Business Segments And Foreign Operations

12 Months Ended

Dec. 31, 2012

Segment Reporting, Measurement Disclosures [Abstract]

Business Segments And Foreign Operations

 Business Segments and Geographic Information

Business Segments:

The Company operates in two business segments: Motorcycles and 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 Motorcycles segment designs, manufactures and sells at wholesale heavyweight (engine displacement of 651+cc) cruiser and touring motorcycles as well as a line of motorcycle parts, accessories, general merchandise and related services.

The Financial Services segment 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.

Information by segment is set forth below for the years ended December 31 (in thousands):

	2012		2011		2010
Motorcycles net revenue	$	4,942,582	$	4,662,264	$	4,176,627
Gross profit	1,720,188		1,555,976		1,427,403
Selling, administrative and engineering expense	976,224		926,808		885,137
Restructuring expense and other impairments	28,475		67,992		163,508
Operating income from Motorcycles	$	715,489	$	561,176	$	378,758
Financial services revenue	$	637,924	$	649,449	$	682,709
Financial services expense	353,237		380,658		500,836
Operating income from Financial Services	$	284,687	$	268,791	$	181,873

Financial Services revenue includes $11.5 million, $10.5 million and $9.2 million of interest that HDMC paid to HDFS on wholesale finance receivables in 2012, 2011 and 2010, respectively. This interest was paid on behalf of HDMC’s independent dealers as a way to enable dealers to manage seasonal increases in inventory. The offsetting cost of these interest incentives was recorded as a reduction to Motorcycles revenue.

Information by industry segment is set forth below as of December 31 (in thousands):

	Motorcycles		Financial Services		Consolidated
2012
Total assets	$	2,751,018	$	6,419,755	$	9,170,773
Depreciation	$	162,659	$	6,319	$	168,978
Capital expenditures	$	180,416	$	8,586	$	189,002
2011
Total assets	$	2,959,333	$	6,714,831	$	9,674,164
Depreciation	$	173,959	$	6,449	$	180,408
Capital expenditures	$	179,988	$	9,047	$	189,035
2010
Total assets	$	2,701,965	$	6,728,775	$	9,430,740
Depreciation	$	248,246	$	6,925	$	255,171
Capital expenditures	$	167,730	$	3,115	$	170,845

Geographic Information:

Included in the consolidated financial statements are the following amounts relating to geographic locations for the years ended December 31 (in thousands):

	2012		2011		2010
Revenue from Motorcycles(a):
United States	$	3,363,640	$	3,155,608	$	2,818,032
Europe	710,861		781,432		699,492
Japan	244,907		229,427		234,247
Canada	186,550		154,314		157,606
Australia	186,674		141,392		136,172
Other foreign countries	249,950		200,091		131,078
	$	4,942,582	$	4,662,264	$	4,176,627
Revenue from Financial Services(a):
United States	$	607,909	$	619,214	$	652,849
Europe	5,483		4,471		3,497
Canada	24,532		25,764		26,363
	$	637,924	$	649,449	$	682,709
Long-lived assets(b):
United States	$	825,509	$	822,089	$	842,461
International	56,143		59,571		62,192
	$	881,652	$	881,660	$	904,653

(a) Revenue is attributed to geographic regions based on location of customer.

(b) Long-lived assets include all long-term assets except those specifically excluded under ASC Topic 280, “Segment Reporting,” such as deferred income taxes and finance receivables.