Harley-Davidson Announces Fourth Quarter, Full-Year 2019 Results

MILWAUKEE, Jan. 28, 2020 /PRNewswire/ -- Harley-Davidson, Inc. (NYSE:HOG) today reported fourth quarter and full-year 2019 results. Fourth quarter earnings per share (EPS) was up year-over-year and overall performance in the quarter and full-year was in line with company expectations. The company advanced its More Roads to Harley-Davidson plan and is on-track to realize its expectation of significant growth in 2021.

2019 Highlights and Results

    --  Delivered fourth quarter GAAP diluted EPS of $0.09; up year-over-year
    --  Advanced More Roads plan, on-track for significant 2021 growth
    --  Increased focus on rider commitment; in the U.S., 527,000 riders joined
        in 2019, up year-over-year(1)
    --  Tempered worldwide year-over-year retail sales rate of decline
    --  Completed steps to mitigate the majority of recent EU and China tariff
        impacts in 2020
    --  Completed key milestones of the manufacturing optimization initiative
        and exceeded expected full-year savings
    --  Repurchased $286.7 million of shares; increased dividends 1.4 percent
        versus prior year to $1.50 per share

Fourth quarter 2019 GAAP diluted EPS was $0.09. Year-ago GAAP diluted EPS was $0.00. Excluding restructuring plan costs and the impact of recent EU and China tariffs, adjusted fourth quarter 2019 diluted EPS was $0.20 compared to $0.17 in the fourth quarter of 2018. Fourth quarter 2019 net income was $13.5 million on consolidated revenue of $1.07 billion versus net income of $0.5 million on consolidated revenue of $1.15 billion in the fourth quarter of 2018.

Full-year 2019 GAAP diluted EPS was $2.68. Year-ago GAAP diluted EPS was $3.19. Excluding restructuring plan costs and the impact of recent EU and China tariffs, adjusted 2019 diluted EPS was $3.36 compared to $3.78 in 2018. Full-year 2019 net income was $423.6 million on consolidated revenue of $5.36 billion versus net income of $531.5 million on consolidated revenue of $5.72 billion in 2018.

"Our performance in Q4 and the full year was in line with our expectations and indicative of increased business stability driven by the tremendous efforts of our employees and dealers," said Matt Levatich, president and chief executive officer of Harley-Davidson. "In 2019, we took important steps toward returning to significant growth in 2021 - including launching LiveWire, our first electric motorcycle, optimizing our global dealer network and expanding our international footprint," said Levatich.

Strategy to Build Riders; Accelerated plan for growth

Harley-Davidson's strategy to build the next generation of Harley-Davidson riders globally is supported by these strategic objectives from 2017 through 2027: expand to 4 million total Harley-Davidson riders in the U.S., grow international business to 50 percent of annual Harley-Davidson Motor Company (HDMC) revenue, launch 100 new high impact motorcycles, deliver superior return on invested capital for HDMC (S&P 500 top 25%) and grow its business without growing its environmental impact.

More Roads to Harley-Davidson is the company's accelerated plan for growth that aims to deliver sustainable growth and build committed riders from 2018 through 2022. The company is focusing investment and building new capabilities to invigorate the Harley-Davidson brand to spark passion that deepens rider commitment. The company's More Roads plan leverages and integrates new products, broader access, stronger dealers and amplifying the brand as catalysts to ignite and sustain momentum and deliver growth.

The company plans to maintain its targeted investment and return profile and capital allocation strategy, while it funds strategic opportunities expected to drive significant revenue growth and expand operating margin starting in 2021.

In 2019, Harley-Davidson continued to advance its More Roads plan initiatives, including:

    --  Asserted its leadership in the electrification of motorcycles with the
        launch of LiveWire(TM), the company's first electric motorcycle, and
        IRONe(TM), an electric-powered two-wheeler for kids
    --  Launched new high impact models and delivered significant technology to
        its class-leading model year 2020 motorcycles to inspire new and
        existing riders
    --  Commissioned Thailand manufacturing facility and established a China
        distribution center, increasing customer access with more competitive
        prices
    --  Improved and expanded global ecommerce and digital capabilities
    --  Advanced good-to-great dealers - meeting its customer experience and
        sales conversion targets
    --  Honed and accelerated efforts to amplify brand and build committed
        riders; more riders joined Harley-Davidson in the U.S. in 2019 compared
        to 2018 and the total pool of Harley-Davidson riders in the U.S. grew to
        3.1 million in 2019(1)

"We see 2020 as the pivotal year in the transformation of Harley-Davidson. This year we will broaden the reach of our brand and build more committed riders as we enter new and growing segments in motorcycling and eBicycles; more and easier access to two-wheeled freedom on a Harley is well underway," said Levatich.

Manufacturing Optimization

Harley-Davidson exceeded full-year expected savings from its manufacturing optimization initiative, realizing savings of $32.2 million, ahead of its estimate of $25 million to $30 million and incurred costs of $43.0 million in 2019. Aiming to further improve its manufacturing operations and cost structure, the company initiated efforts in the first quarter of 2018 including closing its wheel manufacturing facility in Australia and consolidating its motorcycle assembly plant in Kansas City, Mo. into its plant in York, Pa. The company continues to expect annual ongoing cash savings of $65 million to $75 million starting in 2021.

Harley-Davidson Retail Motorcycle Sales


                               Vehicles             4th Quarter             
          
              Full-Year

                                    ---

        
            
              2019          2018                  Change        2019        2018              Change

                   ---

                    U.S.                20,204 20,849       (3.1)%     125,960     132,868              (5.2)%

    ---


        EMEA                            7,187  7,353       (2.3)%      44,086      46,602              (5.4)%

    ---

         Asia Pacific                    7,691  7,244        6.2 %      29,513      28,724               2.7 %

    ---

         Latin America                   2,513  2,515       (0.1)%       9,768      10,167              (3.9)%

    ---


        Canada                          1,159  1,350      (14.1)%       8,946       9,690              (7.7)%

    ---

                    International Total 18,550 18,462        0.5 %      92,313      95,183              (3.0)%

    ---

                    Worldwide Total     38,754 39,311       (1.4)%     218,273     228,051              (4.3)%

    ---

U.S. retail sales rate declines continued to temper. The year-over-year retail sales rate of decline in the fourth quarter was the lowest in 12 quarters and the full-year retail sales rate of decline was the lowest since 2016. Fourth quarter 601+cc U.S. market share was up 1.0 percentage points, to 50.4 percent and full-year market share was 49.1 percent, down slightly versus 2018.

International retail sales were up slightly in the fourth quarter behind continued growth in emerging markets. Full-year international retail sales finished down 3.0 percent. Harley-Davidson's full-year 601+cc Europe market share was 8.9 percent.

Motorcycles and Related Products Segment Results


        
              
                $ in thousands                        4th Quarter               
          
                Full-Year

                                           ---

        
              
                2019                2018                         Change        2019         2018                         Change

                    ---

        Motorcycle Shipments (vehicles)           40,454     43,489                  (7.0)%    213,939      228,665                         (6.4)%

    ---


       Revenue                                 $874,095   $955,633                  (8.5)% $4,572,678   $4,968,646                         (8.0)%

    ---


          Motorcycles                          $666,287   $738,167                  (9.7)% $3,538,269   $3,882,963                         (8.9)%

    ---


          Parts & Accessories                  $129,266   $142,168                  (9.1)%   $713,400     $754,663                         (5.5)%

    ---


          General Merchandise                   $57,187    $58,444                  (2.2)%   $237,566     $241,964                         (1.8)%

    ---


       Gross Margin                               25.2%     27.6%  
              (2.3) pts.      29.4%       32.5%   
              (3.2) pts.

    ---


       Operating (Loss) Income                ($46,460) ($59,543)                  22.0%   $289,620     $422,363                        (31.4)%

    ---


       Operating Margin                          (5.3)%    (6.2)%  
              0.9 pts.         6.3%        8.5%   
              (2.2) pts.

    ---

Revenue from the Motorcycles and Related Products (Motorcycles) segment was down in the fourth quarter and on a full-year basis. Full-year operating income decreased primarily due to lower revenues and increased tariff costs, partially offset by lower SG&A and restructuring expense.

Financial Services Segment Results



         
                $ in thousands                 4th Quarter                                     Full-Year

                                  ---

        
           
                2019         2018                      Change         2019          2018                 Change

                ---


         Revenue                     $198,176 $190,229         4.2%      $789,111      $748,229                 5.5 %

    ---

          Operating Income             $58,855  $63,286       (7.0)%      $265,988      $291,160                (8.6)%

    ---

Financial Services segment full-year operating income of $266.0 million was down 8.6 percent.

Other Results

Cash and marketable securities were $833.9 million at the end of the year, compared to $1.21 billion at the end of 2018. Harley-Davidson generated $868.3 million of cash from operating activities in 2019 compared to $1.21 billion in 2018. The company paid a cash dividend of $0.375 per share in the fourth quarter, and a cumulative total of $1.50 per share on a full-year basis. On a discretionary basis, Harley-Davidson repurchased 2.2 million shares of its common stock during the quarter for $78.7 million, and 8.2 million shares for $286.7 million on a full-year basis. During the quarter, there were 154.9 million weighted-average diluted common shares outstanding. At the end of the quarter, 8.2 million shares remained on a board-approved share repurchase authorization.

Harley-Davidson's full-year effective tax rate was 24.0 percent.

2020 Outlook

For the full-year 2020, the company expects the following:

    --  Motorcycles segment revenue of approximately $4.53 to $4.66 billion. In
        the first quarter, the company expects Motorcycles segment revenue of
        approximately 1.09 to 1.17 billion
    --  Motorcycles segment operating margin as a percent of revenue of
        approximately 7 to 8 percent
    --  Financial Services segment operating income approximately flat
        year-over-year
    --  Effective tax rate of approximately 24 to 25 percent
    --  Capital expenditures of approximately $215 million to $235 million

(1) Data and analysis based on IHS Markit Motorcycles in Operation (MIO) data for On-highway and Dual purpose bikes in the U.S. Snapshot based on data as of Dec. 31, 2019 compared to Dec. 31, 2018.

Company Background

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

Webcast Presentation

Harley-Davidson will discuss fourth quarter and full-year 2019 results and its outlook on an audio webcast at 8:00 a.m. CT today. The webcast login and supporting slides can be accessed at http://investor.harley-davidson.com/news-and-events/events-and-presentations. The audio replay will be available by approximately 10:00 a.m. CT.

Non-GAAP Measures

This press release includes financial measures that have not been calculated in accordance with U.S. generally accepted accounting principles (GAAP) and are therefore referred to as non-GAAP financial measures. The non-GAAP measures described below are intended to be considered by users as supplemental information to the equivalent GAAP measures, to aid investors in better understanding the company's financial results. The company believes that these non-GAAP measures provide useful perspective on underlying business results and trends, and a means to assess period-over-period results. These non-GAAP measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP measures may not be the same as similarly titled measures used by other companies due to possible differences in method and in items or events being adjusted.

The non-GAAP measures included in this press release are adjusted net income and adjusted diluted EPS excluding restructuring plan costs and the impact of recent EU and China tariffs. Restructuring plan costs include restructuring expenses as presented in the consolidated statements of income and costs associated with temporary inefficiencies incurred in connection with the manufacturing optimization initiative included in Motorcycles and Related Products cost of goods sold. The impact of recent EU and China tariffs includes incremental European Union and China tariffs imposed beginning in 2018 on the company's products shipped from the U.S., as well as incremental U.S. tariffs imposed beginning in 2018 on certain items imported from China. The impact of recent EU and China tariffs excludes higher metals cost resulting from the U.S. steel and aluminum tariffs. These adjustments are consistent with the approach used for 2018 to determine performance relative to financial objectives under the company's incentive compensation plans. A reconciliation of these non-GAAP measures from the comparable GAAP measure is included later in this press release.

Forward-Looking Statements

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

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

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

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

### (HOG-F)


                                                                
              Harley-Davidson, Inc.


                                                             
      Condensed Consolidated Statements of Income


                                                              
      (In thousands, except per share amounts)




                                     
         (Unaudited)                 
              (Unaudited)                
      (Unaudited)


                                  
        Three months ended          
              Twelve months ended


                                    
         December 31,                
              December 31,               
      December 31,         
     December 31,


                                                        2019                                    2018                           2019                    2018





      Motorcycles and Related
       Products revenue                             $874,095                                $955,633                     $4,572,678              $4,968,646



     Gross profit                                   220,639                                 263,577                      1,342,880               1,616,850


      Selling, administrative and
       engineering expense                           266,428                                 303,763                      1,020,907               1,101,086


      Restructuring expense                              671                                  19,357                         32,353                  93,401


        Operating (loss) income
         from Motorcycles and
         Related Products                           (46,460)                               (59,543)                       289,620                 422,363




      Financial Services revenue                     198,176                                 190,229                        789,111                 748,229


      Financial Services expense                     139,321                                 126,943                        523,123                 457,069


        Operating income from
         Financial Services                           58,855                                  63,286                        265,988                 291,160






     Operating income                                12,395                                   3,743                        555,608                 713,523


      Other income (expense), net                      4,657                                   1,530                         16,514                   3,039


      Investment income (loss)                         4,401                                 (1,679)                        16,371                     951



     Interest expense                                 7,774                                   7,704                         31,078                  30,884


      Income (loss) before income
       taxes                                          13,679                                 (4,110)                       557,415                 686,629


      Income tax provision
       (benefit)                                         183                                 (4,605)                       133,780                 155,178



     Net income                                     $13,496                                    $495                       $423,635                $531,451





      Earnings per share:



       Basic                                          $0.09                     
              $      -                         $2.70                   $3.21



       Diluted                                        $0.09                     
              $      -                         $2.68                   $3.19




      Weighted-average shares:



       Basic                                        153,947                                 162,073                        157,054                 165,672



       Diluted                                      154,913                                 163,014                        157,804                 166,504




      Cash dividends per share:                       $0.375                                  $0.370                         $1.500                  $1.480


                                                                                 
              Harley-Davidson, Inc.


                                                                   
              Reconciliation of GAAP Amounts to Non-GAAP Amounts


                                                                        
              (In thousands, except per share amounts)




                                                      
         (Unaudited)                          
              (Unaudited)           
      (Unaudited)          
      (Unaudited)


                                                   
        Three months ended                   
              Twelve months ended


                                                     
         December 31,                         
              December 31,          
      December 31,         
      December 31,


                                                                         2019                                             2018                      2019                     2018



                     Net income excluding
                      restructuring plan costs and
                      the impact of recent EU and
                      China tariffs

    ---


       Net income (GAAP)                                             $13,496                                             $495                  $423,635                 $531,451


        Restructuring plan costs                                          973                                           22,944                    42,688                  106,314


        Impact of recent EU and China
         tariffs                                                       20,881                                           13,363                    97,852                   23,675


        Tax effect of adjustments(1)                                  (4,568)                                         (8,804)                 (33,729)                (31,522)



        Adjustments, net of tax                                        17,286                                           27,503                   106,811                   98,467


        Adjusted net income (non-GAAP)                                $30,782                                          $27,998                  $530,446                 $629,918





                     Diluted EPS excluding
                      restructuring plan costs and
                      the impact of recent EU and
                      China tariffs

    ---


       Diluted EPS (GAAP)                                              $0.09                              
              $      -                    $2.68                    $3.19


        Adjustments net of tax, per
         share                                                           0.11                                             0.17                      0.68                     0.59


        Adjusted diluted EPS (non-GAAP)                                 $0.20                                            $0.17                     $3.36                    $3.78


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


                                                           
             Harley-Davidson, Inc.


                                                         
       Condensed Consolidated Balance Sheets


                                                              
              (In thousands)




                                                                                                 
      (Unaudited)


                                                                                                
      December 31,       
     December 31,


                                                                                                                 2019                  2018




       
                ASSETS

    ---


       Current assets:


            Cash and cash equivalents                                                                        $833,868            $1,203,766



           Marketable securities                                                                                                   10,007


            Accounts receivable, net                                                                          259,334               306,474


            Finance receivables, net                                                                        2,272,522             2,214,424



           Inventories, net                                                                                  603,571               556,128



           Restricted cash                                                                                    64,554                49,275



           Other current assets                                                                              168,974               144,368


                                                                                                            4,202,823             4,484,442





       Finance receivables, net                                                                            5,101,844             5,007,507



       Other long-term assets                                                                              1,223,492             1,173,715


                                                                                                          $10,528,159           $10,665,664





                     LIABILITIES AND SHAREHOLDERS' EQUITY

    ---


       Current liabilities:


            Accounts payable and accrued
             liabilities                                                                                     $876,668              $885,991



           Short-term debt                                                                                   571,995             1,135,810


            Current portion of long-term debt,
             net                                                                                            1,748,109             1,575,799


                                                                                                            3,196,772             3,597,600





       Long-term debt, net                                                                                 5,124,826             4,887,667


        Pension and postretirement healthcare
         liabilities                                                                                        128,651               202,229


        Other long-term liabilities                                                                           273,911               204,219





       Shareholders' equity                                                                                1,803,999             1,773,949


                                                                                                          $10,528,159           $10,665,664


                                                             
              Harley-Davidson, Inc.


                                                
              Condensed Consolidated Statements of Cash Flows


                                                                
               (In thousands)




                                                                                        
              (Unaudited)


                                                                                    
              Twelve months ended


                                                                                       
              December 31,       
     December 31,


                                                                                                                2019                  2018





      Net cash provided by
       operating activities                                                                                 $868,272            $1,205,921




      Cash flows from investing
       activities:


        Capital expenditures                                                                               (181,440)            (213,516)


        Finance receivables, net                                                                           (347,605)            (427,148)


        Acquisition of business                                                                              (7,000)


        Other investing activities                                                                            27,919              (21,605)


      Net cash used by investing
       activities                                                                                          (508,126)            (662,269)




      Cash flows from financing
       activities:


        Proceeds from issuance of
         medium-term notes                                                                                 1,203,236             1,591,828


        Repayments of medium-term
         notes                                                                                           (1,350,000)            (877,488)


        Proceeds from
         securitization debt                                                                               1,021,453


        Repayments of
         securitization debt                                                                               (353,251)            (257,869)


        Net decrease in credit facilities and unsecured commercial
         paper                                                                                        (563,453)            (135,356)


        Borrowings of asset-backed
         commercial paper                                                                                    177,950               509,742


        Repayments of asset-backed
         commercial paper                                                                                  (318,006)            (212,729)



       Dividends paid                                                                                     (237,221)            (245,810)


        Repurchase of common stock                                                                         (296,520)            (390,606)


        Issuance of common stock under employee
         stock option plans                                                                                 3,589                 3,525


      Net cash used by financing
       activities                                                                                          (712,223)             (14,763)




      Effect of exchange rate changes on cash, cash equivalents
       and restricted cash                                                                              (2,305)             (15,351)




      Net (decrease) increase in cash, cash equivalents and
       restricted cash                                                                               $(354,382)             $513,538





      Cash, cash equivalents and
       restricted cash:


        Cash, cash equivalents and restricted cash, beginning of
         period                                                                                      $1,259,748              $746,210


        Net (decrease) increase in cash, cash equivalents and
         restricted cash                                                                              (354,382)              513,538


        Cash, cash equivalents and restricted cash,
         end of period                                                                                   $905,366            $1,259,748





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


        Cash and cash equivalents                                                                           $833,868            $1,203,766


        Restricted cash                                                                                       64,554                49,275


        Restricted cash included in Other long-
         term assets                                                                                        6,944                 6,707


        Cash, cash equivalents and restricted cash per the
         Consolidated statements of cash flows                                                         $905,366            $1,259,748

                                                                                                                                 ===


                            Adoption of New Accounting
                             Standards

    ---

               On January 1, 2019, the company
                adopted Accounting Standards
                Update 2016-02 Leases using the
                modified retrospective method. As
                a result, the company recorded a
                right-of-use lease asset of
                approximately $60 million and a
                corresponding lease liability.


                                                                                
              Motorcycles and Related Products Revenue


                                                                                     
               and Motorcycle Shipment Data


                                                                                         
              (Revenue in thousands)




                                                            
           Three months ended                  
              Twelve months ended


                                                               
           December 31,                        
              December 31,          
     December 31,         
     December 31,


                                                                                     2019                                            2018                     2019                    2018



                     MOTORCYCLES AND RELATED PRODUCTS
                      REVENUE

    ---


         Motorcycles                                                            $666,287                                        $738,167               $3,538,269              $3,882,963



         Parts & Accessories                                                     129,266                                         142,168                  713,400                 754,663



         General Merchandise                                                      57,187                                          58,444                  237,566                 241,964



         Licensing                                                                 8,818                                           9,231                   35,917                  38,676



         Other                                                                    12,537                                           7,623                   47,526                  50,380


                                                                                 $874,095                                        $955,633               $4,572,678              $4,968,646





                     MOTORCYCLE SHIPMENTS

    ---


           United States                                                          22,845                                          24,376                  124,326                 132,433



           International                                                          17,609                                          19,113                   89,613                  96,232


                                                                                   40,454                                          43,489                  213,939                 228,665





                     MOTORCYCLE PRODUCT MIX

    ---


           Touring                                                                15,147                                          17,817                   91,018                 101,942



           Cruiser(1)                                                             16,685                                          16,578                   76,052                  78,529


            Sportster(R)/Street                                                     8,622                                           9,094                   46,869                  48,194


                                                                                   40,454                                          43,489                  213,939                 228,665






       
                (1) Includes Softail(R), CVOTM, and LiveWireTM






                                                                        
              Worldwide Retail Sales of Harley-Davidson Motorcycles(1)




                                                            
           Three months ended                  
              Twelve months ended


                                                               
           December 31,                        
              December 31,          
     December 31,         
     December 31,


                                                                                     2019                                            2018                     2019                    2018






       United States                                                              20,204                                          20,849                  125,960                 132,868





       Europe(2)                                                                   6,115                                           6,212                   38,441                  41,179



       EMEA - Other                                                                1,072                                           1,141                    5,645                   5,423




       Total EMEA                                                                  7,187                                           7,353                   44,086                  46,602





       Asia Pacific(3)                                                             4,534                                           4,303                   17,753                  18,429



       Asia Pacific - Other                                                        3,157                                           2,941                   11,760                  10,295




       Total Asia Pacific                                                          7,691                                           7,244                   29,513                  28,724





       Latin America                                                               2,513                                           2,515                    9,768                  10,167



       Canada                                                                      1,159                                           1,350                    8,946                   9,690



          Total international retail sales                                         18,550                                          18,462                   92,313                  95,183


              Total worldwide retail sales                                         38,754                                          39,311                  218,273                 228,051


                            (1) Data source for retail sales
                             figures shown above is new sales
                             warranty and registration
                             information provided by Harley-
                             Davidson dealers and compiled by
                             the company. The company must
                             rely on information that its
                             dealers supply concerning new
                             retail sales, and the company
                             does not regularly verify the
                             information that its dealers
                             supply. This information is
                             subject to revision.




                            (2) Europe data includes Austria,
                             Belgium, Denmark, Finland,
                             France, Germany, Greece, Italy,
                             Luxembourg, Netherlands, Norway,
                             Portugal, Spain, Sweden,
                             Switzerland, and the United
                             Kingdom




                            (3) Asia Pacific data includes
                             Japan, Australia, New Zealand
                             and Korea


                
     Motorcycle Registration Data(1)




                            
              Twelve months ended


                               
              December 31,       
     December 31,


                                                        2019                  2018



      United
      States(2)                                      252,842               263,750


     Europe(3)                                       425,998               397,669


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




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




                            (3) Europe data includes Austria,
                             Belgium, Denmark, Finland, France,
                             Germany, Greece, Italy,
                             Luxembourg, Netherlands, Norway,
                             Portugal, Spain, Sweden,
                             Switzerland, and the United
                             Kingdom. Industry retail
                             motorcycle registration data
                             includes 601+cc models derived
                             from information provided by
                             Association des Constructeurs
                             Europeens de Motocycles, an
                             independent agency. This third-
                             party data is subject to revision
                             and update.

View original content to download multimedia:http://www.prnewswire.com/news-releases/harley-davidson-announces-fourth-quarter-full-year-2019-results-300994151.html

SOURCE Harley-Davidson, Inc.