Harley Davidson 2008 Annual Report Download - page 12

In 2008, Harley-Davidson’s net revenue decreased 2.3
percent to $5.59 billion compared to 2007, on an 8.2
percent reduction in shipments of Harley-Davidson®
motorcycles. Net income decreased 29.9 percent
from the prior year to $654.7 million, reecting both
the performance of the Company’s motorcycle
business and lower protability at Harley-Davidson
Financial Services.
Revenue from sales of Harley-Davidson motorcycles
decreased to $4.28 billion in 2008, a decline of
3.8 percent from 2007. Revenue from Genuine Parts
and Accessories in 2008 totaled $858.7 million, a
1.1 percent decrease from the previous year, and
General Merchandise revenue was $313.8 million,
an increase of 2.8 percent compared to 2007.
Harley-Davidson continues to effectively manage
its balance sheet and realized a return on invested
capital (ROIC) at the end of 2008 of 17.0 percent.
The Company’s share price declined 63.7 percent
during 2008, further reecting the impact of
macro-economic conditions on Harley-Davidson’s
performance. For the ten-year period ending on
December 31, 2008, Harley-Davidson shares
experienced a negative compound annual total return
of 2.2 percent per year, which compares to a
positive compound annual total return of 13.9 percent
for the ten years ending December 31, 2007. The
Company paid out dividends of $1.29 per share
in 2008, a 21.7 percent increase over 2007.
Harley-Davidson has paid a dividend every year
since 1993.
HARLEY-DAVIDSON MOTORCYCLES > Worldwide
retail sales of Harley-Davidson motorcycles declined
7.1 percent in 2008 compared to 2007.
In the United States, 2008 retail sales of 218,939
Harley-Davidson motorcycles decreased 13.0 percent
from 2007 and overall U.S. heavyweight market
registrations declined 7.0 percent.
For the full year 2008, retail sales of Harley-Davidson
motorcycles in our international markets increased
10.3 percent compared to 2007. For the same
period, retail sales of Harley-Davidson motorcycles
increased 6.5 percent in the Europe Region, 47.0
percent in the Latin America Region, 11.7 percent in
Canada and 7.7 percent in the Asia Pacic Region.
In 2008, the Company shipped 303,479
motorcycles to dealers worldwide, compared to
330,619 units in 2007.
HARLEY-DAVIDSON FINANCIAL SERVICES >
Financial Services operating income was $82.8
million in 2008 compared to $212.2 million in 2007,
primarily due to lower securitization income and
write-downs of nance receivables held for sale and
investment in retained securitization interests.
FINANCIAL PERFORMANCE SUMMARY
In thousands, except per-share amounts 2008 2007 2006
Income statement data:
Net revenue $ 5,594,307 $ 5,726,848 $ 5,800,686
Cost of goods sold 3,663,488 3,612,748 3,567,839
Gross profit 1,930,819 2,114,100 2,232,847
Financial services income 376,970 416,196 384,891
Financial services expense 294,205 204,027 174,167
Operating income from nancial services 82,765 212,169 210,724
Selling, administrative and engineering expense 984,560 900,708 846,418
Income from operations 1,029,024 1,425,561 1,597,153
Investment income 9,495 22,258 27,087
Interest expense 4,542 – –
Income before provision for income taxes 1,033,977 1,447,819 1,624,240
Provision for income taxes 379,259 513,976 581,087
Net income $ 654,718 $ 933,843 $ 1,043,153
Weighted-average common shares:
Basic 234,225 249,205 264,453
Diluted 234,477 249,882 265,273
Earnings per common share:
Basic $ 2.80 $ 3.75 $ 3.94
Diluted $ 2.79 $ 3.74 $ 3.93
Dividends paid per common share $ 1.29 $ 1.06 $ 0.81
Balance sheet data:
Working capital $ 2,774,124 $ 1,562,235 $ 1,954,956
Finance receivables held for sale 2,443,965 781,280 547,106
Finance receivables held for investment, net 2,195,563 2,420,327 2,280,217
Total assets 7,828,625 5,656,606 5,532,150
Current debt 1,738,649 1,119,955 832,491
Long-term debt 2,176,238 980,000 870,000
Total debt 3,914,887 2,099,955 1,702,491
Shareholder equity $ 2,115,603 $ 2,375,491 $ 2,756,737
Number of shareholders of record 89,298 90,748 88,995
WORLDWIDE
NET REVE NUE BY PRODUC T L INE
Dollars in millions
76.5 % HARLEY-DAVIDSON MOTORCYCLES $4,278.2
15.3 % PARTS & AC CESSORIES 858.7
5.6 % GENERAL MERCHANDISE 313.8
2.2
% BUELL MOTO RCYCLES 123.1
0.4
% OTHER 20.5
TOTAL NET REVENUE $5,594.3
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WORLDWIDE
NET REVE NUE BY REGION
Dollars in millions
68.7 % UNITE D STATES $3,843.9
16.2 % EUROPE 904.1
5.0 % JAPAN 279.4
4.6 % CANADA 256.6
3.0 % AUSTRALIA 168.1
2.5 % REST OF WORLD 142.2
TOTAL NET REVENUE $5,594.3
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FINANCIAL HIGHLIGHTS
18 > H A RL E Y-DAV I DS ON, I NC. 2008 A NNUA L RE P ORT
S&P 500 20-YEAR COMPARISON OF YEAR-END VALUE OF $100 INVESTED DEC. 31, 1988. ASSUMES FOR BOTH HARLEY-DAVIDSON AND S&P THAT ALL DIVIDENDS ARE REINVESTED.H-D
25,000
20,000
15,000
10,000
5,000
0
9998979695949392919089
HARLEY-DAVIDSON, INC.
VS. STANDAR D & POOR’S 5 00 COMPOSI TE IND EX
In dollars
0605040200 01 03 07 08
161
374
156
367
204
852
220
1,433
242
1,686
245
2,152
337
2,224
414
3,650
553
4,257
710
7
,434
860
10,084
782
12,544
689
17,169
537
14,645
690
15,133
766
19,476
803
16,709
930
23,191
981
15,687
618
5,956