Harley-Davidson Delivers Strong Growth For Fourth Quarter And Full Year

   Harley-Davidson Delivers Strong Growth For Fourth Quarter And Full Year

EPS Rises 29.2% in Fourth Quarter, 16.7% for Full Year on Continuing
Operations

Full-Year New Harley-Davidson Motorcycle Retail Sales Grow 6.2% Worldwide

PR Newswire

MILWAUKEE, Jan. 29, 2013

MILWAUKEE, Jan. 29, 2013 /PRNewswire/ -- A strong fourth-quarter 2012 capped a
year of gains for Harley-Davidson, Inc. (NYSE: HOG), marked by solid growth in
earnings and retail new motorcycle sales. 

Fourth-quarter income from continuing operations was $70.6 million on
consolidated revenue of $1.17 billion, compared to income from continuing
operations in the year-ago period of $54.6 million on consolidated revenue of
$1.18 billion. Fourth-quarter 2012 earnings per share were $0.31, up 29.2%
compared to EPS of $0.24 in the year-ago quarter.

For the full year, Harley-Davidson income from continuing operations was
$623.9 million on consolidated revenue of $5.58 billion, compared to full-year
2011 income from continuing operations of $548.1 million on consolidated
revenue of $5.31 billion. Full-year 2012 EPS was $2.72, up 16.7% from EPS of
$2.33 in 2011.

Worldwide retail sales of new Harley-Davidson motorcycles grew 7.5% in the
quarter and 6.2% for the full year, compared to the year-ago periods.

"Thanks to the outstanding efforts of our employees, dealers and suppliers,
Harley-Davidson achieved its growth and restructuring goals in 2012," said
Keith Wandell, Chairman, President and Chief Executive Officer. 

"The ambitious restructuring of our manufacturing operations, aimed at
delivering better responsiveness for customers and greater operating
efficiency, is now largely behind us," Wandell said. "Motorcycle sales grew in
2012, fueled by exceptional products and retail experiences. Together with our
dealers, we grew sales to U.S. outreach customers faster than to core
customers, grew U.S. market share and continued to expand internationally. 

"Harley-Davidson's purpose is to fulfill the dreams of personal freedom for
people around the world. Through our strategy, we believe the company is
poised to deliver on that purpose like never before," Wandell said.

Retail Harley-Davidson Motorcycle Sales

For the full year 2012, retail unit sales of new Harley-Davidson motorcycles
grew 6.2% worldwide, with increases of 6.6% in the U.S. and 5.6%
internationally compared to 2011. Dealers sold 249,849 new Harley-Davidson
motorcycles worldwide in 2012, with retail unit sales up 39.2% in the Latin
America region, 14.3% in the Asia Pacific region and 6.2% in the North America
region (U.S. and Canada) and down 3.0% in the EMEA region compared to 2011.

In the fourth quarter, retail sales of new Harley-Davidson motorcycles
increased 7.5% worldwide, compared to the prior-year period, with unit sales
up 8.4% in the U.S. and up 6.3% in international markets. Dealers sold 43,405
new Harley-Davidson motorcycles worldwide in the quarter, with retail unit
sales up 23.5% in the Latin America region, 14.8% in the Asia Pacific region
and 7.3% in the North America region and down 3.3% in the EMEA region compared
to last year's fourth quarter.

Industry-wide U.S. heavyweight new motorcycle (651cc-plus) retail unit sales
increased 4.0% in 2012 compared to 2011.

Fourth-quarter and full-year data are listed in the accompanying tables.

Harley-Davidson Motorcycles and Related Products Segment Results

Fourth-Quarter Results: Fourth-quarter operating income from motorcycles and
related products was $53.1 million, a 49.4% increase compared to operating
income of $35.6 million in the year-ago period. Operating income in the
quarter benefited from lower restructuring costs and higher gross margin
compared to the prior-year period.

Revenue from motorcycles during the fourth quarter of 2012 of $771.1 million
was down 2.6% compared to the year-ago period. The Company shipped 47,067
motorcycles to dealers and distributors worldwide during the quarter. In the
year-ago period, the Company shipped 50,730 motorcycles. Fourth-quarter
shipments were in line with guidance and consistent with the Company's
previously announced plans for lower shipments in the quarter related to the
implementation of seasonal surge production at York in the first half of 2013.
The Company believes surge production will provide the flexibility to produce
more motorcycles closer to customer demand during the prime selling season.

Revenue from motorcycle parts and accessories totaled $161.6 million during
the quarter, up 0.2%, and revenue from general merchandise, which includes
MotorClothes® apparel and accessories, was $74.0 million, up 6.8%, compared to
the year-ago period.

Gross margin was 31.8% in the fourth quarter of 2012, compared to 31.2% in the
fourth quarter of 2011. Fourth-quarter operating margin from motorcycles and
related products was 5.3%, compared to operating margin of 3.5% in last year's
fourth quarter.

Twelve-Month Results: For the full year 2012 the Company shipped 247,625
motorcycles to dealers and distributors, a 6.2% increase compared to 2011.
Full-year revenue from motorcycles grew 5.9% to $3.76 billion, revenue from
parts and accessories grew 5.3% to $859.9 million and revenue from general
merchandise grew 9.2% to $299.4 million, compared to 2011. Gross margin for
the full year was 34.8% and operating margin was 14.5%, compared to 33.4% and
12.0% respectively in 2011.

Financial Services Segment Results

Operating income from financial services was $63.0 million in the fourth
quarter of 2012, a 10.9% increase compared to operating income of $56.8
million in last year's fourth quarter. Full-year 2012 operating income from
financial services was $284.7 million, a 5.9% increase compared to operating
income of $268.8 million in 2011. Results for the fourth quarter and full year
reflect continued improvement in credit loss performance year over year and
lower interest expense.

Guidance

Harley-Davidson expects to ship 259,000 to 264,000 motorcycles to dealers and
distributors worldwide in 2013, an approximate 4-1/2% to 6-1/2% increase from
2012. In the first quarter of 2013, the Company expects to ship 71,000 to
76,000 motorcycles, an approximate increase of 10% to 18% from the year-ago
period. The Company's first-quarter shipment plan reflects the implementation
of surge production at York in the first half of 2013. The Company expects
full-year 2013 gross margin of 35.25% to 36.25 %. The Company expects capital
expenditures of $200 million to $220 million in 2013.

Restructuring Update

In 2012, Harley-Davidson realized savings of $280 million from restructuring
activities initiated since early 2009. Restructuring charges were $1.6 million
in the fourth quarter of 2012 and $28.5 million for the full year. Upon the
completion of restructuring in 2013, Harley-Davidson expects restructuring
activities initiated since 2009 to result in one-time overall costs of
approximately $495 million, including approximately $13 million in 2013. The
Company expects savings of approximately $305 million in 2013 from
restructuring activities initiated since 2009, rising to annual ongoing
savings of approximately $320 million beginning in 2014.

Income Tax Rate

For the full year 2012, Harley-Davidson's effective tax rate was 35.1%
compared to 30.9% in 2011.The 2011 effective tax rate benefited from a change
in Wisconsin tax law associated with certain net operating losses, the
favorable settlement of an IRS audit and the benefit of the federal Research
and Development Tax Credit. In 2013, the Company expects its full-year
effective tax rate from continuing operations will be approximately 34.8%.

Cash Flow

Cash and marketable securities totaled $1.20 billion at year-end 2012,
compared to $1.68 billion at year-end 2011. In 2012, Harley-Davidson generated
$793.1 million of cash provided by operating activities of continuing
operations, compared to $885.3 million in 2011. On a discretionary basis, the
Company repurchased 1.2 million shares of Harley-Davidson, Inc. common stock
during the fourth quarter of 2012 at a cost of $53.4 million. For the full
year 2012, Harley-Davidson repurchased 6.5 million shares of its common stock
at a cost of $299.6 million. At the end of 2012, there were approximately 226
million shares of Harley-Davidson common stock outstanding and 14.5 million
shares remaining on board-approved share repurchase authorizations. In January
2013, Harley-Davidson made a $175 million voluntary contribution to its
pension plans.

Company Background

Harley-Davidson, Inc. is the parent company of Harley-Davidson Motor Company
and Harley-Davidson Financial Services. Harley-Davidson Motor Company produces
heavyweight custom, cruiser and touring motorcycles and offers a complete line
of Harley-Davidson motorcycle parts, accessories, riding gear and apparel, and
general merchandise. Harley-Davidson Financial Services provides wholesale and
retail financing, insurance, extended service and other protection plans and
credit card programs to Harley-Davidson dealers and riders in the U.S., Canada
and other select international markets. For more information, visit
Harley-Davidson's Web site at www.harley-davidson.com.

Conference Call and Webcast Presentation

Harley-Davidson will discuss fourth-quarter results on a Webcast at 8:00 a.m.
CT today. The Webcast presentation will be posted prior to the call and can be
accessed at http://investor.harley-davidson.com/. Click "Events and
Presentations" under "Resources." The audio portion of today's call will also
be posted at harley-davidson.com beginning approximately two hoursafter the
conclusion of the call for one year. The audio may also be accessed until Feb.
12, 2013 by calling 404-537-3406 or 855-859-2056 in the US,pin number
8342-2435#.

Forward-Looking Statements

The Company intends that certain matters discussed in this release 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 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 release. Certain of such risks and uncertainties are
described below. 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 release are only made as of
the date of this release, and the Company disclaims any obligation to publicly
update such forward-looking statements to reflect subsequent events or
circumstances.

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) adjust to fluctuations in foreign currency exchange rates,
interest rates and commodity prices, (iii) manage through inconsistent
economic conditions, including changing capital, credit and retail markets,
(iv)implement and manage enterprise-wide information technology solutions,
including solutions at its manufacturing facilities, and secure data contained
in those systems, (v) anticipate the level of consumer confidence in the
economy, (vi) continue to realize production efficiencies at its production
facilities and manage operating costs including materials, labor and overhead,
(vii) manage production capacity and production changes, (viii) manage changes
and prepare for requirements in legislative and regulatory environments for
its products, services and operations, (ix) provide products, services and
experiences that are successful in the marketplace, (x) manage risks that
arise through expanding international operations and sales, (xi) manage the
credit quality, the loan servicing and collection activities, and the recovery
rates of HDFS' loan portfolio, (xii) successfully implement with its labor
unions the agreements that it has executed with them that it believes will
provide flexibility and cost-effectiveness to accomplish restructuring goals
and long-term competitiveness, (xiii) effectively execute the Company's
restructuring plans within expected costs and timing, (xiv) manage supply
chain issues, including any unexpected interruptions or price increases caused
by raw material shortages or natural disasters,(xv) develop and implement
sales and marketing plans that retain existing retail customers and attract
new retail customers in an increasingly competitive marketplace, (xvi) adjust
to healthcare inflation and reform, pension reform and tax changes, (xvii)
retain and attract talented employees, (xviii) manage the risks that our
independent dealers may have difficulty obtaining capital and managing through
changing economic conditions and consumer demand, (xix) continue to have
access to reliable sources of capital funding and adjust to fluctuations in
the cost of capital, (xx) continue to develop the capabilities of its
distributor and dealer network, and (xxi) 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.

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.





TABLES FOLLOW



Harley-Davidson, Inc.
Condensed Consolidated Statements of Operations
(In thousands, except per share amounts)
                        (Unaudited)    (Unaudited)    (Unaudited)
                        Three months ended            Twelve months ended
                        December 31,   December 31,   December 31,   December
                                                                     31,
                        2012           2011           2012           2011
Motorcycles and                                                      $ 
related products        $  1,010,898  $  1,026,777  $  4,942,582  4,662,264
revenue
Gross profit            321,957        320,451        1,720,188      1,555,976
Selling,
administrative and      267,209        265,918        976,224        926,808
engineering expense
Restructuring expense   1,634          18,970         28,475         67,992
 Operating income
from motorcycles &      53,114         35,563         715,489        561,176
related products
Financial services      159,962        157,153        637,924        649,449
revenue
Financial services      96,973         100,336        353,237        380,658
expense
 Operating income
from financial          62,989         56,817         284,687        268,791
services
Operating income        116,103        92,380         1,000,176      829,967
Investment income       1,758          2,338          7,369          7,963
Interest expense        11,505         11,165         46,033         45,266
Income before income    106,356        83,553         961,512        792,664
taxes
Provision for income    35,717         28,909         337,587        244,586
taxes
Income from continuing  70,639         54,644         623,925        548,078
operations
Earnings from
discontinued            -              51,036         -              51,036
operations, net of tax
Net income              $           $            $            $  
                        70,639        105,680       623,925       599,114
Earnings per common
share from continuing
operations:
 Basic                 $         $         $         $    
                        0.31           0.24           2.75            2.35
 Diluted               $         $         $         $    
                        0.31           0.24           2.72            2.33
Earnings per common
share from
discontinued
operations:
 Basic                 $        $         $        $    
                        -             0.22           -              0.22
 Diluted               $        $         $        $    
                        -             0.22           -              0.22
Earnings per common
share:
 Basic                 $         $         $         $    
                        0.31           0.46           2.75            2.57
 Diluted               $         $         $         $    
                        0.31           0.46           2.72            2.55
Weighted-average
common shares:
 Basic                 224,635        229,827        227,119        232,889
 Diluted               226,726        231,968        229,229        234,918
Cash dividends per      $          $          $          $    
common share            0.155          0.125          0.620          0.475

Harley-Davidson, Inc.
Condensed Consolidated Balance Sheets
(In thousands)
                                                (Unaudited)
                                                December 31,    December 31,
                                                2012            2011
ASSETS
Current assets:
 Cash and cash equivalents                   $  1,068,138   $  1,526,950
 Marketable securities                       135,634         153,380
 Accounts receivable, net                    230,079         219,039
 Finance receivables, net^(1)                1,743,045       1,760,467
 Inventories                                 393,524         418,006
 Restricted cash^(1)                         188,008         229,655
 Other current assets                        292,508         234,709
Total current assets                            4,050,936       4,542,206
Finance receivables, net^(1)                    4,038,807       4,026,214
Other long-term assets                          1,081,030       1,105,744
                                                $  9,170,773   $  9,674,164
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
 Accounts payable & accrued liabilities      $   770,977  $   819,885
 Short-term debt                             294,943         838,486
 Current portion of long-term debt^(1)       437,162         1,040,247
Total current liabilities                       1,503,082       2,698,618
Long-term debt^(1)                              4,370,544       3,843,886
Pension and postretirement healthcare           608,356         571,065
liabilities
Other long-term liabilities                     131,167         140,339
Total shareholders' equity                      2,557,624       2,420,256
                                                $  9,170,773   $  9,674,164
(1) Includes amounts held by variable interest entities.



Harley-Davidson, Inc
Condensed Consolidated Statements of Cash Flows
(In thousands)
                                                (Unaudited)
                                                Twelve months ended
                                                December 31,    December 31,
                                                2012            2011
Net cash provided by operating activities
 of continuing operations                      $   793,076  $   885,291
Cash flows from investing activities of
continuing operations:
 Capital expenditures                          (189,002)       (189,035)
 Finance receivables, net                      (90,612)        138,025
 Net change in marketable securities           18,303          (12,532)
Net cash used by by investing activities of     (261,311)       (63,542)
continuing operations
Cash flows from financing activities of
continuing operations:
 Proceeds from issuance of medium-term notes   993,737         387,865
 Repayments of medium-term notes               (420,870)       -
 Proceeds from securitization debt             763,895         1,082,599
 Repayments of securitization debt             (1,405,599)     (1,754,568)
 Net (decrease) increase in credit facilities  (744,724)       237,827
and unsecured commercial paper
 Net borrowings of asset-backed commercial     200,417         -
paper
 Net repayments of asset-backed commercial     (24,301)        (483)
paper
 Net change in restricted cash                 41,647          59,232
 Dividends                                     (141,681)       (111,011)
 Purchase of common stock for treasury         (311,632)       (224,548)
 Excess tax benefits from share-based          21,447          6,303
payments
 Issuance of common stock under employee       45,973          7,840
stock option plans
Net cash used by financing activities of        (981,691)       (308,944)
continuing operations
Effect of exchange rate changes on cash and
cash equivalents
 of continuing operations                      (8,886)         (7,788)
Net (decrease) increase in cash and cash        (458,812)       505,017
equivalents of continuing operations
Cash flows from operating activities of         -               -
discontinued operations
Net (decrease) increase in cash and cash        $  (458,812)  $   505,017
equivalents
Cash and cash equivalents:
 Cash and cash equivalents - beginning of      $  1,526,950   $  1,021,933
period
 Cash and cash equivalents of discontinued     -               -
operations - beginning of period
 Net (decrease) increase in cash and cash      (458,812)       505,017
equivalents
 Less: Cash and cash equivalents of            -               -
discontinued operations - end of period
 Cash and cash equivalents - end of period     $  1,068,138   $  1,526,950



Motorcycles and Related Products Revenue and
Motorcycle Shipment Data
(Unaudited)


                       (Unaudited)     (Unaudited)    (Unaudited)
                       Three months ended             Twelve months ended
                       December 31,    December 31,   December 31,   December
                                                                     31,
                       2012            2011           2012           2011
MOTORCYCLES AND
RELATED PRODUCTS
REVENUE (in
thousands)
 Motorcycles          $   771,137  $            $  3,764,794  $ 
                                       791,984                      3,554,547
 Parts & Accessories  161,564         161,182        859,945        816,569
 General Merchandise  74,028          69,315         299,403        274,124
 Other                4,169           4,296          18,440         17,024
                       $  1,010,898   $  1,026,777  $  4,942,582  $ 
                                                                     4,662,264
MOTORCYCLE SHIPMENTS:
 United States      29,358          33,625         160,477        152,180
 International      17,709          17,105         87,148         80,937
 Total           47,067          50,730         247,625        233,117
MOTORCYCLE PRODUCT
MIX:
 Touring            21,637          21,592         99,496         92,002
 Custom             17,995          19,933         96,425         91,459
 Sportster®         7,435           9,205          51,704         49,656
 Total            47,067          50,730         247,625        233,117

Worldwide Retail Sales of Harley-Davidson Motorcycles
                        Three months ended          Twelve months ended
                        December 31,  December 31,  December 31,  December 31,
                        2012          2011          2012          2011
North America Region
 United States         25,753        23,753        161,678       151,683
 Canada                1,047         1,214         10,573        10,502
 Total North         26,800        24,967        172,251       162,185
America Region
Europe, Middle East
and Africa Region
(EMEA)
 Europe*               5,360         5,997         37,027        39,334
 Other                 1,461         1,059         6,000         5,006
 Total EMEA Region   6,821         7,056         43,027        44,340
Asia Pacific Region
 Japan                 2,727         2,574         10,642        10,401
 Other                 3,980         3,270         13,839        11,015
 Total Asia Pacific  6,707         5,844         24,481        21,416
Region
Latin America Region    3,077         2,492         10,090        7,247
 Total Worldwide     43,405        40,359        249,849       235,188
Retail Sales

Data Source
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 new retail sales, and this information is subject to revision.
* Europe data includes Austria, Belgium, Denmark, Finland, France, Germany,
Greece, Italy, Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, and
the United Kingdom.

Heavyweight Motorcycle Registration Data^(1)
                  Twelve months ended
                  December 31,  December 31,
                  2012          2011
United States^2  281,974       271,029
                  Eleven months ended
                  November 30,  November 30,
                  2012          2011
Europe^3          262,194       284,394

1 - Heavyweight data includes street legal 651+cc models. Street legal 651+cc
models include on-highway, dual purpose models and three-wheeled vehicles.
2 - United States data is derived from information provided by Motorcycle
Industry Council (MIC). This third party data is subject to revision and
update.
3 - 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.



SOURCE Harley-Davidson, Inc.

Website: http://www.harley-davidson.com
Contact: Media, Bob Klein, +1-414-343-8664, or Financial, Amy Giuffre,
+1-414-343-8002
 
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