
796,068
|
HDFS expense
|
|
150,116
|
|
105,093
|
|
503,119
|
|
380,580
|
Restructuring
expense
|
|
-
|
|
238
|
|
-
|
|
674
|
Operating income
from HDFS
|
|
64,265
|
|
95,087
|
|
317,506
|
|
414,814
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
|
3,713
|
|
(7,307)
|
|
909,278
|
|
823,439
|
Non-operating income
(expense), net
|
|
18,853
|
|
12,851
|
|
21,955
|
|
(4,202)
|
Income before income
taxes
|
|
22,566
|
|
5,544
|
|
931,233
|
|
819,237
|
Income tax (benefit)
provision
|
|
(17,111)
|
|
(16,023)
|
|
192,019
|
|
169,213
|
Net income
|
|
$
39,677
|
|
$
21,567
|
|
$
739,214
|
|
$
650,024
|
Less: Loss attributable
to noncontrolling interests
|
|
$
2,194
|
|
$
-
|
|
$
2,194
|
|
$
-
|
Net Income attributable
to Harley-Davidson, Inc.
|
|
$
41,871
|
|
$
21,567
|
|
$
741,408
|
|
$
650,024
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
0.29
|
|
$
0.14
|
|
$
5.01
|
|
$
4.23
|
Diluted
|
|
$
0.28
|
|
$
0.14
|
|
$
4.96
|
|
$
4.19
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
146,187
|
|
153,879
|
|
148,012
|
|
153,747
|
Diluted
|
|
148,956
|
|
155,200
|
|
149,351
|
|
154,980
|
|
|
|
|
|
|
|
|
|
Cash dividends per
share:
|
|
$
0.1575
|
|
$
0.1500
|
|
$
0.6300
|
|
$
0.6000
|
|
|
|
|
|
|
|
|
|
|
(a)
Historically, the Company has operated
with two segments: Motorcycles and Related Products (Motorcycles)
and Financial Services. In connection with the LiveWire transaction
that closed on September 26, 2022 (discussed in Note 20 of the
Notes to Consolidated financial statements included in the
Company's Quarterly Report on Form 10-Q filed on November 3, 2022),
the Company reorganized its business into three segments:
Harley-Davidson Motor Company (HDMC), LiveWire, and Harley-Davidson
Financial Services (HDFS) during the fourth quarter. HDMC includes
the Company's Harley-Davidson motorcycle, parts, accessories,
apparel and licensing business. LiveWire includes the Company's
LiveWire electric motorcycle business. The Financial Services
segment was renamed the HDFS segment but remains unchanged from
periods prior to the reorganization. The change has been
retrospectively reflected in the periods presented
above.
|
|
|
|
|
|
|
|
|
|
Harley-Davidson,
Inc.
|
Condensed Consolidated
Balance Sheets
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
2022
|
|
2021
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
|
Cash
and cash equivalents
|
|
|
|
|
|
$ 1,433,175
|
|
$ 1,874,745
|
Accounts receivable, net
|
|
|
|
|
|
252,225
|
|
182,148
|
Finance receivables, net
|
|
|
|
|
|
1,782,631
|
|
1,465,544
|
Inventories, net
|
|
|
|
|
|
950,960
|
|
712,942
|
Restricted cash
|
|
|
|
|
|
135,424
|
|
128,935
|
Other current assets
|
|
|
|
|
|
196,238
|
|
185,777
|
|
|
|
|
|
|
4,750,653
|
|
4,550,091
|
|
|
|
|
|
|
|
|
|
Finance receivables,
net
|
|
|
|
|
|
5,355,807
|
|
5,106,377
|
Other long-term
assets
|
|
|
|
|
|
1,386,016
|
|
1,394,587
|
|
|
|
|
|
|
$
11,492,476
|
|
$
11,051,055
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
|
|
|
$
998,947
|
|
$
976,959
|
Short-term deposits, net
|
|
|
|
|
|
79,710
|
|
72,146
|
Short-term debt
|
|
|
|
|
|
770,468
|
|
751,286
|
Current portion of long-term debt, net
|
|
|
|
|
|
1,684,782
|
|
1,542,496
|
|
|
|
|
|
|
3,533,907
|
|
3,342,887
|
|
|
|
|
|
|
|
|
|
Long-term debt,
net
|
|
|
|
|
|
4,457,052
|
|
4,595,617
|
Other long-term
liabilities
|
|
|
|
|
|
594,709
|
|
559,307
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
2,906,808
|
|
2,553,244
|
|
|
|
|
|
|
$
11,492,476
|
|
$
11,051,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harley-Davidson,
Inc.
|
Condensed Consolidated
Statements of Cash Flows
|
(In
thousands)
|
|
|
|
|
|
|
|
(Unaudited
|
|
|
|
|
|
|
|
|
Twelve months
ended
|
|
|
|
|
|
|
December 31,
|
|
December 31,
|
|
|
|
|
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
|
|
|
|
$
548,461
|
|
$
975,701
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
|
|
|
(151,669)
|
|
(120,181)
|
Finance
receivables, net
|
|
|
|
|
|
(623,833)
|
|
(341,406)
|
Other investing
activities
|
|
|
|
|
|
2,491
|
|
2,140
|
Net cash used by
investing activities
|
|
|
|
|
|
(773,011)
|
|
(459,447)
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from
issuance of medium-term notes
|
|
|
|
|
|
495,785
|
|
-
|
Repayments of
medium-term notes
|
|
|
|
|
|
(950,000)
|
|
(1,400,000)
|
Proceeds from
securitization debt
|
|
|
|
|
|
1,826,891
|
|
1,169,910
|
Repayments of
securitization debt
|
|
|
|
|
|
(1,442,860)
|
|
(1,340,638)
|
Net increase
(decrease) in unsecured commercial paper
|
|
|
|
|
|
16,003
|
|
(260,250)
|
Borrowings of
asset-backed commercial paper
|
|
|
|
|
|
448,255
|
|
98,863
|
Repayments of
asset-backed commercial paper
|
|
|
|
|
|
(302,922)
|
|
(261,367)
|
Net increase in
deposits
|
|
|
|
|
|
26,605
|
|
210,112
|
Cash received
from business combination(a)
|
|
|
|
|
|
114,068
|
|
-
|
Dividends
paid
|
|
|
|
|
|
(93,180)
|
|
(92,426)
|
Repurchase of
common stock
|
|
|
|
|
|
(338,627)
|
|
(11,623)
|
Other financing
activities
|
|
|
|
|
|
(1,985)
|
|
2,488
|
Net cash used by
financing activities
|
|
|
|
|
|
(201,967)
|
|
(1,884,931)
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash, cash equivalents and restricted cash
|
|
|
|
|
(19,525)
|
|
(15,272)
|
|
|
|
|
|
|
|
|
|
Net decrease in cash,
cash equivalents and restricted cash
|
|
|
|
|
|
$
(446,042)
|
|
$
(1,383,949)
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents
and restricted cash:
|
|
|
|
|
|
|
|
|
Cash, cash equivalents
and restricted cash, beginning of period
|
|
|
|
|
|
$ 2,025,219
|
|
$ 3,409,168
|
Net decrease in cash,
cash equivalents and restricted cash
|
|
|
|
|
|
(446,042)
|
|
(1,383,949)
|
Cash, cash equivalents
and restricted cash, end of period
|
|
|
|
|
|
$ 1,579,177
|
|
$ 2,025,219
|
|
|
|
|
|
|
|
|
|
Reconciliation of cash,
cash equivalents and restricted cash on the Consolidated balance
sheets to the Consolidated statements of cash
flows:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
|
|
$ 1,433,175
|
|
$ 1,874,745
|
Restricted
cash
|
|
|
|
|
|
135,424
|
|
128,935
|
Restricted cash
included in Other long-term assets
|
|
|
|
|
|
10,578
|
|
21,539
|
Cash, cash
equivalents and restricted cash per the Consolidated statements of
cash flows
|
|
|
|
$ 1,579,177
|
|
$ 2,025,219
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) During the period
ended December 31, 2022, the Company received $100 million from an
independent strategic investor, Kwang Yang Motor Co., Ltd. (KYMCO),
and $14 million from LiveWire's merger partner, AEA-Bridges Impact
Corp. (ABIC), related to the LiveWire transaction (discussed in
Note 20 of the Notes to Consolidated financial statements included
in the Company's Quarterly Report on Form 10-Q filed on November 3,
2022). The LiveWire transaction closed on September 26, 2022 as
discussed in the Company's Form 8-K filed on September 30,
2022.
|
|
|
|
|
|
|
|
|
|
HDMC Revenue and
Motorcycle Shipment Data
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
HDMC REVENUE (in
thousands)
|
|
|
|
|
|
|
|
|
Motorcycles
|
|
$
666,387
|
|
$
542,377
|
|
$ 3,787,484
|
|
$ 3,468,689
|
Parts and
accessories
|
|
151,350
|
|
164,433
|
|
731,645
|
|
740,893
|
Apparel
|
|
72,547
|
|
72,720
|
|
271,107
|
|
228,011
|
Licensing
|
|
10,483
|
|
14,925
|
|
39,423
|
|
37,790
|
Other
|
|
17,916
|
|
8,687
|
|
58,013
|
|
29,051
|
|
|
$
918,683
|
|
$
803,142
|
|
$ 4,887,672
|
|
$ 4,504,434
|
|
|
|
|
|
|
|
|
|
HDMC U.S. MOTORCYCLE
SHIPMENTS
|
|
17,839
|
|
15,686
|
|
118,836
|
|
119,761
|
|
|
|
|
|
|
|
|
|
HDMC WORLDWIDE
MOTORCYCLE SHIPMENTS
|
|
|
|
|
|
|
|
|
Grand American Touring(a)
|
|
14,558
|
|
14,476
|
|
89,849
|
|
93,961
|
Cruiser
|
|
11,685
|
|
7,191
|
|
59,010
|
|
59,033
|
Sportster® / Street
|
|
5,709
|
|
5,861
|
|
33,894
|
|
25,123
|
Adventure Touring
|
|
2,031
|
|
1,361
|
|
10,774
|
|
9,916
|
|
|
33,983
|
|
28,889
|
|
193,527
|
|
188,033
|
|
|
|
|
|
|
|
|
|
LiveWire Motorcycle
Shipment Data
|
|
69
|
|
186
|
|
597
|
|
461
|
|
|
|
|
|
|
|
|
|
(a)
CVO™ and Trike
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HDMC Gross
Profit
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
The estimated impact of
significant factors affecting the comparability of gross profit
from 2021 to 2022 were as follows (in millions):
|
|
|
Three months
ended
|
|
|
|
Twelve months
ended
|
|
|
2021 gross
profit
|
|
$
158
|
|
|
|
$
1,300
|
|
|
Volume
|
|
15
|
|
|
|
58
|
|
|
Price and sales
incentives
|
|
72
|
|
|
|
330
|
|
|
Foreign currency
exchange rates and hedging
|
|
(22)
|
|
|
|
(66)
|
|
|
Shipment mix
|
|
(4)
|
|
|
|
1
|
|
|
Raw material
prices
|
|
(5)
|
|
|
|
(30)
|
|
|
Manufacturing and other
costs
|
|
30
|
|
|
|
(65)
|
|
|
|
|
86
|
|
|
|
228
|
|
|
2022 gross
profit
|
|
$
244
|
|
|
|
$
1,528
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
HDFS Finance
Receivables Allowance for Credit Losses
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
Balance, beginning of
period
|
|
$
360,096
|
|
$
355,834
|
|
$
339,379
|
|
$
390,936
|
Provision for credit
losses
|
|
50,561
|
|
20,114
|
|
145,133
|
|
25,049
|
Charge-offs, net of
recoveries
|
|
(51,946)
|
|
(36,569)
|
|
(125,801)
|
|
(76,606)
|
Balance, end of
period
|
|
$
358,711
|
|
$
339,379
|
|
$
358,711
|
|
$
339,379
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Worldwide Retail Sales
of Harley-Davidson Motorcycles(a)
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
|
Three months
ended
|
|
Twelve months
ended
|
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
December 31,
|
|
|
2022
|
|
2021
|
|
2022
|
|
2021
|
|
|
|
|
|
|
|
|
|
United
States
|
|
18,367
|
|
18,761
|
|
109,190
|
|
125,713
|
Canada
|
|
816
|
|
733
|
|
7,924
|
|
8,005
|
Total North
America
|
|
19,183
|
|
19,494
|
|
117,114
|
|
133,718
|
EMEA
|
|
6,562
|
|
6,466
|
|
30,510
|
|
30,907
|
Asia Pacific
|
|
7,532
|
|
6,794
|
|
27,905
|
|
25,020
|
Latin
America
|
|
557
|
|
1,032
|
|
2,922
|
|
3,652
|
Total worldwide retail
sales
|
|
33,834
|
|
33,786
|
|
178,451
|
|
193,297
|
|
|
|
|
|
|
|
|
|
|
(a)
Data source for retail sales figures
shown above is new sales warranty and registration information
provided by dealers and compiled by the Company. The Company must
rely on information that its dealers supply concerning new retail
sales, and the Company does not regularly verify the information
that its dealers supply. This information is subject to
revision.
|
|
|
|
|
|
|
|
|
|
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SOURCE Harley-Davidson, Inc.