Harley Davidson 2012 Annual Report Download - page 3

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PART I
Note regarding forward-looking statements
The Company intends that certain matters discussed by the Company 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 note 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 of this
report 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 as of the date indicated or, if a
date is not indicated, 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.
Item 1. Business
Harley-Davidson, Inc. was incorporated in 1981, at which time it purchased the Harley-Davidson® motorcycle business
from AMF Incorporated in a management buyout. In 1986, Harley-Davidson, Inc. became publicly held. Unless the context
otherwise requires, all references to the “Company” include Harley-Davidson, Inc. and all of its subsidiaries. The Company
operates in two segments: the Motorcycles & Related Products (Motorcycles) segment and the Financial Services (Financial
Services) segment. 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 Motorcycles segment designs, manufactures and sells at wholesale heavyweight (street legal with engine
displacement of 651+cc) Harley-Davidson motorcycles as well as a line of motorcycle parts, accessories, general merchandise
and related services. The Company’s products are sold to retail customers through a network of independent dealers. The
Company conducts business on a global basis, with sales in North America, Europe/Middle East/Africa (EMEA), Asia-Pacific
and Latin America.
In 2009, the Company decided to exit its former Buell product line and ceased production of Buell motorcycles. The sale
of remaining Buell motorcycle inventory to independent dealers and/or distributors was substantially completed during 2010.
The majority of independent dealers continue to provide ongoing service and replacement parts to owners of Buell products
that the Company sold.
In 2010, the Company completed the sale of MV Agusta (MV). The results of MV have been presented as a discontinued
operation for all periods.
The Motorcycles segment discussion that follows is specific to the Harley-Davidson brand unless otherwise specifically
noted.
The Financial Services segment consists of Harley-Davidson Financial Services (HDFS). HDFS provides wholesale and
retail financing and provides insurance and insurance-related programs primarily to Harley-Davidson dealers and their retail
customers. HDFS conducts business principally in the United States and Canada.
See Note 20 of Notes to Consolidated Financial Statements for financial information related to the Company’s business
segments.
Motorcycles and Related Products
Motorcycles – The primary business of the Motorcycles segment is to design and manufacture premium motorcycles for
the heavyweight market and sell them at wholesale. The Company’s worldwide motorcycle sales generated approximately
76%, 76% and 76% of the total net revenue in the Motorcycles segment during 2012, 2011 and 2010, respectively.
Harley-Davidson branded motorcycle products feature classic styling, innovative design, durability and quality. The
Company manufactures five families of motorcycles: Touring, Dyna®, Softail®, Sportster® and V-Rod®. The first four of these
motorcycle families are powered by an air-cooled, twin-cylinder engine with a 45-degree “V” configuration. The V-Rod®
family is powered by a liquid-cooled, twin-cylinder engine with a 60-degree “V” configuration. The Company also offers