10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 1, 2012

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                     to                    

Commission file number 1-9183

Harley-Davidson, Inc.

(Exact name of registrant as specified in its charter)

Wisconsin	39-1382325
(State of organization)	(I.R.S. Employer Identification No.)
3700 West Juneau Avenue Milwaukee, Wisconsin	53208
(Address of principal executive offices)	(Zip code)

Registrants telephone number: (414) 342-4680

None

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No   ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company as defined in Rule 12b-2 of the Exchange Act.    Yes  ¨    No  x

Number of shares of the registrant’s common stock outstanding at August 2, 2012: 227,900,158 shares

Harley-Davidson, Inc.

Form 10-Q

For The Quarter Ended July 1, 2012

Part I	Financial Information
Item 1.	Financial Statements	3
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Comprehensive Income	4
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	61
Item 4.	Controls and Procedures	61
Part II	Other Information	63
Item 1.	Legal Proceedings	63
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	63
Item 6.	Exhibits	64
Signatures		65

2

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

HARLEY-DAVIDSON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three months ended						Six months ended
	July 1,			June 26,			July 1,		June 26,
	2012			2011			2012		2011
Revenue:
Motorcycles and related products	$	1,569,047		$	1,339,744		$	2,842,416	$	2,402,788
Financial services		160,613			165,853			316,935		327,739
Total revenue		1,729,660			1,505,597			3,159,351		2,730,527
Costs and expenses:
Motorcycles and related products cost of goods sold		1,005,230			871,476			1,822,089		1,582,654
Financial services interest expense		48,712			56,991			99,968		115,026
Financial services provision for credit losses		(5,259	)		(6,790	)		3,754		(1,184	)
Selling, administrative and engineering expense		283,244			268,424			548,898		502,539
Restructuring expense		6,220			13,594			17,671		36,593
Total costs and expenses		1,338,147			1,203,695			2,492,380		2,235,628
Operating income		391,513			301,902			666,971		494,899
Investment income		2,231			1,748			4,164		3,146
Interest expense		11,595			11,350			23,090		22,831
Income before provision for income taxes		382,149			292,300			648,045		475,214
Provision for income taxes		134,899			101,720			228,760		165,374
Income from continuing operations		247,250			190,580			419,285		309,840
Income from discontinued operations, net of tax		—			—			—		—
Net income	$	247,250		$	190,580		$	419,285	$	309,840
Earnings per common share from continuing operations:
Basic	$	1.08		$	0.81		$	1.83	$	1.32
Diluted	$	1.07		$	0.81		$	1.81	$	1.31
Earnings per common share from discontinued operations:
Basic	$	—		$	—		$	—	$	—
Diluted	$	—		$	—		$	—	$	—
Earnings per common share:
Basic	$	1.08		$	0.81		$	1.83	$	1.32
Diluted	$	1.07		$	0.81		$	1.81	$	1.31
Cash dividends per common share	$	0.155		$	0.125		$	0.310	$	0.225

The accompanying notes are an integral part of the consolidated financial statements.

3

HARLEY-DAVIDSON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	Three months ended				Six months ended
	July 1,		June 26,		July 1,		June 26,
	2012		2011		2012		2011
Comprehensive income	$	245,646	$	207,055	$	426,462	$	345,486

The accompanying notes are an integral part of the consolidated financial statements.

4

HARLEY-DAVIDSON, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

	(Unaudited)				(Unaudited)
	July 1,		December 31,		June 26,
	2012		2011		2011
ASSETS
Current assets:
Cash and cash equivalents	$	1,071,496	$	1,526,950	$	973,478
Marketable securities		135,848		153,380		244,555
Accounts receivable, net		250,268		219,039		265,663
Finance receivables, net		1,398,553		1,168,603		1,144,886
Restricted finance receivables held by variable interest entities, net		456,285		591,864		573,208
Inventories		323,046		418,006		337,472
Restricted cash held by variable interest entities		188,564		229,655		244,060
Other current assets		245,807		234,709		217,656
Total current assets		4,069,867		4,542,206		4,000,978
Finance receivables, net		2,569,187		1,754,441		2,306,165
Restricted finance receivables held by variable interest entities, net		1,592,544		2,271,773		1,939,181
Property, plant and equipment, net		776,793		809,459		788,943
Goodwill		28,604		29,081		31,156
Other long-term assets		279,789		267,204		295,556
	$	9,316,784	$	9,674,164	$	9,361,979
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	252,239	$	255,713	$	277,395
Accrued liabilities		535,097		564,172		590,096
Short-term debt		845,868		838,486		694,137
Current portion of long-term debt		399,962		399,916		—
Current portion of long-term debt held by variable interest entities		507,427		640,331		635,604
Total current liabilities		2,540,593		2,698,618		2,197,232
Long-term debt		2,745,189		2,396,871		2,893,462
Long-term debt held by variable interest entities		831,805		1,447,015		1,217,778
Pension liability		122,496		302,483		103,511
Postretirement healthcare liability		263,295		268,582		258,881
Other long-term liabilities		147,019		140,339		159,719
Commitments and contingencies (Note 16)
Total shareholders’ equity		2,666,387		2,420,256		2,531,396
	$	9,316,784	$	9,674,164	$	9,361,979

The accompanying notes are an integral part of the consolidated financial statements.

5

HARLEY-DAVIDSON, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Six months ended
	July 1,			June 26,
	2012			2011
Net cash provided by operating activities of continuing operations (Note 3)	$	288,242		$	472,962
Cash flows from investing activities of continuing operations:
Capital expenditures		(60,078	)		(69,267	)
Origination of finance receivables		(1,583,572	)		(1,434,607	)
Collections on finance receivables		1,435,790			1,416,610
Purchases of marketable securities		(4,993	)		(142,653	)
Sales and redemptions of marketable securities		23,046			39,966
Net cash used by investing activities of continuing operations		(189,807	)		(189,951	)
Cash flows from financing activities of continuing operations:
Proceeds from issuance of medium-term notes		397,373			447,076
Proceeds from securitization debt		91,030			—
Repayments of securitization debt		(839,401	)		(901,851	)
Net (decrease) increase in credit facilities and unsecured commercial paper		(46,629	)		131,039
Net change in restricted cash		41,091			44,827
Dividends		(71,645	)		(53,152	)
Purchase of common stock for treasury		(172,742	)		(5,678	)
Excess tax benefits from share-based payments		15,730			3,476
Issuance of common stock under employee stock option plans		35,337			4,534
Net cash used by financing activities of continuing operations		(549,856	)		(329,729	)
Effect of exchange rate changes on cash and cash equivalents of continuing operations		(4,033	)		(1,702	)
Net decrease in cash and cash equivalents of continuing operations		(455,454	)		(48,420	)
Cash flows from discontinued operations:
Cash flows from operating activities of discontinued operations		—			(35	)
Cash flows from investing activities of discontinued operations		—			—
Effect of exchange rate changes on cash and cash equivalents of discontinued operations		—			—
		—			(35	)
Net decrease in cash and cash equivalents	$	(455,454	)	$	(48,455	)
Cash and cash equivalents:
Cash and cash equivalents—beginning of period	$	1,526,950		$	1,021,933
Cash and cash equivalents of discontinued operations—beginning of period		—			—
Net decrease in cash and cash equivalents		(455,454	)		(48,455	)
Less: Cash and cash equivalents of discontinued operations—end of period		—			—
Cash and cash equivalents—end of period	$	1,071,496		$	973,478

The accompanying notes are an integral part of the consolidated financial statements.

6

HARLEY-DAVIDSON, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation and Use of Estimates

The condensed consolidated financial statements include the accounts of Harley-Davidson, Inc. and its wholly-owned subsidiaries (the Company), including the accounts of the group of companies doing business as Harley-Davidson Motor Company (HDMC) and Harley-Davidson Financial Services (HDFS). In addition, certain variable interest entities (VIEs) related to secured financing are consolidated as the Company is the primary beneficiary. All intercompany accounts and material intercompany transactions are eliminated.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the condensed consolidated balance sheets as of July 1, 2012 and June 26, 2011, the condensed consolidated statements of operations for the three and six month periods then ended, the condensed consolidated statements of comprehensive income for the three and six month periods then ended and the condensed consolidated statements of cash flows for the six month periods then ended.

Certain information and footnote disclosures normally included in complete financial statements have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and U.S. generally accepted accounting principles (U.S. GAAP) for interim financial reporting. These condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

The Company operates in two business segments: Motorcycles & Related Products (Motorcycles) and Financial Services (Financial Services).

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates.

During 2008, the Company acquired Italian motorcycle manufacturer MV Agusta (MV). On October 15, 2009, the Company announced its intent to divest MV, and the Company completed the sale on August 6, 2010. MV is presented as a discontinued operation for all periods.

2. New Accounting Standards

Accounting Standards Recently Adopted

In May 2011, the FASB issued ASU No. 2011-4 Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (IFRS.) ASU No. 2011-04 clarifies the application of the existing guidance within ASC Topic 820, Fair Value Measurement, to ensure consistency between U.S. GAAP and IFRS. ASU No. 2011-04 also requires new disclosures about purchases, sales, issuances, and settlements related to Level 3 measurements and also requires new disclosures around transfers into and out of Level 1 and 2 in the fair value hierarchy. The Company adopted ASU No. 2011-04 on January 1, 2012. The required new disclosures are presented in Note 9.

In June 2011, the FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income.” ASU No. 2011-05 amends the guidance within ASC Topic 220, “Comprehensive Income,” to eliminate the option to present the components of other comprehensive income as part of the statement of shareholders’ equity. ASU No. 2011-05 requires that all nonowner changes in shareholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. The Company decided to present comprehensive income in two separate but consecutive statements. The Company adopted ASU No. 2011-05 on January 1, 2012. The adoption of ASU No. 2011-05 and the Company’s decision to present comprehensive income in two separate but consecutive statements required the presentation of an additional financial statement, condensed consolidated statements of comprehensive income, for all periods presented.

7

3. Additional Balance Sheet and Cash Flow Information

Marketable Securities

The Company’s marketable securities consisted of the following (in thousands):

	July 1,		December 31,		June 26,
	2012		2011		2011
Available-for-sale:
Corporate bonds	$	135,848	$	153,380	$	194,556
U.S. Treasuries		—		—		49,999
	$	135,848	$	153,380	$	244,555

The Company’s available-for-sale securities are carried at fair value with any unrealized gains or losses reported in other comprehensive income. During the first half of 2012 and 2011, the Company recognized gross unrealized gains in other comprehensive income of $0.5 million and $1.7 million, respectively, or $0.3 million and $1.1 million net of taxes, respectively, to adjust amortized cost to fair value. The marketable securities have contractual maturities that generally come due over the next 12 to 48 months.

Inventories

Inventories are valued at the lower of cost or market. Substantially all inventories located in the United States are valued using the last-in, first-out (LIFO) method. Other inventories are valued at the lower of cost or market using the first-in, first-out (FIFO) method. Inventories consist of the following (in thousands):

	July 1,			December 31,			June 26,
	2012			2011			2011
Components at the lower of FIFO cost or market
Raw materials and work in process	$	116,166		$	113,932		$	108,518
Motorcycle finished goods		120,199			226,261			147,787
Parts and accessories and general merchandise		131,040			121,340			115,202
Inventory at lower of FIFO cost or market		367,405			461,533			371,507
Excess of FIFO over LIFO cost		(44,359	)		(43,527	)		(34,035	)
	$	323,046		$	418,006		$	337,472

8

Operating Cash Flow

The reconciliation of net income to net cash provided by operating activities is as follows (in thousands):

	Six months ended
	July 1,			June 26,
	2012			2011
Cash flows from operating activities:
Net income	$	419,285		$	309,840
Loss from discontinued operations		—			—
Income from continuing operations		419,285			309,840
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Depreciation		85,997			89,543
Amortization of deferred loan origination costs		38,075			39,054
Amortization of financing origination fees		5,021			5,833
Provision for employee long-term benefits		34,263			34,456
Contributions to pension and postretirement plans		(213,648	)		(205,498	)
Stock compensation expense		22,119			20,537
Net change in wholesale finance receivables related to sales		(124,919	)		11,909
Provision for credit losses		3,754			(1,184	)
Pension and postretirement healthcare plan curtailment and settlement expense		—			236
Foreign currency adjustments		8,143			(2,813	)
Other, net		5,567			27,226
Changes in current assets and liabilities:
Accounts receivable, net		(34,977	)		8,301
Finance receivables—accrued interest and other		2,912			5,553
Inventories		89,162			(530	)
Accounts payable and accrued liabilities		(12,286	)		133,838
Restructuring reserves		(9,915	)		3,195
Derivative instruments		(1,420	)		1,195
Other		(28,891	)		(7,729	)
Total adjustments		(131,043	)		163,122
Net cash provided by operating activities of continuing operations	$	288,242		$	472,962

9

4. Discontinued Operations

In October 2009, the Company unveiled a new business strategy to drive growth through a focus of efforts and resources on the unique strengths of the Harley-Davidson brand and to enhance productivity and profitability through continuous improvement. The Company’s Board of Directors approved and the Company committed to the divestiture of MV as part of this strategy. The Company engaged a third party investment bank to assist with the marketing and sale of MV. During 2009, the Company recorded pre-tax impairment charges of $115.4 million related to MV and a net tax benefit of $40 million related to losses estimated in connection with the sale of MV. As of December 31, 2009, the Company estimated the total tax benefit associated with losses related to the sale of MV to be $66 million of which $26 million was deemed uncertain and appropriately reserved against.

At each subsequent reporting date in 2010 through the date of sale of MV in August 2010, the fair value less selling costs was re-assessed and additional impairment charges totaling $111.8 million and additional tax benefits totaling $18 million were recognized in 2010. As the effort to sell MV progressed into 2010, adverse factors led to decreases in the fair value of MV. During 2010, challenging economic conditions continued to persist, negatively impacting the appetite of prospective buyers and the motorcycle industry as a whole. Information coming directly from the selling process, including discussions with the prospective buyers, indicated a fair value that was less than previously estimated.

On August 6, 2010, the Company concluded its sale of MV to MV Augusta Motor Holding S.r.l., a company controlled by the former owner of MV. Under the agreement relating to the sale, (1) the Company received nominal consideration in return for the transfer of MV and related assets; (2) the parties waived their respective rights under the stock purchase agreement and other documents related to the Company’s purchase of MV in 2008, which included a waiver of the former owner’s right to contingent earn-out consideration; and (3) the Company contributed 20.0 million Euros to MV as operating capital. The 20.0 million Euros contributed were factored into the Company’s estimate of MV’s fair value prior to the sale and was recognized in the 2010 impairment charges discussed above. As a result of the impairment charges recorded in 2009 and 2010 prior to the sale, the Company only incurred an immaterial loss on the date of sale, which was included in the loss from discontinued operations, net of tax, during the year ended December 31, 2010.

As of December 31, 2010, the Company’s estimated total tax benefit associated with the loss on the sale of MV was $101.0 million, of which $43.5 million was deemed uncertain and appropriately reserved against. As a result, the total cumulative net tax benefit recognized as of December 31, 2010 was $57.5 million. The increase in the estimated tax benefit during 2010 was driven by an increase in the losses related to the sale of MV, not a change in the tax position.

In determining the tax benefit recognized from October 2009 through December 2010, the Company engaged appropriate technical expertise and considered all relevant available information. In accordance with ASC 740, “Income Taxes,” at each balance sheet date during this period, the Company re-evaluated the overall tax benefit, determined that it was at least more likely than not that it would be sustained upon review and calculated the amount of recognized tax benefit based on a cumulative probability basis.

Beginning in 2010, the Company voluntarily elected to participate in a pre-filing agreement process with the Internal Revenue Service (IRS) in order to accelerate their review of the Company’s tax position related to MV. The IRS effectively completed its review in late 2011 and executed a Closing Agreement on Final Determination Covering Specific Matters with the Company.

There were no changes to the Company’s estimated gross or recognized tax benefit associated with the loss on the sale of MV during the first three quarters of 2011. In the fourth quarter of 2011, given the outcome of the closing agreement, the Company recognized a $43.5 million tax benefit by reversing the reserve recorded as of September 25, 2011 and recognized an incremental $7.5 million tax benefit related to the final calculation of the tax basis in the loan to and the stock of MV.

10

5. Restructuring Expense

2011 Restructuring Plans

In December 2011, the Company made a decision to cease operations at New Castalloy, its Australian subsidiary and producer of cast motorcycle wheels and wheel hubs, and source those components through other existing suppliers (2011 New Castalloy Restructuring Plan). The Company expects the transition of supply from New Castalloy to be complete by mid-2013. The decision to close New Castalloy came as part of the Company’s overall long term strategy to develop world-class manufacturing capability throughout the Company by restructuring and consolidating operations for greater competitiveness, efficiency and flexibility. In connection with this decision, the Company will reduce its workforce by approximately 200 employees by mid-2013.

Under the 2011 New Castalloy Restructuring Plan, restructuring expenses consist of employee severance and termination costs, accelerated depreciation and other related costs. The Company expects to incur approximately $30 million in restructuring charges related to the transition through 2013. Approximately 35% of the $30 million will be non-cash charges. On a cumulative basis, the Company has incurred $15.4 million of restructuring expense under the 2011 New Castalloy Restructuring Plan as of July 1, 2012, of which $6.0 million was incurred during the first six months of 2012.

In February 2011, the Company’s unionized employees at its facility in Kansas City, Missouri ratified a new seven-year labor agreement. The new agreement took effect on August 1, 2011. The new contract is similar to the labor agreements ratified at the Company’s Wisconsin facilities in September 2010 and its York, Pennsylvania facility in December 2009, and allows for similar flexibility and increased production efficiency. Once the new contract is fully implemented, the production system in Kansas City, like Wisconsin and York, will include the addition of a flexible workforce component.

After taking actions to implement the new ratified labor agreement (2011 Kansas City Restructuring Plan), the Company expects to have about 145 fewer full-time hourly unionized employees in its Kansas City facility than would have been required under the prior contract.

Under the 2011 Kansas City Restructuring Plan, restructuring expenses consist of employee severance and termination costs and other related costs. The Company expects to incur approximately $14 million in restructuring expenses related to the new contract through 2012, of which approximately 10% are expected to be non-cash. On a cumulative basis, the Company has incurred $7.8 million of restructuring expense under the 2011 Kansas City Restructuring Plan as of July 1, 2012. During the first six months of 2012, the Company released a portion of its 2011 Kansas City Restructuring Plan reserve related to severance costs as these costs are no longer expected to be incurred.

For the six months ended June 26, 2011, restructuring expense included $0.2 million of noncash curtailment losses related to the Company’s pension plan that covers employees of the Kansas City facility.

11

The following table summarizes the Motorcycle segment’s 2011 Kansas City Restructuring Plan and 2011 New Castalloy Restructuring Plan reserve activity and balances as recorded in accrued liabilities (in thousands):

	Six months ended July 1, 2012
	Kansas City								New Castalloy												Consolidated
	Employee								Employee
	Severance and								Severance and
	Termination								Termination			Accelerated
	Costs			Other		Total			Costs			Depreciation			Other			Total			Total
Balance, beginning of period	$	4,123		$	—	$	4,123		$	8,428		$	—		$	305		$	8,733		$	12,856
Restructuring expense		—			—		—			1,141			4,093			755			5,989			5,989
Utilized—cash		—			—		—			(312	)		—			(722	)		(1,034	)		(1,034	)
Utilized—noncash		—			—		—			—			(4,093	)		—			(4,093	)		(4,093	)
Noncash reserve release		(967	)		—		(967	)		—			—			—			—			(967	)
Balance, end of period	$	3,156		$	—	$	3,156		$	9,257		$	—		$	338		$	9,595		$	12,751

	Six months ended June 26, 2011
	Kansas City
	Employee
	Severance and
	Termination
	Costs			Other			Total
Restructuring expense		7,177			340			7,517
Utilized—cash		(3,843	)		(340	)		(4,183	)
Utilized—noncash		(236	)		—			(236	)
Balance, end of period	$	3,098		$	—		$	3,098

2010 Restructuring Plan

In September 2010, the Company’s unionized employees in Wisconsin ratified three separate new seven-year labor agreements which took effect in April 2012 when the prior contracts expired. The new contracts are similar to the labor agreement ratified at the Company’s York, Pennsylvania facility in December 2009 and allow for similar flexibility and increased production efficiency. Once the new contracts are fully implemented, the production system in Wisconsin, like York, will include the addition of a flexible workforce component.

Based on the new ratified labor agreements (2010 Restructuring Plan), the Company expects to have about 250 fewer full-time hourly unionized employees in its Milwaukee-area facilities when the contracts are fully implemented than would have been required under the prior contracts. In Tomahawk, the Company expects to have about 75 fewer full-time hourly unionized employees when the contract is fully implemented than would have been required under the prior contract.

Under the 2010 Restructuring Plan, restructuring expenses consist of employee severance and termination costs and other related costs. The Company expects to incur approximately $62 million in restructuring expenses related to the new contracts through 2012, of which approximately 42% are expected to be non-cash. On a cumulative basis, the Company has incurred $60.4 million of restructuring expense under the 2010 Restructuring Plan as of July 1, 2012, of which $3.5 million was incurred during the first six months of 2012.

12

The following table summarizes the Motorcycles segment’s 2010 Restructuring Plan reserve activity and balances as recorded in accrued liabilities (in thousands):

	Six months ended			Six months ended
	July 1, 2012			June 26, 2011
	Employee			Employee
	Severance and			Severance and
	Termination Costs			Termination Costs
Balance, beginning of period	$	20,361		$	8,652
Restructuring expense		3,457			6,296
Utilized—cash		(10,053	)		(732	)
Balance, end of period	$	13,765		$	14,216

2009 Restructuring Plan

During 2009, in response to the U.S. economic recession and worldwide slowdown in consumer demand, the Company committed to a volume reduction and a combination of restructuring actions (2009 Restructuring Plan) that are expected to be completed at various dates between 2009 and 2012. The actions were designed to reduce administrative costs, eliminate excess capacity and exit non-core business operations. The Company’s significant announced actions include the restructuring and transformation of its York, Pennsylvania production facility including the implementation of a new more flexible unionized labor agreement; consolidation of facilities related to engine and transmission production; outsourcing of certain distribution and transportation activities and exiting the Buell product line.

The 2009 Restructuring Plan includes an estimated reduction of approximately 2,700 to 2,900 hourly production positions and approximately 720 non-production, primarily salaried positions within the Motorcycles segment and approximately 100 salaried positions in the Financial Services segment.

Under the 2009 Restructuring Plan, restructuring expenses consist of employee severance and termination costs, accelerated depreciation on the long-lived assets that will be exited as part of the 2009 Restructuring Plan and other related costs. The Company expects total costs related to the 2009 Restructuring Plan to result in restructuring and impairment expenses of approximately $384 million to $404 million from 2009 to 2012, of which approximately 30% are expected to be non-cash. On a cumulative basis, the Company has incurred $389.8 million of restructuring and impairment expense under the 2009 Restructuring Plan as of July 1, 2012, of which $9.2 million was incurred during the first six months of 2012.

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The following table summarizes the Company’s 2009 Restructuring Plan reserve activity and balances recorded in accrued liabilities (in thousands):

	Six months ended July 1, 2012
	Motorcycles & Related Products
	Employee
	Severance and			Accelerated
	Termination Costs			Depreciation		Other			Total
Balance, beginning of period	$	10,089		$	—	$	—		$	10,089
Restructuring expense		331			—		10,888			11,219
Utilized—cash		(1,878	)		—		(10,888	)		(12,766	)
Utilized—noncash		—			—		—			—
Noncash reserve release		(2,027	)		—		—			(2,027	)
Balance, end of period	$	6,515		$	—	$	—		$	6,515

	Six months ended June 26, 2011
	Motorcycles & Related Products
	Employee
	Severance and			Accelerated
	Termination Costs			Depreciation		Other			Total
Balance, beginning of period	$	23,818		$	—	$	2,764		$	26,582
Restructuring expense		3,504			—		19,276			22,780
Utilized—cash		(8,159	)		—		(20,341	)		(28,500	)
Utilized—noncash		—			—		253			253
Balance, end of period	$	19,163		$	—	$	1,952		$	21,115

Other restructuring costs under the 2009 Restructuring Plan include items such as the exit costs for terminating supply contracts, lease termination costs and moving costs. During the first six months of 2012, the Company released a portion of its 2009 Restructuring Plan reserve related to employee severance costs as these costs are no longer expected to be incurred.

6. Finance Receivables

HDFS provides retail financial services to customers of the Company’s independent dealers in the United States and Canada. The origination of retail loans is a separate and distinct transaction between HDFS and the retail customer, unrelated to the Company’s sale of product to its dealers. Retail finance receivables consist of secured promissory notes and installment loans. HDFS holds either titles or liens on titles to vehicles financed by promissory notes and installment loans.

HDFS offers wholesale financing to the Company’s independent dealers. Wholesale loans to dealers are generally secured by financed inventory or property and are originated in the U.S. and Canada.

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Finance receivables, net, including finance receivables held by VIEs, consisted of the following (in thousands):

	July 1,			December 31,			June 26,
	2012			2011			2011
Retail	$	5,225,779		$	5,087,490		$	5,374,055
Wholesale		905,038			824,640			733,789
		6,130,817			5,912,130			6,107,844
Allowance for credit losses		(114,248	)		(125,449	)		(144,404	)
	$	6,016,569		$	5,786,681		$	5,963,440

At July 1, 2012, December 31, 2011 and June 26, 2011, the Company’s Condensed Consolidated Balance Sheet included finance receivables, net of $2.05 billion, $2.86 billion and $2.51 billion, respectively, which were restricted as collateral for the payment of debt held by VIEs and other related obligations as discussed in Note 7. These receivables are included in retail finance receivables in the table above.

A provision for credit losses on finance receivables is charged or credited to earnings in amounts that the Company believes are sufficient to maintain the allowance for credit losses on finance receivables at a level that is adequate to cover losses of principal inherent in the existing portfolio. The allowance for credit losses on finance receivables represents management’s estimate of probable losses inherent in the finance receivable portfolio as of the balance sheet date. However, due to the use of projections and assumptions in estimating the losses, the amount of losses actually incurred by the Company could differ from the amounts estimated.

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Changes in the allowance for credit losses on finance receivables by portfolio were as follows (in thousands):

	Three months ended July 1, 2012
	Retail			Wholesale			Total
Balance, beginning of period	$	112,857		$	9,646		$	122,503
Provision for credit losses		(3,681	)		(1,578	)		(5,259	)
Charge-offs		(17,054	)		—			(17,054	)
Recoveries		14,058			—			14,058
Balance, end of period	$	106,180		$	8,068		$	114,248
	Three months ended June 26, 2011
	Retail			Wholesale			Total
Balance, beginning of period	$	141,704		$	17,980		$	159,684
Provision for credit losses		(2,596	)		(4,194	)		(6,790	)
Charge-offs		(22,903	)		(330	)		(23,233	)
Recoveries		14,743			—			14,743
Balance, end of period	$	130,948		$	13,456		$	144,404
	Six months ended July 1, 2012
	Retail			Wholesale			Total
Balance, beginning of period	$	116,112		$	9,337		$	125,449
Provision for credit losses		5,023			(1,269	)		3,754
Charge-offs		(42,906	)		—			(42,906	)
Recoveries		27,951			—			27,951
Balance, end of period	$	106,180		$	8,068		$	114,248
	Six months ended June 26, 2011
	Retail			Wholesale			Total
Balance, beginning of period	$	157,791		$	15,798		$	173,589
Provision for credit losses		843			(2,027	)		(1,184	)
Charge-offs		(58,094	)		(330	)		(58,424	)
Recoveries		30,408			15			30,423
Balance, end of period	$	130,948		$	13,456		$	144,404

Included in the $106.2 and $130.9 million retail allowance for credit losses on finance receivables is $41.9 and $62.1 million, respectively, related to finance receivables held by VIEs.

Portions of the allowance for credit losses on finance receivables are specified to cover estimated losses on finance receivables specifically identified for impairment. The unspecified portion of the allowance for credit losses on finance receivables covers estimated losses on finance receivables which are collectively reviewed for impairment. Finance receivables are considered impaired when management determines it is probable that the Company will be unable to collect all amounts due according to the terms of the loan agreement.

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The retail portfolio primarily consists of a large number of small balance, homogeneous finance receivables. HDFS performs a periodic and systematic collective evaluation of the adequacy of the retail allowance for credit losses. HDFS utilizes loss forecast models which consider a variety of factors including, but not limited to, historical loss trends, origination or vintage analysis, known and inherent risks in the portfolio, the value of the underlying collateral, recovery rates and current economic conditions including items such as unemployment rates. As retail finance receivables are collectively and not individually reviewed for impairment, this portfolio does not have finance receivables specifically impaired.

The wholesale portfolio is primarily composed of large balance, non-homogeneous loans. The Company’s evaluation for the wholesale allowance for credit losses is first based on a loan-by-loan review. A specific allowance for credit losses is established for wholesale finance receivables determined to be individually impaired when management concludes that the borrower will not be able to make full payment of the contractual amounts due based on the original terms of the loan agreement. The impairment is determined based on the cash that the Company expects to receive discounted at the loan’s original interest rate or the fair value of the collateral, if the loan is collateral-dependent. Finance receivables in the wholesale portfolio that are not considered impaired on an individual basis are segregated, based on similar risk characteristics, according to the Company’s internal risk rating system and collectively evaluated for impairment. The related allowance for credit losses is based on factors such as the specific borrower’s financial performance and ability to repay, the Company’s past loan loss experience, current economic conditions, and the value of the underlying collateral.

Generally, it is the Company’s policy not to change the terms and conditions of finance receivables. However, to minimize the economic loss, the Company may modify certain finance receivables in troubled debt restructurings. Total restructured finance receivables are not significant.

The allowance for credit losses and finance receivables by portfolio, segregated by those amounts that are individually evaluated for impairment and those that are collectively evaluated for impairment was, as follows (in thousands):

	July 1, 2012
	Retail		Wholesale		Total
Allowance for credit losses, ending balance:
Individually evaluated for impairment	$	—	$	—	$	—
Collectively evaluated for impairment		106,180		8,068		114,248
Total allowance for credit losses	$	106,180	$	8,068	$	114,248
Finance receivables, ending balance:
Individually evaluated for impairment	$	—	$	—	$	—
Collectively evaluated for impairment		5,225,779		905,038		6,130,817
Total finance receivables	$	5,225,779	$	905,038	$	6,130,817

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	December 31, 2011
	Retail		Wholesale		Total
Allowance for credit losses, ending balance:
Individually evaluated for impairment	$	—	$	—	$	—
Collectively evaluated for impairment		116,112		9,337		125,449
Total allowance for credit losses	$	116,112	$	9,337	$	125,449
Finance receivables, ending balance:
Individually evaluated for impairment	$	—	$	—	$	—
Collectively evaluated for impairment		5,087,490		824,640		5,912,130
Total finance receivables	$	5,087,490	$	824,640	$	5,912,130
	June 26, 2011
	Retail		Wholesale		Total
Allowance for credit losses, ending balance:
Individually evaluated for impairment	$	—	$	3,031	$	3,031
Collectively evaluated for impairment		130,948		10,425		141,373
Total allowance for credit losses	$	130,948	$	13,456	$	144,404
Finance receivables, ending balance:
Individually evaluated for impairment	$	—	$	4,676	$	4,676
Collectively evaluated for impairment		5,374,055		729,113		6,103,168
Total finance receivables	$	5,374,055	$	733,789	$	6,107,844

There were no wholesale finance receivables at July 1, 2012 or December 31, 2011 that were individually deemed to be impaired under ASC Topic 310, “Receivables.” Additional information related to the wholesale finance receivables that were individually deemed to be impaired under ASC Topic 310, “Receivables,” at June 26, 2011 includes (in thousands):

	June 26, 2011
							Three months ended				Six months ended
			Unpaid				Average		Interest		Average		Interest
	Recorded		Principal		Related		Recorded		Income		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized		Investment		Recognized
Wholesale:
No related allowance recorded	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Related allowance recorded		4,676		4,441		3,031		4,932		—		5,050		—
Total impaired wholesale finance receivables	$	4,676	$	4,441	$	3,031	$	4,932	$	—	$	5,050	$	—

Retail finance receivables are contractually delinquent if the minimum payment is not received by the specified due date. Retail finance receivables are generally charged-off at 120 days contractually past due. Retail finance receivables accrue interest until either collected or charged-off. Accordingly, as of July 1, 2012, December 31, 2011 and June 26, 2011, all retail finance receivables were accounted for as interest-earning receivables, of which $14.8 million, $27.5 million and $18.7 million, respectively, were 90 days or more past due.

Wholesale finance receivables are delinquent if the minimum payment is not received by the contractual due date. A specific allowance for credit losses is established once management determines that the borrower does not have the ability to repay the loan in full. Interest continues to accrue on past due wholesale finance

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receivables until the date the collection of the finance receivables becomes doubtful, at which time the finance receivable is placed on non-accrual status. The Company will resume accruing interest on these wholesale finance receivables when payments are current according to the terms of the loan agreements and future payments are reasonably assured. While on non-accrual status, all cash received is applied to principal or interest as appropriate. There were no wholesale receivables on non-accrual status at July 1, 2012 or December 31, 2011. The recorded investment of non-accrual status wholesale finance receivables at June 26, 2011 was $4.7 million. At July 1, 2012, December 31, 2011 and June 26, 2011, $0.6 million, $0.9 million, and $1.2 million of wholesale finance receivables were 90 days or more past due and accruing interest, respectively.

An analysis of the aging of past due finance receivables, which includes non-accrual status finance receivables was as follows (in thousands):

	July 1, 2012
							Greater than				Total
			31-60 Days		61-90 Days		90 Days		Total		Finance
	Current		Past Due		Past Due		Past Due		Past Due		Receivables
Retail	$	5,101,847	$	84,858	$	24,247	$	14,827	$	123,932	$	5,225,779
Wholesale		902,891		1,125		468		554		2,147		905,038
Total	$	6,004,738	$	85,983	$	24,715	$	15,381	$	126,079	$	6,130,817
	December 31, 2011
							Greater than				Total
			31-60 Days		61-90 Days		90 Days		Total		Finance
	Current		Past Due		Past Due		Past Due		Past Due		Receivables
Retail	$	4,915,711	$	107,373	$	36,937	$	27,469	$	171,779	$	5,087,490
Wholesale		822,610		777		344		909		2,030		824,640
Total	$	5,738,321	$	108,150	$	37,281	$	28,378	$	173,809	$	5,912,130
	June 26, 2011
							Greater than				Total
			31-60 Days		61-90 Days		90 Days		Total		Finance
	Current		Past Due		Past Due		Past Due		Past Due		Receivables
Retail	$	5,205,300	$	115,163	$	34,860	$	18,732	$	168,755	$	5,374,055
Wholesale		730,476		816		387		2,110		3,313		733,789
Total	$	5,935,776	$	115,979	$	35,247	$	20,842	$	172,068	$	6,107,844

A significant part of managing HDFS’ finance receivable portfolios includes the assessment of credit risk associated with each borrower. As the credit risk varies between the retail and wholesale portfolios, HDFS utilizes different credit risk indicators for each portfolio.

HDFS manages retail credit risk through its credit approval policy and ongoing collection efforts. HDFS uses FICO scores, a standard credit rating measurement, to differentiate the expected default rates of retail credit applicants enabling the Company to better evaluate credit applicants for approval and to tailor pricing according to this assessment. Retail loans with a FICO score of 640 or above at origination are considered prime, and loans with a FICO score below 640 are considered sub-prime. These credit quality indicators are determined at the time of loan origination and are not updated subsequent to the loan origination date.

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The recorded investment of retail finance receivables, by credit quality indicator, was as follows (in thousands):

	July 1, 2012		December 31, 2011		June 26, 2011
Prime	$	4,181,527	$	4,097,048	$	4,313,863
Sub-prime		1,044,252		990,442		1,060,192
Total	$	5,225,779	$	5,087,490	$	5,374,055

HDFS’ credit risk on the wholesale portfolio is different from that of the retail portfolio. Whereas the retail portfolio represents a relatively homogeneous pool of retail finance receivables that exhibit more consistent loss patterns, the wholesale portfolio exposures are less consistent. HDFS utilizes an internal credit risk rating system to manage credit risk exposure consistently across wholesale borrowers and capture credit risk factors for each borrower.

HDFS uses the following internal credit quality indicators, based on the Company’s internal risk rating system, listed from highest level of risk to lowest level of risk for the wholesale portfolio: Doubtful, Substandard, Special Mention, Medium Risk and Low Risk. Based upon management’s review, the dealers classified in the Doubtful category are the dealers with the greatest likelihood of being charged-off, while the dealers classified as Low Risk are least likely to be charged-off. The internal rating system considers factors such as the specific borrowers’ ability to repay and the estimated value of any collateral. Dealer risk rating classifications are reviewed and updated on a quarterly basis.

The recorded investment of wholesale finance receivables, by internal credit quality indicator, was as follows (in thousands):

	July 1, 2012		December 31, 2011		June 26, 2011
Doubtful	$	9,467	$	13,048	$	12,386
Substandard		5,902		5,052		21,088
Special Mention		7,897		14,361		12,887
Medium Risk		808		3,032		12,861
Low Risk		880,964		789,147		674,567
Total	$	905,038	$	824,640	$	733,789

7. Asset-Backed Financing

HDFS participates in asset-backed financing through both term asset-backed securitization transactions and its asset-backed commercial paper conduit facility. In both types of asset-backed financing programs, HDFS transfers U.S. retail motorcycle finance receivables to a consolidated special purpose entity (SPE) while retaining the servicing rights. Each SPE then converts those assets into cash, through the issuance of debt. These SPEs are considered VIEs under U.S. GAAP. HDFS is required to consolidate any VIEs in which it is deemed to be the primary beneficiary through having power over the significant activities of the entity and having an obligation to absorb losses or the right to receive benefits from the VIE which are potentially significant to the VIE.

HDFS is considered to have power over the significant activities of its term asset-backed securitization and asset-backed commercial paper conduit facility VIEs due to its role as servicer. Servicing fees are typically not considered potentially significant variable interests in a VIE. However, HDFS retains a residual interest in the VIEs in the form of a debt security, which gives HDFS the right to receive benefits that could be potentially significant to the VIE. Therefore, the Company is the primary beneficiary and consolidates all of its VIEs within its consolidated financial statements. Servicing fees paid by VIEs to HDFS are eliminated in consolidation and therefore are not recorded on a consolidated basis.

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HDFS is not required, and does not currently intend, to provide any additional financial support to its VIEs. Investors and creditors only have recourse to the assets held by the VIEs.

The Company’s VIEs have been aggregated on the balance sheet due to the similarity of the nature of the assets involved as well as the purpose and design of the VIEs.

Term Asset-Backed Securitization VIEs

The Company transfers U.S. retail motorcycle finance receivables to SPEs which in turn issue secured notes to investors, with various maturities and interest rates, secured by future collections of the purchased U.S. retail motorcycle finance receivables. Each term asset-backed securitization SPE is a separate legal entity and the U.S. retail motorcycle finance receivables included in each term asset-backed securitization are only available for payment of that secured debt and other obligations arising from the term asset-backed securitization transaction and are not available to pay other obligations or claims of the Company’s creditors until the associated secured debt and other obligations are satisfied. Cash and cash equivalent balances held by the SPEs are used only to support the securitizations. There are no amortization schedules for the secured notes; however, the debt is reduced monthly as available collections on the related U.S. retail motorcycle finance receivables are applied to outstanding principal. The secured notes’ contractual lives have various maturities ranging from 2012 to 2018.

During the second quarter of 2012, the Company issued $89.5 million of secured notes through the sale of notes that had been previously retained as part of certain 2009 and 2011 term asset-backed securitization transactions. These notes were sold at a premium, which will be recognized over the term of the notes. At July 1, 2012, the unaccreted premium associated with these notes was $1.8 million. There was no additional term-asset backed securitization activity during the six months ended July 1, 2012. There were no term-asset backed securitization transactions during the six months ended June 26, 2011.

The following table presents the assets and liabilities of the consolidated term asset-backed securitization SPEs that were included in the Company’s financial statements (in thousands):

	July 1,			December 31,			June 26,
	2012			2011			2011
Assets:
Finance receivables	$	2,082,375		$	2,916,219		$	2,554,758
Allowance for credit losses		(41,781	)		(65,735	)		(61,642	)
Restricted cash		187,782			228,776			242,618
Other assets		4,243			6,772			7,594
Total assets	$	2,232,619		$	3,086,032		$	2,743,328
Liabilities
Term asset-backed securitization debt	$	1,339,232		$	2,087,346		$	1,853,382

Asset-Backed Commercial Paper Conduit Facility VIE

On September 9, 2011, the Company amended and restated its third-party bank sponsored asset-backed commercial paper conduit facility which provides for a total aggregate commitment of $600.0 million based on, among other things, the amount of eligible U.S. retail motorcycle loans held by the SPE as collateral. The amended agreement has terms similar to the prior agreement and is for the same amount. Under the facility, HDFS may transfer U.S. retail motorcycle finance receivables to a SPE, which in turn may issue debt to third-party bank-sponsored asset-backed commercial paper conduits. The assets of the SPE are restricted as collateral for the payment of the debt or other obligations arising in the transaction and are not available to pay other obligations or claims of the Company’s creditors. The terms for this debt provide for interest on the outstanding principal based on prevailing commercial paper rates, or LIBOR plus a specified margin to the extent the advance is not funded by a conduit lender through the issuance of commercial paper. The conduit facility also provides for

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an unused commitment fee based on the unused portion of the total aggregate commitment of $600.0 million. There is no amortization schedule; however, the debt is reduced monthly as available collections on the related finance receivables are applied to outstanding principal. Upon expiration of the conduit facility, any outstanding principal will continue to be reduced monthly through available collections. Unless earlier terminated or extended by mutual agreement of HDFS and the lenders, the conduit facility has an expiration date of September 7, 2012.

The following table presents the assets of the asset-backed commercial paper conduit facility SPEs that were included in our financial statements (in thousands);

	July 1,			December 31,			June 26,
	2012			2011			2011
Finance receivables	$	8,403		$	13,455		$	19,747
Allowance for credit losses		(168	)		(302	)		(475	)
Restricted cash		782			879			1,443
Other assets		158			449			288
Total assets	$	9,175		$	14,481		$	21,003

The SPEs had no borrowings outstanding under the conduit facility at July 1, 2012, December 31, 2011 or June 26, 2011, therefore, these assets are restricted as collateral for the payment of fees associated with the unused portion of the total aggregate commitment of $600.0 million.

8. Fair Value Measurements

Certain assets and liabilities are recorded at fair value in the financial statements; some of these are measured on a recurring basis while others are measured on a non-recurring basis. Assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. In determining fair value of assets and liabilities, the Company uses various valuation techniques. The availability of inputs observable in the market varies from instrument to instrument and depends on a variety of factors including the type of instrument, whether the instrument is actively traded, and other characteristics particular to the transaction. For many financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management discretion. For other financial instruments, pricing inputs are less observable in the market and may require management judgment.

The Company assesses the inputs used to measure fair value using a three-tier hierarchy. The hierarchy indicates the extent to which inputs used in measuring fair value are observable in the market. Level 1 inputs include quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, foreign currency exchange rates, commodity rates and yield curves. The Company uses the market approach to derive the fair value for its level 2 fair value measurements. Foreign currency exchange contracts are valued using publicly quoted spot and forward prices; commodity contracts are valued using publicly quoted prices, where available, or dealer quotes; interest rate swaps are valued using publicized swap curves; and investments in marketable debt and equity securities are valued using publicly quoted prices.

Level 3 inputs are not observable in the market and include management’s judgments about the assumptions market participants would use in pricing the asset or liability. The use of observable and unobservable inputs is reflected in the hierarchy assessment disclosed in the following tables.

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Recurring Fair Value Measurements

The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis (in thousands):

	July 1, 2012
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
	Balance as of		Identical Assets		Inputs		Inputs
	July 1, 2012		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents	$	764,147	$	764,147	$	—	$	—
Marketable securities		135,848		—		135,848		—
Derivatives		8,879		—		8,879		—
	$	908,874	$	764,147	$	144,727	$	—
Liabilities:
Derivatives	$	2,042	$	—	$	2,042	$	—

	December 31, 2011
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
	Balance as of		Identical Assets		Inputs		Inputs
	December 31, 2011		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents	$	1,302,367	$	1,302,367	$	—	$	—
Marketable securities		153,380		—		153,380		—
Derivatives		16,443		—		16,443		—
	$	1,472,190	$	1,302,367	$	169,823	$	—
Liabilities:
Derivatives	$	5,136	$	—	$	5,136	$	—
	June 26, 2011
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
	Balance as of		Identical Assets		Inputs		Inputs
	June 26, 2011		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents	$	582,808	$	582,808	$	—	$	—
Marketable securities		244,555		49,999		194,556		—
Derivatives		—		—		—		—
	$	827,363	$	632,807	$	194,556	$	—
Liabilities:
Derivatives	$	14,933	$	—	$	14,933	$	—

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9. Fair Value of Financial Instruments

The Company’s financial instruments consist primarily of cash and cash equivalents, marketable securities, trade receivables, finance receivables, net, trade payables, debt, foreign currency contracts and interest rate swaps (derivative instruments are discussed further in Note 10). Under U.S. GAAP, certain of these items are required to be recorded in the financial statements at fair value, while others are required to be recorded at historical cost.

The following table summarizes the fair value and carrying value of the Company’s financial instruments (in thousands):

	July 1, 2012				December 31, 2011				June 26, 2011
	Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value
Assets:
Cash and cash equivalents	$	1,071,496	$	1,071,496	$	1,526,950	$	1,526,950	$	973,478	$	973,478
Marketable securities	$	135,848	$	135,848	$	153,380	$	153,380	$	244,555	$	244,555
Accounts receivable, net	$	250,268	$	250,268	$	219,039	$	219,039	$	265,663	$	265,663
Derivatives	$	8,879	$	8,879	$	16,443	$	16,443	$	—	$	—
Finance receivables, net	$	6,099,619	$	6,016,569	$	5,888,040	$	5,786,681	$	6,052,156	$	5,963,440
Restricted cash held by variable interest entities	$	188,564	$	188,564	$	229,655	$	229,655	$	244,060	$	244,060
Liabilities:
Accounts payable	$	252,239	$	252,239	$	255,713	$	255,713	$	277,395	$	277,395
Derivatives	$	2,042	$	2,042	$	5,136	$	5,136	$	14,933	$	14,933
Unsecured commercial paper	$	845,868	$	845,868	$	874,286	$	874,286	$	735,737	$	735,737
Credit facilities	$	143,792	$	143,792	$	159,794	$	159,794	$	201,112	$	201,112
Medium-term notes	$	2,967,112	$	2,698,359	$	2,561,458	$	2,298,193	$	2,555,926	$	2,347,750
Senior unsecured notes	$	360,791	$	303,000	$	376,513	$	303,000	$	391,051	$	303,000
Term asset-backed securitization debt	$	1,345,452	$	1,339,232	$	2,099,060	$	2,087,346	$	1,883,465	$	1,853,382

Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Net and Accounts Payable – With the exception of certain money-market investments, these items are recorded in the financial statements at historical cost. The historical cost basis for these amounts is estimated to approximate their respective fair values due to the short maturity of these instruments.

Marketable Securities – Marketable securities are recorded in the financial statements at fair value. The fair value of marketable securities is based primarily on quoted market prices of similar financial assets. Changes in fair value are recorded, net of tax, as other comprehensive income and included as a component of shareholders’ equity. Fair Value is based on Level 1 or Level 2 inputs.

Finance Receivables, Net – Finance receivables, net includes finance receivables held for investment, net and restricted finance receivables held by VIEs, net. Retail and wholesale finance receivables are recorded in the financial statements at historical cost less a provision for credit losses. The fair value of retail finance receivables is generally calculated by discounting future cash flows using an estimated discount rate that reflects current credit, interest rate and prepayment risks associated with similar types of instruments. Fair value is determined based on Level 3 inputs. The historical cost basis of wholesale finance receivables approximates fair value because they either are short-term or have interest rates that adjust with changes in market interest rates.

Derivatives – Interest rate swaps, foreign currency exchange contracts and commodity contracts are derivative financial instruments and are carried at fair value on the balance sheet. The fair value of interest rate swaps is determined using pricing models that incorporate quoted prices for similar assets and observable inputs such as interest rates and yield curves. The fair value of foreign currency exchange and commodity contracts are determined using publicly quoted prices. Fair value is calculated using Level 2 inputs.

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Debt – Debt is generally recorded in the financial statements at historical cost. The carrying value of debt provided under credit facilities approximates fair value since the interest rates charged under the facilities are tied directly to market rates and fluctuate as market rates change. The carrying value of unsecured commercial paper approximates fair value due to its short maturity. Fair value is calculated using Level 2 inputs.

The fair values of the medium-term notes maturing in December 2012, December 2014, March 2016, March 2017 and June 2018 are estimated based upon rates currently available for debt with similar terms and remaining maturities. Fair value is calculated using Level 2 inputs.

The fair value of the senior unsecured notes is estimated based upon rates currently available for debt with similar terms and remaining maturities. Fair value is calculated using Level 2 inputs.

The fair value of the debt related to term asset-backed securitization transactions is estimated based on pricing currently available for transactions with similar terms and maturities. Fair value is calculated using Level 2 inputs.

10. Derivative Instruments and Hedging Activities

The Company is exposed to certain risks such as foreign currency exchange rate risk, interest rate risk and commodity price risk. To reduce its exposure to such risks, the Company selectively uses derivative financial instruments. All derivative transactions are authorized and executed pursuant to regularly reviewed policies and procedures, which prohibit the use of financial instruments for speculative trading purposes.

All derivative instruments are recognized on the balance sheet at fair value (see Note 9). In accordance with ASC Topic 815, “Derivatives and Hedging,” the accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. Changes in the fair value of derivatives that are designated as fair value hedges, along with the gain or loss on the hedged item, are recorded in current period earnings. For derivative instruments that are designated as cash flow hedges, the effective portion of gains and losses that result from changes in the fair value of derivative instruments is initially recorded in other comprehensive income (OCI) and subsequently reclassified into earnings when the hedged item affects income. The Company assesses, both at the inception of each hedge and on an on-going basis, whether the derivatives that are used in its hedging transactions are highly effective in offsetting changes in cash flows of the hedged items. Any ineffective portion is immediately recognized in earnings. No component of a hedging derivative instrument’s gain or loss is excluded from the assessment of hedge effectiveness. Derivative instruments that do not qualify for hedge accounting are recorded at fair value and any changes in fair value are recorded in current period earnings.

The Company sells its products internationally and in most markets those sales are made in the foreign country’s local currency. As a result, the Company’s earnings can be affected by fluctuations in the value of the U.S. dollar relative to foreign currency. The Company’s most significant foreign currency risk relates to the Euro, the Australian dollar and the Japanese yen. The Company utilizes foreign currency contracts to mitigate the effects of these currencies’ fluctuations on earnings. The foreign currency contracts are entered into with banks and allow the Company to exchange a specified amount of foreign currency for U.S. dollars at a future date, based on a fixed exchange rate.

The Company utilizes natural gas contracts and diesel fuel contracts to hedge portions of the cost of those commodities consumed in the Company’s motorcycle production and distribution operations.

The Company’s foreign currency contracts and commodity contracts generally have maturities of less than one year.

The Company’s earnings are affected by changes in interest rates. HDFS utilizes interest rate swaps to reduce the impact of fluctuations in interest rates on its unsecured commercial paper by converting a portion from a floating rate basis to a fixed rate basis. HDFS also entered into derivative contracts to facilitate its first quarter 2008 term asset-backed securitization transaction. These derivatives, which hedged assets held by a VIE, did not qualify for hedge accounting treatment and expired during 2011. The fair value of HDFS’s interest rate swaps is determined using pricing models that incorporate quoted prices for similar assets and observable inputs such as interest rates and yield curves.

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The following table summarizes the fair value of the Company’s derivative financial instruments (in thousands):

	July 1, 2012						December 31, 2011						June 26, 2011
Derivatives Designated As Hedging Instruments Under ASC Topic 815	Notional Value		Asset Fair  Value(a)		Liability Fair  Value(b)		Notional Value		Asset Fair Value(a)		Liability Fair  Value(b)		Notional Value		Asset Fair  Value(a)		Liability Fair  Value(b)
Foreign currency contracts(c)	$	244,221	$	8,879	$	1,027	$	306,450	$	16,443	$	1,852	$	272,637	$	—	$	9,691
Natural gas contracts(c)		1,066		—		33		3,915		—		265		2,915		—		86
Interest rate swaps—unsecured commercial paper(c)		41,600		—		982		102,100		—		3,020		117,500		—		5,156
Total	$	286,887	$	8,879	$	2,042	$	412,465	$	16,443	$	5,137	$	393,052	$	—	$	14,933
	July 1, 2012						December 31, 2011						June 26, 2011
Derivatives Not Designated As Hedging Instruments Under ASC Topic 815	Notional Value		Asset Fair  Value(a)		Liability Fair  Value(b)		Notional Value		Asset Fair  Value(a)		Liability Fair  Value(b)		Notional Value		Asset Fair  Value(a)		Liability Fair  Value(b)
Disel fuel contracts	$	4,346	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
	$	4,346	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(a) Included in other current assets

(b) Included in accrued liabilities

(c) Derivative designated as a cash flow hedge

The following tables summarize the amount of gains and losses related to derivative financial instruments designated as cash flow hedges (in thousands):

	Amount of Gain/(Loss) Recognized in OCI
	Three months ended						Six months ended
Cash Flow Hedges	July 1, 2012			June 26, 2011			July 1, 2012			June 26, 2011
Foreign currency contracts	$	10,309		$	(6,760	)	$	4,095		$	(16,921	)
Natural gas contracts		(109	)		(227	)		(424	)		(264	)
Interest rate swaps—unsecured commercial paper		(9	)		(397	)		(24	)		(405	)
Total	$	10,191		$	(7,384	)	$	3,647		$	(17,590	)

	Amount of Gain/(Loss) Reclassified from AOCI into Income
	Three months ended						Six months ended						Expected to be Reclassified
Cash Flow Hedges	July 1, 2012			June 26, 2011			July 1, 2012			June 26, 2011			Over the Next Twelve Months
Foreign currency contracts(a)	$	9,683		$	(14,781	)	$	12,104		$	(20,788	)	$	(5,162	)
Natural gas contracts(a)		(337	)		(166	)		(656	)		(424	)		33
Interest rate swaps—unsecured commercial paper(b)		(968	)		(1,336	)		(1,935	)		(2,686	)		(986	)
Total	$	8,378		$	(16,283	)	$	9,513		$	(23,898	)	$	(6,115	)

(a) Gain/(loss) reclassified from accumulated other comprehensive income (AOCI) to income is included in cost of goods sold.

(b) Gain/(loss) reclassified from AOCI to income is included in financial services interest expense.

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For the three and six months ended July 1, 2012 and June 26, 2011, the cash flow hedges were highly effective and, as a result, the amount of hedge ineffectiveness was not material. No amounts were excluded from effectiveness testing.

For the three and six months ended July 1, 2012 and June 26, 2011, there were no gains or losses recognized in income related to derivative financial instruments designated as fair value hedges.

For the three and six months ended July 1, 2012 and June 26, 2011, there were no gains or losses recognized in income related to derivative financial instruments not designated as hedging instruments.

The Company is exposed to credit loss risk in the event of non-performance by counterparties to these derivative financial instruments. Although no assurances can be given, the Company does not expect any of the counterparties to these derivative financial instruments to fail to meet its obligations. To manage credit loss risk, the Company selects counterparties based on credit ratings and, on a quarterly basis, evaluates each hedge’s net position relative to the counterparty’s ability to cover its position.

11. Income Taxes

The Company’s 2012 income tax rate for the three and six months ended July 1, 2012 was 35.3% compared to 34.8% for the same periods last year. Prior year was favorably impacted by the Federal research and development credit that expired at the end of 2011.

12. Product Warranty and Safety Recall Campaigns

The Company currently provides a standard two-year limited warranty on all new motorcycles sold worldwide, except for Japan, where the Company currently provides a standard three-year limited warranty on all new motorcycles sold. In addition, the Company started offering a one-year warranty for Parts & Accessories (P&A) in 2012. The warranty coverage for the retail customer generally begins when the product is sold to a retail customer. The Company maintains reserves for future warranty claims using an estimated cost, which is based primarily on historical Company claim information. Additionally, the Company has from time to time initiated certain voluntary safety recall campaigns. The Company reserves for all estimated costs associated with safety recalls in the period that the safety recalls are announced.

Changes in the Company’s warranty and safety recall liability were as follows (in thousands):

	Three months ended						Six months ended
	July 1,			June 26,			July 1,			June 26,
	2012			2011			2012			2011
Balance, beginning of period	$	57,102		$	57,111		$	54,994		$	54,134
Warranties issued during the period		17,127			12,335			32,618			23,560
Settlements made during the period		(18,549	)		(12,570	)		(33,086	)		(22,866	)
Recalls and changes to pre-existing warranty liabilities		12,121			(1,469	)		13,275			579
Balance, end of period	$	67,801		$	55,407		$	67,801		$	55,407

The liability for safety recall campaigns was $6.7 million, $10.7 million and $2.9 million as of July 1, 2012, December 31, 2011 and June 26, 2011, respectively.

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13. Earnings Per Share

The following table sets forth the computation for basic and diluted earnings per share from continuing operations (in thousands, except per share amounts):

	Three months ended				Six months ended
	July 1,		June 26,		July 1,		June 26,
	2012		2011		2012		2011
Numerator:
Income from continuing operations used in computing basic and diluted earnings per share	$	247,250	$	190,580	$	419,285	$	309,840
Denominator:
Denominator for basic earnings per share- weighted-average common shares		228,838		234,336		228,914		234,086
Effect of dilutive securities—employee stock compensation plan		2,085		1,832		2,190		1,958
Denominator for diluted earnings per share- adjusted weighted-average shares outstanding		230,923		236,168		231,104		236,044
Earnings per common share from continuing operations:
Basic	$	1.08	$	0.81	$	1.83	$	1.32
Diluted	$	1.07	$	0.81	$	1.81	$	1.31

Outstanding options to purchase 2.1 million and 4.1 million shares of common stock for the three months ended July 1, 2012 and June 26, 2011, respectively, and 2.3 million and 3.7 million shares of common stock for the six months ended July 1, 2012 and June 26, 2011, respectively, were not included in the Company’s computation of dilutive securities because the exercise price was greater than the market price and therefore the effect would have been anti-dilutive.

The Company has a share-based compensation plan under which employees may be granted share-based awards including shares of restricted stock and restricted stock units (RSUs). Non-forfeitable dividends are paid on unvested shares of restricted stock and non-forfeitable dividend equivalents are paid on unvested RSUs. As such, shares of restricted stock and RSUs are considered participating securities under the two-class method of calculating earnings per share as described in ASC Topic 260, “Earnings per Share.” The two-class method of calculating earnings per share did not have a material impact on the Company’s earnings per share calculation for the three and six month periods ending July 1, 2012 and June 26, 2011, respectively.

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14. Employee Benefit Plans

The Company has defined benefit pension plans and postretirement healthcare benefit plans, which cover substantially all employees of the Motorcycles segment. The Company also has unfunded supplemental employee retirement plan agreements (SERPA) with certain employees which were instituted to replace benefits lost under the Tax Revenue Reconciliation Act of 1993. Components of net periodic benefit costs were as follows (in thousands):

	Three months ended						Six months ended
	July 1,			June 26,			July 1,			June 26,
	2012			2011			2012			2011
Pension and SERPA Benefits
Service cost	$	8,420		$	9,273		$	16,840		$	18,545
Interest cost		20,816			20,147			41,632			40,294
Expected return on plan assets		(29,277	)		(26,653	)		(58,555	)		(53,307	)
Amortization of unrecognized:
Prior service cost		740			745			1,479			1,489
Net loss		10,969			7,554			21,937			15,109
Curtailment loss		—			—			—			236
Net periodic benefit cost	$	11,668		$	11,066		$	23,333		$	22,366
Postretirement Healthcare Benefits
Service cost	$	1,853		$	1,907		$	3,706		$	3,814
Interest cost		4,578			4,911			9,155			9,822
Expected return on plan assets		(2,356	)		(2,346	)		(4,712	)		(4,692	)
Amortization of unrecognized:
Prior service credit		(963	)		(969	)		(1,927	)		(1,938	)
Net loss		1,855			1,798			3,711			3,596
Net periodic benefit cost	$	4,967		$	5,301		$	9,933		$	10,602

During the first six months of 2012, the Company voluntarily contributed $200.0 million in cash to further fund its pension plans. No additional pension contributions are required in 2012. The Company also voluntarily contributed $200.0 million in cash to further fund its pension plans during the first six months of 2011. The Company expects it will continue to make on-going contributions related to current benefit payments for SERPA and postretirement healthcare plans.

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

	Three months ended				Six months ended
	July 1,		June 26,		July 1,		June 26,
	2012		2011		2012		2011
Motorcycles net revenue	$	1,569,047	$	1,339,744	$	2,842,416	$	2,402,788
Gross profit		563,817		468,268		1,020,327		820,134
Selling, administrative and engineering expense		248,038		234,827		485,033		438,632
Restructuring expense		6,220		13,594		17,671		36,593
Operating income from Motorcycles		309,559		219,847		517,623		344,909
Financial services income		160,613		165,853		316,935		327,739
Financial services expense		78,659		83,798		167,587		177,749
Operating income from Financial Services		81,954		82,055		149,348		149,990
Operating income	$	391,513	$	301,092	$	666,971	$	494,899

16. Commitment and Contingencies

The Company is subject to lawsuits and other claims related to environmental, product and other matters. In determining required reserves related to these items, the Company carefully analyzes cases and considers the likelihood of adverse judgments or outcomes, as well as the potential range of possible loss. The required reserves are monitored on an ongoing basis and are updated based on new developments or new information in each matter.

Environmental Protection Agency Notice

In December 2009, the Company received formal, written requests for information from the United States Environmental Protection Agency (EPA) regarding: (i) certificates of conformity for motorcycle emissions and related designations and labels, (ii) aftermarket parts, and (iii) warranty claims on emissions related components. The Company promptly submitted written responses to the EPA’s inquiry and engaged in discussions with the EPA. It is possible that a result of the EPA’s investigation will be some form of enforcement action by the EPA that will seek a fine or other relief. However, at this time the Company does not know and cannot reasonably estimate the impact of any remedies the EPA might seek.

York Environmental Matters:

The Company is involved with government agencies and groups of potentially responsible parties in various environmental matters, including a matter involving the cleanup of soil and groundwater contamination at its York, Pennsylvania facility. The York facility was formerly used by the U.S. Navy and AMF prior to the purchase of the York facility by the Company from AMF in 1981. Although the Company is not certain as to the full extent of the environmental contamination at the York facility, it has been working with the Pennsylvania Department of Environmental Protection (PADEP) since 1986 in undertaking environmental investigation and remediation activities, including an ongoing site-wide remedial investigation/feasibility study (RI/FS). In January 1995, the Company entered into a settlement agreement (the Agreement) with the Navy. The Agreement calls for the Navy and the Company to contribute amounts into a trust equal to 53% and 47%, respectively, of future costs associated with environmental investigation and remediation activities at the York facility (Response Costs). The trust administers the payment of the Response Costs incurred at the York facility as covered by the Agreement.

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In February 2002, the Company was advised by the EPA that it considers some of the Company’s remediation activities at the York facility to be subject to the EPA’s corrective action program under the Resource Conservation and Recovery Act (RCRA) and offered the Company the option of addressing corrective action under a RCRA facility lead agreement. In July 2005, the York facility was designated as the first site in Pennsylvania to be addressed under the “One Cleanup Program.” The program provides a more streamlined and efficient oversight of voluntary remediation by both PADEP and EPA and will be carried out consistent with the Agreement with the Navy. As a result, the RCRA facility lead agreement has been superseded.

The Company estimates that its share of the future Response Costs at the York facility will be approximately $2.3 million and has established a reserve for this amount which is included in accrued liabilities in the Condensed Consolidated Balance Sheets. As noted above, the RI/FS is still underway and given the uncertainty that exists concerning the nature and scope of additional environmental investigation and remediation that may ultimately be required under the RI/FS or otherwise at the York facility, we are unable to make a reasonable estimate of those additional costs, if any, that may result.

The estimate of the Company’s future Response Costs that will be incurred at the York facility is based on reports of independent environmental consultants retained by the Company, the actual costs incurred to date and the estimated costs to complete the necessary investigation and remediation activities. Response Costs related to the remediation of soil are expected to be incurred primarily over a period of several years ending in 2015. Response Costs related to ground water remediation may continue for some time beyond 2015.

Product Liability Matters:

Additionally, the Company is involved in product liability suits related to the operation of its business. The Company accrues for claim exposures that are probable of occurrence and can be reasonably estimated. The Company also maintains insurance coverage for product liability exposures. The Company believes that its accruals and insurance coverage are adequate and that product liability will not have a material adverse effect on the Company’s consolidated financial statements.

17. Supplemental Consolidating Data

The supplemental consolidating data for the periods noted is presented for informational purposes. The supplemental consolidating data may be different than segment information presented elsewhere due to the allocation of intercompany eliminations to reporting segments. All supplemental data is presented in thousands.

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	Three months ended July 1, 2012
	Motorcycles & Related		Financial
	Products Operations		Services Operations			Eliminations			Consolidated
Revenue:
Motorcycles and related products	$	1,572,003	$	—		$	(2,956	)	$	1,569,047
Financial services		—		160,843			(230	)		160,613
Total revenue		1,572,003		160,843			(3,186	)		1,729,660
Costs and expenses:
Motorcycles and related products cost of goods sold		1,005,230		—			—			1,005,230
Financial services interest expense		—		48,712			—			48,712
Financial services provision for credit losses		—		(5,259	)		—			(5,259	)
Selling, administrative and engineering expense		248,268		38,162			(3,186	)		283,244
Restructuring expense		6,220		—			—			6,220
Total costs and expenses		1,259,718		81,615			(3,186	)		1,338,147
Operating income		312,285		79,228			—			391,513
Investment income		2,231		—			—			2,231
Interest expense		11,595		—			—			11,595
Income before provision for income taxes		302,921		79,228			—			382,149
Provision for income taxes		106,377		28,522			—			134,899
Income from continuing operations		196,544		50,706			—			247,250
Loss from discontinued operations, net of tax		—		—			—			—
Net income	$	196,544	$	50,706		$	—		$	247,250
	Six months ended July 1, 2012
	Motorcycles & Related		Financial
	Products Operations		Services Operations			Eliminations			Consolidated
Revenue:
Motorcycles and related products	$	2,847,786	$	—		$	(5,370	)	$	2,842,416
Financial services		—		316,749			186			316,935
Total revenue		2,847,786		316,749			(5,184	)		3,159,351
Costs and expenses:
Motorcycles and related products cost of goods sold		1,822,089		—			—			1,822,089
Financial services interest expense		—		99,968			—			99,968
Financial services provision for credit losses		—		3,754			—			3,754
Selling, administrative and engineering expense		484,847		69,235			(5,184	)		548,898
Restructuring expense		17,671		—			—			17,671
Total costs and expenses		2,324,607		172,957			(5,184	)		2,492,380
Operating income		523,179		143,792			—			666,971
Investment income		229,164		—			(225,000	)		4,164
Interest expense		23,090		—			—			23,090
Income before provision for income taxes		729,253		143,792			(225,000	)		648,045
Provision for income taxes		176,995		51,765			—			228,760
Income from continuing operations		552,258		92,027			(225,000	)		419,285
Loss from discontinued operations, net of tax		—		—			—			—
Net income	$	552,258	$	92,027		$	(225,000	)	$	419,285

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	Three months ended June 26, 2011
	Motorcycles & Related		Financial
	Products Operations		Services Operations			Eliminations			Consolidated
Revenue:
Motorcycles and related products	$	1,342,803	$	—		$	(3,059	)	$	1,339,744
Financial services		—		166,518			(665	)		165,853
Total revenue		1,342,803		166,518			(3,724	)		1,505,597
Costs and expenses:
Motorcycles and related products cost of goods sold		871,476		—			—			871,476
Financial services interest expense		—		56,991			—			56,991
Financial services provision for credit losses		—		(6,790	)		—			(6,790	)
Selling, administrative and engineering expense		235,492		36,656			(3,724	)		268,424
Restructuring expense		13,594		—			—			13,594
Total costs and expenses		1,120,562		86,857			(3,724	)		1,203,695
Operating income		222,241		79,661			—			301,902
Investment income		1,748		—			—			1,748
Interest expense		11,350		—			—			11,350
Income before provision for income taxes		212,639		79,661			—			292,300
Provision for income taxes		73,042		28,678			—			101,720
Income from continuing operations		139,597		50,983			—			190,580
Loss from discontinued operations, net of tax		—		—			—			—
Net income	$	139,597	$	50,983		$	—		$	190,580
	Six months ended June 26, 2011
	Motorcycles & Related		Financial
	Products Operations		Services Operations			Eliminations			Consolidated
Revenue:
Motorcycles and related products	$	2,408,293	$	—		$	(5,505	)	$	2,402,788
Financial services		—		328,270			(531	)		327,739
Total revenue		2,408,293		328,270			(6,036	)		2,730,527
Costs and expenses:
Motorcycles and related products cost of goods sold		1,582,654		—			—			1,582,654
Financial services interest expense		—		115,026			—			115,026
Financial services provision for credit losses		—		(1,184	)		—			(1,184	)
Selling, administrative and engineering expense		439,163		69,412			(6,036	)		502,539
Restructuring expense		36,593		—			—			36,593
Total costs and expenses		2,058,410		183,254			(6,036	)		2,235,628
Operating income		349,883		145,016			—			494,899
Investment income		128,146		—			(125,000	)		3,146
Interest expense		22,831		—			—			22,831
Income before provision for income taxes		455,198		145,016			(125,000	)		475,214
Provision for income taxes		113,168		52,206			—			165,374
Income from continuing operations		342,030		92,810			(125,000	)		309,840
Loss from discontinued operations, net of tax		—		—			—			—
Net income	$	342,030	$	92,810		$	(125,000	)	$	309,840

33

	July 1, 2012
	Motorcycles & Related Products Operations		Financial Services Operations		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	725,909	$	345,587	$	—		$	1,071,496
Marketable securities		135,848		—		—			135,848
Accounts receivable, net		885,797		—		(635,529	)		250,268
Finance receivables, net		—		1,398,553		—			1,398,553
Restricted finance receivables held by variable interest entities, net		—		456,285		—			456,285
Inventories		323,046		—		—			323,046
Restricted cash held by variable interest entities		—		188,564		—			188,564
Other current assets		182,464		63,343		—			245,807
Total current assets		2,253,064		2,452,332		(635,529	)		4,069,867
Finance receivables, net		—		2,569,187		—			2,569,187
Restricted finance receivables held by variable interest entities, net		—		1,592,544		—			1,592,544
Property, plant and equipment, net		747,133		29,660		—			776,793
Goodwill		28,604		—		—			28,604
Other long-term assets		335,811		17,956		(73,978	)		279,789
	$	3,364,612	$	6,661,679	$	(709,507	)	$	9,316,784
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	197,891	$	689,877	$	(635,529	)	$	252,239
Accrued liabilities		466,808		71,756		(3,467	)		535,097
Short-term debt		—		845,868		—			845,868
Current portion of long-term debt		—		399,962					399,962
Current portion of long-term debt held by variable interest entities		—		507,427		—			507,427
Total current liabilities		664,699		2,514,890		(638,996	)		2,540,593
Long-term debt		303,000		2,442,189		—			2,745,189
Long-term debt held by variable interest entities		—		831,805		—			831,805
Pension liability		122,496		—		—			122,496
Postretirement healthcare benefits		263,295		—		—			263,295
Other long-term liabilities		131,754		15,265		—			147,019
Commitments and contingencies (Note 17)
Total shareholders’ equity		1,879,368		857,530		(70,511	)		2,666,387
	$	3,364,612	$	6,661,679	$	(709,507	)	$	9,316,784

34

	December 31, 2011
	Motorcycles & Related		Financial
	Products Operations		Services Operations		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	943,330	$	583,620	$	—		$	1,526,950
Marketable securities		153,380		—		—			153,380
Accounts receivable, net		393,615		—		(174,576	)		219,039
Finance receivables, net		—		1,168,603		—			1,168,603
Restricted finance receivables held by variable interest entities, net		—		591,864		—			591,864
Inventories		418,006		—		—			418,006
Restricted cash held by variable interest entities		—		229,655		—			229,655
Other current assets		167,423		67,286		—			234,709
Total current assets		2,075,754		2,641,028		(174,576	)		4,542,206
Finance receivables, net		—		1,754,441		—			1,754,441
Restricted finance receivables held by variable interest entities, net		—		2,271,773		—			2,271,773
Property, plant and equipment, net		779,330		30,129		—			809,459
Goodwill		29,081		—		—			29,081
Other long-term assets		322,379		17,460		(72,635	)		267,204
	$	3,206,544	$	6,714,831	$	(247,211	)	$	9,674,164
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	220,957	$	209,332	$	(174,576	)	$	255,713
Accrued liabilities		482,838		85,038		(3,704	)		564,172
Short-term debt		—		838,486		—			838,486
Current portion of long-term debt		—		399,916					399,916
Current portion of long-term debt held by variable interest entities		—		640,331		—			640,331
Total current liabilities		703,795		2,173,103		(178,280	)		2,698,618
Long-term debt		303,000		2,093,871		—			2,396,871
Long-term debt held by variable interest entities		—		1,447,015		—			1,447,015
Pension liability		302,483		—		—			302,483
Postretirement healthcare benefits		268,582		—		—			268,582
Other long-term liabilities		126,036		14,303		—			140,339
Commitments and contingencies (Note 17)
Total shareholders’ equity		1,502,648		986,539		(68,931	)		2,420,256
	$	3,206,544	$	6,714,831	$	(247,211	)	$	9,674,164

35

	June 26, 2011
	Motorcycles & Related		Financial
	Products Operations		Services Operations		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	681,804	$	291,674	$	—		$	973,478
Marketable securities		244,555		—		—			244,555
Accounts receivable, net		710,791		—		(445,128	)		265,663
Finance receivables, net		—		1,144,886		—			1,144,886
Restricted finance receivables held by variable interest entities, net		—		573,208		—			573,208
Inventories		337,472		—		—			337,472
Restricted cash held by variable interest entities		—		244,060		—			244,060
Other current assets		160,059		57,597		—			217,656
Total current assets		2,134,681		2,311,425		(445,128	)		4,000,978
Finance receivables, net		—		2,306,165		—			2,306,165
Restricted finance receivables held by variable interest entities, net		—		1,939,181		—			1,939,181
Property, plant and equipment, net		758,828		30,115		—			788,943
Goodwill		31,156		—		—			31,156
Other long-term assets		339,666		26,711		(70,821	)		295,556
	$	3,264,331	$	6,613,597	$	(515,949	)	$	9,361,979
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	243,954	$	478,569	$	(445,128	)	$	277,395
Accrued liabilities		522,533		70,880		(3,317	)		590,096
Short-term debt		—		694,137		—			694,137
Current portion of long-term debt held by variable interest entities		—		635,604		—			635,604
Total current liabilities		766,487		1,879,190		(448,445	)		2,197,232
Long-term debt		303,000		2,590,462		—			2,893,462
Long-term debt held by variable interest entities		—		1,217,778		—			1,217,778
Pension liability		103,511		—		—			103,511
Postretirement healthcare liability		258,881		—		—			258,881
Other long-term liabilities		146,286		13,433		—			159,719
Commitments and contingencies (Note 17)
Total shareholders’ equity		1,686,166		912,734		(67,504	)		2,531,396
	$	3,264,331	$	6,613,597	$	(515,949	)	$	9,361,979

36

	Six months ended July 1, 2012
	Motorcycles & Related			Financial			Eliminations &
	Products Operations			Services Operations			Adjustments			Consolidated
Cash flows from operating activities:
Income from continuing operations	$	552,258			92,027		$	(225,000	)	$	419,285
Adjustments to reconcile income from continuing operations to cash provided by operating activities:
Depreciation		82,954			3,043			—			85,997
Amortization of deferred loan origination costs		—			38,075			—			38,075
Amortization of financing origination fees		237			4,784			—			5,021
Provision for employee long-term benefits		33,236			1,027			—			34,263
Contributions to pension and postretirement plans		(213,648	)		—			—			(213,648	)
Stock compensation expense		20,539			1,580			—			22,119
Net change in wholesale finance receivables		—			—			(124,919	)		(124,919	)
Provision for credit losses		—			3,754			—			3,754
Pension and postretirement healthcare plan curtailment and settlement expense		—			—			—			—
Foreign currency adjustments		8,143			—			—			8,143
Other, net		1,275			4,292			—			5,567
Change in current assets and current liabilities:
Accounts receivable		(295,930	)		—			260,953			(34,977	)
Finance receivables—accrued interest and other		—			2,912			—			2,912
Inventories		89,162			—			—			89,162
Accounts payable and accrued liabilities		(22,227	)		270,894			(260,953	)		(12,286	)
Restructuring reserves		(9,915	)		—			—			(9,915	)
Derivative instruments		(1,293	)		(127	)		—			(1,420	)
Other		(25,286	)		(3,605	)		—			(28,891	)
Total adjustments		(332,753	)		326,629			(124,919	)		(131,043	)
Net cash provided by operating activities of continuing operations		219,505			418,656			(349,919	)		288,242
Cash flows from investing activities of continuing operations:
Capital expenditures		(57,504	)		(2,574	)		—			(60,078	)
Origination of finance receivables		—			(3,766,621	)		2,183,049			(1,583,572	)
Collections of finance receivables		—			3,493,920			(2,058,130	)		1,435,790
Sales and redemptions of marketable securities		18,053			—			—			18,053
Net cash (used by) provided by investing activities of continuing operations		(39,451	)		(275,275	)		124,919			(189,807	)
Cash flows from financing activities of continuing operations:
Proceeds from issuance of medium-term notes		—			397,373			—			397,373
Loan to HDFS		(200,000	)		200,000			—			—
Proceeds from securitization of debt		—			91,030			—			91,030
Repayments of securitization debt		—			(839,401	)		—			(839,401	)
Net decrease in credit facilities and unsecured commercial paper		—			(46,629	)		—			(46,629	)
Net change in restricted cash		—			41,091			—			41,091
Dividends paid		(71,645	)		(225,000	)		225,000			(71,645	)
Purchase of common stock for treasury		(172,742	)		—			—			(172,742	)
Excess tax benefits from share based payments		15,730			—			—			15,730
Issuance of common stock under employee stock option plans		35,337			—			—			35,337
Net cash used by financing activities of continuing operations		(393,320	)		(381,536	)		225,000			(549,856	)
Effect of exchange rate changes on cash and cash equivalents of continuing operations		(4,155	)		122			—			(4,033	)
Net (decrease) increase in cash and cash equivalents of continuing operations		(217,421	)		(238,033	)		—			(455,454	)
Cash flows from discontinued operations:
Cash flows from operating activities of discontinued operations		—			—			—			—
Cash flows from investing activities of discontinued operations		—			—			—			—
Effect of exchange rate changes on cash and cash equivalents of discontinued operations		—			—			—			—
		—			—			—			—
Net (decrease) increase in cash and cash equivalents	$	(217,421	)	$	(238,033	)	$	—		$	(455,454	)
Cash and cash equivalents:
Cash and cash equivalents—beginning of period	$	943,330		$	583,620		$	—		$	1,526,950
Cash and cash equivalents of discontinued operations—beginning of period		—			—			—			—
Net (decrease) increase in cash and cash equivalents		(217,421	)		(238,033	)		—			(455,454	)
Less: Cash and cash equivalents of discontinued operations—end of period		—			—			—			—
Cash and cash equivalents—end of period	$	725,909		$	345,587		$	—		$	1,071,496

37

	Six months ended June 26, 2011
	Motorcycles & Related			Financial			Eliminations &
	Products Operations			Services Operations			Adjustments			Consolidated
Cash flows from operating activities:
Net income	$	342,030		$	92,810		$	(125,000	)	$	309,840
Loss from discontinued operations		—			—			—			—
Income from continuing operations		342,030			92,810			(125,000	)		309,840
Adjustments to reconcile income from continuing operations to cash provided by operating activities:
Depreciation		86,375			3,168			—			89,543
Amortization of deferred loan origination costs		—			39,054			—			39,054
Amortization of financing origination fees		237			5,596			—			5,833
Provision for employee long-term benefits		33,018			1,438			—			34,456
Contributions to pension and postretirement plans		(205,498	)		—			—			(205,498	)
Stock compensation expense		19,176			1,361			—			20,537
Net change in wholesale finance receivables		—			—			11,909			11,909
Provision for credit losses		—			(1,184	)		—			(1,184	)
Pension and postretirement healthcare plan curtailment and settlement expense		236			—			—			236
Foreign currency adjustments		(2,813	)		—			—			(2,813	)
Other, net		5,337			21,889			—			27,226
Change in current assets and current liabilities:
Accounts receivable		(44,899	)		—			53,200			8,301
Finance receivables—accrued interest and other		—			5,553			—			5,553
Inventories		(530	)		—			—			(530	)
Accounts payable and accrued liabilities		79,110			60,426			(5,698	)		133,838
Restructuring reserves		3,195			—			—			3,195
Derivative instruments		1,188			7			—			1,195
Other		(4,729	)		44,575			(47,575	)		(7,729	)
Total adjustments		(30,597	)		181,883			11,836			163,122
Net cash provided by (used by) operating activities of continuing operations		311,433			274,693			(113,164	)		472,962
Cash flows from investing activities of continuing operations:
Capital expenditures		(65,956	)		(3,311	)		—			(69,267	)
Origination of finance receivables		—			(3,264,370	)		1,829,763			(1,434,607	)
Collections of finance receivables		—			3,258,282			(1,841,672	)		1,416,610
Purchases of marketable securities		(142,653	)		—			—			(142,653	)
Sales and redemptions of marketable securities		39,966			—			—			39,966
Net cash (used by) provided by investing activities of continuing operations		(168,643	)		(9,399	)		(11,909	)		(189,951	)
Cash flows from financing activities of continuing operations:
Proceeds from issuance of medium-term notes		—			447,076			—			447,076
Loan to HDFS		(200,000	)		200,000			—			—
Repayments of securitization debt		—			(901,851	)		—			(901,851	)
Net decrease in credit facilities and unsecured commercial paper		—			131,039			—			131,039
Net change in restricted cash		—			44,827			—			44,827
Dividends paid		(53,152	)		(125,000	)		125,000			(53,152	)
Purchase of common stock for treasury		(5,678	)		—			—			(5,678	)
Excess tax benefits from share based payments		3,476			—			—			3,476
Issuance of common stock under employee stock option plans		4,534			—			—			4,534
Net cash (used by) provided by financing activities of continuing operations		(250,820	)		(203,909	)		125,000			(329,729	)
Effect of exchange rate changes on cash and cash equivalents of continuing operations		(1,922	)		147			73			(1,702	)
Net (decrease) increase in cash and cash equivalents of continuing operations		(109,952	)		61,532			—			(48,420	)
Cash flows from discontinued operations:
Cash flows from operating activities of discontinued operations		(35	)		—			—			(35	)
Cash flows from investing activities of discontinued operations		—			—			—			—
Effect of exchange rate changes on cash and cash equivalents of discontinued operations		—			—			—			—
		(35	)		—			—			(35	)
Net (decrease) increase in cash and cash equivalents	$	(109,987	)	$	61,532		$	—		$	(48,455	)
Cash and cash equivalents:
Cash and cash equivalents—beginning of period	$	791,791		$	230,142		$	—		$	1,021,933
Cash and cash equivalents of discontinued operations—beginning of period		—			—			—			—
Net (decrease) increase in cash and cash equivalents		(109,987	)		61,532			—			(48,455	)
Less: Cash and cash equivalents of discontinued operations—end of period		—			—			—			—
Cash and cash equivalents—end of period	$	681,804		$	291,674		$	—		$	973,478

38

18. Subsequent Event

In July 2012, the Company issued $675.3 million of secured notes through a term asset-backed securitization transaction.

39

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Harley-Davidson, Inc. is the parent company of the groups of companies doing business as Harley-Davidson Motor Company (HDMC) and Harley-Davidson Financial Services (HDFS). HDMC produces heavyweight cruiser and touring motorcycles. HDMC manufactures five families of motorcycles: Touring, Dyna^®, Softail^®, Sportster^® and V-Rod^®. HDFS provides wholesale and retail financing and insurance programs primarily to Harley-Davidson dealers and customers.

The Company operates in two business segments: Motorcycles & Related Products (Motorcycles) and Financial Services (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 “% Change” figures included in the “Results of Operations” section were calculated using unrounded dollar amounts and may differ from calculations using the rounded dollar amounts presented.

Overview

The Company’s income from continuing operations was $247.3 million, or $1.07 per fully diluted share, for the second quarter of 2012 compared to $190.6 million, or $0.81 per fully diluted share, in the second quarter of 2011. The increase in income from continuing operations was driven by strong financial performance in the Motorcycles segment. Operating income from the Motorcycles segment was up $89.7 million or 40.8 % over last year’s second quarter on a 25.0% increase in wholesale shipments of Harley-Davidson motorcycles. Motorcycles segment results also reflect a higher gross margin percentage, lower restructuring costs and higher selling and administrative expenses. Operating income from Financial Services in the second quarter of 2012 was $82.0 million compared to $82.1 million in the year-ago quarter.

During the second quarter of 2012, worldwide independent dealer retail sales of new Harley-Davidson motorcycles grew 2.8% compared to 2011, including a 4.0% increase in the U.S. and a 0.5% increase in international markets. Through six months, retail sales grew 9.3%, including increases of 12.0% and 4.5% in the U.S. and international markets, respectively. As expected, retail sales growth rates moderated in the second quarter due to an unusually warm spring in the U.S. that pulled some retail sales forward into the first quarter. The Company continues to remain cautious about its expectations for retail sales globally in an environment of greater economic uncertainty, including in Europe where retail sales have been affected by the challenging Eurozone economy.

(1) Note Regarding Forward-Looking Statements

The Company intends that certain matters discussed in this report are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such by reference to this footnote or because the context of the statement will include words such as the Company “believes,” “anticipates,” “expects,” “plans,” or “estimates” or words of similar meaning. Similarly, statements that describe future plans, objectives, outlooks, targets, guidance or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this report. Certain of such risks and uncertainties are described in close proximity to such statements or elsewhere in this report, including under the caption “Cautionary Statements” and in Item 1A “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011. Shareholders, potential investors, and other readers are urged to consider these factors in evaluating the forward-looking statements and cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this report are made only as of the date of the filing of this report (August 9, 2012), and the Company disclaims any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

40

Outlook⁽¹⁾

On August 1, 2012, the Company reaffirmed its expectation to ship 245,000 to 250,000 Harley-Davidson motorcycles to dealers and distributors worldwide in 2012. In addition, the Company announced that its full-year shipment estimate includes expected shipments of 51,000 to 56,000 motorcycles in the third quarter of 2012, down 9% to 17% from prior year. The Company expects 2012 third quarter shipments to be down behind lower production as a result of the planned downtime associated with its July enterprise resource planning (ERP) system implementation at its York, Pennsylvania facility (York). The Company also expects that 2012 fourth quarter shipments and production will be down compared to prior year due to the implementation of flexible production capabilities as discussed below and a decrease in production days due to a five-day decrease in the Company’s fiscal fourth quarter of 2012 as compared to the fourth quarter of 2011. In addition, fourth quarter production will be down due to the incremental production in 2011 related to approximately 7,000 motorcycles produced and inventoried in the fourth quarter of 2011 in advance of the 2012 ERP implementation which the Company had initially expected to occur in the second quarter of 2012. The Company continues to expect U.S. dealers to sell more units at retail than the Company expects to ship in 2012 resulting in a decrease in U.S. retail inventory during 2012.

As previously disclosed, beginning in early 2013, the Company expects to implement flexible production capabilities at York by adding flexible workers thus enabling the Company to increase capacity in the first half of 2013 to more closely match retail demand. The Company expects to achieve the ability to maximize flexibility in the entire manufacturing system during 2014 when it expects that the same capability will be in place for the Kansas City operations. Consequently the Company expects U.S. retail inventory to be slightly lower on a year over year basis at the end of 2012 and 2013 which will be aligned with the seasonal low point for retail sales.

Also on August 1, 2012, the Company announced that it continues to expect 2012 full-year gross margin to be between 34.75% and 35.75%. The Company expects gross margin will be positively impacted by incremental restructuring savings, increased productivity from continuous improvement opportunities, motorcycle pricing actions and product mix. The Company believes that raw material surcharges and temporary inefficiencies resulting from restructuring activities will be comparable to 2011 levels. The Company expects that currency impacts will be unfavorable for 2012. The Company continues to expect 2012 third and fourth quarter gross margin percentages to be down from first half levels driven by several factors including currency and lower production volumes.

The Company also announced on August 1, 2012 that it continues to expect its full-year 2012 effective tax rate from continuing operations to be approximately 35.5%. This guidance excludes the effect of any potential future nonrecurring adjustments such as changes in tax legislation or audit settlements which are recorded as discrete items in the period in which they are settled.

Finally, on August 1, 2012, the Company confirmed its full-year capital expenditure estimate of $190 million to $210 million which includes approximately $35 million of capital related to restructuring.

Restructuring Activities⁽¹⁾

2011 Restructuring Plan

In December 2011, the Company made a decision to cease operations at New Castalloy, its Australian subsidiary and producer of cast motorcycle wheels and wheel hubs, and source those components through other existing suppliers. The Company expects the transition of supply from New Castalloy to be complete by mid-2013. The decision to close New Castalloy came as part of the Company’s overall long term strategy to develop world-class manufacturing capability throughout the Company by restructuring and consolidating operations for greater competitiveness, efficiency and flexibility. In connection with this decision, the Company will reduce its workforce by approximately 200 employees by mid-2013.

In February 2011, the Company’s unionized employees at its facility in Kansas City, Missouri ratified a new seven-year labor agreement. The new agreement took effect on August 1, 2011. The new contract is similar to the labor agreements ratified at the Company’s Wisconsin facilities in September 2010 and its York, Pennsylvania facility in December 2009, and allows for similar flexibility and increased production efficiency. Once the new contract is fully implemented, the production system in Kansas City, like Wisconsin and York, will include the addition of a flexible workforce component.

41

After taking actions to fully implement the new ratified labor agreement, the Company expects to have about 145 fewer full-time hourly unionized employees in its Kansas City facility than would be required under the prior contract.

2010 Restructuring Plan

In September 2010, the Company’s unionized employees in Wisconsin ratified three separate new seven-year labor agreements which took effect in April 2012 when the prior contracts expired. The new contracts are similar to the labor agreement ratified at the Company’s York, Pennsylvania facility in December 2009 and allow for similar flexibility and increased production efficiency. Once the new contracts are fully implemented, the production system in Wisconsin, like York, will include the addition of a flexible workforce component.

After taking actions to fully implement the new ratified labor agreements, the Company expects to have about 250 fewer full-time hourly unionized employees in its Milwaukee-area facilities when the contracts are fully implemented in 2012 than would be required under the previous contract. In Tomahawk, the Company expects to have about 75 fewer full-time hourly unionized employees when the contract is fully implemented than would be required under the previous contract.

2009 Restructuring Plan

During 2009, in response to the U.S. economic recession and worldwide slowdown in consumer demand, the Company committed to a volume reduction and a combination of restructuring actions that are expected to be completed at various dates between 2009 and 2012. The actions were designed to reduce administrative costs, eliminate excess capacity and exit non-core business operations. The Company’s significant announced actions include the restructuring and transformation of its York, Pennsylvania production facility including the implementation of a new more flexible unionized labor agreement; consolidation of facilities related to engine and transmission production; outsourcing of certain distribution and transportation activities and exiting the Buell product line.

The 2009 restructuring plan includes an estimated reduction of approximately 2,700 to 2,900 hourly production positions and approximately 720 non-production, primarily salaried positions within the Motorcycles segment and approximately 100 salaried positions in the Financial Services segment.

Restructuring Costs and Savings

During the first half of 2012, the Company incurred $17.7 million in restructuring expense related to its combined restructuring plan activities. This is in addition to $455.8 million in restructuring and impairment expense incurred in prior years since the restructuring activities were initiated in 2009. On August 1, 2012, the Company revised its estimate for restructuring expenses related to its combined restructuring plan activities that it expects to incur from 2009 to 2013 to $490 million to $510 million. The Company’s previous estimate had been $500 million to $510 million. The Company continues to expect approximately 35% of those amounts to be non-cash. The estimated restructuring expense includes estimated restructuring expenses of $40 million to $50 million in 2012, which was revised down from the previous estimate of $50 million to $60 million. The Company has realized or estimates that it will realize cumulative savings from these restructuring activities, measured against 2008, as follows:

• 2009—$91 million (91% operating expense and 9% cost of sales) (actual);

• 2010—$172 million (64% operating expense and 36% cost of sales) (actual);

• 2011—$217 million (51% operating expense and 49% cost of sales) (actual);

• 2012—$275 million to $295 million (35-45% operating expense and 55-65% cost of sales) (estimated);

• 2013—$300 million to $320 million (30-40% operating expense and 60-70% cost of sales) (estimated); and

• Ongoing annually upon completion—$315 million to $335 million (30-40% operating expense and 60-70% cost of sales) (estimated).

42

Results of Operations for the Three Months Ended July 1, 2012

Compared to the Three Months Ended June 26, 2011

Consolidated Results

	Three months ended
	July 1,		June 26,		(Decrease)			%
(in thousands, except earnings per share)	2012		2011		Increase			Change
Operating income from motorcycles & related products	$	309,559	$	219,847	$	89,712			40.8	%
Operating income from financial services		81,954		82,055		(101	)		(0.1	)
Operating income		391,513		301,902		89,611			29.7
Investment income		2,231		1,748		483			27.6
Interest expense		11,595		11,350		245			2.2
Income before income taxes		382,149		292,300		89,849			30.7
Provision for income taxes		134,899		101,720		33,179			32.6
Income from continuing operations		247,250		190,580		56,670			29.7
Loss from discontinued operations, net of income taxes		—		—		—			N/M
Net income	$	247,250	$	190,580	$	56,670			29.7	%
Diluted earnings per share from continuing operations	$	1.08	$	0.81	$	0.27			33.3	%
Diluted earnings per share from discontinued operations	$	—	$	—	$	—			N/M
Diluted earnings per share	$	1.07	$	0.81	$	0.26			32.1	%

Operating income for the Motorcycles segment during the second quarter of 2012 improved by $89.7 million compared to second quarter 2011. The increase was primarily due to increased motorcycle shipments, higher gross margin and favorable restructuring spending, partially offset by higher selling and administrative expenses. Operating income for the Financial Services segment was strong during the second quarter of 2012, but down slightly compared to the second quarter of 2011 when the Financial Services segment was favorably impacted by a $15.1 million release in the total (retail and wholesale combined) allowance for credit losses. This compares to a $11.2 million release in the total allowance for credit losses in the second quarter of 2012. Please refer to the “Motorcycles and Related Products Segment” and “Financial Services Segment” discussions following for a more detailed discussion of the factors affecting operating income.

The effective income tax rate for the second quarter of 2012 was 35.3% compared to 34.8% for the second quarter of 2011. The second quarter of 2011 was favorable affected by the Federal research and development credits that expired at the end of 2011.

43

Motorcycles & Related Products Segment

Harley-Davidson Motorcycle Worldwide Retail Sales

Worldwide independent dealer retail sales of Harley-Davidson motorcycles increased 2.8% during the second quarter of 2012 compared to the second quarter of 2011. Retail sales of Harley-Davidson motorcycles increased 4.0% in the United States and 0.5% internationally in the quarter. The following table includes retail unit sales of Harley-Davidson motorcycles:

Harley-Davidson Motorcycle Worldwide Retail Sales^(a)

Heavyweight (651+cc)

	Three months ended
	June 30,		June 30,		(Decrease)			%
	2012		2011		Increase			Change
North America Region
United States		55,761		53,599		2,162			4.0	%
Canada		4,881		4,793		88			1.8
Total North America Region		60,642		58,392		2,250			3.9
Europe, Middle East and Africa Region (EMEA)
Europe(b)		14,639		16,106		(1,467	)		(9.1	)
Other		1,797		1,458		339			23.3
Total Europe Region		16,436		17,564		(1,128	)		(6.4	)
Asia Pacific Region
Japan		2,898		3,128		(230	)		(7.4	)
Other		3,509		2,696		813			30.2
Total Asia Pacific Region		6,407		5,824		583			10.0
Latin America Region		2,229		1,616		613			37.9
Total Worldwide Retail Sales		85,714		83,396		2,318			2.8	%

(a) Data source for retail sales figures shown above is new sales warranty and registration information provided by Harley-Davidson dealers and compiled by the Company. The Company must rely on information that its dealers supply concerning retail sales and this information is subject to revision. Only Harley-Davidson motorcycles are included in the table above.

(b) Europe data includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

44

Motorcycle Unit Shipments

The following table includes wholesale motorcycle unit shipments for the Motorcycles segment:

	Three months ended
	July 1,				June 26,						%
	2012				2011				Increase		Change
United States		56,674	67.9	%		42,623	63.8	%		14,051		33.0	%
International		26,828	32.1	%		24,192	36.2	%		2,636		10.9
Harley-Davidson motorcycle units		83,502	100.0	%		66,815	100.0	%		16,687		25.0	%
Touring motorcycle units		32,218	38.6	%		25,557	38.3	%		6,661		26.1	%
Custom motorcycle units(a)		33,139	39.7	%		25,218	37.7	%		7,921		31.4
Sportster motorcycle units		18,145	21.7	%		16,040	24.0	%		2,105		13.1
Harley-Davidson motorcycle units		83,502	100.0	%		66,815	100.0	%		16,687		25.0	%

(a) Custom motorcycle units, as used in this table, include Dyna, Softail, VRSC and CVO models.

The Company shipped 83,502 Harley-Davidson motorcycles worldwide during the second quarter of 2012, which was 25.0% higher than the second quarter of 2011 and in line with Company expectations. During the second quarter of 2012 shipments were higher as the Company depleted its 2012 model-year motorcycle inventory in the U.S. in anticipation of the July 2, 2012 ERP launch at its York, PA facility and the 2013 model year cut-over. International shipments as a percent of the total shipments were down slightly compared to last year given the strong 2012 U.S. first quarter retail sales and tight retail inventory levels in the domestic market. U.S. dealer inventory of new Harley-Davidson motorcycle units was approximately 6,800 higher at the end of the 2012 second quarter than at the end of the year ago period. Despite the increase in retail inventory at the end of the second quarter, the Company continues to expect retail inventory in the U.S. will be below year ago levels for most of the third quarter, due to lower shipments versus prior year as a result of the production lost during the ERP implementation, and due to the later date of the Summer Dealer Meeting which will take place in August 2012 compared to July 2011. The Company announced on August 1, 2012 that it anticipates shipping between 51,000 to 56,000 Harley-Davidson motorcycle units in the third quarter of 2012.⁽¹⁾

45

Segment Results

The following table includes the condensed statements of operations for the Motorcycles segment (in thousands):

	Three months ended
	July 1,		June 26,		Increase			%
	2012		2011		(Decrease)			Change
Revenue:
Motorcycles	$	1,223,776	$	1,006,593	$	217,183			21.6	%
Parts & Accessories		265,574		255,378		10,196			4.0
General Merchandise		75,137		72,910		2,227			3.1
Other		4,560		4,863		(303	)		(6.2	)
Total revenue		1,569,047		1,339,744		229,303			17.1
Cost of goods sold		1,005,230		871,476		133,754			15.3
Gross profit		563,817		468,268		95,549			20.4
Selling & administrative expense		216,726		198,782		17,944			9.0
Engineering expense		31,312		36,045		(4,733	)		(13.1	)
Restructuring expense		6,220		13,594		(7,374	)		(54.2	)
Operating expense		254,258		248,421		5,837			2.3
Operating income from motorcycles	$	309,559	$	219,847	$	89,712			40.8	%

The following table includes the estimated impact of significant factors affecting the comparability of net revenue, cost of goods sold and gross profit from the second quarter of 2011 to the second quarter of 2012 (in millions):

	Net			Cost of			Gross
	Revenue			Goods Sold			Profit
June 26, 2011	$	1,339.8		$	871.5		$	468.3
Volume		259.0			173.8			85.2
Price		9.6			—			9.6
Foreign currency exchange rates and hedging		(33.2	)		(17.6	)		(15.6	)
Product mix		(6.2	)		(7.1	)		0.9
Raw material prices		—			(4.7	)		4.7
Manufacturing costs		—			(10.7	)		10.7
Total		229.2			133.7			95.5
July 1, 2012	$	1,569.0		$	1,005.2		$	563.8

46

The following factors affected the comparability of net revenue, cost of goods sold and gross profit from 2011 to 2012:

• On average, wholesale prices on the Company’s 2012 model-year motorcycles are higher than the prior model year resulting in the favorable impact on revenue and gross profit during the period.

• Foreign currency exchange rates during the second quarter of 2012 resulted in a negative impact on net revenue and were partially offset by the favorable impact of gains associated with foreign currency hedging (included in cost of goods sold) when compared to the same period last year.

• Shipment mix changes negatively impacted net revenue and resulted primarily from product mix changes both between and within the Company’s motorcycle families. However, the impact of mix changes on cost of goods sold more than offset the impact to revenue.

• Raw material prices were lower in the second quarter of 2012 relative to the second quarter of 2011 primarily due to lower metals and lower fuel prices.

• Manufacturing costs benefitted from restructuring savings and higher volumes, partially offset by inflation. Temporary inefficiencies related to restructuring activities were approximately $9 million in the second quarter of 2012 compared to $8.0 million in the second quarter of 2011. The Company expects temporary inefficiencies to be approximately $8 million to $12 million and $5 million to $8 million for the third and fourth quarters of 2012, respectively, for a total of approximately $32 million for 2012.⁽¹⁾

The net increase in operating expense was due in part to higher selling and administrative expense driven by incremental investments to support the Company’s growth initiatives. In addition, warranty and recall expense was higher than in the same period last year. The higher selling and administrative expenses were partially offset by lower restructuring expense related to the Company’s previously announced restructuring activities as well as lower engineering expense. For further information regarding the Company’s previously announced restructuring activities, refer to Note 5 of Notes to Condensed Consolidated Financial Statements. The Company expects selling and administrative expenses in the third quarter of 2012 to be up moderately compared to the third quarter of 2011.⁽¹⁾ However, in the fourth quarter of 2012 the Company expects selling and administrative expenses to be down compared to the same period last year due to the five fewer calendar days in the fiscal quarter and the $12 million recall charge incurred in the fourth quarter of 2011.⁽¹⁾

Financial Services Segment

Segment Results

The following table includes the condensed statements of operations for the Financial Services segment (in thousands):

	Three months ended
	July 1, 2012			June 26, 2011			(Decrease) Increase			% Change
Interest income	$	144,830		$	150,540		$	(5,710	)		(3.8	%)
Other income		15,783			15,313			470			3.1
Financial services revenue		160,613			165,853			(5,240	)		(3.2	)
Interest expense		48,712			56,991			(8,279	)		(14.5	)
Provision for credit losses		(5,259	)		(6,790	)		1,531			(22.5	)
Operating expenses		35,206			33,597			1,609			4.8
Financial services expense		78,659			83,798			(5,139	)		(6.1	)
Operating income from financial services	$	81,954		$	82,055		$	(101	)		(0.1	%)

47

Interest income for the three months ended July 1, 2012 decreased due to lower finance receivables outstanding primarily due to a declining portfolio of retail finance receivables. Interest expense was lower primarily due to a more favorable cost of funds.

The provision for credit losses was unfavorable in the second quarter of 2012 compared to the second quarter of 2011. The provision for credit losses related to retail motorcycle finance receivables increased by $0.7 million in the second quarter of 2012 compared to the second quarter of 2011. During the second quarter of 2012, there was a $9.7 million allowance release as compared to a $15.2 million allowance release in the second quarter of 2011. This was offset by lower finance receivable credit losses in the second quarter of 2012 as compared to the second quarter of 2011. The provision for credit losses related to wholesale motorcycle finance receivables increased by $2.6 million primarily due to a smaller decline in receivables during the second quarter of 2012 compared to the second quarter of 2011.

The Company continues to believe that 2012 operating income from Financial Services will decrease compared to 2011 due to lower net interest income as the portfolio of retail finance receivables continues to contract as a result of lower U.S. retail sales over the last few years and a modest tightening of margins on prime tier retail lending due to a more competitive lending environment. In addition, while credit performance has continued to improve, the Company expects a smaller benefit from allowance releases during 2012 as compared to 2011. ⁽¹⁾ Although the Company expects lower operating income in 2012 compared to 2011, it expects to continue to report positive operating income in 2012. ⁽¹⁾

Changes in the allowance for credit losses on finance receivables were as follows (in thousands):

	Three months ended
	July 1,			June 26,
	2012			2011
Balance, beginning of period	$	122,503		$	159,684
Provision for finance credit losses		(5,259	)		(6,790	)
Charge-offs		(17,054	)		(23,233	)
Recoveries		14,058			14,743
Balance, end of period	$	114,248		$	144,404

At July 1, 2012, the allowance for credit losses on finance receivables was $8.1 million for wholesale receivables and $106.2 million for retail receivables, which includes $41.9 million related to finance receivables held by VIEs. See Note 7 of Notes to Condensed Consolidated Financial Statements for more information on the Company’s VIEs. At June 26, 2011, the allowance for credit losses on finance receivables was $13.5 million for wholesale receivables and $130.9 million for retail receivables, which includes $62.1 million related to receivables held by VIEs.

HDFS’ periodic evaluation of the adequacy of the allowance for credit losses on finance receivables is generally based on HDFS’ past loan loss experience, known and inherent risks in the portfolio, current economic conditions and the estimated value of any underlying collateral.

48

Results of Operations for the Six Months Ended July 1, 2012

Compared to the Six Months Ended June 26, 2011

Consolidated Results

	Six months ended
	July 1,		June 26,		Increase			%
(in thousands, except earnings per share)	2012		2011		(Decrease)			Change
Operating income from motorcycles & related products	$	517,623	$	344,909	$	172,714			50.1	%
Operating income from financial services		149,348		149,990		(642	)		(0.4	)
Operating income		666,971		494,899		172,072			34.8
Investment income		4,164		3,146		1,018			32.4
Interest expense		23,090		22,831		259			1.1
Income before income taxes		648,045		475,214		172,831			36.4
Provision for income taxes		228,760		165,374		63,386			38.3
Income from continuing operations		419,285		309,840		109,445			35.3
Loss from discontinued operations, net of income taxes		—		—		—			N/M
Net income	$	419,285	$	309,840	$	109,445			35.3	%
Diluted earnings per share from continuing operations	$	1.83	$	1.31	$	0.52			39.7	%
Diluted loss per share from discontinued operations	$	—	$	—	$	—			N/M
Diluted earnings per share	$	1.81	$	1.31	$	0.50			38.2	%

Operating income for the Motorcycles segment during the first six months of 2012 improved by $172.7 million compared to the first six months of 2011 primarily due to increased motorcycle shipments gross margin and lower restructuring costs, partially offset by increased selling, general and administrative expenses. Operating income for the Financial Services segment was strong during the first six months of 2012, but down slightly compared to the first six months of 2011 when the Financial Services segment was favorably impacted by a $27.5 million release in the total (retail and wholesale combined) allowance for credit losses. This compares to a $14.4 million release in the total allowance for credit losses in the first six months of 2012. Please refer to the “Motorcycles and Related Products Segment” and “Financial Services Segment” discussions following for a more detailed discussion of the factors affecting operating income.

The effective income tax rate for the first half of 2012 was 35.3% compared to 34.8% for the first half of 2011. The effective income tax rate for the first half of 2011 was favorably impacted by the Federal research and development credit that expired at the end of 2011.

Motorcycles & Related Products Segment

Harley-Davidson Motorcycle Worldwide Retail Sales

Worldwide independent dealer retail sales of Harley-Davidson motorcycles increased 9.3% during the first half of 2012 compared to the first half of 2011. Retail sales of Harley-Davidson motorcycles increased 12.0% in the United States and 4.5% internationally in the first half of 2012. On an industry-wide basis, the heavyweight (651+cc) portion of the market was up 7.9% in the United States and down 8.6% in Europe for the six months ended June 30, 2012 when compared to the same periods in 2011. The following table includes retail unit sales of Harley-Davidson motorcycles:

49

Harley-Davidson Motorcycle Worldwide Retail Sales^(a)

Heavyweight (651+cc)

	Six months ended
	June 30,		June 30,		(Decrease)			%
	2012		2011		Increase			Change
North America Region
United States		95,523		85,290		10,233			12.0	%
Canada		6,948		6,830		118			1.7
Total North America Region		102,471		92,120		10,351			11.2
Europe, Middle East and Africa Region (EMEA)
Europe(b)		23,521		25,273		(1,752	)		(6.9	)
Other		3,209		2,704		505			18.7
Total Europe Region		26,730		27,977		(1,247	)		(4.5	)
Asia Pacific Region
Japan		4,974		4,959		15			0.3
Other		6,776		5,125		1,651			32.2
Total Asia Pacific Region		11,750		10,084		1,666			16.5
Latin America Region		4,440		2,810		1,630			58.0
Total Worldwide Retail Sales		145,391		132,991		12,400			9.3	%

(a) Data source for retail sales figures shown above is new sales warranty and registration information provided by Harley-Davidson dealers and compiled by the Company. The Company must rely on information that its dealers supply concerning retail sales and this information is subject to revision. Only Harley-Davidson motorcycles are included in the table above.

(b) Europe data includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland and the United Kingdom.

The following table includes industry retail motorcycle registration data:

Heavyweight Motorcycle Registration Data^(a)

	Six months ended
	June 30,		June 30,					%
	2012		2011		Increase			Change
United States(b)		170,096		157,608		12,488			7.9	%
	Six months ended
	June 30, 2012		June 30, 2011		Decrease			% Change
Europe(c)		180,284		197,151		(16,867	)		-8.6	%

(a) Heavyweight data includes street legal 651+cc models. Street legal 651+cc models include on-highway, dual purpose models and three-wheeled vehicles.

50

(b) United States industry data is derived from information provided by Motorcycle Industry Council (MIC). This third party data is subject to revision and update.

(c) Europe data includes Austria, Belgium, Denmark, Finland, France, Germany, Greece, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and the United Kingdom. Industry retail motorcycle registration data includes 651+cc models derived from information provided by Association des Constructeurs Europeens de Motocycles (ACEM), an independent agency. Europe market data is reported on a one-month lag. This third-party data is subject to revision and update.

Motorcycle Unit Shipments

The following table includes wholesale motorcycle unit shipments for the Motorcycles segment:

	Six months ended
	July 1,				June 26,				(Decrease)		%
	2012				2011				Increase		Change
United States		97,967	66.3	%		77,489	64.2	%		20,478		26.4	%
International		49,798	33.7	%		43,153	35.8	%		6,645		15.4
Harley-Davidson motorcycle units		147,765	100.0	%		120,642	100.0	%		27,123		22.5	%
Touring motorcycle units		59,376	40.2	%		48,053	39.9	%		11,323		23.6	%
Custom motorcycle units(a)		57,711	39.1	%		45,888	38.0	%		11,823		25.8
Sportster motorcycle units		30,678	20.7	%		26,701	22.1	%		3,977		14.9
Harley-Davidson motorcycle units		147,765	100.0	%		120,642	100.0	%		27,123		22.5	%

(a) Custom motorcycle units, as used in this table, include Dyna, Softail, VRSC and CVO models.

The Company shipped 147,765 Harley-Davidson motorcycles worldwide during the first half of 2012, which was 22.5% higher than the first half of 2011. This is in line with Company expectations and resulted in higher U.S. dealer inventory at the end of the first half of 2012 compared to the end of the first half of 2011. During the first half of 2012, shipments were higher as the Company depleted its 2012 model-year motorcycle inventory in the U.S. in anticipation of the July 2, 2012 ERP launch in its York, PA facility and the 2013 model-year cut-over. The year-over-year increase in shipments was also aided by six additional calendar days included in the first half of 2012 compared to the first half of 2011. The calendar adjustment is required every several years to sync up the Company’s fiscal calendar with the regular calendar. The fourth fiscal quarter will include five fewer calendar days than last year’s fourth fiscal quarter.

51

Segment Results

The following table includes the condensed statements of operations for the Motorcycles segment (in thousands):

	Six months ended
	July 1,		June 26,		Increase			%
	2012		2011		(Decrease)			Change
Revenue:
Motorcycles	$	2,219,678	$	1,840,094	$	379,584			20.6	%
Parts & Accessories		464,632		419,711		44,921			10.7
General Merchandise		149,743		135,476		14,267			10.5
Other		8,363		7,507		856			11.4
Total revenue		2,842,416		2,402,788		439,628			18.3
Cost of goods sold		1,822,089		1,582,654		239,435			15.1
Gross profit		1,020,327		820,134		200,193			24.4
Selling & administrative expense		423,719		372,036		51,683			13.9
Engineering expense		61,314		66,596		(5,282	)		(7.9	)
Restructuring expense		17,671		36,593		(18,922	)		(51.7	)
Operating expense		502,704		475,225		27,479			5.8
Operating income from motorcycles	$	517,623	$	344,909	$	172,714			50.1	%

The following table includes the estimated impact of significant factors affecting the comparability of net revenue, cost of goods sold and gross profit from the first half of 2010 to the first half of 2011 (in millions):

	Net			Cost of			Gross
	Revenue			Goods Sold			Profit
June 26, 2011	$	2,402.8		$	1,582.7		$	820.1
Volume		467.6			314.4			153.2
Price		18.1			—			18.1
Foreign currency exchange rates and hedging		(36.1	)		(31.4	)		(4.7	)
Product mix		(10.0	)		(10.5	)		0.5
Raw material prices		—			(3.1	)		3.1
Manufacturing costs		—			(30.0	)		30.0
Total		439.6			239.4			200.2
July 1, 2012	$	2,842.4		$	1,822.1		$	1,020.3

52

The following factors affected the comparability of net revenue, cost of goods sold and gross profit from 2011 to 2012:

• On average, wholesale prices on the Company’s 2012 model-year motorcycles are higher than the prior model year resulting in the favorable impact on revenue and gross profit during the period.

• Foreign currency exchange rates during the first half of 2012 resulted in a negative impact on net revenue and were partially offset by the favorable impact of gains associated with foreign currency hedging (included in cost of goods sold) when compared to the same period last year.

• Shipment mix changes negatively impacted net revenue and resulted primarily from product mix changes both between and within the Company’s motorcycle families. However, the impact of mix changes on cost of goods sold more than offset the impact to revenue.

• Raw material prices were lower in the first half of 2012 relative to the first half of 2011 primarily due to lower metals costs and lower fuel prices.

• Manufacturing costs benefitted from restructuring savings, incremental margin on higher volumes and lower year over year temporary inefficiencies related to restructuring, partially offset by inflation. Temporary inefficiencies related to restructuring activities were approximately $16 million in the first six months of 2012 compared to $19 million in the same period last year.

The net increase in operating expense was primarily due to higher selling and administrative expense driven by incremental investments to support the Company’s growth initiatives and six more fiscal days in the first six months of 2012 compared to the first six months of 2011. In addition, warranty and recall expense was higher than in the same period last year primarily driven by higher motorcycle shipments. The higher selling and administrative expenses were partially offset by lower restructuring expense related to the Company’s previously announced restructuring activities as well as lower engineering expense. For further information regarding the Company’s previously announced restructuring activities, refer to Note 5 of Notes to Condensed Consolidated Financial Statements.

Financial Services Segment

Segment Results

The following table includes the condensed statements of operations for the Financial Services segment (in thousands):

	Six months ended
	July 1,		June 26,			(Decrease)			%
	2012		2011			Increase			Change
Interest income	$	288,809	$	299,965		$	(11,156	)		(3.7	%)
Other income		28,126		27,774			352			1.3
Financial services revenue		316,935		327,739			(10,804	)		(3.3	)
Interest expense		99,968		115,026			(15,058	)		(13.1	)
Provision for credit losses		3,754		(1,184	)		4,938			(417.1	)
Operating expenses		63,865		63,907			(42	)		(0.1	)
Financial services expense		167,587		177,749			(10,162	)		5.7
Operating income from financial services	$	149,348	$	149,990		$	(642	)		(0.4	%)

Interest income for the six months ended July 1, 2012 decreased due to lower finance receivables outstanding primarily due to a declining portfolio of retail finance receivables. Interest expense was lower primarily due to a more favorable cost of funds.

The provision for credit losses increased in the first six months of 2012. The provision for credit losses related to retail motorcycle finance receivables increased by $7.4 million in the first six months of 2012 compared to the first six months of 2011. During the first six months of 2012, there was an $11.8 million allowance release as compared to a $27.9 million allowance release in the first six months of 2011. This was partially offset by favorable finance receivable credit losses in the first six months of 2012 as compared to the first six months of 2011. The provision for credit losses related to wholesale motorcycle finance receivables increased by $0.8 million primarily due to an increase in receivables during the first six months of 2012 compared to the first six months of 2011.

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Annualized losses on HDFS’ retail motorcycle loans were 0.58% during the first six months of 2012 compared to 1.06% in the first six months of 2011. The decrease in credit losses from 2011 was due to a lower frequency of loss. The 30-day delinquency rate for retail motorcycle loans at July 1, 2012 decreased to 2.68% from 3.53% at June 26, 2011.

Changes in the allowance for finance credit losses on finance receivables were as follows (in thousands):

	Six months ended
	July 1,			June 26,
	2012			2011
Balance, beginning of period	$	125,449		$	173,589
Provision for finance credit losses		3,754			(1,184	)
Charge-offs		(42,906	)		(58,424	)
Recoveries		27,951			30,423
Balance, end of period	$	114,248		$	144,404

Other Matters

Contractual Obligations

The Company has updated its Contractual Obligations table as of July 1, 2012 to reflect the new projected principal and interest payments for the remainder of 2012 and beyond as follows (in thousands):

	2012		2013 - 2014		2015 - 2016		Thereafter		Total
Principal payments on debt	$	1,478,792	$	1,401,035	$	934,634	$	1,515,790	$	5,330,251
Interest payments on debt		108,309		326,609		191,759		98,194		724,871
	$	1,587,101	$	1,727,644	$	1,126,393	$	1,613,984	$	6,055,122

Interest obligations include the impact of interest rate hedges outstanding as of July 1, 2012. Interest for floating rate instruments, as calculated above, assumes rates in effect at July 1, 2012 remain constant.

As of July 1, 2012, there have been no other material changes to the Company’s summary of expected payments for significant contractual obligations under the caption “Contractual Obligations” in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

Commitments and Contingencies

The Company is subject to lawsuits and other claims related to environmental, product and other matters. In determining required reserves related to these items, the Company carefully analyzes cases and considers the likelihood of adverse judgments or outcomes, as well as the potential range of possible loss. The required reserves are monitored on an ongoing basis and are updated based on new developments or new information in each matter.

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Environmental Protection Agency Notice

In December 2009, the Company received formal, written requests for information from the United States Environmental Protection Agency (EPA) regarding: (i) certificates of conformity for motorcycle emissions and related designations and labels, (ii) aftermarket parts, and (iii) warranty claims on emissions related components. The Company promptly submitted written responses to the EPA’s inquiry and engaged in discussions with the EPA. It is possible that a result of the EPA’s investigation will be some form of enforcement action by the EPA that will seek a fine or other relief. However, at this time the Company does not know and cannot reasonably estimate the impact of any remedies the EPA might seek.

York Environmental Matters:

The Company is involved with government agencies and groups of potentially responsible parties in various environmental matters, including a matter involving the cleanup of soil and groundwater contamination at its York, Pennsylvania facility. The York facility was formerly used by the U.S. Navy and AMF prior to the purchase of the York facility by the Company from AMF in 1981. Although the Company is not certain as to the full extent of the environmental contamination at the York facility, it has been working with the Pennsylvania Department of Environmental Protection (PADEP) since 1986 in undertaking environmental investigation and remediation activities, including an ongoing site-wide remedial investigation/feasibility study (RI/FS). In January 1995, the Company entered into a settlement agreement (the Agreement) with the Navy. The Agreement calls for the Navy and the Company to contribute amounts into a trust equal to 53% and 47%, respectively, of future costs associated with environmental investigation and remediation activities at the York facility (Response Costs). The trust administers the payment of the Response Costs incurred at the York facility as covered by the Agreement.

In February 2002, the Company was advised by the EPA that it considers some of the Company’s remediation activities at the York facility to be subject to the EPA’s corrective action program under the Resource Conservation and Recovery Act (RCRA) and offered the Company the option of addressing corrective action under a RCRA facility lead agreement. In July 2005, the York facility was designated as the first site in Pennsylvania to be addressed under the “One Cleanup Program.” The program provides a more streamlined and efficient oversight of voluntary remediation by both PADEP and EPA and will be carried out consistent with the Agreement with the Navy. As a result, the RCRA facility lead agreement has been superseded.

The Company estimates that its share of the future Response Costs at the York facility will be approximately $2.3 million and has established a reserve for this amount which is included in accrued liabilities in the Condensed Consolidated Balance Sheets⁽¹⁾. As noted above, the RI/FS is still underway and given the uncertainty that exists concerning the nature and scope of additional environmental investigation and remediation that may ultimately be required under the RI/FS or otherwise at the York facility, we are unable to make a reasonable estimate of those additional costs, if any, that may result.

The estimate of the Company’s future Response Costs that will be incurred at the York facility is based on reports of independent environmental consultants retained by the Company, the actual costs incurred to date and the estimated costs to complete the necessary investigation and remediation activities. Response Costs related to the remediation of soil are expected to be incurred primarily over a period of several years ending in 2015. Response Costs related to ground water remediation may continue for some time beyond 2015.

Product Liability Matters:

Additionally, the Company is involved in product liability suits related to the operation of its business. The Company accrues for claim exposures that are probable of occurrence and can be reasonably estimated. The Company also maintains insurance coverage for product liability exposures. The Company believes that its accruals and insurance coverage are adequate and that product liability will not have a material adverse effect on the Company’s consolidated financial statements.

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Liquidity and Capital Resources as of July 1, 2012⁽¹⁾

Over the long-term, the Company expects that its business model will continue to generate cash that will allow it to invest in the business, fund future growth opportunities and return value to shareholders. The Company believes the Motorcycles operations will continue to be primarily funded through cash flows generated by operations. The Company’s Financial Services operations have been funded with unsecured debt, unsecured commercial paper, an asset-backed commercial paper conduit facility and committed unsecured bank facilities and through the term asset-backed securitization market.

The Company’s strategy is to maintain a minimum of twelve months of its projected liquidity needs through a combination of cash and marketable securities and availability under credit facilities. The following table summarizes the Company’s cash and marketable securities and availability under credit facilities (in thousands):

	July 1, 2012
Cash and cash equivalents	$	1,071,496
Marketable securities		135,848
Total cash and cash equivalents and marketable securities		1,207,344
Global credit facilities(a)		360,340
Asset-backed conduit facility(b)		600,000
Total availability under credit facilities		960,340
Total	$	2,167,684

(a) $675.0 million of the Company’s total $1.35 billion global credit facilities was replaced on April 13, 2012

(b) The conduit facility is set to expire in September 2012.

The Company recognizes that it must continue to monitor and adjust to changes in the lending environment for its Financial Services operations. The Company intends to continue with a diversified funding profile through a combination of short-term and long-term funding vehicles and to pursue a variety of sources to obtain cost-effective funding. The Financial Services operations could be negatively affected by higher costs of funding and increased difficulty of raising, or potential unsuccessful efforts to raise, funding in the short-term and long-term capital markets. These negative consequences could in turn adversely affect the Company’s business and results of operations in various ways, including through higher costs of capital, reduced funds available through its Financial Services operations to provide loans to independent dealers and their retail customers, and dilution to existing shareholders through the use of alternative sources of capital.

Cash Flow Activity

The following table summarizes the cash flow activity of continuing operations for the periods indicated (in thousands):

	Six months ended
	July 1,			July 26,
	2012			2011
Net cash provided by operating activities	$	288,242		$	472,962
Net cash used by investing activities		(189,807	)		(189,951	)
Net cash used by financing activities		(549,856	)		(329,729	)
Effet of exchange rate changes on cash and cash equivalents		(4,033	)		(1,702	)
Net decrease in cash and cash equivalents of continuing operations	$	(455,454	)	$	(48,420	)

Operating Activities of Continuing Operations

The decrease in cash provided by operating activities for the first six months of 2012 compared to the first six months of 2011 was due to increased HDFS wholesale lending activity driven by an increase in motorcycle shipments in 2012 and changes in working capital primarily due to a decrease in accounts payable. The Company made a voluntary $200.0 million contribution to the Company’s pension plans in the first quarter of 2012 and in the first quarter of 2011. No additional pension contributions are required in 2012. The Company expects it will continue to make on-going contributions related to current benefit payments for SERPA and postretirement healthcare plans.

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Investing Activities of Continuing Operations

The Company’s investing activities consist primarily of capital expenditures, net changes in finance receivables and short-term investment activity. Capital expenditures were $60.1 million in the first six months of 2012 compared to $69.3 million in the same period last year. Net cash flows from finance receivables, net for the first six months of 2012 were $129.8 lower than in the same period last year as a result of an increase in retail motorcycle loan originations during 2012. A net decrease in net cash out-flows related to marketable securities during the first six months of 2011 resulted in higher investing cash flows of approximately $121 million in 2012.

Financing Activities of Continuing Operations

The Company’s financing activities consist primarily of share repurchases, dividend payments and debt activity. Cash outflows from share repurchases were $172.7 in the first six months of 2012 compared to $5.7 million for the same period last year. Share repurchases during the first six months of 2012 included 3.6 million shares of common stock related to discretionary share repurchases as well as shares of common stock that employees surrendered to satisfy withholding taxes in connection with the vesting of restricted stock awards. Share repurchases during the second quarter of 2011 were limited to shares of common stock that employees surrendered to satisfy withholding taxes in connection with the vesting of restricted stock awards. As of July 1, 2012, there were 16.7 million shares remaining on a board-approved share repurchase authorization. In addition, as of July 1, 2012, 0.4 million shares remained on a separate board-approved share repurchase authorization that is in place to offset option exercises. In total at July 1, 2012, the Company had authorization to repurchase 17.1 million shares of its common stock.

The Company paid dividends of $0.31 and $0.225 per share totaling $71.6 million and $53.2 million during the first six months of 2012 and 2011, respectively.

Financing cash flows related to debt activity resulted in net cash outflows of $397.6 million in the first six months of 2012 compared to $323.7 million in the first six months of 2011. The Company’s total outstanding debt consisted of the following (in thousands):

	July 1,		June 26,
	2012		2011
Global credit facilities	$	143,792	$	201,112
Unsecured commercial paper		845,868		735,737
Medium-term notes		2,698,359		2,347,750
Senior unsecured notes		303,000		303,000
		3,991,019		3,587,599
Term asset-backed securitization debt held by VIEs		1,339,232		1,853,382
Total debt	$	5,330,251	$	5,440,981

To access the debt capital markets, the Company relies on credit rating agencies to assign short-term and long-term credit ratings. Generally, lower credit ratings result in higher borrowing costs and reduced access to debt capital markets. A credit rating agency may change or withdraw the Company’s ratings based on its assessment of the Company’s current and future ability to meet interest and principal repayment obligations. The Company’s short-term debt ratings affect its ability to issue unsecured commercial paper. The Company’s short-and long-term debt ratings as of July 1, 2012 were as follows:

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	Short-Term		Long-Term		Outlook
Moody’s		P2		Baa1		Stable
Standard & Poor’s		A2		BBB+		Stable
Fitch(a)		F2		BBB+		Positive

(a) On July 20, 2012, Fitch upgraded the Company's Long-Term rating to A- and its outlook to Stable. Fitch also reaffirmed the Company’s Short-Term rating of F2.

Global Credit Facilities – On April 13, 2012, the Company and HDFS entered into a new $675.0 million five-year credit facility to refinance and replace a $675.0 million three-year credit facility that was due to mature in April 2013. The new five-year credit facility matures in April 2017. The Company and HDFS also have a $675.0 million four-year credit facility which matures in April 2015. The new five-year credit facility and the four-year credit facility (together, the Global Credit Facilities) bear interest at various variable interest rates, which may be adjusted upward or downward depending on certain criteria, such as credit ratings. The Global Credit Facilities also require the Company to pay a fee based upon the average daily unused portion of the aggregate commitments under the Global Credit Facilities. The Global Credit Facilities are committed facilities and primarily used to support HDFS’ unsecured commercial paper program.

Unsecured Commercial Paper – Subject to limitations, HDFS could issue unsecured commercial paper of up to $1.35 billion as of July 1, 2012 supported by Global Credit Facilities discussed above. Outstanding unsecured commercial paper may not exceed the unused portion of the Global Credit Facilities. Maturities may range up to 365 days from the issuance date. HDFS intends to repay unsecured commercial paper as it matures with additional unsecured commercial paper or through other means, such as borrowing under the Global Credit Facilities, borrowing under its asset-backed commercial paper conduit facility or through the use of operating cash flow.⁽¹⁾

Medium-Term Notes – The Company had the following medium-term notes (collectively, the Notes) issued and outstanding at July 1, 2012 (in thousands):

Principal Amount	Rate			Issue Date	Maturity Date
$400,000		5.25	%	December 2007	December 2012
$500,000		5.75	%	November 2009	December 2014
$450,000		3.875	%	March 2011	March 2016
$400,000		2.70	%	January 2012	March 2017
$950,131		6.80	%	May 2008	June 2018

The Notes provide for semi-annual interest payments and principal due at maturity. Unamortized discounts on the Notes reduced the balance by $1.8 million and $2.3 million at July 1, 2012 and June 26, 2011, respectively.

Senior Unsecured Notes – In February 2009, the Company issued $600.0 million of senior unsecured notes in an underwritten offering. The senior unsecured notes provide for semi-annual interest payments and principal due at maturity. The senior unsecured notes mature in February 2014 and have an annual interest rate of 15%. During the fourth quarter of 2010, the Company repurchased $297.0 million of the $600.0 million senior unsecured notes at a price of $380.8 million.

Asset-Backed Commercial Paper Conduit Facility – On September 9, 2011, HDFS amended and restated its revolving asset-backed conduit facility which provides for a total aggregate commitment of $600.0 million. The agreement has similar terms as the prior agreement and is for the same amount. At July 1, 2012, HDFS had no outstanding borrowings under the conduit facility.

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This debt provides for interest on outstanding principal based on prevailing commercial paper rates, or LIBOR plus a specified margin to the extent the advance is not funded by a conduit lender through the issuance of commercial paper. The conduit facility also provides for an unused commitment fee based on the unused portion of the total aggregate commitment of $600.0 million. There is no amortization schedule; however, the debt is reduced monthly as available collections on the related finance receivable collateral are applied to outstanding principal. Upon expiration of the conduit facility, any outstanding principal will continue to be reduced monthly through available collections. Unless earlier terminated or extended by mutual agreement of HDFS and the lenders, as of July 1, 2012, the conduit facility expires on September 7, 2012. The Company currently intends to renew this conduit facility in the third quarter of 2012.⁽¹⁾

Term Asset-Backed Securitization Debt Held by VIEs – During the second quarter of 2012, the Company issued $89.5 million of secured notes through the sale of notes that had been previously retained as part of certain 2009 and 2011 term asset-backed securitization transactions. These notes were sold at a premium, and at July 1, 2012, the unaccreted premium associated with these notes was $1.8 million. There was no additional term-asset backed securitization activity during the six months ended July 1, 2012. There were no term-asset backed securitization transactions during the six months ended June 26, 2011. In July 2012, the Company issued $675.3 million of secured notes through one term asset-backed securitization transaction.

For all of the term asset-backed securitization transactions, HDFS transferred U.S. retail motorcycle finance receivables to separate VIEs, which in turn issued secured notes, with various maturities and interest rates to investors. All of the notes held by the VIEs are secured by future collections of the purchased U.S. retail motorcycle finance receivables. The U.S. retail motorcycle finance receivables included in the term asset-backed securitization transactions are not available to pay other obligations or claims of HDFS’ creditors until the associated debt and other obligations are satisfied. Cash and cash equivalent balances held by the VIEs are used only to support the securitizations. There is no amortization schedule for the secured notes; however, the debt is reduced monthly as available collections on the related retail motorcycle finance receivables are applied to outstanding principal. The secured notes’ contractual lives have various maturities ranging from 2012 to 2018.

As of July 1, 2012, the assets of the VIEs totaled $2.23 billion, of which $2.04 billion of finance receivables and $187.8 million of cash were restricted as collateral for the payment of $1.34 billion of obligations under the secured notes. Approximately $507.4 million of the obligations under the secured notes were classified as current at July 1, 2012, based on the contractual maturities of the restricted finance receivables.

Intercompany Borrowing –HDFS has a revolving credit line with the Company whereby HDFS may borrow up to $210.0 million from the Company at a market interest rate. As of July 1, 2012 and June 26, 2011, HDFS had no outstanding borrowings owed to the Company under this agreement.

During the second quarter of 2012, HDFS and the Company entered into a $200.0 million Term Loan Agreement which provided for monthly interest payments based on the prevailing commercial paper rates and principal due at maturity in August 2012 or upon earlier demand by the Company. HDFS repaid the $200.0 million Term Loan Agreement in July 2012. During the second quarter of 2011, HDFS and the Company entered in a $200.0 million Term Loan Agreement, which was outstanding at June 26, 2011, and matured and was repaid by HDFS during the third quarter of 2011. The Term Loan balances and related interest are eliminated in the Company’s consolidated financial statements.

The Company has a support agreement with HDFS whereby, if required, the Company agrees to provide HDFS with financial support to maintain HDFS’ fixed-charge coverage at 1.25 and minimum net worth of $40.0 million. Support may be provided at the Company’s option as capital contributions or loans. Accordingly, certain debt covenants may restrict the Company’s ability to withdraw funds from HDFS outside the normal course of business. No amount has ever been provided to HDFS under the support agreement.

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Operating and Financial Covenants – HDFS and the Company are subject to various operating and financial covenants related to the Global Credit Facilities and various operating covenants under the Notes and the asset-backed commercial paper conduit facility. The more significant covenants are described below.

The covenants limit the Company’s and HDFS’ ability to:

• incur certain additional indebtedness;

• assume or incur certain liens;

• participate in a merger, consolidation, liquidation or dissolution; and

• purchase or hold margin stock.

Under the financial covenants of the Global Credit Facilities, the consolidated debt to equity ratio of HDFS cannot exceed 10.0 to 1.0. In addition, the Company must maintain a minimum interest coverage ratio of at least 2.25 to 1.0 for each fiscal quarter through June 2013 and 2.5 to 1.0 for each fiscal quarter thereafter. No financial covenants are required under the Notes or the asset-backed commercial paper conduit facility.

At July 1, 2012, HDFS and the Company remained in compliance with all of the then existing covenants.

Cash Flows from Discontinued Operations

There were no significant cash flows from discontinued operations during the six months ended July 1, 2012 and June 26, 2011, respectively.

Cautionary Statements

The Company’s ability to meet the targets and expectations noted depends upon, among other factors, the Company's ability to:

(i) execute its business strategy,

(ii) effectively execute the Company’s restructuring plans within expected costs and timing,

(iii) implement and manage enterprise-wide information technology solutions, including solutions at its manufacturing facilities, and secure data contained in those systems,

(iv) adjust to fluctuations in foreign currency exchange rates, interest rates and commodity prices,

(v) anticipate the level of consumer confidence in the economy,

(vi) manage through inconsistent economic conditions, including changing capital, credit and retail markets,

(vii) continue to realize production efficiencies at its production facilities and manage operating costs including materials, labor and overhead,

(viii) successfully implement with our labor unions the agreements that we have executed with them that we believe will provide flexibility and cost-effectiveness to accomplish restructuring goals and long-term competitiveness,

(ix) manage risks that arise through expanding international operations and sales,

(x) manage supply chain issues, including any unexpected interruptions or price increases caused by raw material shortages or natural disasters,

(xi) manage production capacity and production changes,

(xii) provide products, services and experiences that are successful in the marketplace,

(xiii) develop and implement sales and marketing plans that retain existing retail customers and attract new retail customers in an increasingly competitive marketplace,

(xiv) manage the risks that our independent dealers may have difficulty obtaining capital and managing through changing economic conditions and consumer demand,

(xv) continue to have access to reliable sources of capital funding and adjust to fluctuations in the cost of capital,

(xvi) manage the credit quality, the loan servicing and collection activities, and the recovery rates of HDFS’ loan portfolio,

(xvii) sell all of its motorcycles and related products and services to its independent dealers,

(xviii) continue to develop the capabilities of its distributor and dealer network,

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(xix) manage changes and prepare for requirements in legislative and regulatory environments for its products, services and operations,

(xx) adjust to healthcare inflation and reform, pension reform and tax changes,

(xxi) retain and attract talented employees, and

(xxii) detect any issues with our motorcycles or manufacturing processes to avoid delays in new model launches, recall campaigns, increased warranty costs or litigation.

In addition, the Company could experience delays or disruptions in its operations as a result of work stoppages, strikes, natural causes, terrorism or other factors. Other factors are described in risk factors that the Company has disclosed in documents previously filed with the Securities and Exchange Commission. Many of these risk factors are impacted by the current changing capital, credit and retail markets and the Company’s ability to manage through inconsistent economic conditions.

The Company’s ability to sell its motorcycles and related products and services and to meet its financial expectations also depends on the ability of the Company’s independent dealers to sell its motorcycles and related products and services to retail customers. The Company depends on the capability and financial capacity of its independent dealers and distributors to develop and implement effective retail sales plans to create demand for the motorcycles and related products and services they purchase from the Company.

In addition, the Company’s independent dealers and distributors may experience difficulties in operating their businesses and selling Harley-Davidson motorcycles and related products and services as a result of weather, economic conditions or other factors.

Refer to “Risk Factors” under Item 1A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 for a discussion of additional risk factors and a more complete discussion of some of the cautionary statements noted above.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2011 for a complete discussion of the Company's market risk. There have been no material changes to the market risk information included in the Company's Annual Report on Form 10-K for the year December 31, 2011.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

In accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934 (the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q, the Company’s management evaluated, with the participation of the Company’s Chairman, President and Chief Executive Officer and the Senior Vice President and Chief Financial Officer, the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based upon their evaluation of these disclosure controls and procedures, the Chairman, President and Chief Executive Officer and the Senior Vice President and Chief Financial Officer have concluded that the disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission rules and forms, and to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chairman, President and Chief Executive Officer and Senior Vice President and Chief Financial Officer, as appropriate, to allow timely decisions regarding disclosure.

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Changes in Internal Controls

There was no change in the Company’s internal control over financial reporting during the quarter ended July 1, 2012 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II – OTHER INFORMATION

Item 1 – Legal Proceedings

The information required under this Item 1 of Part II is contained in Item 1 of Part I of the Quarterly report on From 10-Q in Note 16 of the Notes to Condensed Consolidated Financial Statements, and such information is incorporated herein by reference in this Item 1 of Part II.

Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds

The following table contains detail related to the repurchase of common stock based on the date of trade during the quarter ended July 1, 2012:

2012 Fiscal Month	Total Number of Shares Purchased (a)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
April 2 to May 6		154,453	$	53		154,453		19,960,974
May 7 to June 3		1,239,830	$	49		1,239,830		18,807,270
June 4 to July 1		1,728,125	$	48		1,728,125		17,195,696
Total		3,122,408	$	49		3,122,408

(a) Includes discretionary share repurchases and shares of common stock that employees surrenderd to satisfy withholding taxes in connection with the vesting of restricted stock awards

The Company has an authorization (originally adopted in December 1997) by its Board of Directors to repurchase shares of its outstanding common stock under which the cumulative number of shares repurchased, at the time of any repurchase, shall not exceed the sum of (1) the number of shares issued in connection with the exercise of stock options occurring on or after January 1, 2004 plus (2) one percent of the issued and outstanding common stock of the Company on January 1 of the current year, adjusted for any stock split. The Company made discretionary share repurchases of 3,086,227 shares during the quarter ended July 1, 2012 under this authorization. As of July 1, 2012, 0.4 million shares remained under this authorization.

In December 2007, the Company’s Board of Directors separately authorized the Company to buy back up to 20.0 million shares of its common stock with no dollar limit or expiration date. As of July 1, 2012, 16.7 million shares remained under this authorization.

From time to time, the Company may enter into a Rule 10b5-1 trading plan for the purpose of repurchasing shares under either the 1997 authorization or 2007 authorization.

The Harley-Davidson, Inc. 2009 Incentive Stock Plan and predecessor stock plans permit participants to satisfy all or a portion of the statutory federal, state and local withholding tax obligations arising in connection with plan awards by electing to (a) have the Company withhold shares otherwise issuable under the award, (b) tender back shares received in connection with such award or (c) deliver other previously owned shares, in each case having a value equal to the amount to be withheld. During the second quarter of 2012, the Company acquired 36,181 shares of common stock that employees presented to the Company to satisfy withholding taxes in connection with the vesting of restricted stock awards.

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Item 6 – Exhibits

Refer to the Exhibit Index on page 66 of this report.

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SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	HARLEY-DAVIDSON, INC.
Date: August 9, 2012	/s/ John A. Olin
	John A. Olin
	Senior Vice President and
	Chief Financial Officer
	(Principal financial officer)

Date: August 9, 2012	/s/ Mark R. Kornetzke
	Mark R. Kornetzke
	Chief Accounting Officer
	(Principal accounting officer)

65

Harley-Davidson, Inc.

Exhibit Index to Form 10-Q

Exhibit No.	Description
31.1	Chief Executive Officer Certification pursuant to Rule 13a-14(a)
31.2	Chief Financial Officer Certification pursuant to Rule 13a-14(a)
32.1	Written Statement of the Chief Executive Officer and the Chief Financial Officer pursuant to 18 U.S.C. §1350
101	Financial statements from the quarterly report on Form 10-Q of Harley-Davidson, Inc. for the quarter ended July 1, 2012, filed on August 9, 2012, formatted in XBRL: (i) the Condensed Consolidated Statements of Income; (ii) the Condensed Consolidated Balance Sheets; (iii) the Condensed Consolidated Statements of Cash Flows; and (iv) the Notes to Condensed Consolidated Financial Statements.

66

EX-31.1

Exhibit 31.1

Chief Executive Officer Certification

Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

I, Keith E. Wandell, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Harley-Davidson, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors:

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 9, 2012	/s/ Keith E. Wandell
	Keith E. Wandell
	Chairman, President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Chief Financial Officer Certification

Pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934

I, John A. Olin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Harley-Davidson, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors:

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 9, 2012	/s/ John A. Olin
	John A. Olin
	Senior Vice President and
	Chief Financial Officer

EX-32.1

Exhibit 32.1

Written Statement of the Chief Executive Officer and Chief Financial Officer

Pursuant to 18 U.S.C. sec. 1350

Solely for the purpose of complying with 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, we, the undersigned Chairman, President and Chief Executive Officer and the Senior Vice President and Chief Financial Officer of Harley-Davidson, Inc. (the “Company”), hereby certify, based on our knowledge, that the Quarterly Report on Form 10-Q of the Company for the quarter ended July 1, 2012 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 9, 2012	/s/ Keith E. Wandell
	Keith E. Wandell
	Chairman, President and Chief Executive Officer
	/s/ John A. Olin
	John A. Olin
	Senior Vice President and
	Chief Financial Officer

XML

Additional Balance Sheet And Cash Flow Information (Reconciliation Of Net Income To Net Cash Used By Operating Activities) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended			6 Months Ended
	Jul. 01, 2012	Dec. 31, 2011	Jun. 26, 2011	Jul. 01, 2012	Jun. 26, 2011
Condensed Financial Statements, Captions [Line Items]
Net income	$ 247,250		$ 190,580	$ 419,285	$ 309,840
Loss from discontinued operations
Income from continuing operations	247,250		190,580	419,285	309,840
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Depreciation				85,997	89,543
Amortization of deferred loan origination costs				38,075	39,054
Amortization of financing origination fees				5,021	5,833
Provision for employee long-term benefits				34,263	34,456
Contributions to pension and postretirement plans				(213,648)	(205,498)
Stock compensation expense				22,119	20,537
Net change in wholesale finance receivables related to sales				(124,919)	11,909
Provision for credit losses	(5,259)		(6,790)	3,754	(1,184)
Pension and postretirement healthcare plan curtailment and settlement expense					236
Foreign currency adjustments				8,143	(2,813)
Other, net				5,567	27,226
Changes in current assets and liabilities:
Accounts receivable, net				(34,977)	8,301
Finance receivables-accrued interest and other				2,912	5,553
Inventories				89,162	(530)
Accounts payable and accrued liabilities				(12,286)	133,838
Restructuring reserves		7,500		(9,915)	3,195
Derivative instruments				(1,420)	1,195
Other				(28,891)	(7,729)
Total adjustments				(131,043)	163,122
Net cash provided by operating activities of continuing operations				$ 288,242	$ 472,962

XML

Asset-Backed Financing (Assets And Liabilities Of Variable Interest Entities) (Detail) (USD $) In Thousands, unless otherwise specified	Jul. 01, 2012	Dec. 31, 2011	Jun. 26, 2011
SPEs [Member]
Variable Interest Entity [Line Items]
Finance receivables	$ 2,082,375	$ 2,916,219	$ 2,554,758
Allowance for credit losses	(41,781)	(65,735)	(61,642)
Restricted cash	187,782	228,776	242,618
Other assets	4,243	6,772	7,594
Total assets	2,232,619	3,086,032	2,743,328
Term asset-backed securitization debt	1,339,232	2,087,346	1,853,382
SPEs Facility [Member]
Variable Interest Entity [Line Items]
Finance receivables	8,403	13,455	19,747
Allowance for credit losses	(168)	(302)	(475)
Restricted cash	782	879	1,443
Other assets	158	449	288
Total assets	$ 9,175	$ 14,481	$ 21,003

XML

Finance Receivables (Allowance For Credit Losses And Finance Receivables By Portfolio Individually And Collectively Evaluated For Impairment) (Detail) (USD $)	Jul. 01, 2012	Apr. 01, 2012	Dec. 31, 2011	Jun. 26, 2011	Mar. 27, 2011	Dec. 31, 2010
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for credit losses	$ 114,248,000	$ 122,503,000	$ 125,449,000	$ 144,404,000	$ 159,684,000	$ 173,589,000
Finance receivables, gross	5,225,779,000		5,087,490,000	5,374,055,000
Finance receivables, gross	905,038,000		824,640,000	733,789,000
Allowance for credit losses	114,248,000		125,449,000	144,404,000
Finance receivables, gross	6,130,817,000		5,912,130,000	6,107,844,000
Individually Evaluated For Impairment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for credit losses				3,031,000
Finance receivables, gross				4,676,000
Collectively Evaluated For Impairment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for credit losses	114,248,000		125,449,000	141,373,000
Finance receivables, gross	6,130,817,000		5,912,130,000	6,103,168,000
Retail [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for credit losses	106,180,000	112,857,000	116,112,000	130,948,000	141,704,000	157,791,000
Finance receivables, gross	5,225,779,000		5,087,490,000	5,374,055,000
Retail [Member] | Collectively Evaluated For Impairment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for credit losses	106,180,000		116,112,000	130,948,000
Finance receivables, gross	5,225,779,000		5,087,490,000	5,374,055,000
Wholesale [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for credit losses	8,068,000	9,646,000	9,337,000	13,456,000	17,980,000	15,798,000
Allowance for credit losses	8,068,000		9,337,000	13,456,000
Finance receivables, gross	905,038,000		824,640,000	733,789,000
Wholesale [Member] | Individually Evaluated For Impairment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for credit losses				3,031,000
Finance receivables, gross				4,676,000
Wholesale [Member] | Collectively Evaluated For Impairment [Member]
Financing Receivable, Allowance for Credit Losses [Line Items]
Allowance for credit losses	8,068,000		9,337,000	10,425,000
Finance receivables, gross	$ 905,038,000		$ 824,640,000	$ 729,113,000

XML

Supplemental Consolidating Data (Balance Sheet) (Detail) (USD $) In Thousands, unless otherwise specified	Jul. 01, 2012	Dec. 31, 2011	Jun. 26, 2011	Dec. 31, 2010
Segment Reporting Information [Line Items]
Cash and cash equivalents	$ 1,071,496	$ 1,526,950	$ 973,478	$ 1,021,933
Marketable securities	135,848	153,380	244,555
Accounts receivable, net	250,268	219,039	265,663
Finance receivables, net	1,398,553	1,168,603	1,144,886
Restricted finance receivables held by variable interest entities, net	456,285	591,864	573,208
Inventories	323,046	418,006	337,472
Restricted cash held by variable interest entities	188,564	229,655	244,060
Other current assets	245,807	234,709	217,656
Total current assets	4,069,867	4,542,206	4,000,978
Finance receivables, net	2,569,187	1,754,441	2,306,165
Restricted finance receivables held by variable interest entities, net	1,592,544	2,271,773	1,939,181
Property, plant and equipment, net	776,793	809,459	788,943
Goodwill	28,604	29,081	31,156
Other long-term assets	279,789	267,204	295,556
Total Assets	9,316,784	9,674,164	9,361,979
Accounts payable	252,239	255,713	277,395
Accrued liabilities	535,097	564,172	590,096
Short-term debt	845,868	838,486	694,137
Current portion of long-term debt	399,962	399,916
Current portion of long-term debt held by variable interest entities	507,427	640,331	635,604
Total current liabilities	2,540,593	2,698,618	2,197,232
Long-term debt	2,745,189	2,396,871	2,893,462
Long-term debt held by variable interest entities	831,805	1,447,015	1,217,778
Pension liability	122,496	302,483	103,511
Postretirement healthcare benefits	263,295	268,582	258,881
Other long-term liabilities	147,019	140,339	159,719
Commitments and contingencies (Note 17)
Total shareholders' equity	2,666,387	2,420,256	2,531,396
Total liabilities and shareholders' equity	9,316,784	9,674,164	9,361,979
Motorcycles And Related Products Operations [Member]
Segment Reporting Information [Line Items]
Cash and cash equivalents	725,909	943,330	681,804	791,791
Marketable securities	135,848	153,380	244,555
Accounts receivable, net	885,797	393,615	710,791
Inventories	323,046	418,006	337,472
Other current assets	182,464	167,423	160,059
Total current assets	2,253,064	2,075,754	2,134,681
Property, plant and equipment, net	747,133	779,330	758,828
Goodwill	28,604	29,081	31,156
Other long-term assets	335,811	322,379	339,666
Total Assets	3,364,612	3,206,544	3,264,331
Accounts payable	197,891	220,957	243,954
Accrued liabilities	466,808	482,838	522,533
Total current liabilities	664,699	703,795	766,487
Long-term debt	303,000	303,000	303,000
Pension liability	122,496	302,483	103,511
Postretirement healthcare benefits	263,295	268,582	258,881
Other long-term liabilities	131,754	126,036	146,286
Commitments and contingencies (Note 17)
Total shareholders' equity	1,879,368	1,502,648	1,686,166
Total liabilities and shareholders' equity	3,364,612	3,206,544	3,264,331
Financial Services Operations [Member]
Segment Reporting Information [Line Items]
Cash and cash equivalents	345,587	583,620	291,674	230,142
Finance receivables, net	1,398,553	1,168,603	1,144,886
Restricted finance receivables held by variable interest entities, net	456,285	591,864	573,208
Restricted cash held by variable interest entities	188,564	229,655	244,060
Other current assets	63,343	67,286	57,597
Total current assets	2,452,332	2,641,028	2,311,425
Finance receivables, net	2,569,187	1,754,441	2,306,165
Restricted finance receivables held by variable interest entities, net	1,592,544	2,271,773	1,939,181
Property, plant and equipment, net	29,660	30,129	30,115
Other long-term assets	17,956	17,460	26,711
Total Assets	6,661,679	6,714,831	6,613,597
Accounts payable	689,877	209,332	478,569
Accrued liabilities	71,756	85,038	70,880
Short-term debt	845,868	838,486	694,137
Current portion of long-term debt	399,962	399,916
Current portion of long-term debt held by variable interest entities	507,427	640,331	635,604
Total current liabilities	2,514,890	2,173,103	1,879,190
Long-term debt	2,442,189	2,093,871	2,590,462
Long-term debt held by variable interest entities	831,805	1,447,015	1,217,778
Other long-term liabilities	15,265	14,303	13,433
Commitments and contingencies (Note 17)
Total shareholders' equity	857,530	986,539	912,734
Total liabilities and shareholders' equity	6,661,679	6,714,831	6,613,597
Eliminations & Adjustments [Member]
Segment Reporting Information [Line Items]
Accounts receivable, net	(635,529)	(174,576)	(445,128)
Total current assets	(635,529)	(174,576)	(445,128)
Other long-term assets	(73,978)	(72,635)	(70,821)
Total Assets	(709,507)	(247,211)	(515,949)
Accounts payable	(635,529)	(174,576)	(445,128)
Accrued liabilities	(3,467)	(3,704)	(3,317)
Total current liabilities	(638,996)	(178,280)	(448,445)
Commitments and contingencies (Note 17)
Total shareholders' equity	(70,511)	(68,931)	(67,504)
Total liabilities and shareholders' equity	$ (709,507)	$ (247,211)	$ (515,949)

XML

Fair Value Measurements (Summary Of Assets And Liabilities Measured at Fair Value) (Detail) (USD $) In Thousands, unless otherwise specified	Jul. 01, 2012	Dec. 31, 2011	Jun. 26, 2011
Fair Value Of Other Financial Instruments [Line Items]
Cash equivalents	$ 764,147	$ 1,302,367	$ 582,808
Marketable securities	135,848	153,380	244,555
Derivatives, assets	8,879	16,443
Total assets measured at fair value	908,874	1,472,190	827,363
Derivatives, liabilities	2,042	5,136	14,933
Quoted Prices In Active Markets For Identical Assets (Level 1) [Member]
Fair Value Of Other Financial Instruments [Line Items]
Cash equivalents	764,147	1,302,367	582,808
Marketable securities			49,999
Total assets measured at fair value	764,147	1,302,367	632,807
Significant Other Observable Inputs (Level 2) [Member]
Fair Value Of Other Financial Instruments [Line Items]
Marketable securities	135,848	153,380	194,556
Derivatives, assets	8,879	16,443
Total assets measured at fair value	144,727	169,823	194,556
Derivatives, liabilities	2,042	5,136	14,933
Significant Unobservable Inputs (Level 3) [Member]
Fair Value Of Other Financial Instruments [Line Items]
Cash equivalents
Marketable securities
Derivatives, assets
Total assets measured at fair value
Derivatives, liabilities

XML

Finance Receivables (Narrative) (Detail) (USD $)	6 Months Ended
	Jul. 01, 2012	Jun. 26, 2011	Apr. 01, 2012	Dec. 31, 2011	Mar. 27, 2011	Dec. 31, 2010
Accounts, Notes, Loans and Financing Receivable [Line Items]
Restricted finance receivables held as collateral	$ 2,050,000,000	$ 2,510,000,000		$ 2,860,000,000
Allowance for credit losses	114,248,000	144,404,000	122,503,000	125,449,000	159,684,000	173,589,000
Retail financing receivables, gross	5,225,779,000	5,374,055,000		5,087,490,000
Non-accrual status wholesale finance receivables		4,700,000
FICO score for determining credit risk	640
Retail [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses	106,180,000	130,948,000	112,857,000	116,112,000	141,704,000	157,791,000
Retail financing receivables, gross	5,225,779,000	5,374,055,000		5,087,490,000
Retail [Member] | Greater Than 90 Days Past Due [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Retail financing receivables, gross	14,827,000	18,732,000		27,469,000
Related To Finance Receivables Held By Vies [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses	41,900,000	62,100,000
Wholesale [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Allowance for credit losses	8,068,000	13,456,000	9,646,000	9,337,000	17,980,000	15,798,000
Wholesale finance receivables, gross	$ 600,000	$ 1,200,000		$ 900,000

XML

Employee Benefit Plans (Tables)

6 Months Ended

Jul. 01, 2012

Components Of Net Periodic Benefit Costs

Components of net periodic benefit costs were as follows (in thousands):

	Three months ended						Six months ended
	July 1,			June 26,			July 1,			June 26,
	2012			2011			2012			2011
Pension and SERPA Benefits
Service cost	$	8,420		$	9,273		$	16,840		$	18,545
Interest cost		20,816			20,147			41,632			40,294
Expected return on plan assets		(29,277	)		(26,653	)		(58,555	)		(53,307	)
Amortization of unrecognized:
Prior service cost		740			745			1,479			1,489
Net loss		10,969			7,554			21,937			15,109
Curtailment loss		—			—			—			236
Net periodic benefit cost	$	11,668		$	11,066		$	23,333		$	22,366
Postretirement Healthcare Benefits
Service cost	$	1,853		$	1,907		$	3,706		$	3,814
Interest cost		4,578			4,911			9,155			9,822
Expected return on plan assets		(2,356	)		(2,346	)		(4,712	)		(4,692	)
Amortization of unrecognized:
Prior service credit		(963	)		(969	)		(1,927	)		(1,938	)
Net loss		1,855			1,798			3,711			3,596
Net periodic benefit cost	$	4,967		$	5,301		$	9,933		$	10,602

XML

Derivative Instruments And Hedging Activities (Derivative Instrument Fair Value) (Detail) (USD $) In Thousands, unless otherwise specified	Jul. 01, 2012		Dec. 31, 2011		Jun. 26, 2011
Derivatives Not Designated As Hedging Instruments [Member]
Derivative [Line Items]
Notional Value	$ 4,346
Derivatives Not Designated As Hedging Instruments [Member] | Derivatives - Securitization Transactions [Member]
Derivative [Line Items]
Notional Value	4,346
Derivatives Designated As Hedging Instruments
Derivative [Line Items]
Notional Value	286,887		412,465		393,052
Asset Fair Value	8,879	[1]	16,443	[1]
Liability Fair Value	2,042	[2]	5,137	[2]	14,933	[2]
Derivatives Designated As Hedging Instruments | Interest Rate Swaps - Unsecured Commercial Paper
Derivative [Line Items]
Notional Value	41,600	[3]	102,100	[3]	117,500	[3]
Liability Fair Value	982	[2],[3]	3,020	[2],[3]	5,156	[2],[3]
Derivatives Designated As Hedging Instruments | Foreign Currency Contracts [Member]
Derivative [Line Items]
Notional Value	244,221	[3]	306,450	[3]	272,637	[3]
Asset Fair Value	8,879	[1],[3]	16,443	[1],[3]
Liability Fair Value	1,027	[2],[3]	1,852	[2],[3]	9,691	[2],[3]
Derivatives Designated As Hedging Instruments | Natural Gas Contracts [Member]
Derivative [Line Items]
Notional Value	1,066	[3]	3,915	[3]	2,915	[3]
Liability Fair Value	$ 33	[2],[3]	$ 265	[2],[3]	$ 86	[2],[3]

[1] Included in other current assets

[2] Included in accrued liabilities

[3] Derivative designated as a cash flow hedge

XML

Supplemental Consolidating Data (Cash Flows) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended			6 Months Ended
	Jul. 01, 2012	Dec. 31, 2011	Jun. 26, 2011	Jul. 01, 2012	Jun. 26, 2011
Segment Reporting Information [Line Items]
Net income	$ 247,250		$ 190,580	$ 419,285	$ 309,840
Loss from discontinued operations
Income from continuing operations	247,250		190,580	419,285	309,840
Depreciation				85,997	89,543
Amortization of deferred loan origination costs				38,075	39,054
Amortization of financing origination fees				5,021	5,833
Provision for employee long-term benefits				34,263	34,456
Contributions to pension and postretirement plans				(213,648)	(205,498)
Stock compensation expense				22,119	20,537
Net change in wholesale finance receivables				(124,919)	11,909
Provision for credit losses	(5,259)		(6,790)	3,754	(1,184)
Pension and postretirement healthcare plan curtailment and settlement expense					236
Foreign currency adjustments				8,143	(2,813)
Other, net				5,567	27,226
Accounts receivable				(34,977)	8,301
Finance receivables-accrued interest and other				2,912	5,553
Inventories				89,162	(530)
Accounts payable and accrued liabilities				(12,286)	133,838
Restructuring reserves		7,500		(9,915)	3,195
Derivative instruments				(1,420)	1,195
Other				(28,891)	(7,729)
Total adjustments				(131,043)	163,122
Net cash provided by (used by) operating activities of continuing operations				288,242	472,962
Capital expenditures				(60,078)	(69,267)
Origination of finance receivables				(1,583,572)	(1,434,607)
Collections of finance receivables				1,435,790	1,416,610
Purchases of marketable securities				(4,993)	(142,653)
Sales and redemptions of marketable securities				23,046	39,966
Net cash (used by) provided by investing activities of continuing operations				(189,807)	(189,951)
Proceeds from securitization of debt				91,030
Proceeds from issuance of medium-term notes				397,373	447,076
Repayments of securitization debt				(839,401)	(901,851)
Net decrease in credit facilities and unsecured commercial paper				(46,629)	131,039
Net change in restricted cash				41,091	44,827
Dividends paid				(71,645)	(53,152)
Purchase of common stock for treasury				(172,742)	(5,678)
Excess tax benefits from share based payments				15,730	3,476
Issuance of common stock under employee stock option plans				35,337	4,534
Net cash (used by) provided by financing activities of continuing operations				(549,856)	(329,729)
Effect of exchange rate changes on cash and cash equivalents of continuing operations				(4,033)	(1,702)
Net (decrease) increase in cash and cash equivalents of continuing operations				(455,454)	(48,420)
Cash flows from discontinued operations:
Cash flows from operating activities of discontinued operations					(35)
Cash flows from investing activities of discontinued operations
Effect of exchange rate changes on cash and cash equivalents of discontinued operations
Total cash flows from discontinued operations					(35)
Net (decrease) increase in cash and cash equivalents				(455,454)	(48,455)
Cash and cash equivalents-beginning of period				1,526,950	1,021,933
Cash and cash equivalents of discontinued operations-beginning of period
Net (decrease) increase in cash and cash equivalents				(455,454)	(48,455)
Less: Cash and cash equivalents of discontinued operations-end of period
Cash and cash equivalents-end of period	1,071,496	1,526,950	973,478	1,071,496	973,478
Motorcycles And Related Products Operations [Member]
Segment Reporting Information [Line Items]
Net income	196,544		139,597	552,258	342,030
Loss from discontinued operations
Income from continuing operations	196,544		139,597	552,258	342,030
Depreciation				82,954	86,375
Amortization of financing origination fees				237	237
Provision for employee long-term benefits				33,236	33,018
Contributions to pension and postretirement plans				(213,648)	(205,498)
Stock compensation expense				20,539	19,176
Pension and postretirement healthcare plan curtailment and settlement expense					236
Foreign currency adjustments				8,143	(2,813)
Other, net				1,275	5,337
Accounts receivable				(295,930)	(44,899)
Inventories				89,162	(530)
Accounts payable and accrued liabilities				(22,227)	79,110
Restructuring reserves				(9,915)	3,195
Derivative instruments				(1,293)	1,188
Other				(25,286)	(4,729)
Total adjustments				(332,753)	(30,597)
Net cash provided by (used by) operating activities of continuing operations				219,505	311,433
Capital expenditures				(57,504)	(65,956)
Purchases of marketable securities					(142,653)
Sales and redemptions of marketable securities				18,053	39,966
Net cash (used by) provided by investing activities of continuing operations				(39,451)	(168,643)
Loan to HDFS				(200,000)	(200,000)
Dividends paid				(71,645)	(53,152)
Purchase of common stock for treasury				(172,742)	(5,678)
Excess tax benefits from share based payments				15,730	3,476
Issuance of common stock under employee stock option plans				35,337	4,534
Net cash (used by) provided by financing activities of continuing operations				(393,320)	(250,820)
Effect of exchange rate changes on cash and cash equivalents of continuing operations				(4,155)	(1,922)
Net (decrease) increase in cash and cash equivalents of continuing operations				(217,421)	(109,952)
Cash flows from discontinued operations:
Cash flows from operating activities of discontinued operations					(35)
Cash flows from investing activities of discontinued operations
Effect of exchange rate changes on cash and cash equivalents of discontinued operations
Total cash flows from discontinued operations					(35)
Net (decrease) increase in cash and cash equivalents				(217,421)	(109,987)
Cash and cash equivalents-beginning of period				943,330	791,791
Cash and cash equivalents of discontinued operations-beginning of period
Net (decrease) increase in cash and cash equivalents				(217,421)	(109,987)
Less: Cash and cash equivalents of discontinued operations-end of period
Cash and cash equivalents-end of period	725,909		681,804	725,909	681,804
Financial Services Operations [Member]
Segment Reporting Information [Line Items]
Net income	50,706		50,983	92,027	92,810
Loss from discontinued operations
Income from continuing operations	50,706		50,983	92,027	92,810
Depreciation				3,043	3,168
Amortization of deferred loan origination costs				38,075	39,054
Amortization of financing origination fees				4,784	5,596
Provision for employee long-term benefits				1,027	1,438
Stock compensation expense				1,580	1,361
Provision for credit losses	(5,259)		(6,790)	3,754	(1,184)
Other, net				4,292	21,889
Finance receivables-accrued interest and other				2,912	5,553
Accounts payable and accrued liabilities				270,894	60,426
Derivative instruments				(127)	7
Other				(3,605)	44,575
Total adjustments				326,629	181,883
Net cash provided by (used by) operating activities of continuing operations				418,656	274,693
Capital expenditures				(2,574)	(3,311)
Origination of finance receivables				(3,766,621)	(3,264,370)
Collections of finance receivables				3,493,920	3,258,282
Net cash (used by) provided by investing activities of continuing operations				(275,275)	(9,399)
Proceeds from securitization of debt				91,030
Proceeds from issuance of medium-term notes				397,373	447,076
Loan to HDFS				200,000	200,000
Repayments of securitization debt				(839,401)	(901,851)
Net decrease in credit facilities and unsecured commercial paper				(46,629)	131,039
Net change in restricted cash				41,091	44,827
Dividends paid				(225,000)	(125,000)
Net cash (used by) provided by financing activities of continuing operations				(381,536)	(203,909)
Effect of exchange rate changes on cash and cash equivalents of continuing operations				122	147
Net (decrease) increase in cash and cash equivalents of continuing operations				(238,033)	61,532
Cash flows from discontinued operations:
Cash flows from investing activities of discontinued operations
Effect of exchange rate changes on cash and cash equivalents of discontinued operations
Net (decrease) increase in cash and cash equivalents				(238,033)	61,532
Cash and cash equivalents-beginning of period				583,620	230,142
Cash and cash equivalents of discontinued operations-beginning of period
Net (decrease) increase in cash and cash equivalents				(238,033)	61,532
Less: Cash and cash equivalents of discontinued operations-end of period
Cash and cash equivalents-end of period	345,587		291,674	345,587	291,674
Eliminations & Adjustments [Member]
Segment Reporting Information [Line Items]
Net income				(225,000)	(125,000)
Loss from discontinued operations
Income from continuing operations				(225,000)	(125,000)
Net change in wholesale finance receivables				(124,919)	11,909
Accounts receivable				260,953	53,200
Accounts payable and accrued liabilities				(260,953)	(5,698)
Other					(47,575)
Total adjustments				(124,919)	11,836
Net cash provided by (used by) operating activities of continuing operations				(349,919)	(113,164)
Origination of finance receivables				2,183,049	1,829,763
Collections of finance receivables				(2,058,130)	(1,841,672)
Net cash (used by) provided by investing activities of continuing operations				124,919	(11,909)
Dividends paid				225,000	125,000
Net cash (used by) provided by financing activities of continuing operations				225,000	125,000
Effect of exchange rate changes on cash and cash equivalents of continuing operations					73
Cash flows from discontinued operations:
Cash flows from investing activities of discontinued operations
Effect of exchange rate changes on cash and cash equivalents of discontinued operations
Cash and cash equivalents of discontinued operations-beginning of period
Less: Cash and cash equivalents of discontinued operations-end of period

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Restructuring Expense (Tables)

6 Months Ended

Jul. 01, 2012

2010 Restructuring Plan [Member]

Restructuring Plan Reserve Recorded In Accrued Liabilities

The following table summarizes the Motorcycles segment’s 2010 Restructuring Plan reserve activity and balances as recorded in accrued liabilities (in thousands):

	Six months ended			Six months ended
	July 1, 2012			June 26, 2011
	Employee			Employee
	Severance and			Severance and
	Termination Costs			Termination Costs
Balance, beginning of period	$	20,361		$	8,652
Restructuring expense		3,457			6,296
Utilized—cash		(10,053	)		(732	)
Balance, end of period	$	13,765		$	14,216

2011 Restructuring Plan [Member]

Restructuring Plan Reserve Recorded In Accrued Liabilities

The following table summarizes the Motorcycle segment’s 2011 Kansas City Restructuring Plan and 2011 New Castalloy Restructuring Plan reserve activity and balances as recorded in accrued liabilities (in thousands):

	Six months ended July 1, 2012
	Kansas City								New Castalloy												Consolidated
	Employee								Employee
	Severance and								Severance and
	Termination								Termination			Accelerated
	Costs			Other		Total			Costs			Depreciation			Other			Total			Total
Balance, beginning of period	$	4,123		$	—	$	4,123		$	8,428		$	—		$	305		$	8,733		$	12,856
Restructuring expense		—			—		—			1,141			4,093			755			5,989			5,989
Utilized—cash		—			—		—			(312	)		—			(722	)		(1,034	)		(1,034	)
Utilized—noncash		—			—		—			—			(4,093	)		—			(4,093	)		(4,093	)
Noncash reserve release		(967	)		—		(967	)		—			—			—			—			(967	)
Balance, end of period	$	3,156		$	—	$	3,156		$	9,257		$	—		$	338		$	9,595		$	12,751

	Six months ended June 26, 2011
	Kansas City
	Employee
	Severance and
	Termination
	Costs			Other			Total
Restructuring expense		7,177			340			7,517
Utilized—cash		(3,843	)		(340	)		(4,183	)
Utilized—noncash		(236	)		—			(236	)
Balance, end of period	$	3,098		$	—		$	3,098

2009 Restructuring Plan [Member]

Summary Of Restructuring Plan Reserve Activity

The following table summarizes the Company’s 2009 Restructuring Plan reserve activity and balances recorded in accrued liabilities (in thousands):

	Six months ended July 1, 2012
	Motorcycles & Related Products
	Employee
	Severance and			Accelerated
	Termination Costs			Depreciation		Other			Total
Balance, beginning of period	$	10,089		$	—	$	—		$	10,089
Restructuring expense		331			—		10,888			11,219
Utilized—cash		(1,878	)		—		(10,888	)		(12,766	)
Utilized—noncash		—			—		—			—
Noncash reserve release		(2,027	)		—		—			(2,027	)
Balance, end of period	$	6,515		$	—	$	—		$	6,515

	Six months ended June 26, 2011
	Motorcycles & Related Products
	Employee
	Severance and			Accelerated
	Termination Costs			Depreciation		Other			Total
Balance, beginning of period	$	23,818		$	—	$	2,764		$	26,582
Restructuring expense		3,504			—		19,276			22,780
Utilized—cash		(8,159	)		—		(20,341	)		(28,500	)
Utilized—noncash		—			—		253			253
Balance, end of period	$	19,163		$	—	$	1,952		$	21,115

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Finance Receivables (Aging Of Past Due Finance Receivables Including Non Accrual Status Finance Receivables) (Detail) (USD $) In Thousands, unless otherwise specified	Jul. 01, 2012	Dec. 31, 2011	Jun. 26, 2011
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables, gross	$ 5,225,779	$ 5,087,490	$ 5,374,055
Finance receivables, gross	905,038	824,640	733,789
Finance receivables, gross	6,130,817	5,912,130	6,107,844
Retail [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables, gross	5,225,779	5,087,490	5,374,055
Wholesale [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables, gross	905,038	824,640	733,789
Current [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables, gross	6,004,738	5,738,321	5,935,776
Current [Member] | Retail [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables, gross	5,101,847	4,915,711	5,205,300
Current [Member] | Wholesale [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables, gross	902,891	822,610	730,476
31-60 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables, gross	85,983	108,150	115,979
31-60 Days Past Due [Member] | Retail [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables, gross	84,858	107,373	115,163
31-60 Days Past Due [Member] | Wholesale [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables, gross	1,125	777	816
61-90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables, gross	24,715	37,281	35,247
61-90 Days Past Due [Member] | Retail [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables, gross	24,247	36,937	34,860
61-90 Days Past Due [Member] | Wholesale [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables, gross	468	344	387
Greater Than 90 Days Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables, gross	15,381	28,378	20,842
Greater Than 90 Days Past Due [Member] | Retail [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables, gross	14,827	27,469	18,732
Greater Than 90 Days Past Due [Member] | Wholesale [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables, gross	554	909	2,110
Total Past Due [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables, gross	126,079	173,809	172,068
Total Past Due [Member] | Retail [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables, gross	123,932	171,779	168,755
Total Past Due [Member] | Wholesale [Member]
Financing Receivable, Recorded Investment, Past Due [Line Items]
Finance receivables, gross	$ 2,147	$ 2,030	$ 3,313

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Restructuring Expense (Restructuring Plan Reserve Recorded in Accrued Liabilities Related to 2011 Plan) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	6 Months Ended
	Dec. 31, 2011	Jul. 01, 2012 2011 Kansas City Restructuring Plan [Member] Motorcycles And Related Products [Member]	Jun. 26, 2011 2011 Kansas City Restructuring Plan [Member] Motorcycles And Related Products [Member]	Jul. 01, 2012 2011 Kansas City Restructuring Plan [Member] Employee Serverance And Termination Costs [Member] Motorcycles And Related Products [Member]	Jun. 26, 2011 2011 Kansas City Restructuring Plan [Member] Employee Serverance And Termination Costs [Member] Motorcycles And Related Products [Member]	Jun. 26, 2011 2011 Kansas City Restructuring Plan [Member] Other [Member] Motorcycles And Related Products [Member]	Jul. 01, 2012 2011 New Castalloy Restructuring Plan [Member]	Jul. 01, 2012 2011 New Castalloy Restructuring Plan [Member] Motorcycles And Related Products [Member]	Jul. 01, 2012 2011 New Castalloy Restructuring Plan [Member] Employee Serverance And Termination Costs [Member] Motorcycles And Related Products [Member]	Jul. 01, 2012 2011 New Castalloy Restructuring Plan [Member] Other [Member] Motorcycles And Related Products [Member]	Jul. 01, 2012 2011 New Castalloy Restructuring Plan [Member] Accelerated Depreciation [Member] Motorcycles And Related Products [Member]	Jul. 01, 2012 2011 Restructuring Plan [Member] Motorcycles And Related Products [Member]
Restructuring Cost and Reserve [Line Items]
Balance, beginning of period		$ 4,123		$ 4,123				$ 8,733	$ 8,428	$ 305		$ 12,856
Restructuring expense			7,517		7,177	340		5,989	1,141	755	4,093	5,989
Utilized-cash			(4,183)		(3,843)	(340)		(1,034)	(312)	(722)		(1,034)
Utilized-noncash			(236)		(236)		(30,000)	(4,093)			(4,093)	(4,093)
Noncash reserve release	43,500	(967)		(967)								(967)
Balance, end of period		$ 3,156	$ 3,098	$ 3,156	$ 3,098			$ 9,595	$ 9,257	$ 338		$ 12,751

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Additional Balance Sheet and Cash Flow Information (Narrative) (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jul. 01, 2012 Month	Jun. 26, 2011
Investment [Line Items]
Gross unrealized gains	$ 0.5	$ 1.7
Gross unrealized gains, net of taxes	$ 0.3	$ 1.1
Contractual maturities period of marketable securities, minimum (in months)	12
Contractual maturities period of marketable securities, maximum (in months)	48

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Finance Receivables (Recorded Investment Of Wholesale Finance Receivables By Internal Credit Quality Indicator) (Detail) (USD $) In Thousands, unless otherwise specified	Jul. 01, 2012	Dec. 31, 2011	Jun. 26, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables, gross	$ 905,038	$ 824,640	$ 733,789
Wholesale [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables, gross	905,038	824,640	733,789
Wholesale [Member] | Doubtful [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables, gross	9,467	13,048	12,386
Wholesale [Member] | Substandard [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables, gross	5,902	5,052	21,088
Wholesale [Member] | Special Mention [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables, gross	7,897	14,361	12,887
Wholesale [Member] | Medium [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables, gross	808	3,032	12,861
Wholesale [Member] | Low [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables, gross	$ 880,964	$ 789,147	$ 674,567

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Business Segments (Information By Strategic Business Units) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jul. 01, 2012	Jun. 26, 2011	Jul. 01, 2012	Jun. 26, 2011
Segment Reporting Information [Line Items]
Motorcycles net revenue	$ 1,569,047	$ 1,339,744	$ 2,842,416	$ 2,402,788
Financial services income	160,613	165,853	316,935	327,739
Restructuring expense	6,220	13,594	17,671	36,593
Operating income	391,513	301,902	666,971	494,899
Motorcycles [Member]
Segment Reporting Information [Line Items]
Motorcycles net revenue	1,569,047	1,339,744	2,842,416	2,402,788
Gross profit	563,817	468,268	1,020,327	820,134
Selling, administrative and engineering expense	248,038	234,827	485,033	438,632
Restructuring expense	6,220	13,594	17,671	36,593
Operating income	309,559	219,847	517,623	344,909
Financial Services [Member]
Segment Reporting Information [Line Items]
Financial services income	160,613	165,853	316,935	327,739
Financial services expense	78,659	83,798	167,587	177,749
Operating income	$ 81,954	$ 82,055	$ 149,348	$ 149,990

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Product Warranty And Safety Recall Campaigns (Warranty And Safety Recall Liability) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jul. 01, 2012	Jun. 26, 2011	Jul. 01, 2012	Jun. 26, 2011
Guarantor Obligations [Line Items]
Balance, beginning of period	$ 57,102	$ 57,111	$ 54,994	$ 54,134
Warranties issued during the period	17,127	12,335	32,618	23,560
Settlements made during the period	(18,549)	(12,570)	(33,086)	(22,866)
Recalls and changes to pre-existing warranty liabilities	12,121	(1,469)	13,275	579
Balance, end of period	$ 67,801	$ 55,407	$ 67,801	$ 55,407

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Finance Receivables (Changes In Allowance For Credit Losses On Finance Receivables) (Detail) (USD $)	3 Months Ended		6 Months Ended
	Jul. 01, 2012	Jun. 26, 2011	Jul. 01, 2012	Jun. 26, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	$ 122,503,000	$ 159,684,000	$ 125,449,000	$ 173,589,000
Provision for credit losses	(5,259,000)	(6,790,000)	3,754,000	(1,184,000)
Charge-offs	(17,054,000)	(23,233,000)	(42,906,000)	(58,424,000)
Recoveries	14,058,000	14,743,000	27,951,000	30,423,000
Balance, end of period	114,248,000	144,404,000	114,248,000	144,404,000
Retail [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	112,857,000	141,704,000	116,112,000	157,791,000
Provision for credit losses	(3,681,000)	(2,596,000)	5,023,000	843,000
Charge-offs	(17,054,000)	(22,903,000)	(42,906,000)	(58,094,000)
Recoveries	14,058,000	14,743,000	27,951,000	30,408,000
Balance, end of period	106,180,000	130,948,000	106,180,000	130,948,000
Wholesale [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Balance, beginning of period	9,646,000	17,980,000	9,337,000	15,798,000
Provision for credit losses	(1,578,000)	(4,194,000)	(1,269,000)	(2,027,000)
Charge-offs		(330,000)		(330,000)
Recoveries				15,000
Balance, end of period	$ 8,068,000	$ 13,456,000	$ 8,068,000	$ 13,456,000

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Discontinued Operations

6 Months Ended

Jul. 01, 2012

Discontinued Operations

4. Discontinued Operations

In October 2009, the Company unveiled a new business strategy to drive growth through a focus of efforts and resources on the unique strengths of the Harley-Davidson brand and to enhance productivity and profitability through continuous improvement. The Company’s Board of Directors approved and the Company committed to the divestiture of MV as part of this strategy. The Company engaged a third party investment bank to assist with the marketing and sale of MV. During 2009, the Company recorded pre-tax impairment charges of $115.4 million related to MV and a net tax benefit of $40 million related to losses estimated in connection with the sale of MV. As of December 31, 2009, the Company estimated the total tax benefit associated with losses related to the sale of MV to be $66 million of which $26 million was deemed uncertain and appropriately reserved against.

At each subsequent reporting date in 2010 through the date of sale of MV in August 2010, the fair value less selling costs was re-assessed and additional impairment charges totaling $111.8 million and additional tax benefits totaling $18 million were recognized in 2010. As the effort to sell MV progressed into 2010, adverse factors led to decreases in the fair value of MV. During 2010, challenging economic conditions continued to persist, negatively impacting the appetite of prospective buyers and the motorcycle industry as a whole. Information coming directly from the selling process, including discussions with the prospective buyers, indicated a fair value that was less than previously estimated.

On August 6, 2010, the Company concluded its sale of MV to MV Augusta Motor Holding S.r.l., a company controlled by the former owner of MV. Under the agreement relating to the sale, (1) the Company received nominal consideration in return for the transfer of MV and related assets; (2) the parties waived their respective rights under the stock purchase agreement and other documents related to the Company’s purchase of MV in 2008, which included a waiver of the former owner’s right to contingent earn-out consideration; and (3) the Company contributed 20.0 million Euros to MV as operating capital. The 20.0 million Euros contributed were factored into the Company’s estimate of MV’s fair value prior to the sale and was recognized in the 2010 impairment charges discussed above. As a result of the impairment charges recorded in 2009 and 2010 prior to the sale, the Company only incurred an immaterial loss on the date of sale, which was included in the loss from discontinued operations, net of tax, during the year ended December 31, 2010.

As of December 31, 2010, the Company’s estimated total tax benefit associated with the loss on the sale of MV was $101.0 million, of which $43.5 million was deemed uncertain and appropriately reserved against. As a result, the total cumulative net tax benefit recognized as of December 31, 2010 was $57.5 million. The increase in the estimated tax benefit during 2010 was driven by an increase in the losses related to the sale of MV, not a change in the tax position.

In determining the tax benefit recognized from October 2009 through December 2010, the Company engaged appropriate technical expertise and considered all relevant available information. In accordance with ASC 740, “Income Taxes,” at each balance sheet date during this period, the Company re-evaluated the overall tax benefit, determined that it was at least more likely than not that it would be sustained upon review and calculated the amount of recognized tax benefit based on a cumulative probability basis.

Beginning in 2010, the Company voluntarily elected to participate in a pre-filing agreement process with the Internal Revenue Service (IRS) in order to accelerate their review of the Company’s tax position related to MV. The IRS effectively completed its review in late 2011 and executed a Closing Agreement on Final Determination Covering Specific Matters with the Company.

There were no changes to the Company’s estimated gross or recognized tax benefit associated with the loss on the sale of MV during the first three quarters of 2011. In the fourth quarter of 2011, given the outcome of the closing agreement, the Company recognized a $43.5 million tax benefit by reversing the reserve recorded as of September 25, 2011 and recognized an incremental $7.5 million tax benefit related to the final calculation of the tax basis in the loan to and the stock of MV.

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Product Warranty And Safety Recall Campaigns (Narrative) (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended		12 Months Ended
	Jul. 01, 2012	Jun. 26, 2011	Dec. 31, 2011
Net Amount at Risk by Product and Guarantee [Line Items]
Liability for safety recall campaigns	$ 6.7	$ 2.9	$ 10.7

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Restructuring Expense (Restructuring Plan Reserve Recorded In Accrued Liabilities Related To 2010 Plan) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jul. 01, 2012	Jun. 26, 2011	Jul. 01, 2012	Jun. 26, 2011
Restructuring Cost and Reserve [Line Items]
Restructuring expense	$ 6,220	$ 13,594	$ 17,671	$ 36,593
2010 Restructuring Plan [Member] | Employee Serverance And Termination Costs [Member] | Motorcycles And Related Products [Member]
Restructuring Cost and Reserve [Line Items]
Balance, beginning of period			20,361	8,652
Restructuring expense			3,457	6,296
Utilized-cash			(10,053)	(732)
Balance, end of period	$ 13,765	$ 14,216	$ 13,765	$ 14,216

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jul. 01, 2012

Summary Of The Fair Value And Carrying Value Of The Company's Financial Instruments

The following table summarizes the fair value and carrying value of the Company’s financial instruments (in thousands):

	July 1, 2012				December 31, 2011				June 26, 2011
	Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value
Assets:
Cash and cash equivalents	$	1,071,496	$	1,071,496	$	1,526,950	$	1,526,950	$	973,478	$	973,478
Marketable securities	$	135,848	$	135,848	$	153,380	$	153,380	$	244,555	$	244,555
Accounts receivable, net	$	250,268	$	250,268	$	219,039	$	219,039	$	265,663	$	265,663
Derivatives	$	8,879	$	8,879	$	16,443	$	16,443	$	—	$	—
Finance receivables, net	$	6,099,619	$	6,016,569	$	5,888,040	$	5,786,681	$	6,052,156	$	5,963,440
Restricted cash held by variable interest entities	$	188,564	$	188,564	$	229,655	$	229,655	$	244,060	$	244,060
Liabilities:
Accounts payable	$	252,239	$	252,239	$	255,713	$	255,713	$	277,395	$	277,395
Derivatives	$	2,042	$	2,042	$	5,136	$	5,136	$	14,933	$	14,933
Unsecured commercial paper	$	845,868	$	845,868	$	874,286	$	874,286	$	735,737	$	735,737
Credit facilities	$	143,792	$	143,792	$	159,794	$	159,794	$	201,112	$	201,112
Medium-term notes	$	2,967,112	$	2,698,359	$	2,561,458	$	2,298,193	$	2,555,926	$	2,347,750
Senior unsecured notes	$	360,791	$	303,000	$	376,513	$	303,000	$	391,051	$	303,000
Term asset-backed securitization debt	$	1,345,452	$	1,339,232	$	2,099,060	$	2,087,346	$	1,883,465	$	1,853,382

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Fair Value Measurements (Tables)

6 Months Ended

Jul. 01, 2012

Summary Of Assets And Liabilities Measured At Fair Value On A Recurring Basis

The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis (in thousands):

	July 1, 2012
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
	Balance as of		Identical Assets		Inputs		Inputs
	July 1, 2012		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents	$	764,147	$	764,147	$	—	$	—
Marketable securities		135,848		—		135,848		—
Derivatives		8,879		—		8,879		—
	$	908,874	$	764,147	$	144,727	$	—
Liabilities:
Derivatives	$	2,042	$	—	$	2,042	$	—

	December 31, 2011
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
	Balance as of		Identical Assets		Inputs		Inputs
	December 31, 2011		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents	$	1,302,367	$	1,302,367	$	—	$	—
Marketable securities		153,380		—		153,380		—
Derivatives		16,443		—		16,443		—
	$	1,472,190	$	1,302,367	$	169,823	$	—
Liabilities:
Derivatives	$	5,136	$	—	$	5,136	$	—
	June 26, 2011
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
	Balance as of		Identical Assets		Inputs		Inputs
	June 26, 2011		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents	$	582,808	$	582,808	$	—	$	—
Marketable securities		244,555		49,999		194,556		—
Derivatives		—		—		—		—
	$	827,363	$	632,807	$	194,556	$	—
Liabilities:
Derivatives	$	14,933	$	—	$	14,933	$	—

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Fair Value Of Financial Instruments (Summary Of Fair Value And Carrying Value Of Company Financial Instruments) (Detail) (USD $) In Thousands, unless otherwise specified	Jul. 01, 2012	Dec. 31, 2011	Jun. 26, 2011	Dec. 31, 2010
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	$ 1,071,496	$ 1,526,950	$ 973,478	$ 1,021,933
Marketable securities	135,848	153,380	244,555
Accounts receivable, net	250,268	219,039	265,663
Restricted cash held by variable interest entities	188,564	229,655	244,060
Derivatives	2,042	5,136	14,933
Fair Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	1,071,496	1,526,950	973,478
Marketable securities	135,848	153,380	244,555
Accounts receivable, net	250,268	219,039	265,663
Derivatives	8,879	16,443
Finance receivables, net	6,099,619	5,888,040	6,052,156
Restricted cash held by variable interest entities	188,564	229,655	244,060
Accounts payable	252,239	255,713	277,395
Derivatives	2,042	5,136	14,933
Unsecured commercial paper	845,868	874,286	735,737
Credit facilities	143,792	159,794	201,112
Medium-term notes	2,967,112	2,561,458	2,555,926
Senior unsecured notes	360,791	376,513	391,051
Term asset-backed securitization debt	1,345,452	2,099,060	1,883,465
Carrying Value [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents	1,071,496	1,526,950	973,478
Marketable securities	135,848	153,380	244,555
Accounts receivable, net	250,268	219,039	265,663
Derivatives	8,879	16,443
Finance receivables, net	6,016,569	5,786,681	5,963,440
Restricted cash held by variable interest entities	188,564	229,655	244,060
Accounts payable	252,239	255,713	277,395
Derivatives	2,042	5,136	14,933
Unsecured commercial paper	845,868	874,286	735,737
Credit facilities	143,792	159,794	201,112
Medium-term notes	2,698,359	2,298,193	2,347,750
Senior unsecured notes	303,000	303,000	303,000
Term asset-backed securitization debt	$ 1,339,232	$ 2,087,346	$ 1,853,382

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Restructuring Expense (Summary Of Restructuring Plan Reserve Activity Related To 2009 Plan) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended			6 Months Ended
	Jul. 01, 2012	Dec. 31, 2011	Jun. 26, 2011	Jul. 01, 2012	Jun. 26, 2011
Restructuring Cost and Reserve [Line Items]
Restructuring expense	$ 6,220		$ 13,594	$ 17,671	$ 36,593
Noncash reserve release		43,500
2009 Restructuring Plan [Member]
Restructuring Cost and Reserve [Line Items]
Balance, beginning of period				10,089	26,582
Restructuring expense				11,219	22,780
Utilized-cash				(12,766)	(28,500)
Utilized-noncash					253
Noncash reserve release				(2,027)
Balance, end of period	6,515		21,115	6,515	21,115
2009 Restructuring Plan [Member] | Motorcycles And Related Products [Member] | Employee Serverance And Termination Costs [Member]
Restructuring Cost and Reserve [Line Items]
Balance, beginning of period				10,089	23,818
Restructuring expense				331	3,504
Utilized-cash				(1,878)	(8,159)
Noncash reserve release				(2,027)
Balance, end of period	6,515		19,163	6,515	19,163
2009 Restructuring Plan [Member] | Motorcycles And Related Products [Member] | Other [Member]
Restructuring Cost and Reserve [Line Items]
Balance, beginning of period					2,764
Restructuring expense				10,888	19,276
Utilized-cash				(10,888)	(20,341)
Utilized-noncash					253
Balance, end of period			$ 1,952		$ 1,952

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Derivative Instruments and Hedging Activities (Tables)

6 Months Ended

Jul. 01, 2012

Derivative Instrument Fair Value

The following table summarizes the fair value of the Company’s derivative financial instruments (in thousands):

	July 1, 2012						December 31, 2011						June 26, 2011
Derivatives Designated As Hedging Instruments Under ASC Topic 815	Notional Value		Asset Fair  Value(a)		Liability Fair  Value(b)		Notional Value		Asset Fair Value(a)		Liability Fair  Value(b)		Notional Value		Asset Fair  Value(a)		Liability Fair  Value(b)
Foreign currency contracts(c)	$	244,221	$	8,879	$	1,027	$	306,450	$	16,443	$	1,852	$	272,637	$	—	$	9,691
Natural gas contracts(c)		1,066		—		33		3,915		—		265		2,915		—		86
Interest rate swaps—unsecured commercial paper(c)		41,600		—		982		102,100		—		3,020		117,500		—		5,156
Total	$	286,887	$	8,879	$	2,042	$	412,465	$	16,443	$	5,137	$	393,052	$	—	$	14,933
	July 1, 2012						December 31, 2011						June 26, 2011
Derivatives Not Designated As Hedging Instruments Under ASC Topic 815	Notional Value		Asset Fair  Value(a)		Liability Fair  Value(b)		Notional Value		Asset Fair  Value(a)		Liability Fair  Value(b)		Notional Value		Asset Fair  Value(a)		Liability Fair  Value(b)
Disel fuel contracts	$	4,346	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
	$	4,346	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(a) Included in other current assets

(b) Included in accrued liabilities

(c) Derivative designated as a cash flow hedge

Gain (Loss) On Derivative Cash Flow Hedges Recognized In OCI

The following tables summarize the amount of gains and losses related to derivative financial instruments designated as cash flow hedges (in thousands):

	Amount of Gain/(Loss) Recognized in OCI
	Three months ended						Six months ended
Cash Flow Hedges	July 1, 2012			June 26, 2011			July 1, 2012			June 26, 2011
Foreign currency contracts	$	10,309		$	(6,760	)	$	4,095		$	(16,921	)
Natural gas contracts		(109	)		(227	)		(424	)		(264	)
Interest rate swaps—unsecured commercial paper		(9	)		(397	)		(24	)		(405	)
Total	$	10,191		$	(7,384	)	$	3,647		$	(17,590	)

Gain (Loss) On Derivative Cash Flow Hedges Reclassified From AOCI Into Income

	Amount of Gain/(Loss) Reclassified from AOCI into Income
	Three months ended						Six months ended						Expected to be Reclassified
Cash Flow Hedges	July 1, 2012			June 26, 2011			July 1, 2012			June 26, 2011			Over the Next Twelve Months
Foreign currency contracts(a)	$	9,683		$	(14,781	)	$	12,104		$	(20,788	)	$	(5,162	)
Natural gas contracts(a)		(337	)		(166	)		(656	)		(424	)		33
Interest rate swaps—unsecured commercial paper(b)		(968	)		(1,336	)		(1,935	)		(2,686	)		(986	)
Total	$	8,378		$	(16,283	)	$	9,513		$	(23,898	)	$	(6,115	)

(a) Gain/(loss) reclassified from accumulated other comprehensive income (AOCI) to income is included in cost of goods sold.

(b) Gain/(loss) reclassified from AOCI to income is included in financial services interest expense.

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Product Warranty and Safety Recall Campaigns (Tables)

6 Months Ended

Jul. 01, 2012

Warranty And Safety Recall Liability

Changes in the Company’s warranty and safety recall liability were as follows (in thousands):

	Three months ended						Six months ended
	July 1,			June 26,			July 1,			June 26,
	2012			2011			2012			2011
Balance, beginning of period	$	57,102		$	57,111		$	54,994		$	54,134
Warranties issued during the period		17,127			12,335			32,618			23,560
Settlements made during the period		(18,549	)		(12,570	)		(33,086	)		(22,866	)
Recalls and changes to pre-existing warranty liabilities		12,121			(1,469	)		13,275			579
Balance, end of period	$	67,801		$	55,407		$	67,801		$	55,407

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Additional Balance Sheet and Cash Flow Information

6 Months Ended

Jul. 01, 2012

Additional Balance Sheet and Cash Flow Information

3. Additional Balance Sheet and Cash Flow Information

Marketable Securities

The Company’s marketable securities consisted of the following (in thousands):

	July 1,		December 31,		June 26,
	2012		2011		2011
Available-for-sale:
Corporate bonds	$	135,848	$	153,380	$	194,556
U.S. Treasuries		—		—		49,999
	$	135,848	$	153,380	$	244,555

The Company’s available-for-sale securities are carried at fair value with any unrealized gains or losses reported in other comprehensive income. During the first half of 2012 and 2011, the Company recognized gross unrealized gains in other comprehensive income of $0.5 million and $1.7 million, respectively, or $0.3 million and $1.1 million net of taxes, respectively, to adjust amortized cost to fair value. The marketable securities have contractual maturities that generally come due over the next 12 to 48 months.

Inventories

Inventories are valued at the lower of cost or market. Substantially all inventories located in the United States are valued using the last-in, first-out (LIFO) method. Other inventories are valued at the lower of cost or market using the first-in, first-out (FIFO) method. Inventories consist of the following (in thousands):

	July 1,			December 31,			June 26,
	2012			2011			2011
Components at the lower of FIFO cost or market
Raw materials and work in process	$	116,166		$	113,932		$	108,518
Motorcycle finished goods		120,199			226,261			147,787
Parts and accessories and general merchandise		131,040			121,340			115,202
Inventory at lower of FIFO cost or market		367,405			461,533			371,507
Excess of FIFO over LIFO cost		(44,359	)		(43,527	)		(34,035	)
	$	323,046		$	418,006		$	337,472

Operating Cash Flow

The reconciliation of net income to net cash provided by operating activities is as follows (in thousands):

	Six months ended
	July 1,			June 26,
	2012			2011
Cash flows from operating activities:
Net income	$	419,285		$	309,840
Loss from discontinued operations		—			—
Income from continuing operations		419,285			309,840
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Depreciation		85,997			89,543
Amortization of deferred loan origination costs		38,075			39,054
Amortization of financing origination fees		5,021			5,833
Provision for employee long-term benefits		34,263			34,456
Contributions to pension and postretirement plans		(213,648	)		(205,498	)
Stock compensation expense		22,119			20,537
Net change in wholesale finance receivables related to sales		(124,919	)		11,909
Provision for credit losses		3,754			(1,184	)
Pension and postretirement healthcare plan curtailment and settlement expense		—			236
Foreign currency adjustments		8,143			(2,813	)
Other, net		5,567			27,226
Changes in current assets and liabilities:
Accounts receivable, net		(34,977	)		8,301
Finance receivables—accrued interest and other		2,912			5,553
Inventories		89,162			(530	)
Accounts payable and accrued liabilities		(12,286	)		133,838
Restructuring reserves		(9,915	)		3,195
Derivative instruments		(1,420	)		1,195
Other		(28,891	)		(7,729	)
Total adjustments		(131,043	)		163,122
Net cash provided by operating activities of continuing operations	$	288,242		$	472,962

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Earnings Per Share (Tables)

6 Months Ended

Jul. 01, 2012

Reconciliation Of Earnings Per Share Basic And Diluted

The following table sets forth the computation for basic and diluted earnings per share from continuing operations (in thousands, except per share amounts):

	Three months ended				Six months ended
	July 1,		June 26,		July 1,		June 26,
	2012		2011		2012		2011
Numerator:
Income from continuing operations used in computing basic and diluted earnings per share	$	247,250	$	190,580	$	419,285	$	309,840
Denominator:
Denominator for basic earnings per share- weighted-average common shares		228,838		234,336		228,914		234,086
Effect of dilutive securities—employee stock compensation plan		2,085		1,832		2,190		1,958
Denominator for diluted earnings per share- adjusted weighted-average shares outstanding		230,923		236,168		231,104		236,044
Earnings per common share from continuing operations:
Basic	$	1.08	$	0.81	$	1.83	$	1.32
Diluted	$	1.07	$	0.81	$	1.81	$	1.31

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Discontinued Operations (Detail)	3 Months Ended	6 Months Ended		12 Months Ended
	Dec. 31, 2011 USD ($)	Jul. 01, 2012 USD ($)	Jun. 26, 2011 USD ($)	Dec. 31, 2010 USD ($)	Dec. 31, 2009 USD ($)	Aug. 06, 2010 EUR (€)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Pre-tax impairment charges					$ 115,400,000
Net tax benefit, related to losses estimated in connection with sale					40,000,000
Total tax benefit associated with losses on sale				101,000,000	66,000,000
Uncertain tax benefit reserved against losses estimated in connection with sale of MV				43,500,000	26,000,000
Impairment charges included in operating loss				111,800,000
Additional tax benefits on impairment charges				18,000,000
Advances to affiliate						20,000,000
Cumulative net tax benefit				57,500,000
Tax benefit by reversing reserve	43,500,000
Incremental tax benefit	$ 7,500,000	$ (9,915,000)	$ 3,195,000

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Asset-Backed Financing (Narrative) (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jul. 01, 2012	Dec. 31, 2011	Jun. 26, 2011
Variable Interest Entity [Line Items]
Secured notes issued	$ 89.5
Unaccreted premium	1.8
Total aggregate commitment	675.3
SPEs [Member]
Variable Interest Entity [Line Items]
Secured notes' contractual maturity period, start	Jan. 01, 2012
Secured notes' contractual maturity period, end	Dec. 31, 2018
SPEs Facility [Member] | Commercial Paper [Member]
Variable Interest Entity [Line Items]
Asset-backed securities expiration date	2012-09-07
Total aggregate commitment	600.0
Borrowings outstanding under conduit facility	$ 0	$ 0	$ 0

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Subsequent Event (Detail) (USD $) In Millions, unless otherwise specified	Jul. 01, 2012
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity	$ 675.3

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jul. 01, 2012	Jun. 26, 2011	Jul. 01, 2012	Jun. 26, 2011
Revenue:
Motorcycles and related products	$ 1,569,047	$ 1,339,744	$ 2,842,416	$ 2,402,788
Financial services	160,613	165,853	316,935	327,739
Total revenue	1,729,660	1,505,597	3,159,351	2,730,527
Costs and expenses:
Motorcycles and related products cost of goods sold	1,005,230	871,476	1,822,089	1,582,654
Financial services interest expense	48,712	56,991	99,968	115,026
Financial services provision for credit losses	(5,259)	(6,790)	3,754	(1,184)
Selling, administrative and engineering expense	283,244	268,424	548,898	502,539
Restructuring expense	6,220	13,594	17,671	36,593
Total costs and expenses	1,338,147	1,203,695	2,492,380	2,235,628
Operating income	391,513	301,902	666,971	494,899
Investment income	2,231	1,748	4,164	3,146
Interest expense	11,595	11,350	23,090	22,831
Income before provision for income taxes	382,149	292,300	648,045	475,214
Provision for income taxes	134,899	101,720	228,760	165,374
Income from continuing operations	247,250	190,580	419,285	309,840
Income from discontinued operations, net of tax
Net income	$ 247,250	$ 190,580	$ 419,285	$ 309,840
Earnings per common share from continuing operations:
Basic	$ 1.08	$ 0.81	$ 1.83	$ 1.32
Diluted	$ 1.07	$ 0.81	$ 1.81	$ 1.31
Earnings per common share from discontinued operations:
Basic
Diluted
Earnings per common share:
Basic	$ 1.08	$ 0.81	$ 1.83	$ 1.32
Diluted	$ 1.07	$ 0.81	$ 1.81	$ 1.31
Cash dividends per common share	$ 0.155	$ 0.125	$ 0.310	$ 0.225

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Finance Receivables (Finance Receivables) (Detail) (USD $) In Thousands, unless otherwise specified	Jul. 01, 2012	Dec. 31, 2011	Jun. 26, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables, gross	$ 5,225,779	$ 5,087,490	$ 5,374,055
Finance receivables, gross	905,038	824,640	733,789
Finance receivables, gross	6,130,817	5,912,130	6,107,844
Allowance for credit losses	(114,248)	(125,449)	(144,404)
Finance receivables, net	6,016,569	5,786,681	5,963,440
Retail [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables, gross	5,225,779	5,087,490	5,374,055
Wholesale [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables, gross	$ 905,038	$ 824,640	$ 733,789

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Basis Of Presentation And Use Of Estimates

6 Months Ended

Jul. 01, 2012

Basis Of Presentation And Use Of Estimates

1. Basis of Presentation and Use of Estimates

The condensed consolidated financial statements include the accounts of Harley-Davidson, Inc. and its wholly-owned subsidiaries (the Company), including the accounts of the group of companies doing business as Harley-Davidson Motor Company (HDMC) and Harley-Davidson Financial Services (HDFS). In addition, certain variable interest entities (VIEs) related to secured financing are consolidated as the Company is the primary beneficiary. All intercompany accounts and material intercompany transactions are eliminated.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting only of normal recurring adjustments) necessary to present fairly the condensed consolidated balance sheets as of July 1, 2012 and June 26, 2011, the condensed consolidated statements of operations for the three and six month periods then ended, the condensed consolidated statements of comprehensive income for the three and six month periods then ended and the condensed consolidated statements of cash flows for the six month periods then ended.

Certain information and footnote disclosures normally included in complete financial statements have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and U.S. generally accepted accounting principles (U.S. GAAP) for interim financial reporting. These condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

The Company operates in two business segments: Motorcycles & Related Products (Motorcycles) and Financial Services (Financial Services).

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates.

During 2008, the Company acquired Italian motorcycle manufacturer MV Agusta (MV). On October 15, 2009, the Company announced its intent to divest MV, and the Company completed the sale on August 6, 2010. MV is presented as a discontinued operation for all periods.

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Derivative Instruments And Hedging Activities (Gain Loss On Derivative Cash Flow Hedges Reclassified From AOCI Into Income) (Detail) (Cash Flow Hedging [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended				6 Months Ended
	Jul. 01, 2012		Jun. 26, 2011		Jul. 01, 2012		Jun. 26, 2011
Derivative Instruments And Hedging Activities [Line Items]
Amount of Gain/(Loss) Reclassified from AOCI into Income	$ 8,378		$ (16,283)		$ 9,513		$ (23,898)
Expected to be Reclassified Over the Next Twelve Months					(6,115)
Interest Rate Swaps Unsecured Commercial Paper [Member]
Derivative Instruments And Hedging Activities [Line Items]
Amount of (Loss) Reclassified from AOCI into Income	(968)	[1]	(1,336)	[1]	(1,935)	[1]	(2,686)	[1]
Expected to be Reclassified Over the Next Twelve Months					(986)	[1]
Foreign Currency Contracts [Member]
Derivative Instruments And Hedging Activities [Line Items]
Amount of Gain Reclassified from AOCI into Income	9,683	[2]	(14,781)	[2]	12,104	[2]	(20,788)	[2]
Expected to be Reclassified Over the Next Twelve Months					(5,162)	[2]
Natural Gas Contracts [Member]
Derivative Instruments And Hedging Activities [Line Items]
Amount of (Loss) Reclassified from AOCI into Income	(337)	[2]	(166)	[2]	(656)	[2]	(424)	[2]
Expected to be Reclassified Over the Next Twelve Months					$ 33	[2]

[1] Gain/(loss) reclassified from AOCI to income is included in financial services interest expense.

[2] Gain/(loss) reclassified from accumulated other comprehensive income (AOCI) to income is included in cost of goods sold.

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Supplemental Consolidating Data (Tables)

6 Months Ended

Jul. 01, 2012

Operations

All supplemental data is presented in thousands.

	Three months ended July 1, 2012
	Motorcycles & Related		Financial
	Products Operations		Services Operations			Eliminations			Consolidated
Revenue:
Motorcycles and related products	$	1,572,003	$	—		$	(2,956	)	$	1,569,047
Financial services		—		160,843			(230	)		160,613
Total revenue		1,572,003		160,843			(3,186	)		1,729,660
Costs and expenses:
Motorcycles and related products cost of goods sold		1,005,230		—			—			1,005,230
Financial services interest expense		—		48,712			—			48,712
Financial services provision for credit losses		—		(5,259	)		—			(5,259	)
Selling, administrative and engineering expense		248,268		38,162			(3,186	)		283,244
Restructuring expense		6,220		—			—			6,220
Total costs and expenses		1,259,718		81,615			(3,186	)		1,338,147
Operating income		312,285		79,228			—			391,513
Investment income		2,231		—			—			2,231
Interest expense		11,595		—			—			11,595
Income before provision for income taxes		302,921		79,228			—			382,149
Provision for income taxes		106,377		28,522			—			134,899
Income from continuing operations		196,544		50,706			—			247,250
Loss from discontinued operations, net of tax		—		—			—			—
Net income	$	196,544	$	50,706		$	—		$	247,250
	Six months ended July 1, 2012
	Motorcycles & Related		Financial
	Products Operations		Services Operations			Eliminations			Consolidated
Revenue:
Motorcycles and related products	$	2,847,786	$	—		$	(5,370	)	$	2,842,416
Financial services		—		316,749			186			316,935
Total revenue		2,847,786		316,749			(5,184	)		3,159,351
Costs and expenses:
Motorcycles and related products cost of goods sold		1,822,089		—			—			1,822,089
Financial services interest expense		—		99,968			—			99,968
Financial services provision for credit losses		—		3,754			—			3,754
Selling, administrative and engineering expense		484,847		69,235			(5,184	)		548,898
Restructuring expense		17,671		—			—			17,671
Total costs and expenses		2,324,607		172,957			(5,184	)		2,492,380
Operating income		523,179		143,792			—			666,971
Investment income		229,164		—			(225,000	)		4,164
Interest expense		23,090		—			—			23,090
Income before provision for income taxes		729,253		143,792			(225,000	)		648,045
Provision for income taxes		176,995		51,765			—			228,760
Income from continuing operations		552,258		92,027			(225,000	)		419,285
Loss from discontinued operations, net of tax		—		—			—			—
Net income	$	552,258	$	92,027		$	(225,000	)	$	419,285

	Three months ended June 26, 2011
	Motorcycles & Related		Financial
	Products Operations		Services Operations			Eliminations			Consolidated
Revenue:
Motorcycles and related products	$	1,342,803	$	—		$	(3,059	)	$	1,339,744
Financial services		—		166,518			(665	)		165,853
Total revenue		1,342,803		166,518			(3,724	)		1,505,597
Costs and expenses:
Motorcycles and related products cost of goods sold		871,476		—			—			871,476
Financial services interest expense		—		56,991			—			56,991
Financial services provision for credit losses		—		(6,790	)		—			(6,790	)
Selling, administrative and engineering expense		235,492		36,656			(3,724	)		268,424
Restructuring expense		13,594		—			—			13,594
Total costs and expenses		1,120,562		86,857			(3,724	)		1,203,695
Operating income		222,241		79,661			—			301,902
Investment income		1,748		—			—			1,748
Interest expense		11,350		—			—			11,350
Income before provision for income taxes		212,639		79,661			—			292,300
Provision for income taxes		73,042		28,678			—			101,720
Income from continuing operations		139,597		50,983			—			190,580
Loss from discontinued operations, net of tax		—		—			—			—
Net income	$	139,597	$	50,983		$	—		$	190,580
	Six months ended June 26, 2011
	Motorcycles & Related		Financial
	Products Operations		Services Operations			Eliminations			Consolidated
Revenue:
Motorcycles and related products	$	2,408,293	$	—		$	(5,505	)	$	2,402,788
Financial services		—		328,270			(531	)		327,739
Total revenue		2,408,293		328,270			(6,036	)		2,730,527
Costs and expenses:
Motorcycles and related products cost of goods sold		1,582,654		—			—			1,582,654
Financial services interest expense		—		115,026			—			115,026
Financial services provision for credit losses		—		(1,184	)		—			(1,184	)
Selling, administrative and engineering expense		439,163		69,412			(6,036	)		502,539
Restructuring expense		36,593		—			—			36,593
Total costs and expenses		2,058,410		183,254			(6,036	)		2,235,628
Operating income		349,883		145,016			—			494,899
Investment income		128,146		—			(125,000	)		3,146
Interest expense		22,831		—			—			22,831
Income before provision for income taxes		455,198		145,016			(125,000	)		475,214
Provision for income taxes		113,168		52,206			—			165,374
Income from continuing operations		342,030		92,810			(125,000	)		309,840
Loss from discontinued operations, net of tax		—		—			—			—
Net income	$	342,030	$	92,810		$	(125,000	)	$	309,840

Balance Sheet

	July 1, 2012
	Motorcycles & Related Products Operations		Financial Services Operations		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	725,909	$	345,587	$	—		$	1,071,496
Marketable securities		135,848		—		—			135,848
Accounts receivable, net		885,797		—		(635,529	)		250,268
Finance receivables, net		—		1,398,553		—			1,398,553
Restricted finance receivables held by variable interest entities, net		—		456,285		—			456,285
Inventories		323,046		—		—			323,046
Restricted cash held by variable interest entities		—		188,564		—			188,564
Other current assets		182,464		63,343		—			245,807
Total current assets		2,253,064		2,452,332		(635,529	)		4,069,867
Finance receivables, net		—		2,569,187		—			2,569,187
Restricted finance receivables held by variable interest entities, net		—		1,592,544		—			1,592,544
Property, plant and equipment, net		747,133		29,660		—			776,793
Goodwill		28,604		—		—			28,604
Other long-term assets		335,811		17,956		(73,978	)		279,789
	$	3,364,612	$	6,661,679	$	(709,507	)	$	9,316,784
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	197,891	$	689,877	$	(635,529	)	$	252,239
Accrued liabilities		466,808		71,756		(3,467	)		535,097
Short-term debt		—		845,868		—			845,868
Current portion of long-term debt		—		399,962					399,962
Current portion of long-term debt held by variable interest entities		—		507,427		—			507,427
Total current liabilities		664,699		2,514,890		(638,996	)		2,540,593
Long-term debt		303,000		2,442,189		—			2,745,189
Long-term debt held by variable interest entities		—		831,805		—			831,805
Pension liability		122,496		—		—			122,496
Postretirement healthcare benefits		263,295		—		—			263,295
Other long-term liabilities		131,754		15,265		—			147,019
Commitments and contingencies (Note 17)
Total shareholders’ equity		1,879,368		857,530		(70,511	)		2,666,387
	$	3,364,612	$	6,661,679	$	(709,507	)	$	9,316,784

	December 31, 2011
	Motorcycles & Related		Financial
	Products Operations		Services Operations		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	943,330	$	583,620	$	—		$	1,526,950
Marketable securities		153,380		—		—			153,380
Accounts receivable, net		393,615		—		(174,576	)		219,039
Finance receivables, net		—		1,168,603		—			1,168,603
Restricted finance receivables held by variable interest entities, net		—		591,864		—			591,864
Inventories		418,006		—		—			418,006
Restricted cash held by variable interest entities		—		229,655		—			229,655
Other current assets		167,423		67,286		—			234,709
Total current assets		2,075,754		2,641,028		(174,576	)		4,542,206
Finance receivables, net		—		1,754,441		—			1,754,441
Restricted finance receivables held by variable interest entities, net		—		2,271,773		—			2,271,773
Property, plant and equipment, net		779,330		30,129		—			809,459
Goodwill		29,081		—		—			29,081
Other long-term assets		322,379		17,460		(72,635	)		267,204
	$	3,206,544	$	6,714,831	$	(247,211	)	$	9,674,164
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	220,957	$	209,332	$	(174,576	)	$	255,713
Accrued liabilities		482,838		85,038		(3,704	)		564,172
Short-term debt		—		838,486		—			838,486
Current portion of long-term debt		—		399,916					399,916
Current portion of long-term debt held by variable interest entities		—		640,331		—			640,331
Total current liabilities		703,795		2,173,103		(178,280	)		2,698,618
Long-term debt		303,000		2,093,871		—			2,396,871
Long-term debt held by variable interest entities		—		1,447,015		—			1,447,015
Pension liability		302,483		—		—			302,483
Postretirement healthcare benefits		268,582		—		—			268,582
Other long-term liabilities		126,036		14,303		—			140,339
Commitments and contingencies (Note 17)
Total shareholders’ equity		1,502,648		986,539		(68,931	)		2,420,256
	$	3,206,544	$	6,714,831	$	(247,211	)	$	9,674,164

	June 26, 2011
	Motorcycles & Related		Financial
	Products Operations		Services Operations		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	681,804	$	291,674	$	—		$	973,478
Marketable securities		244,555		—		—			244,555
Accounts receivable, net		710,791		—		(445,128	)		265,663
Finance receivables, net		—		1,144,886		—			1,144,886
Restricted finance receivables held by variable interest entities, net		—		573,208		—			573,208
Inventories		337,472		—		—			337,472
Restricted cash held by variable interest entities		—		244,060		—			244,060
Other current assets		160,059		57,597		—			217,656
Total current assets		2,134,681		2,311,425		(445,128	)		4,000,978
Finance receivables, net		—		2,306,165		—			2,306,165
Restricted finance receivables held by variable interest entities, net		—		1,939,181		—			1,939,181
Property, plant and equipment, net		758,828		30,115		—			788,943
Goodwill		31,156		—		—			31,156
Other long-term assets		339,666		26,711		(70,821	)		295,556
	$	3,264,331	$	6,613,597	$	(515,949	)	$	9,361,979
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	243,954	$	478,569	$	(445,128	)	$	277,395
Accrued liabilities		522,533		70,880		(3,317	)		590,096
Short-term debt		—		694,137		—			694,137
Current portion of long-term debt held by variable interest entities		—		635,604		—			635,604
Total current liabilities		766,487		1,879,190		(448,445	)		2,197,232
Long-term debt		303,000		2,590,462		—			2,893,462
Long-term debt held by variable interest entities		—		1,217,778		—			1,217,778
Pension liability		103,511		—		—			103,511
Postretirement healthcare liability		258,881		—		—			258,881
Other long-term liabilities		146,286		13,433		—			159,719
Commitments and contingencies (Note 17)
Total shareholders’ equity		1,686,166		912,734		(67,504	)		2,531,396
	$	3,264,331	$	6,613,597	$	(515,949	)	$	9,361,979

Cash Flows

	Six months ended July 1, 2012
	Motorcycles & Related			Financial			Eliminations &
	Products Operations			Services Operations			Adjustments			Consolidated
Cash flows from operating activities:
Income from continuing operations	$	552,258			92,027		$	(225,000	)	$	419,285
Adjustments to reconcile income from continuing operations to cash provided by operating activities:
Depreciation		82,954			3,043			—			85,997
Amortization of deferred loan origination costs		—			38,075			—			38,075
Amortization of financing origination fees		237			4,784			—			5,021
Provision for employee long-term benefits		33,236			1,027			—			34,263
Contributions to pension and postretirement plans		(213,648	)		—			—			(213,648	)
Stock compensation expense		20,539			1,580			—			22,119
Net change in wholesale finance receivables		—			—			(124,919	)		(124,919	)
Provision for credit losses		—			3,754			—			3,754
Pension and postretirement healthcare plan curtailment and settlement expense		—			—			—			—
Foreign currency adjustments		8,143			—			—			8,143
Other, net		1,275			4,292			—			5,567
Change in current assets and current liabilities:
Accounts receivable		(295,930	)		—			260,953			(34,977	)
Finance receivables—accrued interest and other		—			2,912			—			2,912
Inventories		89,162			—			—			89,162
Accounts payable and accrued liabilities		(22,227	)		270,894			(260,953	)		(12,286	)
Restructuring reserves		(9,915	)		—			—			(9,915	)
Derivative instruments		(1,293	)		(127	)		—			(1,420	)
Other		(25,286	)		(3,605	)		—			(28,891	)
Total adjustments		(332,753	)		326,629			(124,919	)		(131,043	)
Net cash provided by operating activities of continuing operations		219,505			418,656			(349,919	)		288,242
Cash flows from investing activities of continuing operations:
Capital expenditures		(57,504	)		(2,574	)		—			(60,078	)
Origination of finance receivables		—			(3,766,621	)		2,183,049			(1,583,572	)
Collections of finance receivables		—			3,493,920			(2,058,130	)		1,435,790
Sales and redemptions of marketable securities		18,053			—			—			18,053
Net cash (used by) provided by investing activities of continuing operations		(39,451	)		(275,275	)		124,919			(189,807	)
Cash flows from financing activities of continuing operations:
Proceeds from issuance of medium-term notes		—			397,373			—			397,373
Loan to HDFS		(200,000	)		200,000			—			—
Proceeds from securitization of debt		—			91,030			—			91,030
Repayments of securitization debt		—			(839,401	)		—			(839,401	)
Net decrease in credit facilities and unsecured commercial paper		—			(46,629	)		—			(46,629	)
Net change in restricted cash		—			41,091			—			41,091
Dividends paid		(71,645	)		(225,000	)		225,000			(71,645	)
Purchase of common stock for treasury		(172,742	)		—			—			(172,742	)
Excess tax benefits from share based payments		15,730			—			—			15,730
Issuance of common stock under employee stock option plans		35,337			—			—			35,337
Net cash used by financing activities of continuing operations		(393,320	)		(381,536	)		225,000			(549,856	)
Effect of exchange rate changes on cash and cash equivalents of continuing operations		(4,155	)		122			—			(4,033	)
Net (decrease) increase in cash and cash equivalents of continuing operations		(217,421	)		(238,033	)		—			(455,454	)
Cash flows from discontinued operations:
Cash flows from operating activities of discontinued operations		—			—			—			—
Cash flows from investing activities of discontinued operations		—			—			—			—
Effect of exchange rate changes on cash and cash equivalents of discontinued operations		—			—			—			—
		—			—			—			—
Net (decrease) increase in cash and cash equivalents	$	(217,421	)	$	(238,033	)	$	—		$	(455,454	)
Cash and cash equivalents:
Cash and cash equivalents—beginning of period	$	943,330		$	583,620		$	—		$	1,526,950
Cash and cash equivalents of discontinued operations—beginning of period		—			—			—			—
Net (decrease) increase in cash and cash equivalents		(217,421	)		(238,033	)		—			(455,454	)
Less: Cash and cash equivalents of discontinued operations—end of period		—			—			—			—
Cash and cash equivalents—end of period	$	725,909		$	345,587		$	—		$	1,071,496

	Six months ended June 26, 2011
	Motorcycles & Related			Financial			Eliminations &
	Products Operations			Services Operations			Adjustments			Consolidated
Cash flows from operating activities:
Net income	$	342,030		$	92,810		$	(125,000	)	$	309,840
Loss from discontinued operations		—			—			—			—
Income from continuing operations		342,030			92,810			(125,000	)		309,840
Adjustments to reconcile income from continuing operations to cash provided by operating activities:
Depreciation		86,375			3,168			—			89,543
Amortization of deferred loan origination costs		—			39,054			—			39,054
Amortization of financing origination fees		237			5,596			—			5,833
Provision for employee long-term benefits		33,018			1,438			—			34,456
Contributions to pension and postretirement plans		(205,498	)		—			—			(205,498	)
Stock compensation expense		19,176			1,361			—			20,537
Net change in wholesale finance receivables		—			—			11,909			11,909
Provision for credit losses		—			(1,184	)		—			(1,184	)
Pension and postretirement healthcare plan curtailment and settlement expense		236			—			—			236
Foreign currency adjustments		(2,813	)		—			—			(2,813	)
Other, net		5,337			21,889			—			27,226
Change in current assets and current liabilities:
Accounts receivable		(44,899	)		—			53,200			8,301
Finance receivables—accrued interest and other		—			5,553			—			5,553
Inventories		(530	)		—			—			(530	)
Accounts payable and accrued liabilities		79,110			60,426			(5,698	)		133,838
Restructuring reserves		3,195			—			—			3,195
Derivative instruments		1,188			7			—			1,195
Other		(4,729	)		44,575			(47,575	)		(7,729	)
Total adjustments		(30,597	)		181,883			11,836			163,122
Net cash provided by (used by) operating activities of continuing operations		311,433			274,693			(113,164	)		472,962
Cash flows from investing activities of continuing operations:
Capital expenditures		(65,956	)		(3,311	)		—			(69,267	)
Origination of finance receivables		—			(3,264,370	)		1,829,763			(1,434,607	)
Collections of finance receivables		—			3,258,282			(1,841,672	)		1,416,610
Purchases of marketable securities		(142,653	)		—			—			(142,653	)
Sales and redemptions of marketable securities		39,966			—			—			39,966
Net cash (used by) provided by investing activities of continuing operations		(168,643	)		(9,399	)		(11,909	)		(189,951	)
Cash flows from financing activities of continuing operations:
Proceeds from issuance of medium-term notes		—			447,076			—			447,076
Loan to HDFS		(200,000	)		200,000			—			—
Repayments of securitization debt		—			(901,851	)		—			(901,851	)
Net decrease in credit facilities and unsecured commercial paper		—			131,039			—			131,039
Net change in restricted cash		—			44,827			—			44,827
Dividends paid		(53,152	)		(125,000	)		125,000			(53,152	)
Purchase of common stock for treasury		(5,678	)		—			—			(5,678	)
Excess tax benefits from share based payments		3,476			—			—			3,476
Issuance of common stock under employee stock option plans		4,534			—			—			4,534
Net cash (used by) provided by financing activities of continuing operations		(250,820	)		(203,909	)		125,000			(329,729	)
Effect of exchange rate changes on cash and cash equivalents of continuing operations		(1,922	)		147			73			(1,702	)
Net (decrease) increase in cash and cash equivalents of continuing operations		(109,952	)		61,532			—			(48,420	)
Cash flows from discontinued operations:
Cash flows from operating activities of discontinued operations		(35	)		—			—			(35	)
Cash flows from investing activities of discontinued operations		—			—			—			—
Effect of exchange rate changes on cash and cash equivalents of discontinued operations		—			—			—			—
		(35	)		—			—			(35	)
Net (decrease) increase in cash and cash equivalents	$	(109,987	)	$	61,532		$	—		$	(48,455	)
Cash and cash equivalents:
Cash and cash equivalents—beginning of period	$	791,791		$	230,142		$	—		$	1,021,933
Cash and cash equivalents of discontinued operations—beginning of period		—			—			—			—
Net (decrease) increase in cash and cash equivalents		(109,987	)		61,532			—			(48,455	)
Less: Cash and cash equivalents of discontinued operations—end of period		—			—			—			—
Cash and cash equivalents—end of period	$	681,804		$	291,674		$	—		$	973,478

XML

Employee Benefit Plans (Components Of Net Periodic Benefit Costs) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jul. 01, 2012	Jun. 26, 2011	Jul. 01, 2012	Jun. 26, 2011
Pension And SERPA Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 8,420	$ 9,273	$ 16,840	$ 18,545
Interest cost	20,816	20,147	41,632	40,294
Expected return on plan assets	(29,277)	(26,653)	(58,555)	(53,307)
Prior service cost	740	745	1,479	1,489
Net loss	10,969	7,554	21,937	15,109
Curtailment loss				236
Net periodic benefit cost	11,668	11,066	23,333	22,366
Postretirement Healthcare Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Service cost	1,853	1,907	3,706	3,814
Interest cost	4,578	4,911	9,155	9,822
Expected return on plan assets	(2,356)	(2,346)	(4,712)	(4,692)
Prior service cost	(963)	(969)	(1,927)	(1,938)
Net loss	1,855	1,798	3,711	3,596
Net periodic benefit cost	$ 4,967	$ 5,301	$ 9,933	$ 10,602

XML

Supplemental Consolidating Data

6 Months Ended

Jul. 01, 2012

Supplemental Consolidating Data

17. Supplemental Consolidating Data

The supplemental consolidating data for the periods noted is presented for informational purposes. The supplemental consolidating data may be different than segment information presented elsewhere due to the allocation of intercompany eliminations to reporting segments. All supplemental data is presented in thousands.

	Three months ended July 1, 2012
	Motorcycles & Related		Financial
	Products Operations		Services Operations			Eliminations			Consolidated
Revenue:
Motorcycles and related products	$	1,572,003	$	—		$	(2,956	)	$	1,569,047
Financial services		—		160,843			(230	)		160,613
Total revenue		1,572,003		160,843			(3,186	)		1,729,660
Costs and expenses:
Motorcycles and related products cost of goods sold		1,005,230		—			—			1,005,230
Financial services interest expense		—		48,712			—			48,712
Financial services provision for credit losses		—		(5,259	)		—			(5,259	)
Selling, administrative and engineering expense		248,268		38,162			(3,186	)		283,244
Restructuring expense		6,220		—			—			6,220
Total costs and expenses		1,259,718		81,615			(3,186	)		1,338,147
Operating income		312,285		79,228			—			391,513
Investment income		2,231		—			—			2,231
Interest expense		11,595		—			—			11,595
Income before provision for income taxes		302,921		79,228			—			382,149
Provision for income taxes		106,377		28,522			—			134,899
Income from continuing operations		196,544		50,706			—			247,250
Loss from discontinued operations, net of tax		—		—			—			—
Net income	$	196,544	$	50,706		$	—		$	247,250
	Six months ended July 1, 2012
	Motorcycles & Related		Financial
	Products Operations		Services Operations			Eliminations			Consolidated
Revenue:
Motorcycles and related products	$	2,847,786	$	—		$	(5,370	)	$	2,842,416
Financial services		—		316,749			186			316,935
Total revenue		2,847,786		316,749			(5,184	)		3,159,351
Costs and expenses:
Motorcycles and related products cost of goods sold		1,822,089		—			—			1,822,089
Financial services interest expense		—		99,968			—			99,968
Financial services provision for credit losses		—		3,754			—			3,754
Selling, administrative and engineering expense		484,847		69,235			(5,184	)		548,898
Restructuring expense		17,671		—			—			17,671
Total costs and expenses		2,324,607		172,957			(5,184	)		2,492,380
Operating income		523,179		143,792			—			666,971
Investment income		229,164		—			(225,000	)		4,164
Interest expense		23,090		—			—			23,090
Income before provision for income taxes		729,253		143,792			(225,000	)		648,045
Provision for income taxes		176,995		51,765			—			228,760
Income from continuing operations		552,258		92,027			(225,000	)		419,285
Loss from discontinued operations, net of tax		—		—			—			—
Net income	$	552,258	$	92,027		$	(225,000	)	$	419,285

	Three months ended June 26, 2011
	Motorcycles & Related		Financial
	Products Operations		Services Operations			Eliminations			Consolidated
Revenue:
Motorcycles and related products	$	1,342,803	$	—		$	(3,059	)	$	1,339,744
Financial services		—		166,518			(665	)		165,853
Total revenue		1,342,803		166,518			(3,724	)		1,505,597
Costs and expenses:
Motorcycles and related products cost of goods sold		871,476		—			—			871,476
Financial services interest expense		—		56,991			—			56,991
Financial services provision for credit losses		—		(6,790	)		—			(6,790	)
Selling, administrative and engineering expense		235,492		36,656			(3,724	)		268,424
Restructuring expense		13,594		—			—			13,594
Total costs and expenses		1,120,562		86,857			(3,724	)		1,203,695
Operating income		222,241		79,661			—			301,902
Investment income		1,748		—			—			1,748
Interest expense		11,350		—			—			11,350
Income before provision for income taxes		212,639		79,661			—			292,300
Provision for income taxes		73,042		28,678			—			101,720
Income from continuing operations		139,597		50,983			—			190,580
Loss from discontinued operations, net of tax		—		—			—			—
Net income	$	139,597	$	50,983		$	—		$	190,580
	Six months ended June 26, 2011
	Motorcycles & Related		Financial
	Products Operations		Services Operations			Eliminations			Consolidated
Revenue:
Motorcycles and related products	$	2,408,293	$	—		$	(5,505	)	$	2,402,788
Financial services		—		328,270			(531	)		327,739
Total revenue		2,408,293		328,270			(6,036	)		2,730,527
Costs and expenses:
Motorcycles and related products cost of goods sold		1,582,654		—			—			1,582,654
Financial services interest expense		—		115,026			—			115,026
Financial services provision for credit losses		—		(1,184	)		—			(1,184	)
Selling, administrative and engineering expense		439,163		69,412			(6,036	)		502,539
Restructuring expense		36,593		—			—			36,593
Total costs and expenses		2,058,410		183,254			(6,036	)		2,235,628
Operating income		349,883		145,016			—			494,899
Investment income		128,146		—			(125,000	)		3,146
Interest expense		22,831		—			—			22,831
Income before provision for income taxes		455,198		145,016			(125,000	)		475,214
Provision for income taxes		113,168		52,206			—			165,374
Income from continuing operations		342,030		92,810			(125,000	)		309,840
Loss from discontinued operations, net of tax		—		—			—			—
Net income	$	342,030	$	92,810		$	(125,000	)	$	309,840

	July 1, 2012
	Motorcycles & Related Products Operations		Financial Services Operations		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	725,909	$	345,587	$	—		$	1,071,496
Marketable securities		135,848		—		—			135,848
Accounts receivable, net		885,797		—		(635,529	)		250,268
Finance receivables, net		—		1,398,553		—			1,398,553
Restricted finance receivables held by variable interest entities, net		—		456,285		—			456,285
Inventories		323,046		—		—			323,046
Restricted cash held by variable interest entities		—		188,564		—			188,564
Other current assets		182,464		63,343		—			245,807
Total current assets		2,253,064		2,452,332		(635,529	)		4,069,867
Finance receivables, net		—		2,569,187		—			2,569,187
Restricted finance receivables held by variable interest entities, net		—		1,592,544		—			1,592,544
Property, plant and equipment, net		747,133		29,660		—			776,793
Goodwill		28,604		—		—			28,604
Other long-term assets		335,811		17,956		(73,978	)		279,789
	$	3,364,612	$	6,661,679	$	(709,507	)	$	9,316,784
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	197,891	$	689,877	$	(635,529	)	$	252,239
Accrued liabilities		466,808		71,756		(3,467	)		535,097
Short-term debt		—		845,868		—			845,868
Current portion of long-term debt		—		399,962					399,962
Current portion of long-term debt held by variable interest entities		—		507,427		—			507,427
Total current liabilities		664,699		2,514,890		(638,996	)		2,540,593
Long-term debt		303,000		2,442,189		—			2,745,189
Long-term debt held by variable interest entities		—		831,805		—			831,805
Pension liability		122,496		—		—			122,496
Postretirement healthcare benefits		263,295		—		—			263,295
Other long-term liabilities		131,754		15,265		—			147,019
Commitments and contingencies (Note 17)
Total shareholders’ equity		1,879,368		857,530		(70,511	)		2,666,387
	$	3,364,612	$	6,661,679	$	(709,507	)	$	9,316,784

	December 31, 2011
	Motorcycles & Related		Financial
	Products Operations		Services Operations		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	943,330	$	583,620	$	—		$	1,526,950
Marketable securities		153,380		—		—			153,380
Accounts receivable, net		393,615		—		(174,576	)		219,039
Finance receivables, net		—		1,168,603		—			1,168,603
Restricted finance receivables held by variable interest entities, net		—		591,864		—			591,864
Inventories		418,006		—		—			418,006
Restricted cash held by variable interest entities		—		229,655		—			229,655
Other current assets		167,423		67,286		—			234,709
Total current assets		2,075,754		2,641,028		(174,576	)		4,542,206
Finance receivables, net		—		1,754,441		—			1,754,441
Restricted finance receivables held by variable interest entities, net		—		2,271,773		—			2,271,773
Property, plant and equipment, net		779,330		30,129		—			809,459
Goodwill		29,081		—		—			29,081
Other long-term assets		322,379		17,460		(72,635	)		267,204
	$	3,206,544	$	6,714,831	$	(247,211	)	$	9,674,164
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	220,957	$	209,332	$	(174,576	)	$	255,713
Accrued liabilities		482,838		85,038		(3,704	)		564,172
Short-term debt		—		838,486		—			838,486
Current portion of long-term debt		—		399,916					399,916
Current portion of long-term debt held by variable interest entities		—		640,331		—			640,331
Total current liabilities		703,795		2,173,103		(178,280	)		2,698,618
Long-term debt		303,000		2,093,871		—			2,396,871
Long-term debt held by variable interest entities		—		1,447,015		—			1,447,015
Pension liability		302,483		—		—			302,483
Postretirement healthcare benefits		268,582		—		—			268,582
Other long-term liabilities		126,036		14,303		—			140,339
Commitments and contingencies (Note 17)
Total shareholders’ equity		1,502,648		986,539		(68,931	)		2,420,256
	$	3,206,544	$	6,714,831	$	(247,211	)	$	9,674,164

	June 26, 2011
	Motorcycles & Related		Financial
	Products Operations		Services Operations		Eliminations			Consolidated
ASSETS
Current assets:
Cash and cash equivalents	$	681,804	$	291,674	$	—		$	973,478
Marketable securities		244,555		—		—			244,555
Accounts receivable, net		710,791		—		(445,128	)		265,663
Finance receivables, net		—		1,144,886		—			1,144,886
Restricted finance receivables held by variable interest entities, net		—		573,208		—			573,208
Inventories		337,472		—		—			337,472
Restricted cash held by variable interest entities		—		244,060		—			244,060
Other current assets		160,059		57,597		—			217,656
Total current assets		2,134,681		2,311,425		(445,128	)		4,000,978
Finance receivables, net		—		2,306,165		—			2,306,165
Restricted finance receivables held by variable interest entities, net		—		1,939,181		—			1,939,181
Property, plant and equipment, net		758,828		30,115		—			788,943
Goodwill		31,156		—		—			31,156
Other long-term assets		339,666		26,711		(70,821	)		295,556
	$	3,264,331	$	6,613,597	$	(515,949	)	$	9,361,979
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	243,954	$	478,569	$	(445,128	)	$	277,395
Accrued liabilities		522,533		70,880		(3,317	)		590,096
Short-term debt		—		694,137		—			694,137
Current portion of long-term debt held by variable interest entities		—		635,604		—			635,604
Total current liabilities		766,487		1,879,190		(448,445	)		2,197,232
Long-term debt		303,000		2,590,462		—			2,893,462
Long-term debt held by variable interest entities		—		1,217,778		—			1,217,778
Pension liability		103,511		—		—			103,511
Postretirement healthcare liability		258,881		—		—			258,881
Other long-term liabilities		146,286		13,433		—			159,719
Commitments and contingencies (Note 17)
Total shareholders’ equity		1,686,166		912,734		(67,504	)		2,531,396
	$	3,264,331	$	6,613,597	$	(515,949	)	$	9,361,979

	Six months ended July 1, 2012
	Motorcycles & Related			Financial			Eliminations &
	Products Operations			Services Operations			Adjustments			Consolidated
Cash flows from operating activities:
Income from continuing operations	$	552,258			92,027		$	(225,000	)	$	419,285
Adjustments to reconcile income from continuing operations to cash provided by operating activities:
Depreciation		82,954			3,043			—			85,997
Amortization of deferred loan origination costs		—			38,075			—			38,075
Amortization of financing origination fees		237			4,784			—			5,021
Provision for employee long-term benefits		33,236			1,027			—			34,263
Contributions to pension and postretirement plans		(213,648	)		—			—			(213,648	)
Stock compensation expense		20,539			1,580			—			22,119
Net change in wholesale finance receivables		—			—			(124,919	)		(124,919	)
Provision for credit losses		—			3,754			—			3,754
Pension and postretirement healthcare plan curtailment and settlement expense		—			—			—			—
Foreign currency adjustments		8,143			—			—			8,143
Other, net		1,275			4,292			—			5,567
Change in current assets and current liabilities:
Accounts receivable		(295,930	)		—			260,953			(34,977	)
Finance receivables—accrued interest and other		—			2,912			—			2,912
Inventories		89,162			—			—			89,162
Accounts payable and accrued liabilities		(22,227	)		270,894			(260,953	)		(12,286	)
Restructuring reserves		(9,915	)		—			—			(9,915	)
Derivative instruments		(1,293	)		(127	)		—			(1,420	)
Other		(25,286	)		(3,605	)		—			(28,891	)
Total adjustments		(332,753	)		326,629			(124,919	)		(131,043	)
Net cash provided by operating activities of continuing operations		219,505			418,656			(349,919	)		288,242
Cash flows from investing activities of continuing operations:
Capital expenditures		(57,504	)		(2,574	)		—			(60,078	)
Origination of finance receivables		—			(3,766,621	)		2,183,049			(1,583,572	)
Collections of finance receivables		—			3,493,920			(2,058,130	)		1,435,790
Sales and redemptions of marketable securities		18,053			—			—			18,053
Net cash (used by) provided by investing activities of continuing operations		(39,451	)		(275,275	)		124,919			(189,807	)
Cash flows from financing activities of continuing operations:
Proceeds from issuance of medium-term notes		—			397,373			—			397,373
Loan to HDFS		(200,000	)		200,000			—			—
Proceeds from securitization of debt		—			91,030			—			91,030
Repayments of securitization debt		—			(839,401	)		—			(839,401	)
Net decrease in credit facilities and unsecured commercial paper		—			(46,629	)		—			(46,629	)
Net change in restricted cash		—			41,091			—			41,091
Dividends paid		(71,645	)		(225,000	)		225,000			(71,645	)
Purchase of common stock for treasury		(172,742	)		—			—			(172,742	)
Excess tax benefits from share based payments		15,730			—			—			15,730
Issuance of common stock under employee stock option plans		35,337			—			—			35,337
Net cash used by financing activities of continuing operations		(393,320	)		(381,536	)		225,000			(549,856	)
Effect of exchange rate changes on cash and cash equivalents of continuing operations		(4,155	)		122			—			(4,033	)
Net (decrease) increase in cash and cash equivalents of continuing operations		(217,421	)		(238,033	)		—			(455,454	)
Cash flows from discontinued operations:
Cash flows from operating activities of discontinued operations		—			—			—			—
Cash flows from investing activities of discontinued operations		—			—			—			—
Effect of exchange rate changes on cash and cash equivalents of discontinued operations		—			—			—			—
		—			—			—			—
Net (decrease) increase in cash and cash equivalents	$	(217,421	)	$	(238,033	)	$	—		$	(455,454	)
Cash and cash equivalents:
Cash and cash equivalents—beginning of period	$	943,330		$	583,620		$	—		$	1,526,950
Cash and cash equivalents of discontinued operations—beginning of period		—			—			—			—
Net (decrease) increase in cash and cash equivalents		(217,421	)		(238,033	)		—			(455,454	)
Less: Cash and cash equivalents of discontinued operations—end of period		—			—			—			—
Cash and cash equivalents—end of period	$	725,909		$	345,587		$	—		$	1,071,496

	Six months ended June 26, 2011
	Motorcycles & Related			Financial			Eliminations &
	Products Operations			Services Operations			Adjustments			Consolidated
Cash flows from operating activities:
Net income	$	342,030		$	92,810		$	(125,000	)	$	309,840
Loss from discontinued operations		—			—			—			—
Income from continuing operations		342,030			92,810			(125,000	)		309,840
Adjustments to reconcile income from continuing operations to cash provided by operating activities:
Depreciation		86,375			3,168			—			89,543
Amortization of deferred loan origination costs		—			39,054			—			39,054
Amortization of financing origination fees		237			5,596			—			5,833
Provision for employee long-term benefits		33,018			1,438			—			34,456
Contributions to pension and postretirement plans		(205,498	)		—			—			(205,498	)
Stock compensation expense		19,176			1,361			—			20,537
Net change in wholesale finance receivables		—			—			11,909			11,909
Provision for credit losses		—			(1,184	)		—			(1,184	)
Pension and postretirement healthcare plan curtailment and settlement expense		236			—			—			236
Foreign currency adjustments		(2,813	)		—			—			(2,813	)
Other, net		5,337			21,889			—			27,226
Change in current assets and current liabilities:
Accounts receivable		(44,899	)		—			53,200			8,301
Finance receivables—accrued interest and other		—			5,553			—			5,553
Inventories		(530	)		—			—			(530	)
Accounts payable and accrued liabilities		79,110			60,426			(5,698	)		133,838
Restructuring reserves		3,195			—			—			3,195
Derivative instruments		1,188			7			—			1,195
Other		(4,729	)		44,575			(47,575	)		(7,729	)
Total adjustments		(30,597	)		181,883			11,836			163,122
Net cash provided by (used by) operating activities of continuing operations		311,433			274,693			(113,164	)		472,962
Cash flows from investing activities of continuing operations:
Capital expenditures		(65,956	)		(3,311	)		—			(69,267	)
Origination of finance receivables		—			(3,264,370	)		1,829,763			(1,434,607	)
Collections of finance receivables		—			3,258,282			(1,841,672	)		1,416,610
Purchases of marketable securities		(142,653	)		—			—			(142,653	)
Sales and redemptions of marketable securities		39,966			—			—			39,966
Net cash (used by) provided by investing activities of continuing operations		(168,643	)		(9,399	)		(11,909	)		(189,951	)
Cash flows from financing activities of continuing operations:
Proceeds from issuance of medium-term notes		—			447,076			—			447,076
Loan to HDFS		(200,000	)		200,000			—			—
Repayments of securitization debt		—			(901,851	)		—			(901,851	)
Net decrease in credit facilities and unsecured commercial paper		—			131,039			—			131,039
Net change in restricted cash		—			44,827			—			44,827
Dividends paid		(53,152	)		(125,000	)		125,000			(53,152	)
Purchase of common stock for treasury		(5,678	)		—			—			(5,678	)
Excess tax benefits from share based payments		3,476			—			—			3,476
Issuance of common stock under employee stock option plans		4,534			—			—			4,534
Net cash (used by) provided by financing activities of continuing operations		(250,820	)		(203,909	)		125,000			(329,729	)
Effect of exchange rate changes on cash and cash equivalents of continuing operations		(1,922	)		147			73			(1,702	)
Net (decrease) increase in cash and cash equivalents of continuing operations		(109,952	)		61,532			—			(48,420	)
Cash flows from discontinued operations:
Cash flows from operating activities of discontinued operations		(35	)		—			—			(35	)
Cash flows from investing activities of discontinued operations		—			—			—			—
Effect of exchange rate changes on cash and cash equivalents of discontinued operations		—			—			—			—
		(35	)		—			—			(35	)
Net (decrease) increase in cash and cash equivalents	$	(109,987	)	$	61,532		$	—		$	(48,455	)
Cash and cash equivalents:
Cash and cash equivalents—beginning of period	$	791,791		$	230,142		$	—		$	1,021,933
Cash and cash equivalents of discontinued operations—beginning of period		—			—			—			—
Net (decrease) increase in cash and cash equivalents		(109,987	)		61,532			—			(48,455	)
Less: Cash and cash equivalents of discontinued operations—end of period		—			—			—			—
Cash and cash equivalents—end of period	$	681,804		$	291,674		$	—		$	973,478

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Additional Balance Sheet And Cash Flow Information (Marketable Securities) (Detail) (USD $) In Thousands, unless otherwise specified	Jul. 01, 2012	Dec. 31, 2011	Jun. 26, 2011
Restricted Cash and Cash Equivalents Items [Line Items]
Available-for-sale securities	$ 135,848	$ 153,380	$ 244,555
U.S. Treasuries [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Available-for-sale securities			49,999
Corporate Bonds [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Available-for-sale securities	$ 135,848	$ 153,380	$ 194,556

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Additional Balance Sheet and Cash Flow Information (Tables)

6 Months Ended

Jul. 01, 2012

Marketable Securities

The Company’s marketable securities consisted of the following (in thousands):

	July 1,		December 31,		June 26,
	2012		2011		2011
Available-for-sale:
Corporate bonds	$	135,848	$	153,380	$	194,556
U.S. Treasuries		—		—		49,999
	$	135,848	$	153,380	$	244,555

Inventories Net

the first-in, first-out (FIFO) method. Inventories consist of the following (in thousands):

	July 1,			December 31,			June 26,
	2012			2011			2011
Components at the lower of FIFO cost or market
Raw materials and work in process	$	116,166		$	113,932		$	108,518
Motorcycle finished goods		120,199			226,261			147,787
Parts and accessories and general merchandise		131,040			121,340			115,202
Inventory at lower of FIFO cost or market		367,405			461,533			371,507
Excess of FIFO over LIFO cost		(44,359	)		(43,527	)		(34,035	)
	$	323,046		$	418,006		$	337,472

Reconciliation Of Net Income To Net Cash Used By Operating Activities

The reconciliation of net income to net cash provided by operating activities is as follows (in thousands):

	Six months ended
	July 1,			June 26,
	2012			2011
Cash flows from operating activities:
Net income	$	419,285		$	309,840
Loss from discontinued operations		—			—
Income from continuing operations		419,285			309,840
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
Depreciation		85,997			89,543
Amortization of deferred loan origination costs		38,075			39,054
Amortization of financing origination fees		5,021			5,833
Provision for employee long-term benefits		34,263			34,456
Contributions to pension and postretirement plans		(213,648	)		(205,498	)
Stock compensation expense		22,119			20,537
Net change in wholesale finance receivables related to sales		(124,919	)		11,909
Provision for credit losses		3,754			(1,184	)
Pension and postretirement healthcare plan curtailment and settlement expense		—			236
Foreign currency adjustments		8,143			(2,813	)
Other, net		5,567			27,226
Changes in current assets and liabilities:
Accounts receivable, net		(34,977	)		8,301
Finance receivables—accrued interest and other		2,912			5,553
Inventories		89,162			(530	)
Accounts payable and accrued liabilities		(12,286	)		133,838
Restructuring reserves		(9,915	)		3,195
Derivative instruments		(1,420	)		1,195
Other		(28,891	)		(7,729	)
Total adjustments		(131,043	)		163,122
Net cash provided by operating activities of continuing operations	$	288,242		$	472,962

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Commitment And Contingencies (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jul. 01, 2012
Commitment And Contingencies [Line Items]
Estimate of Company's share of York environmental matters	2.3
Navy [Member]
Commitment And Contingencies [Line Items]
Portion of settlement contribution percentage	53.00%
Harley Davidson, Inc. [Member]
Commitment And Contingencies [Line Items]
Portion of settlement contribution percentage	47.00%

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New Accounting Standards

6 Months Ended

Jul. 01, 2012

New Accounting Standards

2. New Accounting Standards

Accounting Standards Recently Adopted

In May 2011, the FASB issued ASU No. 2011-4 Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (IFRS.) ASU No. 2011-04 clarifies the application of the existing guidance within ASC Topic 820, Fair Value Measurement, to ensure consistency between U.S. GAAP and IFRS. ASU No. 2011-04 also requires new disclosures about purchases, sales, issuances, and settlements related to Level 3 measurements and also requires new disclosures around transfers into and out of Level 1 and 2 in the fair value hierarchy. The Company adopted ASU No. 2011-04 on January 1, 2012. The required new disclosures are presented in Note 9.

In June 2011, the FASB issued ASU No. 2011-05, “Presentation of Comprehensive Income.” ASU No. 2011-05 amends the guidance within ASC Topic 220, “Comprehensive Income,” to eliminate the option to present the components of other comprehensive income as part of the statement of shareholders’ equity. ASU No. 2011-05 requires that all nonowner changes in shareholders’ equity be presented in either a single continuous statement of comprehensive income or in two separate but consecutive statements. The Company decided to present comprehensive income in two separate but consecutive statements. The Company adopted ASU No. 2011-05 on January 1, 2012. The adoption of ASU No. 2011-05 and the Company’s decision to present comprehensive income in two separate but consecutive statements required the presentation of an additional financial statement, condensed consolidated statements of comprehensive income, for all periods presented.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jul. 01, 2012	Jun. 26, 2011	Jul. 01, 2012	Jun. 26, 2011
Comprehensive income	$ 245,646	$ 207,055	$ 426,462	$ 345,486

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Product Warranty and Safety Recall Campaigns

6 Months Ended

Jul. 01, 2012

Product Warranty and Safety Recall Campaigns

12. Product Warranty and Safety Recall Campaigns

The Company currently provides a standard two-year limited warranty on all new motorcycles sold worldwide, except for Japan, where the Company currently provides a standard three-year limited warranty on all new motorcycles sold. In addition, the Company started offering a one-year warranty for Parts & Accessories (P&A) in 2012. The warranty coverage for the retail customer generally begins when the product is sold to a retail customer. The Company maintains reserves for future warranty claims using an estimated cost, which is based primarily on historical Company claim information. Additionally, the Company has from time to time initiated certain voluntary safety recall campaigns. The Company reserves for all estimated costs associated with safety recalls in the period that the safety recalls are announced.

Changes in the Company’s warranty and safety recall liability were as follows (in thousands):

	Three months ended						Six months ended
	July 1,			June 26,			July 1,			June 26,
	2012			2011			2012			2011
Balance, beginning of period	$	57,102		$	57,111		$	54,994		$	54,134
Warranties issued during the period		17,127			12,335			32,618			23,560
Settlements made during the period		(18,549	)		(12,570	)		(33,086	)		(22,866	)
Recalls and changes to pre-existing warranty liabilities		12,121			(1,469	)		13,275			579
Balance, end of period	$	67,801		$	55,407		$	67,801		$	55,407

The liability for safety recall campaigns was $6.7 million, $10.7 million and $2.9 million as of July 1, 2012, December 31, 2011 and June 26, 2011, respectively.

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Document and Entity Information	6 Months Ended
	Jul. 01, 2012	Aug. 02, 2012
Entity Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jul. 01, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Trading Symbol	HOG
Entity Registrant Name	HARLEY DAVIDSON INC
Entity Central Index Key	0000793952
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		227,900,158

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Earnings Per Share

6 Months Ended

Jul. 01, 2012

Earnings Per Share

13. Earnings Per Share

The following table sets forth the computation for basic and diluted earnings per share from continuing operations (in thousands, except per share amounts):

	Three months ended				Six months ended
	July 1,		June 26,		July 1,		June 26,
	2012		2011		2012		2011
Numerator:
Income from continuing operations used in computing basic and diluted earnings per share	$	247,250	$	190,580	$	419,285	$	309,840
Denominator:
Denominator for basic earnings per share- weighted-average common shares		228,838		234,336		228,914		234,086
Effect of dilutive securities—employee stock compensation plan		2,085		1,832		2,190		1,958
Denominator for diluted earnings per share- adjusted weighted-average shares outstanding		230,923		236,168		231,104		236,044
Earnings per common share from continuing operations:
Basic	$	1.08	$	0.81	$	1.83	$	1.32
Diluted	$	1.07	$	0.81	$	1.81	$	1.31

Outstanding options to purchase 2.1 million and 4.1 million shares of common stock for the three months ended July 1, 2012 and June 26, 2011, respectively, and 2.3 million and 3.7 million shares of common stock for the six months ended July 1, 2012 and June 26, 2011, respectively, were not included in the Company’s computation of dilutive securities because the exercise price was greater than the market price and therefore the effect would have been anti-dilutive.

The Company has a share-based compensation plan under which employees may be granted share-based awards including shares of restricted stock and restricted stock units (RSUs). Non-forfeitable dividends are paid on unvested shares of restricted stock and non-forfeitable dividend equivalents are paid on unvested RSUs. As such, shares of restricted stock and RSUs are considered participating securities under the two-class method of calculating earnings per share as described in ASC Topic 260, “Earnings per Share.” The two-class method of calculating earnings per share did not have a material impact on the Company’s earnings per share calculation for the three and six month periods ending July 1, 2012 and June 26, 2011, respectively.

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Jul. 01, 2012	Dec. 31, 2011	Jun. 26, 2011	Dec. 31, 2010
Current assets:
Cash and cash equivalents	$ 1,071,496	$ 1,526,950	$ 973,478	$ 1,021,933
Marketable securities	135,848	153,380	244,555
Accounts receivable, net	250,268	219,039	265,663
Finance receivables, net	1,398,553	1,168,603	1,144,886
Restricted finance receivables held by variable interest entities, net	456,285	591,864	573,208
Inventories	323,046	418,006	337,472
Restricted cash held by variable interest entities	188,564	229,655	244,060
Other current assets	245,807	234,709	217,656
Total current assets	4,069,867	4,542,206	4,000,978
Finance receivables, net	2,569,187	1,754,441	2,306,165
Restricted finance receivables held by variable interest entities, net	1,592,544	2,271,773	1,939,181
Property, plant and equipment, net	776,793	809,459	788,943
Goodwill	28,604	29,081	31,156
Other long-term assets	279,789	267,204	295,556
Total assets	9,316,784	9,674,164	9,361,979
Current liabilities:
Accounts payable	252,239	255,713	277,395
Accrued liabilities	535,097	564,172	590,096
Short-term debt	845,868	838,486	694,137
Current portion of long-term debt	399,962	399,916
Current portion of long-term debt held by variable interest entities	507,427	640,331	635,604
Total current liabilities	2,540,593	2,698,618	2,197,232
Long-term debt	2,745,189	2,396,871	2,893,462
Long-term debt held by variable interest entities	831,805	1,447,015	1,217,778
Pension liability	122,496	302,483	103,511
Postretirement healthcare liability	263,295	268,582	258,881
Other long-term liabilities	147,019	140,339	159,719
Commitments and contingencies (Note 16)
Total shareholders' equity	2,666,387	2,420,256	2,531,396
Total liabilities and shareholders' equity	$ 9,316,784	$ 9,674,164	$ 9,361,979

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Asset-Backed Financing

6 Months Ended

Jul. 01, 2012

Asset-Backed Financing

7. Asset-Backed Financing

HDFS participates in asset-backed financing through both term asset-backed securitization transactions and its asset-backed commercial paper conduit facility. In both types of asset-backed financing programs, HDFS transfers U.S. retail motorcycle finance receivables to a consolidated special purpose entity (SPE) while retaining the servicing rights. Each SPE then converts those assets into cash, through the issuance of debt. These SPEs are considered VIEs under U.S. GAAP. HDFS is required to consolidate any VIEs in which it is deemed to be the primary beneficiary through having power over the significant activities of the entity and having an obligation to absorb losses or the right to receive benefits from the VIE which are potentially significant to the VIE.

HDFS is considered to have power over the significant activities of its term asset-backed securitization and asset-backed commercial paper conduit facility VIEs due to its role as servicer. Servicing fees are typically not considered potentially significant variable interests in a VIE. However, HDFS retains a residual interest in the VIEs in the form of a debt security, which gives HDFS the right to receive benefits that could be potentially significant to the VIE. Therefore, the Company is the primary beneficiary and consolidates all of its VIEs within its consolidated financial statements. Servicing fees paid by VIEs to HDFS are eliminated in consolidation and therefore are not recorded on a consolidated basis.

HDFS is not required, and does not currently intend, to provide any additional financial support to its VIEs. Investors and creditors only have recourse to the assets held by the VIEs.

The Company’s VIEs have been aggregated on the balance sheet due to the similarity of the nature of the assets involved as well as the purpose and design of the VIEs.

Term Asset-Backed Securitization VIEs

The Company transfers U.S. retail motorcycle finance receivables to SPEs which in turn issue secured notes to investors, with various maturities and interest rates, secured by future collections of the purchased U.S. retail motorcycle finance receivables. Each term asset-backed securitization SPE is a separate legal entity and the U.S. retail motorcycle finance receivables included in each term asset-backed securitization are only available for payment of that secured debt and other obligations arising from the term asset-backed securitization transaction and are not available to pay other obligations or claims of the Company’s creditors until the associated secured debt and other obligations are satisfied. Cash and cash equivalent balances held by the SPEs are used only to support the securitizations. There are no amortization schedules for the secured notes; however, the debt is reduced monthly as available collections on the related U.S. retail motorcycle finance receivables are applied to outstanding principal. The secured notes’ contractual lives have various maturities ranging from 2012 to 2018.

During the second quarter of 2012, the Company issued $89.5 million of secured notes through the sale of notes that had been previously retained as part of certain 2009 and 2011 term asset-backed securitization transactions. These notes were sold at a premium, which will be recognized over the term of the notes. At July 1, 2012, the unaccreted premium associated with these notes was $1.8 million. There was no additional term-asset backed securitization activity during the six months ended July 1, 2012. There were no term-asset backed securitization transactions during the six months ended June 26, 2011.

The following table presents the assets and liabilities of the consolidated term asset-backed securitization SPEs that were included in the Company’s financial statements (in thousands):

	July 1,			December 31,			June 26,
	2012			2011			2011
Assets:
Finance receivables	$	2,082,375		$	2,916,219		$	2,554,758
Allowance for credit losses		(41,781	)		(65,735	)		(61,642	)
Restricted cash		187,782			228,776			242,618
Other assets		4,243			6,772			7,594
Total assets	$	2,232,619		$	3,086,032		$	2,743,328
Liabilities
Term asset-backed securitization debt	$	1,339,232		$	2,087,346		$	1,853,382

Asset-Backed Commercial Paper Conduit Facility VIE

On September 9, 2011, the Company amended and restated its third-party bank sponsored asset-backed commercial paper conduit facility which provides for a total aggregate commitment of $600.0 million based on, among other things, the amount of eligible U.S. retail motorcycle loans held by the SPE as collateral. The amended agreement has terms similar to the prior agreement and is for the same amount. Under the facility, HDFS may transfer U.S. retail motorcycle finance receivables to a SPE, which in turn may issue debt to third-party bank-sponsored asset-backed commercial paper conduits. The assets of the SPE are restricted as collateral for the payment of the debt or other obligations arising in the transaction and are not available to pay other obligations or claims of the Company’s creditors. The terms for this debt provide for interest on the outstanding principal based on prevailing commercial paper rates, or LIBOR plus a specified margin to the extent the advance is not funded by a conduit lender through the issuance of commercial paper. The conduit facility also provides for an unused commitment fee based on the unused portion of the total aggregate commitment of $600.0 million. There is no amortization schedule; however, the debt is reduced monthly as available collections on the related finance receivables are applied to outstanding principal. Upon expiration of the conduit facility, any outstanding principal will continue to be reduced monthly through available collections. Unless earlier terminated or extended by mutual agreement of HDFS and the lenders, the conduit facility has an expiration date of September 7, 2012.

The following table presents the assets of the asset-backed commercial paper conduit facility SPEs that were included in our financial statements (in thousands);

	July 1,			December 31,			June 26,
	2012			2011			2011
Finance receivables	$	8,403		$	13,455		$	19,747
Allowance for credit losses		(168	)		(302	)		(475	)
Restricted cash		782			879			1,443
Other assets		158			449			288
Total assets	$	9,175		$	14,481		$	21,003

The SPEs had no borrowings outstanding under the conduit facility at July 1, 2012, December 31, 2011 or June 26, 2011, therefore, these assets are restricted as collateral for the payment of fees associated with the unused portion of the total aggregate commitment of $600.0 million.

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Finance Receivables

6 Months Ended

Jul. 01, 2012

Finance Receivables

6. Finance Receivables

HDFS provides retail financial services to customers of the Company’s independent dealers in the United States and Canada. The origination of retail loans is a separate and distinct transaction between HDFS and the retail customer, unrelated to the Company’s sale of product to its dealers. Retail finance receivables consist of secured promissory notes and installment loans. HDFS holds either titles or liens on titles to vehicles financed by promissory notes and installment loans.

HDFS offers wholesale financing to the Company’s independent dealers. Wholesale loans to dealers are generally secured by financed inventory or property and are originated in the U.S. and Canada.

Finance receivables, net, including finance receivables held by VIEs, consisted of the following (in thousands):

	July 1,			December 31,			June 26,
	2012			2011			2011
Retail	$	5,225,779		$	5,087,490		$	5,374,055
Wholesale		905,038			824,640			733,789
		6,130,817			5,912,130			6,107,844
Allowance for credit losses		(114,248	)		(125,449	)		(144,404	)
	$	6,016,569		$	5,786,681		$	5,963,440

At July 1, 2012, December 31, 2011 and June 26, 2011, the Company’s Condensed Consolidated Balance Sheet included finance receivables, net of $2.05 billion, $2.86 billion and $2.51 billion, respectively, which were restricted as collateral for the payment of debt held by VIEs and other related obligations as discussed in Note 7. These receivables are included in retail finance receivables in the table above.

A provision for credit losses on finance receivables is charged or credited to earnings in amounts that the Company believes are sufficient to maintain the allowance for credit losses on finance receivables at a level that is adequate to cover losses of principal inherent in the existing portfolio. The allowance for credit losses on finance receivables represents management’s estimate of probable losses inherent in the finance receivable portfolio as of the balance sheet date. However, due to the use of projections and assumptions in estimating the losses, the amount of losses actually incurred by the Company could differ from the amounts estimated.

Changes in the allowance for credit losses on finance receivables by portfolio were as follows (in thousands):

	Three months ended July 1, 2012
	Retail			Wholesale			Total
Balance, beginning of period	$	112,857		$	9,646		$	122,503
Provision for credit losses		(3,681	)		(1,578	)		(5,259	)
Charge-offs		(17,054	)		—			(17,054	)
Recoveries		14,058			—			14,058
Balance, end of period	$	106,180		$	8,068		$	114,248
	Three months ended June 26, 2011
	Retail			Wholesale			Total
Balance, beginning of period	$	141,704		$	17,980		$	159,684
Provision for credit losses		(2,596	)		(4,194	)		(6,790	)
Charge-offs		(22,903	)		(330	)		(23,233	)
Recoveries		14,743			—			14,743
Balance, end of period	$	130,948		$	13,456		$	144,404
	Six months ended July 1, 2012
	Retail			Wholesale			Total
Balance, beginning of period	$	116,112		$	9,337		$	125,449
Provision for credit losses		5,023			(1,269	)		3,754
Charge-offs		(42,906	)		—			(42,906	)
Recoveries		27,951			—			27,951
Balance, end of period	$	106,180		$	8,068		$	114,248
	Six months ended June 26, 2011
	Retail			Wholesale			Total
Balance, beginning of period	$	157,791		$	15,798		$	173,589
Provision for credit losses		843			(2,027	)		(1,184	)
Charge-offs		(58,094	)		(330	)		(58,424	)
Recoveries		30,408			15			30,423
Balance, end of period	$	130,948		$	13,456		$	144,404

Included in the $106.2 and $130.9 million retail allowance for credit losses on finance receivables is $41.9 and $62.1 million, respectively, related to finance receivables held by VIEs.

Portions of the allowance for credit losses on finance receivables are specified to cover estimated losses on finance receivables specifically identified for impairment. The unspecified portion of the allowance for credit losses on finance receivables covers estimated losses on finance receivables which are collectively reviewed for impairment. Finance receivables are considered impaired when management determines it is probable that the Company will be unable to collect all amounts due according to the terms of the loan agreement.

The retail portfolio primarily consists of a large number of small balance, homogeneous finance receivables. HDFS performs a periodic and systematic collective evaluation of the adequacy of the retail allowance for credit losses. HDFS utilizes loss forecast models which consider a variety of factors including, but not limited to, historical loss trends, origination or vintage analysis, known and inherent risks in the portfolio, the value of the underlying collateral, recovery rates and current economic conditions including items such as unemployment rates. As retail finance receivables are collectively and not individually reviewed for impairment, this portfolio does not have finance receivables specifically impaired.

The wholesale portfolio is primarily composed of large balance, non-homogeneous loans. The Company’s evaluation for the wholesale allowance for credit losses is first based on a loan-by-loan review. A specific allowance for credit losses is established for wholesale finance receivables determined to be individually impaired when management concludes that the borrower will not be able to make full payment of the contractual amounts due based on the original terms of the loan agreement. The impairment is determined based on the cash that the Company expects to receive discounted at the loan’s original interest rate or the fair value of the collateral, if the loan is collateral-dependent. Finance receivables in the wholesale portfolio that are not considered impaired on an individual basis are segregated, based on similar risk characteristics, according to the Company’s internal risk rating system and collectively evaluated for impairment. The related allowance for credit losses is based on factors such as the specific borrower’s financial performance and ability to repay, the Company’s past loan loss experience, current economic conditions, and the value of the underlying collateral.

Generally, it is the Company’s policy not to change the terms and conditions of finance receivables. However, to minimize the economic loss, the Company may modify certain finance receivables in troubled debt restructurings. Total restructured finance receivables are not significant.

The allowance for credit losses and finance receivables by portfolio, segregated by those amounts that are individually evaluated for impairment and those that are collectively evaluated for impairment was, as follows (in thousands):

	July 1, 2012
	Retail		Wholesale		Total
Allowance for credit losses, ending balance:
Individually evaluated for impairment	$	—	$	—	$	—
Collectively evaluated for impairment		106,180		8,068		114,248
Total allowance for credit losses	$	106,180	$	8,068	$	114,248
Finance receivables, ending balance:
Individually evaluated for impairment	$	—	$	—	$	—
Collectively evaluated for impairment		5,225,779		905,038		6,130,817
Total finance receivables	$	5,225,779	$	905,038	$	6,130,817

	December 31, 2011
	Retail		Wholesale		Total
Allowance for credit losses, ending balance:
Individually evaluated for impairment	$	—	$	—	$	—
Collectively evaluated for impairment		116,112		9,337		125,449
Total allowance for credit losses	$	116,112	$	9,337	$	125,449
Finance receivables, ending balance:
Individually evaluated for impairment	$	—	$	—	$	—
Collectively evaluated for impairment		5,087,490		824,640		5,912,130
Total finance receivables	$	5,087,490	$	824,640	$	5,912,130
	June 26, 2011
	Retail		Wholesale		Total
Allowance for credit losses, ending balance:
Individually evaluated for impairment	$	—	$	3,031	$	3,031
Collectively evaluated for impairment		130,948		10,425		141,373
Total allowance for credit losses	$	130,948	$	13,456	$	144,404
Finance receivables, ending balance:
Individually evaluated for impairment	$	—	$	4,676	$	4,676
Collectively evaluated for impairment		5,374,055		729,113		6,103,168
Total finance receivables	$	5,374,055	$	733,789	$	6,107,844

There were no wholesale finance receivables at July 1, 2012 or December 31, 2011 that were individually deemed to be impaired under ASC Topic 310, “Receivables.” Additional information related to the wholesale finance receivables that were individually deemed to be impaired under ASC Topic 310, “Receivables,” at June 26, 2011 includes (in thousands):

	June 26, 2011
							Three months ended				Six months ended
			Unpaid				Average		Interest		Average		Interest
	Recorded		Principal		Related		Recorded		Income		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized		Investment		Recognized
Wholesale:
No related allowance recorded	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Related allowance recorded		4,676		4,441		3,031		4,932		—		5,050		—
Total impaired wholesale finance receivables	$	4,676	$	4,441	$	3,031	$	4,932	$	—	$	5,050	$	—

Retail finance receivables are contractually delinquent if the minimum payment is not received by the specified due date. Retail finance receivables are generally charged-off at 120 days contractually past due. Retail finance receivables accrue interest until either collected or charged-off. Accordingly, as of July 1, 2012, December 31, 2011 and June 26, 2011, all retail finance receivables were accounted for as interest-earning receivables, of which $14.8 million, $27.5 million and $18.7 million, respectively, were 90 days or more past due.

Wholesale finance receivables are delinquent if the minimum payment is not received by the contractual due date. A specific allowance for credit losses is established once management determines that the borrower does not have the ability to repay the loan in full. Interest continues to accrue on past due wholesale finance receivables until the date the collection of the finance receivables becomes doubtful, at which time the finance receivable is placed on non-accrual status. The Company will resume accruing interest on these wholesale finance receivables when payments are current according to the terms of the loan agreements and future payments are reasonably assured. While on non-accrual status, all cash received is applied to principal or interest as appropriate. There were no wholesale receivables on non-accrual status at July 1, 2012 or December 31, 2011. The recorded investment of non-accrual status wholesale finance receivables at June 26, 2011 was $4.7 million. At July 1, 2012, December 31, 2011 and June 26, 2011, $0.6 million, $0.9 million, and $1.2 million of wholesale finance receivables were 90 days or more past due and accruing interest, respectively.

An analysis of the aging of past due finance receivables, which includes non-accrual status finance receivables was as follows (in thousands):

	July 1, 2012
							Greater than				Total
			31-60 Days		61-90 Days		90 Days		Total		Finance
	Current		Past Due		Past Due		Past Due		Past Due		Receivables
Retail	$	5,101,847	$	84,858	$	24,247	$	14,827	$	123,932	$	5,225,779
Wholesale		902,891		1,125		468		554		2,147		905,038
Total	$	6,004,738	$	85,983	$	24,715	$	15,381	$	126,079	$	6,130,817
	December 31, 2011
							Greater than				Total
			31-60 Days		61-90 Days		90 Days		Total		Finance
	Current		Past Due		Past Due		Past Due		Past Due		Receivables
Retail	$	4,915,711	$	107,373	$	36,937	$	27,469	$	171,779	$	5,087,490
Wholesale		822,610		777		344		909		2,030		824,640
Total	$	5,738,321	$	108,150	$	37,281	$	28,378	$	173,809	$	5,912,130
	June 26, 2011
							Greater than				Total
			31-60 Days		61-90 Days		90 Days		Total		Finance
	Current		Past Due		Past Due		Past Due		Past Due		Receivables
Retail	$	5,205,300	$	115,163	$	34,860	$	18,732	$	168,755	$	5,374,055
Wholesale		730,476		816		387		2,110		3,313		733,789
Total	$	5,935,776	$	115,979	$	35,247	$	20,842	$	172,068	$	6,107,844

A significant part of managing HDFS’ finance receivable portfolios includes the assessment of credit risk associated with each borrower. As the credit risk varies between the retail and wholesale portfolios, HDFS utilizes different credit risk indicators for each portfolio.

HDFS manages retail credit risk through its credit approval policy and ongoing collection efforts. HDFS uses FICO scores, a standard credit rating measurement, to differentiate the expected default rates of retail credit applicants enabling the Company to better evaluate credit applicants for approval and to tailor pricing according to this assessment. Retail loans with a FICO score of 640 or above at origination are considered prime, and loans with a FICO score below 640 are considered sub-prime. These credit quality indicators are determined at the time of loan origination and are not updated subsequent to the loan origination date.

The recorded investment of retail finance receivables, by credit quality indicator, was as follows (in thousands):

	July 1, 2012		December 31, 2011		June 26, 2011
Prime	$	4,181,527	$	4,097,048	$	4,313,863
Sub-prime		1,044,252		990,442		1,060,192
Total	$	5,225,779	$	5,087,490	$	5,374,055

HDFS’ credit risk on the wholesale portfolio is different from that of the retail portfolio. Whereas the retail portfolio represents a relatively homogeneous pool of retail finance receivables that exhibit more consistent loss patterns, the wholesale portfolio exposures are less consistent. HDFS utilizes an internal credit risk rating system to manage credit risk exposure consistently across wholesale borrowers and capture credit risk factors for each borrower.

HDFS uses the following internal credit quality indicators, based on the Company’s internal risk rating system, listed from highest level of risk to lowest level of risk for the wholesale portfolio: Doubtful, Substandard, Special Mention, Medium Risk and Low Risk. Based upon management’s review, the dealers classified in the Doubtful category are the dealers with the greatest likelihood of being charged-off, while the dealers classified as Low Risk are least likely to be charged-off. The internal rating system considers factors such as the specific borrowers’ ability to repay and the estimated value of any collateral. Dealer risk rating classifications are reviewed and updated on a quarterly basis.

The recorded investment of wholesale finance receivables, by internal credit quality indicator, was as follows (in thousands):

	July 1, 2012		December 31, 2011		June 26, 2011
Doubtful	$	9,467	$	13,048	$	12,386
Substandard		5,902		5,052		21,088
Special Mention		7,897		14,361		12,887
Medium Risk		808		3,032		12,861
Low Risk		880,964		789,147		674,567
Total	$	905,038	$	824,640	$	733,789

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Subsequent Event

6 Months Ended

Jul. 01, 2012

Subsequent Event

18. Subsequent Event

In July 2012, the Company issued $675.3 million of secured notes through a term asset-backed securitization transaction.

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Employee Benefit Plans

6 Months Ended

Jul. 01, 2012

Employee Benefit Plans

14. Employee Benefit Plans

The Company has defined benefit pension plans and postretirement healthcare benefit plans, which cover substantially all employees of the Motorcycles segment. The Company also has unfunded supplemental employee retirement plan agreements (SERPA) with certain employees which were instituted to replace benefits lost under the Tax Revenue Reconciliation Act of 1993. Components of net periodic benefit costs were as follows (in thousands):

	Three months ended						Six months ended
	July 1,			June 26,			July 1,			June 26,
	2012			2011			2012			2011
Pension and SERPA Benefits
Service cost	$	8,420		$	9,273		$	16,840		$	18,545
Interest cost		20,816			20,147			41,632			40,294
Expected return on plan assets		(29,277	)		(26,653	)		(58,555	)		(53,307	)
Amortization of unrecognized:
Prior service cost		740			745			1,479			1,489
Net loss		10,969			7,554			21,937			15,109
Curtailment loss		—			—			—			236
Net periodic benefit cost	$	11,668		$	11,066		$	23,333		$	22,366
Postretirement Healthcare Benefits
Service cost	$	1,853		$	1,907		$	3,706		$	3,814
Interest cost		4,578			4,911			9,155			9,822
Expected return on plan assets		(2,356	)		(2,346	)		(4,712	)		(4,692	)
Amortization of unrecognized:
Prior service credit		(963	)		(969	)		(1,927	)		(1,938	)
Net loss		1,855			1,798			3,711			3,596
Net periodic benefit cost	$	4,967		$	5,301		$	9,933		$	10,602

During the first six months of 2012, the Company voluntarily contributed $200.0 million in cash to further fund its pension plans. No additional pension contributions are required in 2012. The Company also voluntarily contributed $200.0 million in cash to further fund its pension plans during the first six months of 2011. The Company expects it will continue to make on-going contributions related to current benefit payments for SERPA and postretirement healthcare plans.

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Derivative Instruments and Hedging Activities

6 Months Ended

Jul. 01, 2012

Derivative Instruments and Hedging Activities

10. Derivative Instruments and Hedging Activities

The Company is exposed to certain risks such as foreign currency exchange rate risk, interest rate risk and commodity price risk. To reduce its exposure to such risks, the Company selectively uses derivative financial instruments. All derivative transactions are authorized and executed pursuant to regularly reviewed policies and procedures, which prohibit the use of financial instruments for speculative trading purposes.

All derivative instruments are recognized on the balance sheet at fair value (see Note 9). In accordance with ASC Topic 815, “Derivatives and Hedging,” the accounting for changes in the fair value of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and, further, on the type of hedging relationship. Changes in the fair value of derivatives that are designated as fair value hedges, along with the gain or loss on the hedged item, are recorded in current period earnings. For derivative instruments that are designated as cash flow hedges, the effective portion of gains and losses that result from changes in the fair value of derivative instruments is initially recorded in other comprehensive income (OCI) and subsequently reclassified into earnings when the hedged item affects income. The Company assesses, both at the inception of each hedge and on an on-going basis, whether the derivatives that are used in its hedging transactions are highly effective in offsetting changes in cash flows of the hedged items. Any ineffective portion is immediately recognized in earnings. No component of a hedging derivative instrument’s gain or loss is excluded from the assessment of hedge effectiveness. Derivative instruments that do not qualify for hedge accounting are recorded at fair value and any changes in fair value are recorded in current period earnings.

The Company sells its products internationally and in most markets those sales are made in the foreign country’s local currency. As a result, the Company’s earnings can be affected by fluctuations in the value of the U.S. dollar relative to foreign currency. The Company’s most significant foreign currency risk relates to the Euro, the Australian dollar and the Japanese yen. The Company utilizes foreign currency contracts to mitigate the effects of these currencies’ fluctuations on earnings. The foreign currency contracts are entered into with banks and allow the Company to exchange a specified amount of foreign currency for U.S. dollars at a future date, based on a fixed exchange rate.

The Company utilizes natural gas contracts and diesel fuel contracts to hedge portions of the cost of those commodities consumed in the Company’s motorcycle production and distribution operations.

The Company’s foreign currency contracts and commodity contracts generally have maturities of less than one year.

The Company’s earnings are affected by changes in interest rates. HDFS utilizes interest rate swaps to reduce the impact of fluctuations in interest rates on its unsecured commercial paper by converting a portion from a floating rate basis to a fixed rate basis. HDFS also entered into derivative contracts to facilitate its first quarter 2008 term asset-backed securitization transaction. These derivatives, which hedged assets held by a VIE, did not qualify for hedge accounting treatment and expired during 2011. The fair value of HDFS’s interest rate swaps is determined using pricing models that incorporate quoted prices for similar assets and observable inputs such as interest rates and yield curves.

The following table summarizes the fair value of the Company’s derivative financial instruments (in thousands):

	July 1, 2012						December 31, 2011						June 26, 2011
Derivatives Designated As Hedging Instruments Under ASC Topic 815	Notional Value		Asset Fair  Value(a)		Liability Fair  Value(b)		Notional Value		Asset Fair Value(a)		Liability Fair  Value(b)		Notional Value		Asset Fair  Value(a)		Liability Fair  Value(b)
Foreign currency contracts(c)	$	244,221	$	8,879	$	1,027	$	306,450	$	16,443	$	1,852	$	272,637	$	—	$	9,691
Natural gas contracts(c)		1,066		—		33		3,915		—		265		2,915		—		86
Interest rate swaps—unsecured commercial paper(c)		41,600		—		982		102,100		—		3,020		117,500		—		5,156
Total	$	286,887	$	8,879	$	2,042	$	412,465	$	16,443	$	5,137	$	393,052	$	—	$	14,933
	July 1, 2012						December 31, 2011						June 26, 2011
Derivatives Not Designated As Hedging Instruments Under ASC Topic 815	Notional Value		Asset Fair  Value(a)		Liability Fair  Value(b)		Notional Value		Asset Fair  Value(a)		Liability Fair  Value(b)		Notional Value		Asset Fair  Value(a)		Liability Fair  Value(b)
Disel fuel contracts	$	4,346	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
	$	4,346	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

(a) Included in other current assets

(b) Included in accrued liabilities

(c) Derivative designated as a cash flow hedge

The following tables summarize the amount of gains and losses related to derivative financial instruments designated as cash flow hedges (in thousands):

	Amount of Gain/(Loss) Recognized in OCI
	Three months ended						Six months ended
Cash Flow Hedges	July 1, 2012			June 26, 2011			July 1, 2012			June 26, 2011
Foreign currency contracts	$	10,309		$	(6,760	)	$	4,095		$	(16,921	)
Natural gas contracts		(109	)		(227	)		(424	)		(264	)
Interest rate swaps—unsecured commercial paper		(9	)		(397	)		(24	)		(405	)
Total	$	10,191		$	(7,384	)	$	3,647		$	(17,590	)

	Amount of Gain/(Loss) Reclassified from AOCI into Income
	Three months ended						Six months ended						Expected to be Reclassified
Cash Flow Hedges	July 1, 2012			June 26, 2011			July 1, 2012			June 26, 2011			Over the Next Twelve Months
Foreign currency contracts(a)	$	9,683		$	(14,781	)	$	12,104		$	(20,788	)	$	(5,162	)
Natural gas contracts(a)		(337	)		(166	)		(656	)		(424	)		33
Interest rate swaps—unsecured commercial paper(b)		(968	)		(1,336	)		(1,935	)		(2,686	)		(986	)
Total	$	8,378		$	(16,283	)	$	9,513		$	(23,898	)	$	(6,115	)

(a) Gain/(loss) reclassified from accumulated other comprehensive income (AOCI) to income is included in cost of goods sold.

(b) Gain/(loss) reclassified from AOCI to income is included in financial services interest expense.

For the three and six months ended July 1, 2012 and June 26, 2011, the cash flow hedges were highly effective and, as a result, the amount of hedge ineffectiveness was not material. No amounts were excluded from effectiveness testing.

For the three and six months ended July 1, 2012 and June 26, 2011, there were no gains or losses recognized in income related to derivative financial instruments designated as fair value hedges.

For the three and six months ended July 1, 2012 and June 26, 2011, there were no gains or losses recognized in income related to derivative financial instruments not designated as hedging instruments.

The Company is exposed to credit loss risk in the event of non-performance by counterparties to these derivative financial instruments. Although no assurances can be given, the Company does not expect any of the counterparties to these derivative financial instruments to fail to meet its obligations. To manage credit loss risk, the Company selects counterparties based on credit ratings and, on a quarterly basis, evaluates each hedge’s net position relative to the counterparty’s ability to cover its position.

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Income Taxes (Detail)	3 Months Ended		6 Months Ended
	Jul. 01, 2012	Jun. 26, 2011	Jul. 01, 2012	Jun. 26, 2011
Income Tax Rate Reconciliation [Line Items]
Income tax rate	35.30%	34.80%	35.30%	34.80%

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Fair Value Measurements

6 Months Ended

Jul. 01, 2012

Fair Value Measurements

8. Fair Value Measurements

Certain assets and liabilities are recorded at fair value in the financial statements; some of these are measured on a recurring basis while others are measured on a non-recurring basis. Assets and liabilities measured on a recurring basis are those that are adjusted to fair value each time a financial statement is prepared. Assets and liabilities measured on a non-recurring basis are those that are adjusted to fair value when a significant event occurs. In determining fair value of assets and liabilities, the Company uses various valuation techniques. The availability of inputs observable in the market varies from instrument to instrument and depends on a variety of factors including the type of instrument, whether the instrument is actively traded, and other characteristics particular to the transaction. For many financial instruments, pricing inputs are readily observable in the market, the valuation methodology used is widely accepted by market participants, and the valuation does not require significant management discretion. For other financial instruments, pricing inputs are less observable in the market and may require management judgment.

The Company assesses the inputs used to measure fair value using a three-tier hierarchy. The hierarchy indicates the extent to which inputs used in measuring fair value are observable in the market. Level 1 inputs include quoted prices for identical instruments and are the most observable. Level 2 inputs include quoted prices for similar assets and observable inputs such as interest rates, foreign currency exchange rates, commodity rates and yield curves. The Company uses the market approach to derive the fair value for its level 2 fair value measurements. Foreign currency exchange contracts are valued using publicly quoted spot and forward prices; commodity contracts are valued using publicly quoted prices, where available, or dealer quotes; interest rate swaps are valued using publicized swap curves; and investments in marketable debt and equity securities are valued using publicly quoted prices.

Level 3 inputs are not observable in the market and include management’s judgments about the assumptions market participants would use in pricing the asset or liability. The use of observable and unobservable inputs is reflected in the hierarchy assessment disclosed in the following tables.

Recurring Fair Value Measurements

The following tables present information about the Company’s assets and liabilities measured at fair value on a recurring basis (in thousands):

	July 1, 2012
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
	Balance as of		Identical Assets		Inputs		Inputs
	July 1, 2012		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents	$	764,147	$	764,147	$	—	$	—
Marketable securities		135,848		—		135,848		—
Derivatives		8,879		—		8,879		—
	$	908,874	$	764,147	$	144,727	$	—
Liabilities:
Derivatives	$	2,042	$	—	$	2,042	$	—

	December 31, 2011
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
	Balance as of		Identical Assets		Inputs		Inputs
	December 31, 2011		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents	$	1,302,367	$	1,302,367	$	—	$	—
Marketable securities		153,380		—		153,380		—
Derivatives		16,443		—		16,443		—
	$	1,472,190	$	1,302,367	$	169,823	$	—
Liabilities:
Derivatives	$	5,136	$	—	$	5,136	$	—
	June 26, 2011
					Significant
			Quoted Prices in		Other		Significant
			Active Markets for		Observable		Unobservable
	Balance as of		Identical Assets		Inputs		Inputs
	June 26, 2011		(Level 1)		(Level 2)		(Level 3)
Assets:
Cash equivalents	$	582,808	$	582,808	$	—	$	—
Marketable securities		244,555		49,999		194,556		—
Derivatives		—		—		—		—
	$	827,363	$	632,807	$	194,556	$	—
Liabilities:
Derivatives	$	14,933	$	—	$	14,933	$	—

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Fair Value of Financial Instruments

6 Months Ended

Jul. 01, 2012

Fair Value of Financial Instruments

9. Fair Value of Financial Instruments

The Company’s financial instruments consist primarily of cash and cash equivalents, marketable securities, trade receivables, finance receivables, net, trade payables, debt, foreign currency contracts and interest rate swaps (derivative instruments are discussed further in Note 10). Under U.S. GAAP, certain of these items are required to be recorded in the financial statements at fair value, while others are required to be recorded at historical cost.

The following table summarizes the fair value and carrying value of the Company’s financial instruments (in thousands):

	July 1, 2012				December 31, 2011				June 26, 2011
	Fair Value		Carrying Value		Fair Value		Carrying Value		Fair Value		Carrying Value
Assets:
Cash and cash equivalents	$	1,071,496	$	1,071,496	$	1,526,950	$	1,526,950	$	973,478	$	973,478
Marketable securities	$	135,848	$	135,848	$	153,380	$	153,380	$	244,555	$	244,555
Accounts receivable, net	$	250,268	$	250,268	$	219,039	$	219,039	$	265,663	$	265,663
Derivatives	$	8,879	$	8,879	$	16,443	$	16,443	$	—	$	—
Finance receivables, net	$	6,099,619	$	6,016,569	$	5,888,040	$	5,786,681	$	6,052,156	$	5,963,440
Restricted cash held by variable interest entities	$	188,564	$	188,564	$	229,655	$	229,655	$	244,060	$	244,060
Liabilities:
Accounts payable	$	252,239	$	252,239	$	255,713	$	255,713	$	277,395	$	277,395
Derivatives	$	2,042	$	2,042	$	5,136	$	5,136	$	14,933	$	14,933
Unsecured commercial paper	$	845,868	$	845,868	$	874,286	$	874,286	$	735,737	$	735,737
Credit facilities	$	143,792	$	143,792	$	159,794	$	159,794	$	201,112	$	201,112
Medium-term notes	$	2,967,112	$	2,698,359	$	2,561,458	$	2,298,193	$	2,555,926	$	2,347,750
Senior unsecured notes	$	360,791	$	303,000	$	376,513	$	303,000	$	391,051	$	303,000
Term asset-backed securitization debt	$	1,345,452	$	1,339,232	$	2,099,060	$	2,087,346	$	1,883,465	$	1,853,382

Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Net and Accounts Payable – With the exception of certain money-market investments, these items are recorded in the financial statements at historical cost. The historical cost basis for these amounts is estimated to approximate their respective fair values due to the short maturity of these instruments.

Marketable Securities – Marketable securities are recorded in the financial statements at fair value. The fair value of marketable securities is based primarily on quoted market prices of similar financial assets. Changes in fair value are recorded, net of tax, as other comprehensive income and included as a component of shareholders’ equity. Fair Value is based on Level 1 or Level 2 inputs.

Finance Receivables, Net – Finance receivables, net includes finance receivables held for investment, net and restricted finance receivables held by VIEs, net. Retail and wholesale finance receivables are recorded in the financial statements at historical cost less a provision for credit losses. The fair value of retail finance receivables is generally calculated by discounting future cash flows using an estimated discount rate that reflects current credit, interest rate and prepayment risks associated with similar types of instruments. Fair value is determined based on Level 3 inputs. The historical cost basis of wholesale finance receivables approximates fair value because they either are short-term or have interest rates that adjust with changes in market interest rates.

Derivatives – Interest rate swaps, foreign currency exchange contracts and commodity contracts are derivative financial instruments and are carried at fair value on the balance sheet. The fair value of interest rate swaps is determined using pricing models that incorporate quoted prices for similar assets and observable inputs such as interest rates and yield curves. The fair value of foreign currency exchange and commodity contracts are determined using publicly quoted prices. Fair value is calculated using Level 2 inputs.

Debt – Debt is generally recorded in the financial statements at historical cost. The carrying value of debt provided under credit facilities approximates fair value since the interest rates charged under the facilities are tied directly to market rates and fluctuate as market rates change. The carrying value of unsecured commercial paper approximates fair value due to its short maturity. Fair value is calculated using Level 2 inputs.

The fair values of the medium-term notes maturing in December 2012, December 2014, March 2016, March 2017 and June 2018 are estimated based upon rates currently available for debt with similar terms and remaining maturities. Fair value is calculated using Level 2 inputs.

The fair value of the senior unsecured notes is estimated based upon rates currently available for debt with similar terms and remaining maturities. Fair value is calculated using Level 2 inputs.

The fair value of the debt related to term asset-backed securitization transactions is estimated based on pricing currently available for transactions with similar terms and maturities. Fair value is calculated using Level 2 inputs.

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Income Taxes

6 Months Ended

Jul. 01, 2012

Income Taxes

11. Income Taxes

The Company’s 2012 income tax rate for the three and six months ended July 1, 2012 was 35.3% compared to 34.8% for the same periods last year. Prior year was favorably impacted by the Federal research and development credit that expired at the end of 2011.

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Earnings Per Share (Narrative) (Detail) In Millions, unless otherwise specified	3 Months Ended		6 Months Ended
	Jul. 01, 2012	Jun. 26, 2011	Jul. 01, 2012	Jun. 26, 2011
Earnings Per Share [Line Items]
Shares considered anti-dilutive and excluded from computation	2.1	4.1	2.3	3.7

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Employee Benefit Plans (Narrative) (Detail) (USD $) In Millions, unless otherwise specified	6 Months Ended
	Jul. 01, 2012 Pension And Postretirement Healthcare Plan [Member]	Jun. 26, 2011 Postretirement Healthcare Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Company contributions	$ 200.0	$ 200.0

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Earnings Per Share (Reconciliation Of Earnings Per Share Basic And Diluted) (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jul. 01, 2012	Jun. 26, 2011	Jul. 01, 2012	Jun. 26, 2011
Earnings Per Share [Line Items]
Income from continuing operations used in computing basic and diluted earnings per share	$ 247,250	$ 190,580	$ 419,285	$ 309,840
Denominator for basic earnings per share- weighted-average common shares	228,838	234,336	228,914	234,086
Effect of dilutive securities-employee stock compensation plan	2,085	1,832	2,190	1,958
Denominator for diluted earnings per share- adjusted weighted-average shares outstanding	230,923	236,168	231,104	236,044
Basic	$ 1.08	$ 0.81	$ 1.83	$ 1.32
Diluted	$ 1.07	$ 0.81	$ 1.81	$ 1.31

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Business Segments (Tables)

6 Months Ended

Jul. 01, 2012

Information By Strategic Business Units

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

	Three months ended				Six months ended
	July 1,		June 26,		July 1,		June 26,
	2012		2011		2012		2011
Motorcycles net revenue	$	1,569,047	$	1,339,744	$	2,842,416	$	2,402,788
Gross profit		563,817		468,268		1,020,327		820,134
Selling, administrative and engineering expense		248,038		234,827		485,033		438,632
Restructuring expense		6,220		13,594		17,671		36,593
Operating income from Motorcycles		309,559		219,847		517,623		344,909
Financial services income		160,613		165,853		316,935		327,739
Financial services expense		78,659		83,798		167,587		177,749
Operating income from Financial Services		81,954		82,055		149,348		149,990
Operating income	$	391,513	$	301,092	$	666,971	$	494,899

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Finance Receivables (Recorded Investment Of Retail Finance Receivables By Credit Quality Indicator) (Detail) (USD $) In Thousands, unless otherwise specified	Jul. 01, 2012	Dec. 31, 2011	Jun. 26, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables, gross	$ 5,225,779	$ 5,087,490	$ 5,374,055
Retail [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables, gross	5,225,779	5,087,490	5,374,055
Retail [Member] | Prime [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables, gross	4,181,527	4,097,048	4,313,863
Retail [Member] | Sub-Prime [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Finance receivables, gross	$ 1,044,252	$ 990,442	$ 1,060,192

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Commitment and Contingencies

6 Months Ended

Jul. 01, 2012

Commitment and Contingencies

16. Commitment and Contingencies

The Company is subject to lawsuits and other claims related to environmental, product and other matters. In determining required reserves related to these items, the Company carefully analyzes cases and considers the likelihood of adverse judgments or outcomes, as well as the potential range of possible loss. The required reserves are monitored on an ongoing basis and are updated based on new developments or new information in each matter.

Environmental Protection Agency Notice

In December 2009, the Company received formal, written requests for information from the United States Environmental Protection Agency (EPA) regarding: (i) certificates of conformity for motorcycle emissions and related designations and labels, (ii) aftermarket parts, and (iii) warranty claims on emissions related components. The Company promptly submitted written responses to the EPA’s inquiry and engaged in discussions with the EPA. It is possible that a result of the EPA’s investigation will be some form of enforcement action by the EPA that will seek a fine or other relief. However, at this time the Company does not know and cannot reasonably estimate the impact of any remedies the EPA might seek.

York Environmental Matters:

The Company is involved with government agencies and groups of potentially responsible parties in various environmental matters, including a matter involving the cleanup of soil and groundwater contamination at its York, Pennsylvania facility. The York facility was formerly used by the U.S. Navy and AMF prior to the purchase of the York facility by the Company from AMF in 1981. Although the Company is not certain as to the full extent of the environmental contamination at the York facility, it has been working with the Pennsylvania Department of Environmental Protection (PADEP) since 1986 in undertaking environmental investigation and remediation activities, including an ongoing site-wide remedial investigation/feasibility study (RI/FS). In January 1995, the Company entered into a settlement agreement (the Agreement) with the Navy. The Agreement calls for the Navy and the Company to contribute amounts into a trust equal to 53% and 47%, respectively, of future costs associated with environmental investigation and remediation activities at the York facility (Response Costs). The trust administers the payment of the Response Costs incurred at the York facility as covered by the Agreement.

In February 2002, the Company was advised by the EPA that it considers some of the Company’s remediation activities at the York facility to be subject to the EPA’s corrective action program under the Resource Conservation and Recovery Act (RCRA) and offered the Company the option of addressing corrective action under a RCRA facility lead agreement. In July 2005, the York facility was designated as the first site in Pennsylvania to be addressed under the “One Cleanup Program.” The program provides a more streamlined and efficient oversight of voluntary remediation by both PADEP and EPA and will be carried out consistent with the Agreement with the Navy. As a result, the RCRA facility lead agreement has been superseded.

The Company estimates that its share of the future Response Costs at the York facility will be approximately $2.3 million and has established a reserve for this amount which is included in accrued liabilities in the Condensed Consolidated Balance Sheets. As noted above, the RI/FS is still underway and given the uncertainty that exists concerning the nature and scope of additional environmental investigation and remediation that may ultimately be required under the RI/FS or otherwise at the York facility, we are unable to make a reasonable estimate of those additional costs, if any, that may result.

The estimate of the Company’s future Response Costs that will be incurred at the York facility is based on reports of independent environmental consultants retained by the Company, the actual costs incurred to date and the estimated costs to complete the necessary investigation and remediation activities. Response Costs related to the remediation of soil are expected to be incurred primarily over a period of several years ending in 2015. Response Costs related to ground water remediation may continue for some time beyond 2015.

Product Liability Matters:

Additionally, the Company is involved in product liability suits related to the operation of its business. The Company accrues for claim exposures that are probable of occurrence and can be reasonably estimated. The Company also maintains insurance coverage for product liability exposures. The Company believes that its accruals and insurance coverage are adequate and that product liability will not have a material adverse effect on the Company’s consolidated financial statements.

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Finance Receivables (Tables)

6 Months Ended

Jul. 01, 2012

Finance Receivables

Finance receivables, net, including finance receivables held by VIEs, consisted of the following (in thousands):

	July 1,			December 31,			June 26,
	2012			2011			2011
Retail	$	5,225,779		$	5,087,490		$	5,374,055
Wholesale		905,038			824,640			733,789
		6,130,817			5,912,130			6,107,844
Allowance for credit losses		(114,248	)		(125,449	)		(144,404	)
	$	6,016,569		$	5,786,681		$	5,963,440

Changes In The Allowance For Credit Losses On Finance Receivables

Changes in the allowance for credit losses on finance receivables by portfolio were as follows (in thousands):

	Three months ended July 1, 2012
	Retail			Wholesale			Total
Balance, beginning of period	$	112,857		$	9,646		$	122,503
Provision for credit losses		(3,681	)		(1,578	)		(5,259	)
Charge-offs		(17,054	)		—			(17,054	)
Recoveries		14,058			—			14,058
Balance, end of period	$	106,180		$	8,068		$	114,248
	Three months ended June 26, 2011
	Retail			Wholesale			Total
Balance, beginning of period	$	141,704		$	17,980		$	159,684
Provision for credit losses		(2,596	)		(4,194	)		(6,790	)
Charge-offs		(22,903	)		(330	)		(23,233	)
Recoveries		14,743			—			14,743
Balance, end of period	$	130,948		$	13,456		$	144,404
	Six months ended July 1, 2012
	Retail			Wholesale			Total
Balance, beginning of period	$	116,112		$	9,337		$	125,449
Provision for credit losses		5,023			(1,269	)		3,754
Charge-offs		(42,906	)		—			(42,906	)
Recoveries		27,951			—			27,951
Balance, end of period	$	106,180		$	8,068		$	114,248
	Six months ended June 26, 2011
	Retail			Wholesale			Total
Balance, beginning of period	$	157,791		$	15,798		$	173,589
Provision for credit losses		843			(2,027	)		(1,184	)
Charge-offs		(58,094	)		(330	)		(58,424	)
Recoveries		30,408			15			30,423
Balance, end of period	$	130,948		$	13,456		$	144,404

Allowance For Credit Losses And Finance Receivables By Portfolio Individually And Collectively Evaluated For Impairment

The allowance for credit losses and finance receivables by portfolio, segregated by those amounts that are individually evaluated for impairment and those that are collectively evaluated for impairment was, as follows (in thousands):

	July 1, 2012
	Retail		Wholesale		Total
Allowance for credit losses, ending balance:
Individually evaluated for impairment	$	—	$	—	$	—
Collectively evaluated for impairment		106,180		8,068		114,248
Total allowance for credit losses	$	106,180	$	8,068	$	114,248
Finance receivables, ending balance:
Individually evaluated for impairment	$	—	$	—	$	—
Collectively evaluated for impairment		5,225,779		905,038		6,130,817
Total finance receivables	$	5,225,779	$	905,038	$	6,130,817

	December 31, 2011
	Retail		Wholesale		Total
Allowance for credit losses, ending balance:
Individually evaluated for impairment	$	—	$	—	$	—
Collectively evaluated for impairment		116,112		9,337		125,449
Total allowance for credit losses	$	116,112	$	9,337	$	125,449
Finance receivables, ending balance:
Individually evaluated for impairment	$	—	$	—	$	—
Collectively evaluated for impairment		5,087,490		824,640		5,912,130
Total finance receivables	$	5,087,490	$	824,640	$	5,912,130
	June 26, 2011
	Retail		Wholesale		Total
Allowance for credit losses, ending balance:
Individually evaluated for impairment	$	—	$	3,031	$	3,031
Collectively evaluated for impairment		130,948		10,425		141,373
Total allowance for credit losses	$	130,948	$	13,456	$	144,404
Finance receivables, ending balance:
Individually evaluated for impairment	$	—	$	4,676	$	4,676
Collectively evaluated for impairment		5,374,055		729,113		6,103,168
Total finance receivables	$	5,374,055	$	733,789	$	6,107,844

Finance Receivables That Are Individually Deemed To Be Impaired

Additional information related to the wholesale finance receivables that were individually deemed to be impaired under ASC Topic 310, “Receivables,” at June 26, 2011 includes (in thousands):

	June 26, 2011
							Three months ended				Six months ended
			Unpaid				Average		Interest		Average		Interest
	Recorded		Principal		Related		Recorded		Income		Recorded		Income
	Investment		Balance		Allowance		Investment		Recognized		Investment		Recognized
Wholesale:
No related allowance recorded	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Related allowance recorded		4,676		4,441		3,031		4,932		—		5,050		—
Total impaired wholesale finance receivables	$	4,676	$	4,441	$	3,031	$	4,932	$	—	$	5,050	$	—

Aging Of Past Due Finance Receivables Including Non-Accrual Status Finance Receivables

An analysis of the aging of past due finance receivables, which includes non-accrual status finance receivables was as follows (in thousands):

	July 1, 2012
							Greater than				Total
			31-60 Days		61-90 Days		90 Days		Total		Finance
	Current		Past Due		Past Due		Past Due		Past Due		Receivables
Retail	$	5,101,847	$	84,858	$	24,247	$	14,827	$	123,932	$	5,225,779
Wholesale		902,891		1,125		468		554		2,147		905,038
Total	$	6,004,738	$	85,983	$	24,715	$	15,381	$	126,079	$	6,130,817
	December 31, 2011
							Greater than				Total
			31-60 Days		61-90 Days		90 Days		Total		Finance
	Current		Past Due		Past Due		Past Due		Past Due		Receivables
Retail	$	4,915,711	$	107,373	$	36,937	$	27,469	$	171,779	$	5,087,490
Wholesale		822,610		777		344		909		2,030		824,640
Total	$	5,738,321	$	108,150	$	37,281	$	28,378	$	173,809	$	5,912,130
	June 26, 2011
							Greater than				Total
			31-60 Days		61-90 Days		90 Days		Total		Finance
	Current		Past Due		Past Due		Past Due		Past Due		Receivables
Retail	$	5,205,300	$	115,163	$	34,860	$	18,732	$	168,755	$	5,374,055
Wholesale		730,476		816		387		2,110		3,313		733,789
Total	$	5,935,776	$	115,979	$	35,247	$	20,842	$	172,068	$	6,107,844

Recorded Investment Of Retail Finance Receivables By Credit Quality Indicator

The recorded investment of retail finance receivables, by credit quality indicator, was as follows (in thousands):

	July 1, 2012		December 31, 2011		June 26, 2011
Prime	$	4,181,527	$	4,097,048	$	4,313,863
Sub-prime		1,044,252		990,442		1,060,192
Total	$	5,225,779	$	5,087,490	$	5,374,055

Recorded Investment Of Wholesale Finance Receivables By Internal Credit Quality Indicator

The recorded investment of wholesale finance receivables, by internal credit quality indicator, was as follows (in thousands):

	July 1, 2012		December 31, 2011		June 26, 2011
Doubtful	$	9,467	$	13,048	$	12,386
Substandard		5,902		5,052		21,088
Special Mention		7,897		14,361		12,887
Medium Risk		808		3,032		12,861
Low Risk		880,964		789,147		674,567
Total	$	905,038	$	824,640	$	733,789

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Finance Receivables (Finance Receivables Individually Deemed To Be Impaired) (Detail) (USD $)	3 Months Ended	6 Months Ended
	Jun. 26, 2011	Jun. 26, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	$ 4,676	$ 4,676
Unpaid Principal Balance	4,441	4,441
Related Allowance	3,031	3,031
Average Recorded Investment	4,932	5,050
Interest Income Recognized
Wholesale [Member] | No Related Allowance Recorded [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Interest Income Recognized
Wholesale [Member] | Related Allowance Recorded [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Recorded Investment	4,676	4,676
Unpaid Principal Balance	4,441	4,441
Related Allowance	3,031	3,031
Average Recorded Investment	4,932	5,050
Interest Income Recognized

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Restructuring Expense (Narrative) (Detail) (USD $)	1 Months Ended	6 Months Ended
	Feb. 28, 2011	Jul. 01, 2012 2011 Restructuring Plan [Member]	Jul. 01, 2012 2011 Restructuring Plan [Member] Kansas City Facility [Member]	Jun. 26, 2011 2011 Restructuring Plan [Member] Kansas City Facility [Member]	Jul. 01, 2012 2010 Restructuring Plan [Member]	Jul. 01, 2012 2010 Restructuring Plan [Member] Milwaukee Facilities [Member]	Jul. 01, 2012 2010 Restructuring Plan [Member] Tomahawk Facilities [Member]	Jul. 01, 2012 2011 Kansas City Restructuring Plan [Member]	Jul. 01, 2012 2011 New Castalloy Restructuring Plan [Member] Employee	Jul. 01, 2012 2009 Restructuring Plan [Member]	Jun. 26, 2011 2009 Restructuring Plan [Member]	Jul. 01, 2012 2009 Restructuring Plan [Member] Motorcycles [Member]	Jul. 01, 2012 2009 Restructuring Plan [Member] Financial Services [Member]
Restructuring Cost and Reserve [Line Items]
Estimated reduction in workforce									200
Estimated restructuring expense		$ 14,000,000			$ 62,000,000				$ 30,000,000
Non-cash restructuring expense				200,000					30,000,000		253,000
Estimated percentage of restructuring charges that will be non-cash		10.00%			42.00%				35.00%	30.00%
Cumulative restructuring and impairment expenses					60,400,000			7,800,000	15,400,000	389,800,000
Incurred restructuring and impairment expense					3,500,000				6,000,000	9,200,000
Labor agreement period (in years)	7
Less employees: required under existing contract			145			250	75
Reduction in hourly production positions, minimum										2,700
Reduction in hourly production positions, maximum										2,900
Estimated reduction in salaried positions from restructuring												720	100
Restructuring and impairment expenses, minimum										384,000,000
Restructuring and impairment expenses, maximum										$ 404,000,000

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jul. 01, 2012	Jun. 26, 2011
Net cash provided by operating activities of continuing operations (Note 3)	$ 288,242	$ 472,962
Cash flows from investing activities of continuing operations:
Capital expenditures	(60,078)	(69,267)
Origination of finance receivables	(1,583,572)	(1,434,607)
Collections on finance receivables	1,435,790	1,416,610
Purchases of marketable securities	(4,993)	(142,653)
Sales and redemptions of marketable securities	23,046	39,966
Net cash used by investing activities of continuing operations	(189,807)	(189,951)
Cash flows from financing activities of continuing operations:
Proceeds from issuance of medium-term notes	397,373	447,076
Proceeds from securitization debt	91,030
Repayments of securitization debt	(839,401)	(901,851)
Net (decrease) increase in credit facilities and unsecured commercial paper	(46,629)	131,039
Net change in restricted cash	41,091	44,827
Dividends	(71,645)	(53,152)
Purchase of common stock for treasury	(172,742)	(5,678)
Excess tax benefits from share-based payments	15,730	3,476
Issuance of common stock under employee stock option plans	35,337	4,534
Net cash (used by) provided by financing activities of continuing operations	(549,856)	(329,729)
Effect of exchange rate changes on cash and cash equivalents of continuing operations	(4,033)	(1,702)
Net decrease in cash and cash equivalents of continuing operations	(455,454)	(48,420)
Cash flows from discontinued operations:
Cash flows from operating activities of discontinued operations		(35)
Cash flows from investing activities of discontinued operations
Effect of exchange rate changes on cash and cash equivalents of discontinued operations
Total cash flows from discontinued operations		(35)
Net decrease in cash and cash equivalents	(455,454)	(48,455)
Cash and cash equivalents:
Cash and cash equivalents-beginning of period	1,526,950	1,021,933
Cash and cash equivalents of discontinued operations-beginning of period
Net decrease in cash and cash equivalents	(455,454)	(48,455)
Less: Cash and cash equivalents of discontinued operations-end of period
Cash and cash equivalents-end of period	$ 1,071,496	$ 973,478

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Restructuring Expense

6 Months Ended

Jul. 01, 2012

Restructuring Expense

5. Restructuring Expense

2011 Restructuring Plans

In December 2011, the Company made a decision to cease operations at New Castalloy, its Australian subsidiary and producer of cast motorcycle wheels and wheel hubs, and source those components through other existing suppliers (2011 New Castalloy Restructuring Plan). The Company expects the transition of supply from New Castalloy to be complete by mid-2013. The decision to close New Castalloy came as part of the Company’s overall long term strategy to develop world-class manufacturing capability throughout the Company by restructuring and consolidating operations for greater competitiveness, efficiency and flexibility. In connection with this decision, the Company will reduce its workforce by approximately 200 employees by mid-2013.

Under the 2011 New Castalloy Restructuring Plan, restructuring expenses consist of employee severance and termination costs, accelerated depreciation and other related costs. The Company expects to incur approximately $30 million in restructuring charges related to the transition through 2013. Approximately 35% of the $30 million will be non-cash charges. On a cumulative basis, the Company has incurred $15.4 million of restructuring expense under the 2011 New Castalloy Restructuring Plan as of July 1, 2012, of which $6.0 million was incurred during the first six months of 2012.

In February 2011, the Company’s unionized employees at its facility in Kansas City, Missouri ratified a new seven-year labor agreement. The new agreement took effect on August 1, 2011. The new contract is similar to the labor agreements ratified at the Company’s Wisconsin facilities in September 2010 and its York, Pennsylvania facility in December 2009, and allows for similar flexibility and increased production efficiency. Once the new contract is fully implemented, the production system in Kansas City, like Wisconsin and York, will include the addition of a flexible workforce component.

After taking actions to implement the new ratified labor agreement (2011 Kansas City Restructuring Plan), the Company expects to have about 145 fewer full-time hourly unionized employees in its Kansas City facility than would have been required under the prior contract.

Under the 2011 Kansas City Restructuring Plan, restructuring expenses consist of employee severance and termination costs and other related costs. The Company expects to incur approximately $14 million in restructuring expenses related to the new contract through 2012, of which approximately 10% are expected to be non-cash. On a cumulative basis, the Company has incurred $7.8 million of restructuring expense under the 2011 Kansas City Restructuring Plan as of July 1, 2012. During the first six months of 2012, the Company released a portion of its 2011 Kansas City Restructuring Plan reserve related to severance costs as these costs are no longer expected to be incurred.

For the six months ended June 26, 2011, restructuring expense included $0.2 million of noncash curtailment losses related to the Company’s pension plan that covers employees of the Kansas City facility.

The following table summarizes the Motorcycle segment’s 2011 Kansas City Restructuring Plan and 2011 New Castalloy Restructuring Plan reserve activity and balances as recorded in accrued liabilities (in thousands):

	Six months ended July 1, 2012
	Kansas City								New Castalloy												Consolidated
	Employee								Employee
	Severance and								Severance and
	Termination								Termination			Accelerated
	Costs			Other		Total			Costs			Depreciation			Other			Total			Total
Balance, beginning of period	$	4,123		$	—	$	4,123		$	8,428		$	—		$	305		$	8,733		$	12,856
Restructuring expense		—			—		—			1,141			4,093			755			5,989			5,989
Utilized—cash		—			—		—			(312	)		—			(722	)		(1,034	)		(1,034	)
Utilized—noncash		—			—		—			—			(4,093	)		—			(4,093	)		(4,093	)
Noncash reserve release		(967	)		—		(967	)		—			—			—			—			(967	)
Balance, end of period	$	3,156		$	—	$	3,156		$	9,257		$	—		$	338		$	9,595		$	12,751

	Six months ended June 26, 2011
	Kansas City
	Employee
	Severance and
	Termination
	Costs			Other			Total
Restructuring expense		7,177			340			7,517
Utilized—cash		(3,843	)		(340	)		(4,183	)
Utilized—noncash		(236	)		—			(236	)
Balance, end of period	$	3,098		$	—		$	3,098

2010 Restructuring Plan

In September 2010, the Company’s unionized employees in Wisconsin ratified three separate new seven-year labor agreements which took effect in April 2012 when the prior contracts expired. The new contracts are similar to the labor agreement ratified at the Company’s York, Pennsylvania facility in December 2009 and allow for similar flexibility and increased production efficiency. Once the new contracts are fully implemented, the production system in Wisconsin, like York, will include the addition of a flexible workforce component.

Based on the new ratified labor agreements (2010 Restructuring Plan), the Company expects to have about 250 fewer full-time hourly unionized employees in its Milwaukee-area facilities when the contracts are fully implemented than would have been required under the prior contracts. In Tomahawk, the Company expects to have about 75 fewer full-time hourly unionized employees when the contract is fully implemented than would have been required under the prior contract.

Under the 2010 Restructuring Plan, restructuring expenses consist of employee severance and termination costs and other related costs. The Company expects to incur approximately $62 million in restructuring expenses related to the new contracts through 2012, of which approximately 42% are expected to be non-cash. On a cumulative basis, the Company has incurred $60.4 million of restructuring expense under the 2010 Restructuring Plan as of July 1, 2012, of which $3.5 million was incurred during the first six months of 2012.

The following table summarizes the Motorcycles segment’s 2010 Restructuring Plan reserve activity and balances as recorded in accrued liabilities (in thousands):

	Six months ended			Six months ended
	July 1, 2012			June 26, 2011
	Employee			Employee
	Severance and			Severance and
	Termination Costs			Termination Costs
Balance, beginning of period	$	20,361		$	8,652
Restructuring expense		3,457			6,296
Utilized—cash		(10,053	)		(732	)
Balance, end of period	$	13,765		$	14,216

2009 Restructuring Plan

During 2009, in response to the U.S. economic recession and worldwide slowdown in consumer demand, the Company committed to a volume reduction and a combination of restructuring actions (2009 Restructuring Plan) that are expected to be completed at various dates between 2009 and 2012. The actions were designed to reduce administrative costs, eliminate excess capacity and exit non-core business operations. The Company’s significant announced actions include the restructuring and transformation of its York, Pennsylvania production facility including the implementation of a new more flexible unionized labor agreement; consolidation of facilities related to engine and transmission production; outsourcing of certain distribution and transportation activities and exiting the Buell product line.

The 2009 Restructuring Plan includes an estimated reduction of approximately 2,700 to 2,900 hourly production positions and approximately 720 non-production, primarily salaried positions within the Motorcycles segment and approximately 100 salaried positions in the Financial Services segment.

Under the 2009 Restructuring Plan, restructuring expenses consist of employee severance and termination costs, accelerated depreciation on the long-lived assets that will be exited as part of the 2009 Restructuring Plan and other related costs. The Company expects total costs related to the 2009 Restructuring Plan to result in restructuring and impairment expenses of approximately $384 million to $404 million from 2009 to 2012, of which approximately 30% are expected to be non-cash. On a cumulative basis, the Company has incurred $389.8 million of restructuring and impairment expense under the 2009 Restructuring Plan as of July 1, 2012, of which $9.2 million was incurred during the first six months of 2012.

The following table summarizes the Company’s 2009 Restructuring Plan reserve activity and balances recorded in accrued liabilities (in thousands):

	Six months ended July 1, 2012
	Motorcycles & Related Products
	Employee
	Severance and			Accelerated
	Termination Costs			Depreciation		Other			Total
Balance, beginning of period	$	10,089		$	—	$	—		$	10,089
Restructuring expense		331			—		10,888			11,219
Utilized—cash		(1,878	)		—		(10,888	)		(12,766	)
Utilized—noncash		—			—		—			—
Noncash reserve release		(2,027	)		—		—			(2,027	)
Balance, end of period	$	6,515		$	—	$	—		$	6,515

	Six months ended June 26, 2011
	Motorcycles & Related Products
	Employee
	Severance and			Accelerated
	Termination Costs			Depreciation		Other			Total
Balance, beginning of period	$	23,818		$	—	$	2,764		$	26,582
Restructuring expense		3,504			—		19,276			22,780
Utilized—cash		(8,159	)		—		(20,341	)		(28,500	)
Utilized—noncash		—			—		253			253
Balance, end of period	$	19,163		$	—	$	1,952		$	21,115

Other restructuring costs under the 2009 Restructuring Plan include items such as the exit costs for terminating supply contracts, lease termination costs and moving costs. During the first six months of 2012, the Company released a portion of its 2009 Restructuring Plan reserve related to employee severance costs as these costs are no longer expected to be incurred.

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Derivative Instruments And Hedging Activities (Gain Loss On Derivative Cash Flow Hedges Recognized In OCI) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jul. 01, 2012	Jun. 26, 2011	Jul. 01, 2012	Jun. 26, 2011
Derivative Instruments And Hedging Activities [Line Items]
Amount of Gain/(Loss) Recognized in OCI	$ 10,191	$ (7,384)	$ 3,647	$ (17,590)
Interest Rate Swaps Unsecured Commercial Paper [Member]
Derivative Instruments And Hedging Activities [Line Items]
Amount of (Loss) Recognized in OCI	(9)	(397)	(24)	(405)
Foreign Currency Contracts [Member]
Derivative Instruments And Hedging Activities [Line Items]
Amount of (Loss) Recognized in OCI	10,309	(6,760)	4,095	(16,921)
Natural Gas Contracts [Member]
Derivative Instruments And Hedging Activities [Line Items]
Amount of (Loss) Recognized in OCI	$ (109)	$ (227)	$ (424)	$ (264)

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Supplemental Consolidating Data (Operations) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jul. 01, 2012	Jun. 26, 2011	Jul. 01, 2012	Jun. 26, 2011
Segment Reporting Information [Line Items]
Motorcycles and related products	$ 1,569,047	$ 1,339,744	$ 2,842,416	$ 2,402,788
Financial services	160,613	165,853	316,935	327,739
Total revenue	1,729,660	1,505,597	3,159,351	2,730,527
Motorcycles and related products cost of goods sold	1,005,230	871,476	1,822,089	1,582,654
Financial services interest expense	48,712	56,991	99,968	115,026
Financial services provision for credit losses	(5,259)	(6,790)	3,754	(1,184)
Selling, administrative and engineering expense	283,244	268,424	548,898	502,539
Restructuring expense	6,220	13,594	17,671	36,593
Total costs and expenses	1,338,147	1,203,695	2,492,380	2,235,628
Operating income	391,513	301,902	666,971	494,899
Investment income	2,231	1,748	4,164	3,146
Interest expense	11,595	11,350	23,090	22,831
Income before provision for income taxes	382,149	292,300	648,045	475,214
Provision for income taxes	134,899	101,720	228,760	165,374
Income from continuing operations	247,250	190,580	419,285	309,840
Loss from discontinued operations, net of tax
Net income	247,250	190,580	419,285	309,840
Motorcycles And Related Products Operations [Member]
Segment Reporting Information [Line Items]
Motorcycles and related products	1,572,003	1,342,803	2,847,786	2,408,293
Total revenue	1,572,003	1,342,803	2,847,786	2,408,293
Motorcycles and related products cost of goods sold	1,005,230	871,476	1,822,089	1,582,654
Selling, administrative and engineering expense	248,268	235,492	484,847	439,163
Restructuring expense	6,220	13,594	17,671	36,593
Total costs and expenses	1,259,718	1,120,562	2,324,607	2,058,410
Operating income	312,285	222,241	523,179	349,883
Investment income	2,231	1,748	229,164	128,146
Interest expense	11,595	11,350	23,090	22,831
Income before provision for income taxes	302,921	212,639	729,253	455,198
Provision for income taxes	106,377	73,042	176,995	113,168
Income from continuing operations	196,544	139,597	552,258	342,030
Loss from discontinued operations, net of tax
Net income	196,544	139,597	552,258	342,030
Financial Services Operations [Member]
Segment Reporting Information [Line Items]
Financial services	160,843	166,518	316,749	328,270
Total revenue	160,843	166,518	316,749	328,270
Financial services interest expense	48,712	56,991	99,968	115,026
Financial services provision for credit losses	(5,259)	(6,790)	3,754	(1,184)
Selling, administrative and engineering expense	38,162	36,656	69,235	69,412
Total costs and expenses	81,615	86,857	172,957	183,254
Operating income	79,228	79,661	143,792	145,016
Income before provision for income taxes	79,228	79,661	143,792	145,016
Provision for income taxes	28,522	28,678	51,765	52,206
Income from continuing operations	50,706	50,983	92,027	92,810
Loss from discontinued operations, net of tax
Net income	50,706	50,983	92,027	92,810
Eliminations & Adjustments [Member]
Segment Reporting Information [Line Items]
Motorcycles and related products	(2,956)	(3,059)	(5,370)	(5,505)
Financial services	(230)	(665)	186	(531)
Total revenue	(3,186)	(3,724)	(5,184)	(6,036)
Selling, administrative and engineering expense	(3,186)	(3,724)	(5,184)	(6,036)
Total costs and expenses	(3,186)	(3,724)	(5,184)	(6,036)
Investment income			(225,000)	(125,000)
Income before provision for income taxes			(225,000)	(125,000)
Income from continuing operations			(225,000)	(125,000)
Loss from discontinued operations, net of tax
Net income			$ (225,000)	$ (125,000)

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Asset-Backed Financing (Tables)

6 Months Ended

Jul. 01, 2012

SPEs [Member]

Assets And Liabilities Of Variable Interest Entities

The following table presents the assets and liabilities of the consolidated term asset-backed securitization SPEs that were included in the Company’s financial statements (in thousands):

	July 1,			December 31,			June 26,
	2012			2011			2011
Assets:
Finance receivables	$	2,082,375		$	2,916,219		$	2,554,758
Allowance for credit losses		(41,781	)		(65,735	)		(61,642	)
Restricted cash		187,782			228,776			242,618
Other assets		4,243			6,772			7,594
Total assets	$	2,232,619		$	3,086,032		$	2,743,328
Liabilities
Term asset-backed securitization debt	$	1,339,232		$	2,087,346		$	1,853,382

SPEs Facility [Member]

Assets And Liabilities Of Variable Interest Entities

The following table presents the assets of the asset-backed commercial paper conduit facility SPEs that were included in our financial statements (in thousands);

	July 1,			December 31,			June 26,
	2012			2011			2011
Finance receivables	$	8,403		$	13,455		$	19,747
Allowance for credit losses		(168	)		(302	)		(475	)
Restricted cash		782			879			1,443
Other assets		158			449			288
Total assets	$	9,175		$	14,481		$	21,003

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Additional Balance Sheet And Cash Flow Information (Inventories, Net) (Detail) (USD $) In Thousands, unless otherwise specified	Jul. 01, 2012	Dec. 31, 2011	Jun. 26, 2011
Inventory [Line Items]
Components at the lower of FIFO cost or market Raw materials and work in process	$ 116,166	$ 113,932	$ 108,518
Motorcycle finished goods	120,199	226,261	147,787
Parts and accessories and general merchandise	131,040	121,340	115,202
Inventory at lower of FIFO cost or market	367,405	461,533	371,507
Excess of FIFO over LIFO cost	(44,359)	(43,527)	(34,035)
Inventories, net	$ 323,046	$ 418,006	$ 337,472

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Business Segments

6 Months Ended

Jul. 01, 2012

Business Segments

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

	Three months ended				Six months ended
	July 1,		June 26,		July 1,		June 26,
	2012		2011		2012		2011
Motorcycles net revenue	$	1,569,047	$	1,339,744	$	2,842,416	$	2,402,788
Gross profit		563,817		468,268		1,020,327		820,134
Selling, administrative and engineering expense		248,038		234,827		485,033		438,632
Restructuring expense		6,220		13,594		17,671		36,593
Operating income from Motorcycles		309,559		219,847		517,623		344,909
Financial services income		160,613		165,853		316,935		327,739
Financial services expense		78,659		83,798		167,587		177,749
Operating income from Financial Services		81,954		82,055		149,348		149,990
Operating income	$	391,513	$	301,092	$	666,971	$	494,899