Business Segments And Foreign Operations

12 Months Ended

Dec. 31, 2011

Business Segments And Foreign Operations [Abstract]

Business Segments And Foreign Operations

21.    Business Segments and Foreign Operations

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

	2011		2010		2009
Motorcycles net revenue	$	4,662,264	$	4,176,627	$	4,287,130
Gross profit		1,555,976		1,427,403		1,386,196
Selling, administrative and engineering expense		926,808		885,137		851,165
Restructuring expense and other impairments		67,992		163,508		220,976
Operating income from Motorcycles	$	561,176	$	378,758	$	314,055
Financial services revenue	$	649,449	$	682,709	$	494,779
Financial services expense		380,658		500,836		581,059
Goodwill impairment		—		—		28,387
Restructuring expense		—		—		3,302
Operating income (loss) from Financial Services(a)(b)(c)	$	268,791	$	181,873	$	(117,969	)

(a) Financial Services operating income for 2010 includes the effects of consolidating formerly unconsolidated QSPEs (see Note 1).

(b) Financial Services operating (loss) income for 2009 includes a lower of cost or market adjustment of $5.9 million

(c) Financial Services operating (loss) income for 2009 includes an impairment charge of $45.4 million (see Note 7)

Financial Services revenue includes $10.5 million, $9.2 million and $14.7 million of interest that HDMC paid to HDFS on wholesale finance receivables in 2011, 2010 and 2009, 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
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
2009
Total assets(a)	$	3,277,925	$	5,877,593	$	9,155,518
Depreciation	$	238,276	$	8,068	$	246,344
Capital expenditures	$	111,316	$	5,432	$	116,748

(a) 2009 total assets for the Motorcycles segment includes assets of discontinued operations of $181.2 million.

Geographic Information:

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

	2011		2010		2009
Revenue from Motorcycles(a):
United States	$	3,155,608	$	2,818,032	$	2,910,094
Europe		781,432		699,492		700,882
Japan		229,427		234,247		255,901
Canada		154,314		157,606		175,964
Australia		141,392		136,172		137,626
Other foreign countries		200,091		131,078		106,663
	$	4,662,264	$	4,176,627	$	4,287,130
Revenue from Financial Services(a):
United States	$	619,214	$	652,849	$	466,161
Europe		4,471		3,497		3,164
Canada		25,764		26,363		25,454
	$	649,449	$	682,709	$	494,779
Long-lived assets(b):
United States	$	822,089	$	842,461	$	918,659
International		59,571		62,192		65,412
	$	881,660	$	904,653	$	984,071

(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.