Harley-Davidson (NYSE: HOG, formerly HDI[2]), often abbreviated H-D or Harley, is an American motorcycle manufacturer. Founded in Milwaukee, Wisconsin, during the first decade of the 20th century, it was one of two major American motorcycle manufacturers to survive the Great Depression.[3] Harley-Davidson also survived a period of poor quality control and competition from Japanese manufacturers.[4]
The company sells heavyweight (over 750 cc) motorcycles designed for cruising on the highway. Harley-Davidson motorcycles (popularly known as "Harleys") have a distinctive design and exhaust note. They are especially noted for the tradition of heavy customization that gave rise to the chopper style of motorcycle.[5] Except for the modern VRSC model family, current Harley-Davidson motorcycles reflect the styles of classic Harley designs. Harley-Davidson's attempts to establish itself in the light motorcycle market have met with limited success and have largely been abandoned since the 1978 sale of its Italian Aermacchi subsidiary.
Harley-Davidson sustains a loyal brand community which keeps active through clubs, events, and a museum. Licensing of the Harley-Davidson brand and logo accounted for $40 million (0.8%) of the company's net revenue in 2010.

Harley-Davidson, Inc., incorporated in 1981, operates in two segments: the Motorcycles and Related Products (Motorcycles) segment and the Financial Services (Financial Services) segment. The Motorcycles segment designs, manufactures and sells at wholesale heavyweight (engine displacement of 651+cc) cruiser and touring motorcycles as well as a line of motorcycle parts, accessories, general merchandise and related services. The Company conducts business on a global basis, with sales in North America, Europe/Middle East/Africa (EMEA), Asia/Pacific and Latin America. The Company conducts business on a global basis, with sales in North America, Europe/Middle East/Africa (EMEA), Asia/Pacific and Latin America. The Motorcycles segment includes the Harley-Davidson and Buell product lines.
Motorcycles and Related Products
The Company’s worldwide motorcycle sales generated approximately 76%, of the total net revenue in the Motorcycles segment during the year ended December 31, 2010. The Company manufactures five families of motorcycles: Touring, Dyna, Softail, Sportster, and VRSC. The first four of these motorcycle families are powered by an air-cooled, twin-cylinder engine with a 45-degree V configuration. The VRSC family is powered by a liquid-cooled, twin-cylinder engine with a 60-degree V configuration. The Company’s Harley-Davidson engines range in displacement size from 883cc’s to 1803cc’s. The total heavyweight (651+cc) motorcycle market consists of five segments: Traditional (a basic motorcycle which usually features upright seating for one or two passengers; Sportbike (incorporates racing technology, aerodynamic styling, low handlebars with a sport riding position and high performance tires); Cruiser (emphasizes styling and individual owner customization); Touring (incorporates features such as saddlebags, fairings, or large luggage compartments and emphasizes rider comfort and load capacity), and Dual (designed with the capability for use on public roads as well as for off-highway recreational use).
The touring segment of the heavyweight market includes the Harley-Davidson Touring family of motorcycles, including three-wheeled motorcycles, which are generally equipped with fairings, windshields, saddlebags and/or Tour Pak luggage carriers. The cruiser segment of the market includes the Company’s Dyna, Softail, VRSC and Sportster motorcycle families. During 2010, the United States and European regions accounted for approximately 83% of total annual independent dealer retail sales of new Harley-Davidson motorcycles. Parts and Accessories (P&A) products consist of replacement parts (Genuine Motor Parts) and mechanical and cosmetic accessories (Genuine Motor Accessories). Worldwide P&A net revenue consist of 17.9% of net revenue in the Motorcycles segment during 2010.
The Company provides a variety of services to its independent dealers including service and business management training programs, customized dealer software packages and delivery of its motorcycles. Motorcycle rentals are available through the Company’s independent dealers. The Company’s revenue from the sale of motorcycles and related products to independent dealers and distributors located outside of the United States was approximately 33% of net revenue of the Motorcycles segment, during 2010. The United States retail purchasers of new Harley-Davidson motorcycles include both core and outreach customers.
Financial Services
HDFS is engaged in the business of financing and servicing wholesale inventory receivables and retail consumer loans, primarily for the purchase of Harley-Davidson motorcycles. HDFS is an agent for certain unaffiliated insurance carriers providing property/casualty insurance and also sells extended service contracts, gap coverage and debt protection products to motorcycle owners. HDFS conducts business principally in the United States and Canada. HDFS provides wholesale financial services to Harley-Davidson dealers, including floorplan and open account financing of motorcycles and motorcycle parts and accessories. HDFS offers wholesale financial services to Harley-Davidson dealers in the United States and Canada, and during 2010 approximately 94% of such dealers utilized those services. The wholesale finance operations of HDFS are located in Plano, Texas. HDFS provides retail financing to consumers, including installment lending for the purchase of new and used Harley-Davidson motorcycles. HDFS’ retail financial services are available through most Harley-Davidson dealers in the United States and Canada. HDFS’ retail finance operations are principally located in Carson City, Nevada and Plano, Texas.
HDFS is an agent for the sale of motorcycle insurance policies. In the United States HDFS also offers motorcycle insurance, extended service contracts, gap coverage and debt protection products through most Harley-Davidson dealers. Motorcycle insurance is also marketed on a direct basis to motorcycle riders. In Canada, HDFS primarily offers extended service contracts through most Harley-Davidson dealers. HDFS insurance operations are principally located in Carson City, Nevada and Plano, Texas.

Richard Teerlink, who had become president and CEO of Harley-Davidson, warned in the company's 1990 annual report that "maintaining Harley-Davidson's growth through a recessionary period will be a difficult, but not impossible task. We could easily exploit our worldwide motorcycle popularity for quick profits, a near-fatal mistake we made in the 1970s, but we are committed to a corporate vision that discourages short-term thinking."
The 1990s: Facing the Competition Head-On
The early 1990s brought the company some minor setbacks. Though sales in 1991 rose to $939.8 million, profits fell slightly, marking the first decrease since the 1986 refloatation. In addition, the company's motorcycle division experienced a work stoppage at the York plant, and sales and profits at the Holiday Rambler Corporation continued downwards.
Harley-Davidson instituted new labor and fiscal policies in the late 1990s under the leadership of Jeff Bleustein, policies that revitalized production and sales. The company's stock has grown steadily and attracted many new investors while keeping the old. Kiplinger's Personal Finance Magazine reporters Steven T. Goldberg and Nancy Stover declared in May 1998 that "Harley stock is now selling at 23 times this year's estimated earnings. Earnings are expected to grow 15 percent in 1998 and an annualized 18 percent over five years," and named Harley-Davidson, Inc. to their list of 12 stocks "that keep growing & growing & growing." Envisioning Harley-Davidson as a wise stock pick in spite of the motorcycle's rebel image is not misinformed: the company announced in April 1998 that they had realized record sales and earnings for the first quarter of that year. While the company had 32 consecutive quarters of growth, it had to absorb some of the costs of a new Kansas City plant, seen mostly in the decline of the gross margin from 32.4 percent to 32.1 versus the previous year. While company officials warned that further costs would have to be absorbed from plant openings and refurbishings, "the introduction of two new Europe specific Harley-Davidson motorcycle models, a new European marketing campaign, a full year of Buell sales, and additional dealers will result in increased sales for 1998," according to an article on the corporate web site.
There would be no profit without the product, and Harley-Davidson management has explored and incorporated new labor-friendly production techniques that reflect respect for its manufacturers. As the company borrowed management ideas from the Honda plant in Maryland, so also did it take a close look at GM's Saturn plant, with its great success through worker empowerment. Harley-Davidson opened a new plant in Kansas City in January 1998, at a cost of some $85 million, but that was only the tip of the iceberg. For two years, the company interviewed some 2,000 applicants for 300 positions. They were put through hours of rigorous personality and aptitude training. Those few who earned a place with Harley-Davidson enjoyed collective decision-making and a strong voice in the production process. Dealernews reported in March 1998 that Fortune magazine had named Harley-Davidson as one of the top 100 places to work in the country.
Harley-Davidson wisely selected merchandising that reflected the changing profile of the motorcycle-worshipping customer. "It's one thing to have people buy your products. It's another for them to tattoo your name on their bodies," the web site crows. Harley-Davidson has gone far beyond tattoos in hip merchandising. The Jacksonville Business Journal interviewed a third-generation dealership owner who planned to dedicate almost a fourth of his floor space to merchandise including, "Anything from blue jeans and T-shirts to leather jackets and boots. It's not just leather anymore," said Chris Adamec. He pointed to a new and wealthy clientele, the so-called "Rolex" riders, as a new source of demand. VH1, the MTV for yuppies, debuted a commercial in June 1998 raffling off four vintage-style Harleys and leather jackets in their "Chrome on the Range" contest. Smiling mothers holding babies posed in front of the bikes (and the American flag) at the close of the commercial suggested a new generation of Harley riders yet to grasp their first Gold Card.
With the approach of the millennium, Harley-Davidson roared into cyberspace. Besides a Lollapalooza of a party, Harley-Davidson's 95th anniversary was celebrated with a virtual Harley tour online. Visitors to Harley-Davidson's web site were invited to partake of video and audio journals of actual motorcycle mamas and daddies from Washington to Pennsylvania. Harley-Davidson has proved that heavyweight motorcycles are not just about nostalgia, whether for the early days of motorcycles or the freewheeling 1960s; the classic appeal of the Harley-Davidson motorcycle would certainly continue into the next century, and the company was poised to support continued growth.
Principal Subsidiaries: Holiday Rambler Corporation; Utilmaster Corporation; B&B Molders; Creative Dimensions; Nappanee Wood Products.


OVERALL
Beta: 2.28
Market Cap (Mil.): $8,926.36
Shares Outstanding (Mil.): 236.27
Annual Dividend: 0.50
Yield (%): 1.32
FINANCIALS
HOG.N Industry Sector
P/E (TTM): 28.67 3.50 9.28
EPS (TTM): 2,816.42 -- --
ROI: 3.94 0.35 0.94
ROE: 14.01 0.98 1.62

Statistics:
Public Company
Incorporated: 1903 as Harley-Davidson Motor Company
Employees: 5,300
Sales: $466.52 million (1997)
Stock Exchanges: New York
Ticker Symbol: HDI
SICs: 3751 Motorcycles, Bicycles & Parts; 3711 Motor Vehicles & Car Bodies; 3443 Fabricated Plate Work--Boiler Shops; 6719 Holding Companies, Not Elsewhere Classified; 3089 Plastics Products, Not Elsewhere Classified; 2900 Petroleum & Coal Products; 2389 Apparel & Accessories, Not Elsewhere Classified; 3714 Motor Vehicle Parts & Accessories; 3716 Motor Homes; 3792 Travel Trailers & Campers; 2522 Office Furniture Except Wood; 2521 Wood Office Furniture; 3524 Lawn & Garden Equipment; 3519 Internal Combustion Engines, Not Elsewhere Classified; 5651 Family Clothing Stores

Statistics:
Public Company
Incorporated: 1903 as Harley-Davidson Motor Company
Employees: 5,300
Sales: $466.52 million (1997)
Stock Exchanges: New York
Ticker Symbol: HDI
SICs: 3751 Motorcycles, Bicycles & Parts; 3711 Motor Vehicles & Car Bodies; 3443 Fabricated Plate Work--Boiler Shops; 6719 Holding Companies, Not Elsewhere Classified; 3089 Plastics Products, Not Elsewhere Classified; 2900 Petroleum & Coal Products; 2389 Apparel & Accessories, Not Elsewhere Classified; 3714 Motor Vehicle Parts & Accessories; 3716 Motor Homes; 3792 Travel Trailers & Campers; 2522 Office Furniture Except Wood; 2521 Wood Office Furniture; 3524 Lawn & Garden Equipment; 3519 Internal Combustion Engines, Not Elsewhere Classified; 5651 Family Clothing Stores

Name Age Since Current Position
Allen, Barry 62 2009 Independent Chairman of the Board
Wandell, Keith 61 2009 President, Chief Executive Officer, Director
Olin, John 50 2009 Chief Financial Officer, Senior Vice President
Levatich, Matthew 46 2009 President and Chief Operating Officer of Motor Company
Hund, Lawrence 54 2009 President and Chief Operating Officer of HDFS
Jones, Paul 40 2010 Vice President, Chief Compliance Officer, General Counsel, Secretary
Calaway, Tonit 43 2010 Vice President - Human Resources
Bischmann, Joanne 49 2010 Vice President - Communications
Baker, John 43 General Manager - Corporate Strategy and Business Development of the Motor Company
James, Donald 67 1991 Director
Beattie, Richard 71 1996 Independent Director
Levinson, Sara 60 1996 Independent Director
Norling, James 69 1993 Independent Director
Miles, George 69 2002 Independent Director
Conrades, George 72 2002 Independent Director
Green, Judson 58 2004 Independent Director
Zeitz, Jochen 48 2007 Independent Director
Linebarger, Norman 48 2008 Independent Director
Brooks, Martha 51 2009 Independent Director
Anderson, R. John 60 2010 Independent Director

Address:
1700 West Juneau Ave.
P.O. Box 653
Milwaukee, Wisconsin 53201
U.S.A.
 
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