Harley Davidson 2012 Annual Report Download - page 25

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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Harley-Davidson, Inc. is the parent company for the groups of companies doing business as Harley-Davidson Motor
Company (HDMC) and Harley-Davidson Financial Services (HDFS). HDMC produces heavyweight cruiser and touring
motorcycles. HDMC manufactures five families of motorcycles: Touring, Dyna®, Softail®, Sportster® and V-Rod®. HDFS
provides wholesale and retail financing and insurance programs primarily to Harley-Davidson dealers and customers.
The Company operates in two business segments: Motorcycles & Related Products (Motorcycles) and Financial Services
(Financial Services). The Company’s reportable segments are strategic business units that offer different products and services.
They are managed separately based on the fundamental differences in their operations.
The “% Change” figures included in the “Results of Operations” section were calculated using unrounded dollar amounts
and may differ from calculations using the rounded dollar amounts presented.
Overview
The Company’s income from continuing operations for 2012 was $623.9 million, or $2.72 per diluted share compared to
$548.1 million, or $2.33 per diluted share, in 2011. The increase in 2012 income from continuing operations was driven by
strong financial performance in both the Motorcycles and the Financial Services segments. Operating income from the
Motorcycles segment was up $154.3 million over 2011 on a 6.2% increase in wholesale shipments of Harley-Davidson
motorcycles, lower manufacturing costs and a decrease in restructuring expense. Operating income from the Financial Services
segment was also up over the prior year, increasing $15.9 million, or 5.9%, driven primarily by a decrease in interest expense.
In 2012, worldwide independent dealer retail sales of new Harley-Davidson motorcycles grew 6.2% compared to 2011,
including a 6.6% increase in the U.S. and a 5.6% increase in international markets. The Company believes the improvement in
retail sales of new Harley-Davidson motorcycles reflects the strength of the Harley-Davidson brand and the appeal of model-
year 2012 and 2013 products, worldwide dealer efforts and continued investment in growth opportunities around the world.
Please refer to the “Results of Operations 2012 Compared to 2011” for additional details concerning the results for 2012.
(1) Note Regarding Forward-Looking Statements
The Company intends that certain matters discussed in this report 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 by reference to this
footnote or because the context of the statement will include words such as the Company “believes,” “anticipates,” “expects,” “plans,” or “estimates” or words
of similar meaning. Similarly, statements that describe future plans, objectives, outlooks, targets, guidance 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 from those anticipated as of the date
of this report. Certain of such risks and uncertainties are described in close proximity to such statements or elsewhere in this report, including under the caption
“Risk Factors” in Item 1A and under “Cautionary Statements” in Item 7 of this report. 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 report are made only as of the date of the filing of this report (February 22, 2013), and the Company disclaims any obligation to
publicly update such forward-looking statements to reflect subsequent events or circumstances.