HARLEY-DAVIDSON INC
For the period ended Mar 31, 2024. Filed May 6, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2024 · Filed May 6, 2024
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6. Additional Balance Sheet and Cash Flow Information
- Additional Balance Sheet and Cash Flow Information
Investments in Marketable Securities –The Company’s investments in marketable securities consisted of the following (in thousands):
| March 31,2024 | December 31,2023 | March 31,2023 | |
|---|---|---|---|
| Mutual funds | $36,484 | $34,079 | $34,017 |
Mutual funds, included in Other long-term assets on the Consolidated balance sheets, are carried at fair value with gains and losses recorded in income. Mutual funds are held to support certain deferred compensation obligations.
Inventories, net –Substantially all inventories located in the U.S. are valued using the last-in, first-out (LIFO) method. Other inventories are valued at the lower of cost or net realizable value using the first-in, first-out (FIFO) method. Motorcycle finished goods inventories include motorcycles that are ready for sale and motorcycles that are substantially complete but awaiting installation of certain components affected by supply chain constraints. Inventories, net consisted of the following (in thousands):
| March 31,2024 | December 31,2023 | March 31,2023 | |
|---|---|---|---|
| Raw materials and work in process | $341,884 | $389,221 | $387,466 |
| Motorcycle finished goods | 422,504 | 514,964 | 380,083 |
| Parts and accessories and apparel | 144,157 | 150,844 | 182,905 |
| Inventory at lower of FIFO cost or net realizable value | 908,545 | 1,055,029 | 950,454 |
| Excess of FIFO over LIFO cost | (128,970) | (125,078) | (119,933) |
| $779,575 | $929,951 | $830,521 |
Deposits– HDFS offers brokered certificates of deposit to customers indirectly through contractual arrangements with third-party banks and/or securities brokerage firms through its bank subsidiary. The Company had $441.2 million, $447.8 million, and $369.3 million, net of fees, of interest-bearing brokered certificates of deposit outstanding as of March 31, 2024, December 31, 2023, and March 31, 2023, respectively. The liabilities for deposits are included in Short-term deposits, net or Long-term deposits, net on the Consolidated balance sheets based upon the term of each brokered certificate of deposit issued. Each separate brokered certificate of deposit is issued under a master certificate, and as such, all outstanding brokered certificates of deposit are considered below the Federal Deposit Insurance Corporation insurance coverage limits.
Future maturities of the Company's certificates of deposit as of March 31, 2024 were as follows (in thousands):
| 2024 | $163,607 |
| 2025 | 103,496 |
| 2026 | 120,725 |
| 2027 | 54,138 |
| Thereafter | — |
| Future maturities | 441,966 |
| Unamortized fees | (798) |
| $441,168 |
Operating Cash Flow –The reconciliation of Net income to Net cash provided by operating activities was as follows (in thousands):
| Three months ended | ||
|---|---|---|
| March 31,2024 | March 31,2023 | |
| Cash flows from operating activities: | ||
| Net income | $232,233 | $301,829 |
| Adjustments to reconcile Net income to Net cash provided by operating activities: | ||
| Depreciation and amortization | 41,504 | 34,352 |
| Amortization of deferred loan origination costs | 18,282 | 21,858 |
| Amortization of financing origination fees | 3,358 | 3,011 |
| Provision for long-term employee benefits | (13,933) | (16,939) |
| Employee benefit plan contributions and payments | (1,399) | (1,739) |
| Stock compensation expense | 16,212 | 23,628 |
| Net change in wholesale finance receivables related to sales | (435,047) | (487,314) |
| Provision for credit losses | 61,010 | 52,364 |
| Deferred income taxes | 5,399 | 5,648 |
| Other, net | 1,769 | (21,671) |
| Changes in current assets and liabilities: | ||
| Accounts receivable, net | (47,119) | (77,993) |
| Finance receivables – accrued interest and other | 1,213 | 2,252 |
| Inventories, net | 131,529 | 123,047 |
| Accounts payable and accrued liabilities | 53,233 | 43,787 |
| Other current assets | 35,753 | 40,557 |
| (128,236) | (255,152) | |
| Net cash provided by operating activities | $103,997 | $46,677 |
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