Reportable Segments and Geographic Information

12 Months Ended

Dec. 31, 2016

Segment Reporting [Abstract]

Reportable Segments and Geographic Information

 Reportable Segments and Geographic Information

Reportable Segments:

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). The Company operates in two segments: the Motorcycles & Related Products (Motorcycles) segment and the Financial Services segment. The Company’s reportable segments are strategic business units that offer different products and services and are managed separately based on the fundamental differences in their operations.

The Motorcycles segment consists of HDMC which designs, manufactures and sells at wholesale on-road Harley-Davidson motorcycles as well as 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 the United States, Canada, Latin America, Europe/Middle East/Africa (EMEA) and the Asia Pacific region.

The Financial Services reportable segment consists of HDFS which 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):

	2016		2015		2014
Motorcycles net revenue	$	5,271,376	$	5,308,744	$	5,567,681
Gross profit	1,851,666		1,952,460		2,025,080
Selling, administrative and engineering expense	1,078,260		1,076,970		1,021,933
Operating income from Motorcycles	$	773,406	$	875,490	$	1,003,147
Financial Services revenue	$	725,082	$	686,658	$	660,827
Financial Services expense	449,552		406,453		382,991
Operating income from Financial Services	$	275,530	$	280,205	$	277,836

Financial Services revenue includes $4.4 million, $6.9 million and $8.1 million of interest that HDMC paid to HDFS on wholesale finance receivables in 2016, 2015 and 2014, respectively. The offsetting cost of these interest incentives was recorded as a reduction to Motorcycles revenue.

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

	Motorcycles		Financial Services		Consolidated
2016
Total assets	$	2,490,450	$	7,399,790	$	9,890,240
Depreciation and amortization	$	202,122	$	7,433	$	209,555
Capital expenditures	$	245,316	$	10,947	$	256,263
2015
Total assets	$	2,522,249	$	7,450,728	$	9,972,977
Depreciation and amortization	$	188,926	$	9,148	$	198,074
Capital expenditures	$	249,772	$	10,202	$	259,974
2014
Total assets	$	2,502,190	$	7,013,680	$	9,515,870
Depreciation and amortization	$	171,187	$	8,113	$	179,300
Capital expenditures	$	224,262	$	8,057	$	232,319

Geographic Information:

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

	2016		2015		2014
Revenue from Motorcycles(a):
United States	$	3,579,129	$	3,768,069	$	3,773,087
EMEA	798,489		728,198		869,690
Japan	200,309		162,675		197,792
Canada	212,099		178,042		194,422
Australia and New Zealand	181,809		165,854		190,029
Other foreign countries	299,541		305,906		342,661
Total revenue from Motorcycles	$	5,271,376	$	5,308,744	$	5,567,681
Revenue from Financial Services(a):
United States	$	692,784	$	656,888	$	627,317
Europe	6,528		5,373		5,684
Canada	21,626		21,180		23,707
Other foreign countries	4,144		3,217		4,119
Total revenue from Financial Services	$	725,082	$	686,658	$	660,827
Long-lived assets(b):
United States	$	943,479	$	915,509	$	865,617
International	38,114		26,909		34,328
Total long-lived assets	$	981,593	$	942,418	$	899,945

(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.