-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TAjH6BYqghpt6jJOi5lQ0OPOLudWqfB1nMViZMr225pXGWqm7DoT7YP6pmYMAlES o9Ue8ahK56uwmZrIQY3tSg== 0000897069-97-000287.txt : 19970701 0000897069-97-000287.hdr.sgml : 19970701 ACCESSION NUMBER: 0000897069-97-000287 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19961231 FILED AS OF DATE: 19970630 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARLEY DAVIDSON INC CENTRAL INDEX KEY: 0000793952 STANDARD INDUSTRIAL CLASSIFICATION: MOTORCYCLES, BICYCLES & PARTS [3751] IRS NUMBER: 391382325 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09183 FILM NUMBER: 97632659 BUSINESS ADDRESS: STREET 1: 3700 W JUNEAU AVE CITY: MILWAUKEE STATE: WI ZIP: 53208 BUSINESS PHONE: 4143424680 11-K 1 FORM 11-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1996 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 33-35311 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Harley-Davidson Retirement Savings Plan for Milwaukee and Tomahawk Hourly Bargaining Unit Employees B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Harley-Davidson, Inc. 3700 West Juneau Avenue Milwaukee, Wisconsin 53208 REQUIRED INFORMATION 1. Not Applicable. 2. Not Applicable. 3. Not Applicable. 4. The Harley-Davidson Retirement Savings Plan for Milwaukee and Tomahawk Hourly Bargaining Unit Employees (the "Plan") is subject to the requirements of the Employee Retirement Income Security Act of 1974 ("ERISA"). Attached hereto is a copy of the most recent financial statements and schedules of the Plan prepared in accordance with the financial reporting requirements of ERISA. Exhibits 23 Consent of Independent Auditors CONTENTS Harley-Davidson Retirement Savings Plan for Milwaukee and Tomahawk Hourly Bargaining Unit Employees Page Report of independent auditors 5 Financial statements Statements of net assets available for plan benefits 6-7 Statements of changes in net assets available for plan benefits 8-9 Notes to financial statements 10-17 Supplemental schedules Schedules Assets held for investment 1 Transactions or series of transactions in excess of 5 percent of the current value of plan assets 2 A schedule of party-in-interest transactions has not been presented because there were no party-in-interest transactions that are prohibited by ERISA Section 406 and for which there is no statutory or administrative exemption. Report of Ernst & Young, LLP, Independent Auditors Plan Administrative Committee Harley-Davidson Retirement Savings Plan for Milwaukee and Tomahawk Hourly Bargaining Unit Employees We have audited the accompanying statements of net assets available for plan benefits of Harley-Davidson Retirement Savings Plan for Milwaukee and Tomahawk Hourly Bargaining Unit Employees (the Plan) as of December 31, 1996 and 1995, and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan at December 31, 1996 and 1995, and the changes in its net assets available for plan benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment as of December 31, 1996, and transactions or series of transactions in excess of five percent of the current value of plan assets for the year then ended, are presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the basic financial statements. The fund information in the statements of net assets available for plan benefits and in the statements of changes in net assets available for plan benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. Milwaukee, Wisconsin ERNST & YOUNG LLP June 6, 1997 HARLEY-DAVIDSON RETIREMENT SAVINGS PLAN FOR MILWAUKEE AND TOMAHAWK HOURLY BARGAINING UNIT EMPLOYEES STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS December 31, 1996
Fidelity Fidelity Fidelity Managed Investment International Harley- Asset Income Grade Bond Growth and Davidson Manager ASSETS Total Fund Fund Income Fund Stock Fund Income Investments: Interest in Harley- Davidson Retirement Savings Plan Master Trust, comprised of: Investments in securities of unaffiliated issuers, at fair value $11,680,170 $ 405,841 $1,741,888 $315,550 $ - $173,501 Investments in securities of affiliated issuer, at fair value-common stock of Harley- Davidson, Inc. 10,348,948 - - - 10,348,948 - Investments other than securities - Insurance group annuity contracts, at contract value (Note D) 10,751,614 10,751,614 - - - - Cash and cash equivalents 497,860 453,585 - - 44,275 - Notes receivable from participants 1,778,160 - - - - - ---------- ---------- --------- ------- ---------- ------- Total investments 35,056,752 11,611,040 1,741,888 315,550 10,393,223 173,501 Other assets - participant contributions receivable 185,157 52,605 9,218 5,620 43,261 3,230 ---------- ---------- --------- ------- ---------- ------- Net assets available for plan benefits $35,241,909 $11,663,645 $1,751,106 $321,170 $10,436,484 $176,731 ========== ========== ========= ======= ========== ======= Fidelity Fidelity Asset Fidelity Blue Chip Manager Asset Growth Loan ASSETS Growth Manager Fund Fund Investments: Interest in Harley- Davidson Retirement Savings Plan Master Trust, comprised of: Investments in securities of unaffiliated issuers, at fair value $834,951 $1,677,442 $6,530,997 $ - Investments in securities of affiliated issuer, at fair value-common stock of Harley- Davidson, Inc. - - - - Investments other than securities - Insurance group annuity contracts, at contract value (Note D) - - - - Cash and cash equivalents - - - - Notes receivable from participants - - - 1,778,160 ------- --------- --------- --------- Total investments 834,951 1,677,442 6,530,997 1,778,160 Other assets - participant contributions receivable 11,046 10,611 49,566 - ------- --------- --------- --------- Net assets available for plan benefits $845,997 $1,688,053 $6,580,563 $1,778,160 ======= ========= ========= =========
See notes to financial statements. HARLEY-DAVIDSON RETIREMENT SAVINGS PLAN FOR MILWAUKEE AND TOMAHAWK HOURLY BARGAINING UNIT EMPLOYEES STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS December 31, 1995
Fidelity Fidelity Fidelity Managed Investment International Harley- Asset Income Grade Bond Growth and Davidson Manager ASSETS Total Fund Fund Income Fund Stock Fund Income Investments: Interest in Harley- Davidson Retirement Savings Plan Master Trust, comprised of: Investments in securities of unaffiliated issuers, at fair value $8,481,238 $ 128 $1,595,058 $141,431 $ - $75,646 Investments in securities of affiliated issuer, at fair value-common stock of Harley-Davidson, Inc. 5,225,391 - - - 5,225,391 - Investments other than securities - Insurance group annuity contracts, at contract value (Note D) 10,519,474 10,519,474 - - - - Cash and cash equivalents 385,907 333,670 - - 52,237 - Notes receivable from participants 1,471,590 - - - - - ---------- ---------- --------- -------- --------- ------ Net assets available for plan benefits $26,083,600 $10,853,272 $1,595,058 $141,431 $5,277,628 $75,646 ========== ========== ========= ======= ========= ====== Fidelity Fidelity Asset Fidelity Blue Chip Manager Asset Growth Loan ASSETS Growth Manager Fund Fund Investments: Interest in Harley- Davidson Retirement Savings Plan Master Trust, comprised of: Investments in securities of unaffiliated issuers, at fair value $291,051 $1,344,363 $5,033,561 $ - Investments in securities of affiliated issuer, at fair value-common stock of Harley- Davidson, Inc. - - - - Investments other than securities - Insurance group annuity contracts, at contract value (Note D) - - - - Cash and cash equivalents - - - - Notes receivable from participants - - - 1,471,590 ------- --------- --------- --------- Net assets available for plan benefits $291,051 $1,344,363 $5,033,561 $1,471,590 ======= ========= ========= =========
See notes to financial statements. HARLEY-DAVIDSON RETIREMENT SAVINGS PLAN FOR MILWAUKEE AND TOMAHAWK HOURLY BARGAINING UNIT EMPLOYEES STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS Year Ended December 31, 1996
Fidelity Fidelity Fidelity Managed Investment International Harley- Asset Income Grade Bond Growth and Davidson Manager ADDITIONS Total Fund Fund Income Fund Stock Fund Income Investment income: Net appreciation (depreciation) in fair value of investments (Note C) $ 4,018,754 $ - $ (55,778) $ 19,623 $ 3,598,737 $ (123) Interest and dividend income 1,584,468 636,139 105,870 11,100 48,399 8,475 ---------- --------- -------- -------- --------- ------- Net investment income 5,603,222 636,139 50,092 30,723 3,647,136 8,352 Participant contributions 4,457,418 1,262,501 238,773 141,452 995,464 86,618 ---------- --------- -------- -------- --------- ------- 10,060,640 1,898,640 288,865 172,175 4,642,600 94,970 DEDUCTIONS Benefit payments and withdrawals (902,331) (525,372) (25,259) - (192,602) - Net transfers in (out) - (562,895) (107,558) 7,564 708,858 6,115 ---------- --------- -------- -------- -------- ------- (902,331) (1,088,267) (132,817) 7,564 516,256 6,115 ---------- --------- -------- -------- -------- ------- Increase in net assets available for plan benefits 9,158,309 810,373 156,048 179,739 5,158,856 101,085 Net assets available for plan benefits: Beginning of year 26,083,600 10,853,272 1,595,058 141,431 5,277,628 75,646 ---------- ---------- --------- -------- ---------- ------- End of Year $35,241,909 $11,663,645 $1,751,106 $321,170 $10,436,484 $176,731 ========== ========== ========= ======== ========== ======= Fidelity Asset Fidelity Fidelity Manager Asset Blue Chip Loan ADDITIONS Growth Manager Growth Fund Fund Investment income: Net appreciation (depreciation) in fair value of investments (Note C) $ 25,705 $ 48,430 $ 382,160 $ - Interest and dividend income 68,920 127,645 440,461 137,459 -------- --------- --------- --------- Net investment income 94,625 176,075 822,621 137,459 Participant contributions 255,860 252,228 1,224,522 - -------- --------- --------- --------- 350,485 428,303 2,047,143 137,459 DEDUCTIONS Benefit payments and withdrawals (745) (37,303) (88,126) (32,924) Net transfers in (out) 205,206 (47,310) (412,015) 202,035 -------- --------- --------- --------- 204,461 (84,613) (500,141) 169,111 -------- --------- --------- --------- Increase in net assets available for plan benefits 554,946 343,690 1,547,002 306,570 Net assets available for plan benefits: Beginning of year 291,051 1,344,363 5,033,561 1,471,590 -------- --------- --------- --------- End of Year $845,997 $1,688,053 $6,580,563 $1,778,160 ======== ========= ========= =========
See notes to financial statements. HARLEY-DAVIDSON RETIREMENT SAVINGS PLAN FOR MILWAUKEE AND TOMAHAWK HOURLY BARGAINING UNIT EMPLOYEES STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS Year Ended December 31, 1995
Fidelity Strong Asset Fidelity Managed Investment Allocation Insurance Balanced Income Income Grade Bond ADDITIONS Total Fund Account Fund Fund Fund Fund Investment income: Net appreciation in fair value of invest- ments (Note C) $1,131,211 $ 60,993 $ - $ 49,960 $ - $ - $ 76,193 Interest and dividend income 1,261,543 15,919 - 13,875 214,039 416,466 72,115 --------- -------- --------- ------- --------- -------- -------- Net investment income 2,392,754 76,912 - 63,835 214,039 416,466 148,308 Participant contributions 4,162,778 97,534 - 123,600 635,969 915,035 166,171 --------- -------- --------- ------- --------- -------- -------- 6,555,532 174,446 - 187,435 850,008 1,331,501 314,479 DEDUCTIONS Benefit payments and withdrawals (686,525) (29,480) - (12) (321,018) (295,424) (3,230) Life insurance expense, less increase in cash surrender value (8,260) - (8,260) - - - - Net transfers in (out) - (1,599,002) (183,509) (1,649,627) (10,766,481) 9,817,195 1,283,809 --------- -------- --------- ------- --------- -------- -------- (694,785) (1,628,482) (191,769) (1,649,639) (11,087,499) 9,521,771 1,280,579 --------- -------- --------- ------- --------- -------- -------- Increase (decrease) in net assets available for plan benefits 5,860,747 (1,454,036) (191,769) (1,462,204) (10,237,491) 10,853,272 1,595,058 Net assets available for plan benefits: Beginning of year 20,222,853 1,454,036 191,769 1,462,204 $10,237,491 - - ---------- --------- -------- --------- ---------- ---------- --------- End of year $26,083,600 $ - $ - $ - $ - $10,853,272 $1,595,058 ========== ========= ======== ========= ========== ========== ========= Fidelity Fidelity Fidelity International Harley- Asset Asset Fidelity Fidelity Growth and Davidson Manager Manager Asset Blue Chip Loan ADDITIONS Income Fund Stock Fund Income Growth Manager Growth Fund Fund Investment income: Net appreciation in fair value of investments (Note C) $ 285 $ 261,649 $ 1,616 $ 9,169 $ 118,780 $ 552,566 $ - Interest and dividend income 3,562 29,171 1,711 4,208 29,682 370,966 89,829 -------- ---------- ------- -------- --------- --------- ------- Net investment income 3,847 290,820 3,327 13,377 148,462 923,532 89,829 Participant contributions 75,550 851,574 48,209 125,346 160,373 963,417 - -------- ---------- ------- -------- --------- --------- ------- 79,397 1,142,394 51,536 138,723 308,835 1,886,949 89,829 DEDUCTIONS Benefit payments and withdrawals - (14,470) - - (5,482) (17,409) - Life insurance expense, less increase in cash surrender value - - - - - - - Net transfers in (out) 62,034 1,022,688 24,110 152,328 1,041,010 456,091 339,354 -------- ---------- ------- -------- --------- --------- --------- 62,034 1,008,218 24,110 152,328 1,035,528 438,682 339,354 -------- ---------- ------- -------- --------- --------- --------- Increase (decrease) in net assets available for plan benefits 141,431 2,150,612 75,646 291,051 1,344,363 2,325,631 429,183 Net assets available for plan benefits: Beginning of year - 3,127,016 - - - 2,707,930 1,042,407 -------- ---------- ------- -------- --------- --------- --------- End of year $141,431 $5,277,628 $75,646 $291,051 $1,344,363 $5,033,561 $1,471,590 ======== ========== ======= ======== ========= ========= =========
See notes to financial statements. HARLEY-DAVIDSON RETIREMENT SAVINGS PLAN FOR MILWAUKEE AND TOMAHAWK HOURLY BARGAINING UNIT EMPLOYEES NOTES TO FINANCIAL STATEMENTS December 31, 1996 Note A - Description of the Plan The following brief description of the Harley-Davidson Retirement Savings Plan for Milwaukee and Tomahawk Hourly Bargaining Unit Employees ("the Plan"), is provided for general information purposes only. Participants should refer to the Plan agreement for more complete information. General - The Plan is a defined contribution plan that covers hourly employees of Harley-Davidson Motor Company's (the "Company") Milwaukee and Tomahawk plants subject to a union bargaining agreement and meeting minimum eligibility requirements. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). Effective May 1, 1995, the Plan Trustee was changed, the Plan adopted daily valuation for each of its investment funds, and universal life insurance policies were deleted as an investment option. Contributions - Participants have the right to make salary deferral contributions of not less than 1% or more than 15% of their base compensation (as defined in the Plan); subject to certain Internal Revenue Code limitations. Participants have the option of investing their contributions in one or a combination of several different investment funds. Such voluntary contributions are nonforfeitable, accounted for in a separate Voluntary Contribution Account for each participant in the various funds, and can be withdrawn as provided in the Plan. The Company may make discretionary matching contributions; however, no such contributions were made during 1996 or 1995. Participant contributions below the statutory limit are made with tax-deferred dollars under Section 401(k) of the Internal Revenue Code (the "Code"). These contributions are excluded from the participant's current wages for federal income tax purposes. No federal income tax is paid for the tax-deferred contributions, earnings thereon or Company contributions, if any, until the participant withdraws them from the Plan. Participants' accounts - A separate account is maintained for each applicable fund for each participant. Effective May 1, 1995, the account balances are adjusted on a daily basis for participants' contributions, net investment income, Company contributions, and distributions of participants' benefits or withdrawals. Prior to May 1, 1995, account balances were adjusted on a monthly basis. Vesting - Participants are currently 100% vested in their accounts. Payment of benefits - Benefit and withdrawal payments consist of the following: (1) Upon retirement, death, disability, or termination of employment, the balance in a participant's separate account(s) is paid to the participant or beneficiary in a lump sum. (2) A participant may withdraw at any time all or any portion of the vested balance of their separate account(s) that does not pertain to contributions made under provisions of Section 401(k) of the Code. (3) A participant may not withdraw prior to retirement, death, disability, or termination of employment any portion of their separate account(s) pertaining to contributions made under provisions of Section 401(k) of the Code, except for financial hardships, as defined in the Code, or after the participant attains age 59-1/2. Investment provisions - The Plan's investments consist of its interest in the commingled investments of the Harley-Davidson Retirement Savings Plan Master Trust (Master Trust)and notes receivable from participants. The Master Trust is a common trust arrangement under which investments of the Plan and another Harley-Davidson defined contribution plan are commingled (see Note C). The Plan's investment in the Master Trust is based on its equity share of the Master Trust's investments (determined separately for each of the Master Trust's investment accounts), which are described below. In accordance with Plan provisions, participants may direct their contributions, and the corresponding Company contributions, if any, to be invested in one or a combination of the following funds: Managed Income Fund, Fidelity Investment Grade Bond Fund, Fidelity Blue Chip Growth Fund, Fidelity International Growth and Income Fund, Harley-Davidson Stock Fund, Fidelity Asset Manager: Income Fund, Fidelity Asset Manager Fund and Fidelity Asset Manager: Growth Fund. The Managed Income Fund seeks to preserve capital and achieve a competitive level of income over time. The Managed Income Fund is a combination of the Managed Income Portfolio and existing investment contracts previously purchased by Harley-Davidson Motor Company. The Managed Income Portfolio purchases investment contracts from high quality financial institutions such as insurance companies or banks, "synthetic" investment contracts that are composed of high quality bonds and a wrapper which simulates the terms of conventional investment contracts, and money market instruments for liquidity. The Fund's goal is to maintain a stable $1 share price, but there is no guarantee that it will be able to do so. Its yield will fluctuate. The Managed Income Fund is not a mutual fund and is managed by Fidelity Management Trust Company (FMTC). Although individual investment contracts are backed by the issuers of the debt, shares of the Fund are not guaranteed by the Sponsor, FMTC or insured by the FDIC. The Fidelity Investment Grade Bond Fund seeks a high level of current income. The Fund will invest in a broad array of securities that are considered "investment-grade," which means that they are generally of medium to high quality. These types of bonds generally provide lower yields than those rated below investment-grade, but they also involve less investment risk. The Fidelity Blue Chip Growth Fund is a "capital growth" mutual fund and seeks to grow the value of the investment over the long term. The Fund invests in common stocks of well-known, established growth companies that are generally considered industry leaders. The Fidelity International Growth and Income Fund seeks both capital growth and income. While the Fund focuses primarily on stocks which have growth possibilities, it will keep at least 25% of its assets invested in debt securities for the income they provide. The Fund invests primarily in companies who mostly operate outside of the U.S. Although it will generally spread its investments across six different countries, including the U.S., the Fund may, at times invest all assets in a single country. International investing may pose greater risks, as well as greater potential rewards, than investments in domestic securities. The Harley-Davidson Stock Fund consists primarily of Harley-Davidson Common Stock, with a small portion of short-term instruments to allow for daily transactions into and out of this option. The value of this Fund will fluctuate and is tied directly to the performance of Harley-Davidson Motor Company as well as general stock market trends. The Fidelity Asset Manager: Income Fund seeks to provide a high level of current income, but also considers the potential for capital appreciation. The Fund can invest in all three investment classes: foreign (including emerging markets) and domestic stocks, bonds and short-term instruments. Based on the current outlook for market conditions, the Fund's manager can gradually increase or decrease the amount that the Fund invests in each of these asset classes. The Fund's investments in each of these classes can range anywhere from 10% to 30% in stocks, 40% to 60% in bonds and 10% to 50% in short-term instruments, but over time, the general mix of these investment classes (known as the Fund's "neutral mix") will include 20% stocks, 50% bonds and 30% short-term instruments. The Fidelity Asset Manager Fund seeks to provide high total return with reduced risk over the long term. Total return is the combination of income (from dividends and capital gains) and the change in the value of the share price of the Fund. As an asset allocation fund, Asset Manager invests in all three investment classes: foreign (including emerging markets) and domestic stocks, bonds, and short-term instruments. The Fund's manager may gradually adjust the combination of these investments depending upon the current outlook for the various markets. As a result, Asset Manager's investments can range anywhere from 30% to 70% in stocks, 20% to 60% in bonds, and 0% to 50% in short-term instruments. Over the long term, the Fund will generally include the following combination of these investments (known as its "neutral mix"): 50% stocks, 40% bonds, and 10% short-term instruments. The Fidelity Asset Manager: Growth Fund focuses on maximizing total return over the long term. Total return is the combination of income (from dividends and capital gains) and the change in the value of the share price of the Fund. As the most aggressive asset allocation fund that Fidelity offers, Asset Manager: Growth can invest anywhere from 50% to 100% of its assets in stocks, 0% to 50% in bonds, and 0% to 50% in short- term instruments. The Fund's "neutral mix," which represents the way the Fund's investments will be allocated over the long term, includes 70% stocks, 25% bonds and 5% short-term instruments. Participants may borrow from their separate account balances subject to Code provisions, which include a surtax on loans in excess of 50% of the participant's vested separate account balance and require a market rate of interest to be charged on the loans. The Plan administrator has discretion to make such loans under the Plan and determine the rate of interest for such loans (within Code guidelines). Amounts loaned to a participant will not share in the allocation of the Plan earnings, but will be credited with the interest earned on the loan balance payable by the participant. The Plan's security investments were held until April 30, 1995 by the Marshall & Ilsley Trust Company under a nondiscretionary trust agreement dated October 1, 1989. As of May 1, 1995 the Plan's security investments were held by FMTC. The Administrative Committee directs the Trustee to invest and reinvest amounts with the current investment managers. Plan termination - While the Company has not expressed any intent to terminate the Plan, it is free to do so at any time. In the event of termination, Company contributions automatically become vested to the extent of the balance in each participant's separate account(s). Administrative expenses - Administrative expenses generally are paid by the Company. Note B - Summary of significant accounting policies Valuation of investments - The investments in the mutual funds are stated at fair value and are based on the quoted market or redemption values on the last business day of the plan year. Securities traded on a national securities exchange (including the Harley-Davidson, Inc. common stock) are valued at the closing market price on the last business day of the plan year. The insurance group annuity contracts are fully benefit responsive and therefore, are valued at contract value as reported by the Plan Trustee. Contract value represents contributions made under the contract, plus interest at the contract rate, less funds used to pay retirement and other benefits. Notes receivable from participants are stated at their unpaid principal balances which approximates fair value. Reclassifications - Certain prior year balances have been reclassified in order to conform to current year presentation. Use of estimates - The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Note C - Investments As indicated in Note A, the assets of the Master Trust include commingled investments held for both the Plan and the Harley-Davidson, Inc. Retirement Savings Plan for Salaried Employees (Salaried Plan). The carrying amounts of the commingled investments and cash have been allocated between the Plan and the Salaried Plan based on the respective participants' interest, reduced by other allocable assets and liabilities. A summary of the Master Trust's commingled investments and the Plan's interest in those Master Trust investments at December 31, 1996 is as follows: Contract Value/ Cost Fair Value Cash and cash equivalents $ 1,106,401 $ 1,106,401 Master Trust investments at contract value: Insurance company contracts 25,176,240 25,176,240 Master Trust investments at fair value: Securities of unaffiliated issuers 31,074,460 34,470,238 Securities of affiliated issuer-Common stock - Harley Davidson, Inc. 18,275,976 32,354,776 ---------- ---------- Commingled assets of the Master Trust 75,633,077 93,107,655 Less amount allocated to Salaried Plan 47,611,734 59,829,063 ---------- ---------- Plan interest in Master Trust $28,021,343 $33,278,592 ========== ========== The Plan's interest in the fair values of the various Master Trust investment categories is as follows at December 31, 1996: Cash and cash equivalent $ 497,860 Insurance company contracts 10,751,614 Investments in securities of unaffiliated issuers 11,680,170 Investments in securities of affiliated issuer - common stock of Harley-Davidson, Inc. 10,348,948 ---------- $33,278,592 ========== Income earned by the commingled investments of the Master Trust and the Plan's allocated share therein for the year ended December 31, 1996 and for the period from inception of the Master Trust Agreement May 1, 1995 through December 31, 1995, is as follows: Year Ended May 1, 1995- Dec. 31, 1996 Dec. 31, 1995 Interest and dividend income $ 4,200,938 $2,493,098 Net realized and unrealized appreciation in fair value of investments 12,619,716 7,113,787 ---------- --------- Commingled investment income earned by the Master Trust 16,820,654 9,606,885 Less amount allocated to Salaried Plan 11,217,432 6,421,542 ---------- --------- Master Trust commingled investment income allocated to the Plan $ 5,603,222 $3,185,343 ========== ========= These amounts are included in the respective categories in the Statement of Changes in Net Assets Available for Plan Benefits. Investments that represent 5% or more of the Master Trust's net assets at December 31, 1996 are as follows: 1996 Aetna group annuity contracts $25,176,240 Harley-Davidson Stock Fund 32,354,776 Fidelity Asset Manager 5,539,951 Fidelity Blue Chip Growth Fund 18,351,809 For the four months ended April 30, 1995, investments held by the Plan (including investments bought, sold, as well as held during the year) appreciated in fair value as follows (as determined by reference to quoted market prices as discussed in Note B). Four months ended April 30, 1995 Net depreciation in fair value of investments by investment type: Mutual Funds $ (70,326) Common stock - Harley-Davidson, Inc. (973,147) ---------- $(1,043,473) ========== Note D - Insurance group annuity contracts The insurance group annuity contract owned by the Plan at December 31, 1996 and 1995 was group annuity contract #14490 with Aetna Life Insurance Company and is stated at contract value which approximates fair value. The crediting interest rate which approximates the average yield, is adjusted semi-annually and is subject to contractually guaranteed minimum rates. In 1996, the crediting interest rates were 5.90% and 6.21%. In 1995, the crediting interest rates were 6.61% and 5.95%. Note E - Transactions with Parties-in-interest The following Harley-Davidson, Inc. common stock transactions occurred (includes the Plan's share of Master Trust transactions): 1996 1995 Cost of stock held at beginning of year $3,988,426 $2,091,309 Cost of purchases during the year 4,749,893 2,256,228 Proceeds from sales during the year (3,220,292) (435,216) Net gain 707,943 76,105 --------- --------- Cost of stock held at end of year $6,225,970 $3,988,426 ========= ========= Market value of stock held at end of year $10,348,948 $5,225,391 ========== ========= Shares held at end of year 220,190 181,753 ======= ======== All transactions in Harley-Davidson, Inc. common stock were executed at market prices on the dates of the transactions. The Plan received dividends of approximately $48,000 and $30,000 on the common stock in 1996 and 1995, respectively. Note F - Income tax status The Plan received a favorable determination from the U.S. Treasury Department on September 13, 1995 substantiating that the Plan is qualified under Section 401(a) of the Code. As such, the Plan is exempt from federal income taxes. Once qualified, a plan is required to operate in conformity with the Code to maintain its qualification. The Company's pension administration committee is not aware of any course of action or series of events that would adversely affect the Plan's qualified status. The Plan is intended to satisfy the requirements under Section 404(c) of the ERISA, and therefore, provides that participants may choose to direct their contributions and/or all or part of their account balances among any of the Plan's eight investment alternatives every day. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the Plan) have duly caused this annual report to be signed by the undersigned thereunto duly authorized. Harley-Davidson Retirement Savings Plan for Milwaukee and Tomahawk Hourly Bargaining Unit Employees Date: June 27, 1997 By: /S/ James M. Brostowitz James M. Brostowitz Administrative Committee Member SUPPLEMENTAL SCHEDULES Schedule 1 HARLEY-DAVIDSON RETIREMENT SAVINGS PLAN FOR THE MILWAUKEE AND TOMAHAWK HOURLY BARGAINING UNIT EMPLOYEES ASSETS HELD FOR INVESTMENT December 31, 1996 Shares or Current Description face amount Cost value Plan's share of Master Trust assets: Cash and cash equivalents 497,860 $ 497,860 $ 497,860 Mutual funds- Fidelity: Commingled assets of the Managed Income Fund 405,841 405,841 405,841 Investment Grade Bond Fund 244,647 1,727,258 1,741,888 Blue Chip Growth Fund 199,786 5,587,224 6,530,997 International Growth and Income Fund 16,141 298,202 315,550 Asset Manager: Income 14,944 172,605 173,501 Asset Manager 101,848 1,550,008 1,677,442 Asset Manager: Growth 51,067 804,761 834,951 ---------- ---------- 10,545,899 11,680,170 Common stock - Harley Davidson, Inc. 220,190 6,225,970 10,348,948 Insurance group annuity - administration contracts: Aetna Life Insurance Company group annuity contract #14490 10,751,614 10,751,614 10,751,614 Participant loans, at various interest rates (ranging from 7% to 11%) and maturities 1,778,160 1,778,160 1,778,160 ---------- ---------- Total assets held for investment $29,799,503 $35,056,752 =========== ========== Schedule 2 HARLEY-DAVIDSON RETIREMENT SAVINGS PLAN FOR THE MILWAUKEE AND TOMAHAWK HOURLY BARGAINING UNIT EMPLOYEES TRANSACTIONS OR SERIES OF TRANSACTIONS IN EXCESS OF 5 PERCENT OF THE CURRENT VALUE OF PLAN ASSETS Year ended December 31, 1996 Cost of Proceeds purchases from sales Number of (1) during during Net Description transactions the year the year gain Category (iii)-Series of transactions in excess of 5% of plan assets Bank common trust fund - FMTC Insti Money Market Fund 165P;205S $3,591,850 $3,591,850 $ - Aetna Life Insurance Company Group Annuity Contracts 1P;4S 974,787 742,647 - Mutual Funds: Fidelity Blue Chip Growth Fund 178P;120S 3,149,529 2,034,252 177,721 Common stock - Harley-Davidson, Inc. 211P;129S 4,749,893 3,220,292 707,943 Note: The above transactions represent the Plan's share of Master Trust transactions. There were no category (i), (ii) or (iv) reportable transactions during 1996. (1) P=Purchases; S=Sales EXHIBIT INDEX EXHIBIT NO. DESCRIPTION 23 Consent of Independent Auditors EX-23 2 EXHIBIT 23 CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-35311) pertaining to the Harley-Davidson Retirement Savings Plan for Milwaukee and Tomahawk Hourly Bargaining Unit Employees (the Plan) of our report dated June 6, 1997, with respect to the financial statements and schedules of the Plan included in this Annual Report (Form 11-K) for the year ended December 31, 1996. Milwaukee, Wisconsin ERNST & YOUNG LLP June 27, 1997 -----END PRIVACY-ENHANCED MESSAGE-----