Harley Davidson 2014 Annual Report Download - page 15

insurance. The costs associated with defending product liability claims, including frivolous lawsuits, and payment of
damages could be substantial. The Company’s reputation may also be adversely affected by such claims, whether or
not successful.
•The Company is and may in the future become subject to legal proceedings and commercial or contractual
disputes. The uncertainty associated with substantial unresolved claims and lawsuits may harm the Company’s
business, financial condition, reputation and brand. The defense of the lawsuits may result in the expenditures of
significant financial resources and the diversion of management’s time and attention away from business operations.
In addition, although the Company is unable to determine the amount, if any, that it may be required to pay in
connection with the resolution of the lawsuits by settlement or otherwise, any such payment may have a material
adverse effect on the Company’s business and results of operations. Refer to the Company’s disclosures concerning
legal proceedings in the periodic reports that the Company files with the Securities and Exchange Commission (SEC)
for additional detail regarding lawsuits and other claims against the Company.
•The Company’s marketing strategy of appealing to and growing sales to multi-generational and multi-cultural
customers worldwide may not continue to be successful. The Company has been successful in marketing its
products in large part by promoting the experience of Harley-Davidson motorcycling. To sustain and grow the
business over the long-term, the Company must continue to be successful selling products and promoting the
experience of motorcycling to both core customers and outreach customers such as women, young adults and
ethnically diverse adults. The Company must also execute its multi-generational and multi-cultural strategy without
adversely impacting the strength of the brand with core customers.
•The Company’s success depends upon the continued strength of the Harley-Davidson brand. The Company
believes that the Harley-Davidson brand has significantly contributed to the success of its business and that
maintaining and enhancing the brand is critical to expanding its customer base. Failure to protect the brand from
infringers or to grow the value of the Harley-Davidson brand may have a material adverse effect on the Company’s
business and results of operations.
•The Company must invest in and successfully implement new information systems and technology. The
Company is continually modifying and enhancing its systems and technology to increase productivity and efficiency.
The Company has several large, strategic information system projects in process. As new systems and technologies
(and related strategies) are implemented, the Company could experience unanticipated difficulties resulting in
unexpected costs and adverse impacts to its manufacturing and other business processes. When implemented, the
systems and technology may not provide the benefits anticipated and could add costs and complications to ongoing
operations, which may have a material adverse effect on the Company’s business and results of operations.
•The Company must maintain stakeholder confidence in its operating ethics and corporate governance
practices. The Company believes it has a history of good corporate governance. Prior to the enactment of the
Sarbanes-Oxley Act of 2002, the Company had in place many of the corporate governance procedures and processes
now mandated by the Sarbanes-Oxley Act and related rules and regulations, such as Board Committee Charters and a
Corporate Governance Policy. In 1992, the Company established a Code of Business Conduct that defines how
employees interact with various Company stakeholders and addresses issues such as confidentiality, conflict of interest
and fair dealing. Failure to maintain its reputation for good corporate governance may have a material adverse effect
on the Company’s business and results of operations.
•The Company’s ability to remain competitive is dependent upon its capability to develop and successfully
introduce new, innovative and compliant products. The motorcycle market continues to change in terms of styling
preferences and advances in new technology and, at the same time, be subject to increasing regulations related to
safety and emissions. The Company must continue to distinguish its products from its competitors’ products with
unique styling and new technologies. As the Company incorporates new and different features and technology into its
products, the Company must protect its intellectual property from imitators and ensure its products do not infringe the
intellectual property of other companies. In addition, these new products must comply with applicable regulations
worldwide and satisfy the potential demand for products that produce lower emissions and achieve better fuel
economy. The Company must make product advancements while maintaining the classic look, sound and feel
associated with Harley-Davidson products. The Company must also be able to design and manufacture these products
and deliver them to a global marketplace in an efficient and timely manner. There can be no assurances that the
Company will be successful in these endeavors or that existing and prospective customers will like or want the
Company’s new products.
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