Business Segments And Geographic Information

12 Months Ended

Dec. 31, 2013

Segment Reporting [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 601+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):

	2013			2012		2011
Motorcycles net revenue	$	5,258,290		$	4,942,582	$	4,662,264
Gross profit	1,862,372			1,720,188		1,555,976
Selling, administrative and engineering expense	993,894			976,224		926,808
Restructuring (benefit) expense and other impairments	(2,131		)	28,475		67,992
Operating income from Motorcycles	$	870,609		$	715,489	$	561,176
Financial services revenue	$	641,582		$	637,924	$	649,449
Financial services expense	358,489			353,237		380,658
Operating income from Financial Services	$	283,093		$	284,687	$	268,791

Financial Services revenue includes $10.4 million, $11.5 million and $10.5 million of interest that HDMC paid to HDFS on wholesale finance receivables in 2013, 2012 and 2011, 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
2013
Total assets	$	2,793,497	$	6,611,543	$	9,405,040
Depreciation	$	160,181	$	6,891	$	167,072
Capital expenditures	$	199,354	$	8,967	$	208,321
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

Geographic Information:

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

	2013		2012		2011
Revenue from Motorcycles(a):
United States	$	3,562,847	$	3,363,640	$	3,155,608
EMEA region	769,864		710,861		781,432
Japan	217,700		244,907		229,427
Canada	204,315		186,550		154,314
Australia	193,081		186,674		141,392
Other foreign countries	310,483		249,950		200,091
	$	5,258,290	$	4,942,582	$	4,662,264
Revenue from Financial Services(a):
United States	$	609,574	$	607,909	$	619,214
Europe	4,274		3,661		3,657
Canada	24,486		24,532		25,764
Other foreign countries	3,248		1,822		814
	$	641,582	$	637,924	$	649,449
Long-lived assets(b):
United States	$	874,833	$	825,509	$	822,089
International	36,860		56,143		59,571
	$	911,693	$	881,652	$	881,660

(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.