Business Segments

9 Months Ended

Sep. 30, 2018

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 and 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. Selected segment information is set forth below (in thousands):



	Three months ended				Nine months ended
	September 30, 2018		September 24, 2017		September 30, 2018		September 24, 2017
Motorcycles net revenue	$	1,123,945	$	962,136	$	4,013,013	$	3,867,982
Gross profit	347,415		274,313		1,353,273		1,322,098
Selling, administrative and engineering expense	266,921		256,961		797,323		750,848
Restructuring expense	14,832		—		74,044		—
Operating income from Motorcycles	65,662		17,352		481,906		571,250
Financial Services revenue	191,724		189,059		558,000		550,314
Financial Services expense	107,970		111,999		330,126		338,683
Operating income from Financial Services	83,754		77,060		227,874		211,631
Operating income	$	149,416	$	94,412	$	709,780	$	782,881

As discussed in Note 2, the Company adopted ASU 2017-07 on January 1, 2018, which required the Company to record the non-service cost components of net periodic benefit costs in non-operating income on a prospective and retrospective basis. As a result, operating income from Motorcycles excludes these costs for all periods presented.