Harley-Davidson (HOG) 10-Q 30 Oct 09 2009 Q3 Quarterly report Financial data

Statement Of Income

Statement Of Income (USD $)
In Thousands, except Per Share data	3 Months Ended Sep. 27, 2009	3 Months Ended Sep. 28, 2008	9 Months Ended Sep. 27, 2009	9 Months Ended Sep. 28, 2008
Net revenue	$1,121,275	$1,422,834	$3,565,568	$4,301,716
Cost of goods sold	750,189	938,762	2,331,421	2,779,583
Gross profit	371,086	484,072	1,234,147	1,522,133
Financial services income	136,993	111,966	365,627	312,095
Financial services expense	167,333	76,333	446,881	204,408
Restructuring expense	1,204	0	1,204	0
Goodwill impairment	0	0	28,387	0
Operating (loss) income from financial services	(31,544)	35,633	(110,845)	107,687
Selling, administrative and engineering expense	200,261	250,777	631,234	712,427
Restructuring expense and other impairments	50,745	926	100,738	12,475
Goodwill impairment	18,888	0	18,888	0
Income from operations	69,648	268,002	372,442	904,918
Investment income	947	2,751	3,217	7,033
Interest expense	1,312	1,226	13,110	1,226
Income before provision for income taxes	69,283	269,527	362,549	910,725
Provision for income taxes	42,800	102,986	198,969	333,816
Net income	$26,483	$166,541	$163,580	$576,909
Earnings per common share:
Basic	0.11	0.71	0.7	2.45
Diluted	0.11	0.71	0.7	2.45
Cash dividends per common share	0.1	0.33	0.3	0.96

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Thousands	9 Months Ended Sep. 27, 2009	9 Months Ended Dec. 31, 2008	9 Months Ended Sep. 28, 2008
Current assets:
Cash and cash equivalents	$1,524,382	$593,558	$504,385
Marketable securities	0	0	524
Accounts receivable, net	339,163	296,258	331,388
Finance receivables held for sale	0	2,443,965	2,245,015
Finance receivables held for investment, net	1,525,164	1,378,461	1,115,035
Inventories	432,691	400,908	401,277
Prepaid expenses and other current assets	423,684	264,731	222,890
Total current assets	4,245,084	5,377,881	4,820,514
Finance receivables held for investment, net	3,652,987	817,102	906,244
Property, plant and equipment, net	987,393	1,094,487	1,088,179
Prepaid pension costs	0	0	75,054
Goodwill	99,200	138,579	144,678
Other long-term assets	368,404	400,576	165,068
Assets, Total	9,353,068	7,828,625	7,199,737
Current liabilities:
Accounts payable	298,485	323,736	435,291
Accrued liabilities	654,627	541,372	635,479
Short-term debt	1,325,303	1,738,649	737,886
Current portion of long-term debt	668,205	0	401,096
Total current liabilities	2,946,620	2,603,757	2,209,752
Long-term debt	3,176,648	2,176,238	2,033,000
Pension liability	498,959	484,003	68,149
Postretirement healthcare benefits	269,515	274,408	207,810
Other long-term liabilities	171,354	174,616	180,667
Commitments and contingencies (Note 18)	-	-	-
Total shareholders' equity	2,289,972	2,115,603	2,500,359
Liabilities and Stockholders' Equity, Total	$9,353,068	$7,828,625	$7,199,737

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Thousands	9 Months Ended Sep. 27, 2009	9 Months Ended Sep. 28, 2008
Net cash provided by (used by) operating activities (Note 3)	$511,052	($221,222)
Cash flows from investing activities:
Capital expenditures	(89,411)	(153,687)
Origination of finance receivables held for investment	(943,557)	(471,735)
Collections on finance receivables held for investment	423,641	360,485
Collection of retained securitization interests	45,843	75,379
Sales and redemptions of marketable securities	0	2,019
Acquisition of business, net of cash acquired	0	(95,224)
Other, net	(4,566)	(1,192)
Net cash used by investing activities	(568,050)	(283,955)
Cash flows from financing activities:
Proceeds from issuance of medium-term notes	0	993,550
Proceeds from issuance of senior unsecured notes	589,030	0
Proceeds from securitization debt	1,195,129	0
Repayments of securitization debt	(106,350)	0
Net (decrease) increase in credit facilities and unsecured commerical paper	(556,101)	88,538
Net borrowings of asset-backed commercial paper	56,691	0
Net change in restricted cash	(127,462)	0
Dividends	(70,329)	(225,243)
Purchase of common stock for treasury	(296)	(250,008)
Excess tax benefits from share-based payments	148	301
Issuance of common stock under employee stock option plans	11	1,179
Net cash provided by financing activities	980,471	608,317
Effect of exchange rate changes on cash and cash equivalents	7,351	(1,609)
Net increase in cash and cash equivalents	930,824	101,531
Cash and cash equivalents:
At beginning of period	593,558	402,854
At end of period	$1,524,382	$504,385

1.Basis of Presentation and Use

1.Basis of Presentation and Use of Estimates
	9 Months Ended Sep. 27, 2009 USD / shares
Notes to Financial Statements [Abstract]
1.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 groups of companies doing business as Harley-Davidson Motor Company (HDMC), Buell Motorcycle Company (Buell), MV Agusta (MV) 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 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 September27, 2009 and September28, 2008, the condensed consolidated statements of income for the three and nine month periods then ended and the condensed consolidated statements of cash flows for the nine month periods then ended. The Companys management has evaluated subsequent events after September27, 2009 through October30, 2009, which is the date the Companys financial statements were issued. Certain information and footnote disclosures normally included in complete financial statements have been condensed or omitted pursuant to the rules and regulations of the SEC and U.S. GAAP for interim financial information. These condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes included in the Companys Annual Report on Form 10-K for the year ended December31, 2008. In connection with term asset-backed securitization transactions prior to 2009, HDFS utilized Qualifying Special Purpose Entities (QSPEs) as defined by SFAS No.140 Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities (ASC Topic 860). Assets and liabilities of the QSPEs are not consolidated in the financial statements of the Company. For further discussion of QSPEs and off-balance sheet securitization transactions, see Note 7. 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. Certain prior year amounts related to debt have been reclassified to conform to the current year presentation.

2.New Accounting Standards

2.New Accounting Standards
	9 Months Ended Sep. 27, 2009 USD / shares
Notes to Financial Statements [Abstract]
2.New Accounting Standards	2. New Accounting Standards Accounting Standards Recently Adopted In December 2007, the FASB issued SFAS No.141 (revised 2007), Business Combinations (ASC Topic 805). ASC Topic 805 changes the accounting for business combinations in a number of areas including the treatment of contingent consideration, pre-acquisition contingencies, transaction costs, in-process research and development and restructuring costs. In addition, under ASC Topic 805, changes in an acquired entitys deferred tax assets and uncertain tax positions after the measurement period will impact income tax expense. ASC Topic 805 is effective for the Company beginning in fiscal year 2009. This standard will change the Companys accounting treatment for business combinations on a prospective basis. In March 2008, the FASB issued SFAS No.161, Disclosures about Derivative Instruments and Hedging Activities, an amendment of FASB Statement No.133 (ASC Topic 815). ASC Topic 815 requires enhanced disclosures about an entitys derivative and hedging activities. Entities will be required to provide enhanced disclosures about: (a)how and why an entity uses derivative instruments; (b)how derivative instruments and related hedge items are accounted for under SFAS No.133, Accounting for Derivative Instruments and Hedging Activity (ASC Topic 815), and its related interpretations; and (c)how derivative instruments and related hedge items affect an entitys financial position, financial performance and cash flows. The Company adopted ASC Topic 815 as of January1, 2009; see Note 11 for further discussion. In June 2008, the FASB issued FASB Staff Position (FSP) Emerging Issues Task Force (EITF) 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (ASC Topic 260-10-55). ASC Topic 260 addresses whether instruments granted in share-based payment transactions are participating securities prior to vesting and, therefore, need to be included in the earnings allocation in computing earnings per share under the two-class method as described in SFAS No.128, Earnings Per Share (ASC Topic 260). Under the guidance of ASC Topic 260-10-55, unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and must be included in the computation of earnings per share pursuant to the two-class method. All prior period earnings per share information must be adjusted retrospectively. The Company adopted ASC Topic 260-10-55 as of January1, 2009; see Note 14 for further discussion. In April 2009, the FASB issued three FSPs intended to provide additional application guidance and enhance disclosures regarding fair value measurements and impairments of securities: FSP No. FAS 157-4, Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly (ASC Topic 820-10-65-4); FSP No. FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments (ASC Topic 825-10-65-1); and FSP No. FAS 115-2 and

3.Additional Balance Sheet and

3.Additional Balance Sheet and Cash Flow Information
	9 Months Ended Sep. 27, 2009 USD / shares
Notes to Financial Statements [Abstract]
3.Additional Balance Sheet and Cash Flow Information	3. Additional Balance Sheet and Cash Flow Information Finance receivables held for investment, net consist of the following (in thousands): September27, 2009 December31, 2008 September28, 2008 Wholesale $ 958,683 $ 1,164,236 $ 870,693 Retail 4,103,286 740,721 787,585 5,061,969 1,904,957 1,658,278 Allowance for credit losses 148,917 40,068 36,826 4,913,052 1,864,889 1,621,452 Investment in retained securitization interests 265,099 330,674 399,827 $ 5,178,151 $ 2,195,563 $ 2,021,279 During the second quarter of 2009, the Company reclassified $3.14 billion of finance receivables held for sale at the lower of cost or fair value to finance receivables held for investment due to the structure of its May 2009 term asset-backed securitization transaction and the Companys intent to structure subsequent securitization transactions in a manner that will not qualify for accounting sale treatment under the provisions of ASC Topic 860. As a result of the reclassification, the Company recorded a $72.7 million increase to the allowance for credit losses during the second quarter of 2009 in order to establish the initial reserve for the reclassified receivables. Of the $72.7 million increase, $10.9 million related to the reclassification of finance receivables securitized in May 2009 and $61.8 million related to the reclassification of the remaining finance receivables held for sale as of June 2009. 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): September27, 2009 December31, 2008 September28, 2008 Components at the lower of FIFO cost or market Raw materials and work in process $ 114,061 $ 151,896 $ 152,350 Motorcycle finished goods 251,937 185,464 170,140 Parts and accessories and general merchandise 101,442 103,682 116,480 Inventory at lower of FIFO cost or market 467,440 441,042 438,970 Excess of FIFO over LIFO cost 34,749 40,134 37,693 $ 432,691 $ 400,908 $ 401,277 The reconciliation of net income to net cash provided by (used by) operating activities is as follows (in thousands): Nine months ended September27, 2009 September28, 2008 Cash flows from operating activities: Net income $ 163,580 $ 576,909 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 186,826 154,393 Amortization of acquistion-related intangibles 16,556 Provision for employee long-term benefits 64,422 59,102 Contributions to pension and

4.Acquisition

4.Acquisition
	9 Months Ended Sep. 27, 2009 USD / shares
Notes to Financial Statements [Abstract]
4.Acquisition	4. Acquisition On August8, 2008, the Company announced the completion of its purchase of privately-held Italian motorcycle maker MV. The Company acquired 100 percent of MV shares for total consideration of 68.3million ($105.1 million), which includes the satisfaction of existing bank debt for 47.5million ($73.2 million). In addition, the agreement provides for a contingent payment to the former owner of MV in 2016 based on certain financial metrics during 2013 through 2015. The Company financed the transaction and MVs initial working capital requirements through 130.0million of debt under existing credit facilities. In conjunction with the acquisition of MV, the Company recorded goodwill of $85.6 million. The operating results of MV, which is part of the Motorcycles segment, have been included in the Companys consolidated financial statements from the date of acquisition. Pro forma information reflecting this acquisition has not been disclosed as the pro forma impact on consolidated net income would not be material. As discussed in Note 6, the Company recorded a goodwill impairment charge of $18.9 million related to MV during the third quarter of 2009. On October15, 2009, the Company announced its intent to divest MV; see Note 19 for additional discussion.

5.Restructuring Expense and Oth

5.Restructuring Expense and Other Impairments
	9 Months Ended Sep. 27, 2009 USD / shares
Notes to Financial Statements [Abstract]
5.Restructuring Expense and Other Impairments	5. Restructuring Expense and Other Impairments 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) in the Motorcycles and Financial Services segments. The 2009 Restructuring Plan was designed to reduce excess capacity, exit certain business operations and lower the Companys cost structure. The Companys planned actions include: consolidating its two engine and transmission plants in the Milwaukee area into its facility in Menomonee Falls, Wisconsin; consolidating paint and frame operations at its assembly facility in York, Pennsylvania into existing operations at that site; closing its distribution facility in Franklin, Wisconsin and consolidating Parts and Accessories and General Merchandise distribution through a third party; and discontinuing the domestic transportation fleet. The 2009 Restructuring Plan included a reduction of approximately 2,400 to 2,500 positions over 2009 and 2010. This consisted of approximately 1,800 to 1,900 hourly production positions and approximately 500 non-production, primarily salaried positions within the Motorcycles segment and approximately 100 salaried positions in the Financial Services segment. Restructuring charges 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. As of September27, 2009, approximately 1,800 employees have left the Company under the 2009 Restructuring Plan. The following table summarizes the Companys 2009 Restructuring Plan reserve recorded in accrued liabilities as of September27, 2009 (in thousands): Motorcycles Related Products FinancialServices Consolidated Total Employee Severanceand TerminationCosts Accelerated Depreciation Other Total Employee Severanceand TerminationCosts Original reserve $ 30,816 $ 3,786 $ 260 $ 34,862 $ $ 34,862 Utilized - cash (1,047 ) (260 ) (1,307 ) (1,307 ) Utilized - noncash (4,533 ) (3,786 ) (8,319 ) (8,319 ) Balance, March29, 2009 $ 25,236 $ $ $ 25,236 $ $ 25,236 Additional provision 8,636 5,355 1,140 15,131 15,131 Utilized - cash (7,140 ) (1,140 ) (8,280 ) (8,280 ) Utilized - noncash (5,355 ) (5,355 ) (5,355 ) Balance, June28, 2009 $ 26,732 $ $ $ 26,732 $ $ 26,732 Additional provision 24,326 7,243 5,001 36,570 1,204 37,774 Utilized - cash (10,776 ) (5,001 ) (15,777 ) (836 ) (16,613 ) Utilized - noncash (7,243 ) (7,243 ) (7,243 )

6.Goodwill Impairment

6.Goodwill Impairment
	9 Months Ended Sep. 27, 2009 USD / shares
Notes to Financial Statements [Abstract]
6.Goodwill Impairment	6. Goodwill Impairment Goodwill represents the excess of acquisition cost over the fair value of the net assets purchased. Goodwill is tested for impairment, based on financial data related to the reporting unit to which it has been assigned, at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. The impairment test involves comparing the estimated fair value of the reporting unit associated with the goodwill to its carrying amount, including goodwill. If the carrying amount of the reporting unit exceeds its fair value, goodwill must be adjusted to its implied fair value. Motorcycles Segment During October 2009, the Company unveiled a new strategy that is designed to strengthen the Harley-Davidson brand for long-term future growth by focusing exclusively on the Harley-Davidson brand. As the Company developed this strategy, several scenarios for MV were under consideration during the third quarter of 2009, including the option of selling the business. Because the option to sell MV was under consideration, the Company determined that an interim goodwill impairment test was necessary. The results of the impairment test indicated the current fair value of MV had declined below its carrying value and as a result the Company recorded an impairment charge of $18.9 million during the third quarter of 2009. The Company also evaluated the carrying value of MVs fixed assets and determined that no impairment was present. On October15, 2009, the Company announced its intent to divest MV; see Note 19 for additional discussion. Financial Services Segment As a result of the Companys lower retail sales volume projections and the decline in operating performance at HDFS during 2009 due to significant write-downs of its loan portfolio and investment in retained securitization interests, the Company performed an impairment test of the goodwill balance associated with HDFS as of June28, 2009. The results of the impairment test indicated the current fair value of HDFS had declined below its carrying value and as such the Company recorded an impairment charge of $28.4 million during the second quarter of 2009.

7.Off-Balance Sheet Finance Rec

7.Off-Balance Sheet Finance Receivable Securitizations
	9 Months Ended Sep. 27, 2009 USD / shares
Notes to Financial Statements [Abstract]
7.Off-Balance Sheet Finance Receivable Securitizations	7. Off-Balance Sheet Finance Receivable Securitizations Prior to 2009, HDFS sold U.S. retail motorcycle loans through term asset-backed securitization transactions that qualified for accounting sale treatment under ASC Topic 860. Under the terms of these off-balance sheet term asset-backed securitization transactions, HDFS sold retail loans to a securitization trust. The securitization trust issued notes to investors, with various maturities and interest rates, secured by future collections of purchased retail loans. The proceeds from the issuance of the term asset-backed securities were utilized by the securitization trust to purchase retail loans from HDFS. Upon sale of the retail loans to the securitization trust, HDFS received cash, recorded a gain or loss on the transaction and also retained an interest in excess cash flows, subordinated securities, and the right to receive cash reserve account deposits in the future, collectively referred to as investment in retained securitization interests. The investment in retained securitization interests relating to the off-balance sheet term asset-backed securitization transactions is included with finance receivables held for investment in the consolidated balance sheets. The interest in excess cash flows reflects the expected cash flows arising from U.S. retail motorcycle loans sold to the securitization trust less expected servicing fees, credit losses and contracted payment obligations owed to securitization trust investors. As part of the first quarter 2008 off-balance sheet term asset-backed securitization transaction, HDFS retained $54.0 million of the subordinated securities issued by the securitization trust. These securities have a stated principal and fixed interest rate and are subordinated to the senior securities within the securitization trust. Reserve account deposits represent interest-earning cash deposits which collateralize the trust securities. The funds are not available for use by HDFS until the reserve account balances exceed thresholds specified in the securitization agreements. HDFS retains servicing rights on the U.S. retail motorcycle loans that it has sold to the securitization trust and receives annual servicing fees approximating 1% of the outstanding securitized retail loans. HDFS serviced $2.19 billion of U.S. retail motorcycle loans securitized in off-balance sheet term asset-backed securitization transactions as of September27, 2009. The servicing fee paid to HDFS is considered adequate compensation for the services provided and is included in Financial Services income as earned. HDFS earned $32.3 million from contractually specified servicing fees, late fees, and ancillary fees during the first nine months of 2009. These fees are recorded in Financial Services income. Gains or losses on off-balance sheet term asset-backed securitizations from the sale of the U.S. retail motorcycle loans are recognized in the period in which the sale occurs. The amount of the gain or loss depends on the proceeds received and the original carrying amount of the transferred U.S. retail motorcycle loans, allocated between the assets sold and the retained

8.Secured Borrowings

8.Secured Borrowings
	9 Months Ended Sep. 27, 2009 USD / shares
Notes to Financial Statements [Abstract]
8.Secured Borrowings	8. Secured Borrowings Asset-Backed Commercial Paper Conduit Facility In December 2008, HDFS transferred $666.7 million of U.S. retail motorcycle finance receivables to a special purpose entity (SPE), which in turn issued $500.0 million of debt to third-party bank-sponsored asset-backed commercial paper conduits. The SPE funded the purchase of the finance receivables from HDFS primarily with cash obtained through the issuance of the debt. In April 2009, HDFS replaced its December 2008 asset-backed commercial paper conduit facility agreement with a new revolving agreement (2009 Conduit Loan Agreement). As part of the April 2009 transaction, HDFS transferred an additional $354.4 million of U.S. retail motorcycle loans to the SPE and increased the debt issued to the third-party bank sponsored conduits from $500.0 million to $640.2 million. HDFS is the primary and sole beneficiary of the SPE, and the finance receivables transfer does not satisfy the requirements for accounting sale treatment under ASC Topic 860. Therefore, the assets and associated debt are included in the Companys financial statements. The SPE is a separate legal entity and as such 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 Companys creditors. The 2009 Conduit Loan Agreement provides for a total aggregate commitment of up to $1.20 billion based on, among other things, the amount of eligible U.S. retail motorcycle loans held by the SPE as collateral. The interest rates 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 2009 Conduit Loan Agreement also provides for an unused commitment fee based on the unused portion of the total aggregate commitment of $1.20 billion. There is no amortization schedule; however, the debt is reduced monthly as available collections on the related finance receivables are applied to outstanding principal with the balance due at maturity. Unless earlier terminated or extended by mutual agreement of HDFS and the lenders, the 2009 Conduit Loan Agreement will expire on April29, 2010, at which time HDFS will be obligated to repay any amounts outstanding in full. The assets of the SPE totaled $818.1 million at September27, 2009 and are included primarily in other current assets and finance receivables held for investment in the Companys Condensed Consolidated Balance Sheet. At September27, 2009, the SPE held finance receivables of $759.2 million restricted as collateral for the payment of $570.1 million short-term asset-backed conduit facility debt, which is included in the Companys Condensed Consolidated Balance Sheet. The SPE also held $38.0 million of cash collections from the finance receivables held by the SPE restricted for payment on the outstanding debt at September27, 2009. During the nine months ended September27, 2009, the SPE recorded interest expense on the debt of $43.9 million, which i

9.Fair Value of Financial Instr

9.Fair Value of Financial Instruments
	9 Months Ended Sep. 27, 2009 USD / shares
Notes to Financial Statements [Abstract]
9.Fair Value of Financial Instruments	9. Fair Value of Financial Instruments The Companys financial instruments consist primarily of cash and cash equivalents, marketable securities, trade receivables, finance receivables held for investment, net, finance receivables held for sale, trade payables, debt, foreign currency contracts and interest rate swaps (derivative instruments are discussed further in Note 11). 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 Companys financial instruments at September27, 2009 (in thousands): Fair Value CarryingValue Assets: Cash and cash equivalents $ 1,524,382 $ 1,524,382 Accounts receivable, net $ 339,163 $ 339,163 Restricted cash $ 127,462 $ 127,462 Finance receivables held for investment $ 4,885,118 $ 4,913,052 Investment in retained securitization interests $ 265,099 $ 265,099 Liabilities: Accounts payable $ 298,485 $ 298,485 Unsecured commercial paper $ 899,971 $ 899,971 Asset-backed commercial paper conduit facility $ 570,132 $ 570,132 Credit facilities $ 400,939 $ 400,939 Medium-term notes $ 1,567,270 $ 1,605,464 Senior unsecured notes $ 770,253 $ 600,000 On-balance sheet securitization debt $ 1,109,375 $ 1,093,650 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. Changes in fair value are recorded, net of tax, as other comprehensive income and included as a component of shareholders equity. Finance Receivables Held for Investment, Net Finance receivables held for investment are recorded in the financial statements at historical cost. 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. The historical cost basis of wholesale finance receivables approximates fair value because they are either short-term or have interest rates that adjust with changes in market interest rates. The fair value of investment in retained securitization interest is recorded in the financial statements at fair value and is estimated based on the present value of future expected cash flows using managements best estimates of the key assumptions. Finance Receivables Held for Sale Finance receivables held for sale in the aggregate were recorded at the lower of cost or estimated fair

10.Fair Value Measurements

10.Fair Value Measurements
	9 Months Ended Sep. 27, 2009 USD / shares
Notes to Financial Statements [Abstract]
10.Fair Value Measurements	10. 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. Level 3 inputs are not observable in the market and include managements 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 table below. The following tables present information about the Companys assets and liabilities measured at fair value on a recurring basis as of September27, 2009 and September28, 2008 (in thousands): Balance as of September27,2009 Quoted Prices in ActiveMarketsfor IdenticalAssets (Level1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level3) Assets: Cash equivalents $ 1,260,544 $ 1,260,544 $ $ Derivatives 15,483 15,483 Investment in retained securitization interests 265,099 265,099 $ 1,541,126 $ 1,260,544 $ 15,483 $ 265,099 Liabilities: Derivatives $ 28,132 $ $ 28,132 $ Balance as of September28,2008 QuotedPricesin ActiveMarketsfor IdenticalAssets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Assets: Cash equivalents and marketable securities $ 258,583 $ 258,059 $ 524 $ Derivatives 13,570 13,570 Investment in retained

11.Derivative Instruments and H

11.Derivative Instruments and Hedging Activities
	9 Months Ended Sep. 27, 2009 USD / shares
Notes to Financial Statements [Abstract]
11.Derivative Instruments and Hedging Activities	11. Derivative Instruments and Hedging Activities The Company is exposed to certain risks relating to its ongoing business operations. The primary risks are foreign currency exchange rate risk, interest rate risk and commodity price risk. To reduce such risks, the Company selectively uses derivative financial instruments. All hedging 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 10). In accordance with ASC Topic 815, 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, at both 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 instruments gain or loss is excluded from the assessment of hedge effectiveness. Derivative instruments which 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 countrys local currency. As a result, the Companys earnings can be affected by fluctuations in the value of the U.S. dollar relative to foreign currency. The Companys most significant foreign currency risk relates to the Euro and the Australian dollar. The Company utilizes foreign currency contracts to mitigate the effect of the Euro and the Australian dollar 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 to hedge portions of the cost of natural gas consumed in the Companys motorcycle production operations. The Companys 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 and on its debt by converting portions of HDFS floating-rate debt to a fixed rate basis. HDFS also entered into derivative contracts to facilitate its first quarter 2008 term asset-backed securitization transaction as well as its third qu

12.Income Taxes

12.Income Taxes
	9 Months Ended Sep. 27, 2009 USD / shares
Notes to Financial Statements [Abstract]
12.Income Taxes	12. Income Taxes During the first nine months of 2009, income tax expense was impacted by an unanticipated change in Wisconsin tax law resulting in a valuation allowance of $22.5 million related to net operating loss carryforwards, by non-deductible goodwill impairment charges and by the tax implications of MV.

13.Product Warranty and Safety

13.Product Warranty and Safety Recall Campaigns
	9 Months Ended Sep. 27, 2009 USD / shares
Notes to Financial Statements [Abstract]
13.Product Warranty and Safety Recall Campaigns	13. 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. The warranty coverage for the retail customer includes parts and labor and generally begins when the motorcycle is sold to a retail customer. The Company maintains reserves for future warranty claims using an estimated cost per unit sold, 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 Companys warranty and safety recall liability were as follows (in thousands): Three months ended Nine months ended September27, 2009 September28, 2008 September27, 2009 September28, 2008 Balance, beginning of period $ 60,935 $ 81,427 $ 64,543 $ 70,523 Warranties issued during the period 12,384 14,742 36,195 40,390 Settlements made during the period (20,688 ) (21,881 ) (53,625 ) (51,047 ) Recalls and changes to pre-existing warranty liabilities 778 115 6,296 14,537 Balance, end of period $ 53,409 $ 74,403 $ 53,409 $ 74,403 The liability for safety recall campaigns was $2.6 million and $4.2 million as of September27, 2009 and September28, 2008, respectively.

14.Earnings Per Share

14.Earnings Per Share
	9 Months Ended Sep. 27, 2009 USD / shares
Notes to Financial Statements [Abstract]
14.Earnings Per Share	14. Earnings Per Share As discussed in Note 2, the Company was required to adopt ASC Topic 260-10-55 as of January1, 2009. Under the guidance of ASC Topic 260-10-55, unvested share-based payment awards that contain non-forfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and must be included in the computation of earnings per share pursuant to the two-class method as described in ASC Topic 260. 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. The two-class method of calculating earnings per share did not have a material impact on the Companys earnings per share calculation as of September27, 2009 and September28, 2008. The following table sets forth the computation for basic and diluted earnings per share (in thousands, except per share amounts): Three months ended Nine months ended September27, 2009 September28, 2008 September27, 2009 September28, 2008 Numerator: Net income used in computing basic and diluted earnings per share $ 26,483 $ 166,541 $ 163,580 $ 576,909 Denominator: Denominator for basic earnings per share - weighted-average common shares 232,677 233,081 232,527 235,068 Effect of dilutive securities - employee stock compensation plan 1,198 339 830 253 Denominator for diluted earnings per share - adjusted weighted-average shares outstanding 233,875 233,420 233,357 235,321 Basic earnings per share $ 0.11 $ 0.71 $ 0.70 $ 2.45 Diluted earnings per share $ 0.11 $ 0.71 $ 0.70 $ 2.45 Outstanding options to purchase 4.6million and 5.4million shares of common stock for the three months ended September27, 2009 and September28, 2008, respectively, and 5.2million and 5.1million shares of common stock for the nine months ended September27, 2009 and September28, 2008, respectively, were not included in the Companys computation of dilutive securities because the exercise price was greater than the market price and therefore the effect would have been anti-dilutive.

15.Comprehensive Income

15.Comprehensive Income
	9 Months Ended Sep. 27, 2009 USD / shares
Notes to Financial Statements [Abstract]
15.Comprehensive Income	15. Comprehensive Income The following tables set forth the reconciliation of net income to comprehensive income (in thousands): Three months ended September27, 2009 September28, 2008 Net income $ 26,483 $ 166,541 Other comprehensive income, net of tax: Foreign currency translation adjustment 23,495 (37,736 ) Investment in retained securitization interest: Unrealized net gains (losses) arising during the period 5,279 (3,263 ) Less: net losses reclassified into net income (1,902 ) 7,181 (3,263 ) Derivative financial instruments: Unrealized net (losses) gains arising during period (9,384 ) 7,771 Less: net losses reclassified into net income (4,631 ) (4,753 ) (2,200 ) 9,971 Pension and postretirement benefit plans: Amortization of actuarial loss 2,534 1,844 Amortization of net prior service cost 693 3,227 779 2,623 $ 55,633 $ 138,136 Nine months ended September27, 2009 September28, 2008 Net income $ 163,580 $ 576,909 Other comprehensive income, net of tax: Foreign currency translation adjustment 33,061 (16,362 ) Investment in retained securitization interest: Unrealized net gains (losses) arising during the period 7,384 (8,705 ) Less: net losses reclassified into net income (2,778 ) 10,162 (8,705 ) Derivative financial instruments: Unrealized net losses arising during period (3,673 ) (6,573 ) Less: net gains (losses) reclassified into net income 4,596 (8,269 ) (27,313 ) 20,740 Marketable securities Unrealized losses on marketable securities Less: net losses reclassified into net income (68 ) 68 Pension and postretirement benefit plans: Amortization of actuarial loss 7,868 5,532 Amortization of net prior service cost 2,125 2,337 Pension and postretirement plan funded status adjustment 4,147 Less: actuarial loss reclassified into net income due to settlement (232 ) Less: actuarial loss reclassified into net income due to curtailment (8,352 ) Less: prior service cost reclassified into net income due to curtailment (2,839 ) 25,563 7,869 $ 224,097 $ 580,519

16.Employee Benefit Plans

16.Employee Benefit Plans
	9 Months Ended Sep. 27, 2009 USD / shares
Notes to Financial Statements [Abstract]
16.Employee Benefit Plans	16. Employee Benefit Plans The Company has several defined benefit pension plans and several 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 Nine months ended September27, 2009 September28, 2008 September27, 2009 September28, 2008 Pension and SERPA Benefits Service cost $ 11,702 $ 12,841 $ 36,620 $ 38,523 Interest cost 18,589 17,148 57,744 51,444 Expected return on plan assets (21,885 ) (22,015 ) (67,740 ) (66,045 ) Amortization of unrecognized: Prior service cost 1,432 1,540 4,473 4,620 Net loss 2,764 1,604 8,855 4,812 Curtailment loss 4,164 Settlement loss 370 Net periodic benefit cost $ 12,602 $ 11,118 $ 44,486 $ 33,354 Postretirement Healthcare Benefits Service cost $ 2,807 $ 3,270 $ 8,753 $ 9,810 Interest cost 5,570 5,410 17,142 16,230 Expected return on plan assets (2,724 ) (2,808 ) (8,376 ) (8,424 ) Amortization of unrecognized: Prior service credit (283 ) (281 ) (867 ) (843 ) Net loss 1,357 1,375 4,223 4,125 Curtailment loss 369 Special retiree benefits 926 4,881 Net periodic benefit cost $ 6,727 $ 7,892 $ 21,244 $ 25,779 As discussed in Note 5, the Company recorded restructuring expense of $86.6 million related to its Motorcycles segment during the first nine months of 2009. The restructuring action resulted in a pension and postretirement healthcare plan curtailment loss of $4.5 million, which is included in the $86.6 million restructuring expense, and an increase to equity of $13.3 million, or $8.4 million net of tax, which is included in accumulated other comprehensive income, during the first nine months of 2009. The plan curtailment also resulted in a plan remeasurement using a discount rate of 6.4% compared to 6.1% at December31, 2008. All other significant assumptions remain unchanged from the December31, 2008 measurement date. As a result of the remeasurement, the Company recognized a funded status adjustment consisting of a $6.6 million decrease to its pension and postretirement healthcare liabilities and an increase to accumulated other comprehensive income of $6.6 million, or $4.1 million net of tax. Due to significant declines in worldwide financial market conditions during 2008, the

17.Business Segments

17.Business Segments
	9 Months Ended Sep. 27, 2009 USD / shares
Notes to Financial Statements [Abstract]
17.Business Segments	17. Business Segments The Company operates in two business segments: Motorcycles Related Products (Motorcycles) and Financial Services (Financial Services). The Companys 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 Nine months ended September27, 2009 September28, 2008 September27, 2009 September28, 2008 Motorcycles net revenue $ 1,121,275 $ 1,422,834 $ 3,565,568 $ 4,301,716 Gross profit 371,086 484,072 1,234,147 1,522,133 Selling, administrative and engineering expense 194,973 249,120 611,864 697,945 Restructuring expense and other impairments 50,745 926 100,738 12,475 Goodwill impairment 18,888 18,888 Operating income from Motorcycles 106,480 234,026 502,657 811,713 Financial services income 136,993 111,966 365,627 312,095 Financial services expense 167,333 76,333 446,881 204,408 Restructuring expense 1,204 1,204 Goodwill impairment 28,387 Operating (loss) income from financial services (31,544 ) 35,633 (110,845 ) 107,687 Corporate expense 5,288 1,657 19,370 14,482 Income from operations $ 69,648 $ 268,002 $ 372,442 $ 904,918 As discussed in Note 3, Financial Services expense for the nine months ended September27, 2009 includes a $72.7 million charge related to increased provision for credit losses resulting from the one-time reclassification of finance receivables held for sale to finance receivables held for investment. As discussed in Note 6, the Company recorded an $18.9 million goodwill impairment charge related to Motorcycles during the three and nine months ended September27, 2009. As discussed in Note 6, the Company recorded a $28.4 million goodwill impairment charge related to HDFS during the first nine months of 2009. As discussed in Note 7, Financial Services income for the three and nine months ended September27, 2009 includes an impairment charge of $3.4 million and $35.6 million, respectively, related to the investment in retained securitization interests. For the nine months ended September28, 2008, the impairment charge was $6.3 million.

18.Commitment and Contingencies

18.Commitment and Contingencies
	9 Months Ended Sep. 27, 2009 USD / shares
Notes to Financial Statements [Abstract]
18.Commitment and Contingencies	18. 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. Shareholder Lawsuits: In re Harley-Davidson, Inc. Securities Litigation was a consolidated shareholder securities class action lawsuit filed in the United States District Court for the Eastern District of Wisconsin. On October2, 2006, the Lead Plaintiffs filed a Consolidated Class Action Complaint, which named the Company and certain former Company officers as defendants, that alleged securities law violations and sought unspecified damages relating generally to the Companys April13, 2005 announcement that it was reducing short-term production growth and planned increases of motorcycle shipments. On December18, 2006, the defendants filed a motion to dismiss the Consolidated Complaint. On October8, 2009, the judge granted defendants motion to dismiss, and the clerk of court entered judgment dismissing the consolidated lawsuit. On August25, 2005, a class action lawsuit alleging violations of the Employee Retirement Income Security Act (ERISA) was filed in the United States District Court for the Eastern District of Wisconsin. On October2, 2006, the ERISA plaintiff filed an Amended Class Action Complaint, which named the Company, the Harley-Davidson Motor Company Retirement Plans Committee, the Companys Leadership and Strategy Council, and certain current or former Company officers or employees as defendants. In general, the ERISA complaint included factual allegations similar to those in the consolidated securities class action and alleged on behalf of participants in certain Harley-Davidson retirement savings plans that the plan fiduciaries breached their ERISA fiduciary duties. On December18, 2006, the defendants filed a motion to dismiss the ERISA complaint. On October8, 2009, the judge granted defendants motion to dismiss, and the clerk of court entered judgment dismissing the class action lawsuit. Three shareholder derivative lawsuits were filed in the United States District Court for the Eastern District of Wisconsin on June3, 2005,October25, 2005 (this lawsuit was later voluntarily dismissed) and December2, 2005, and two shareholder derivative lawsuits were filed in Milwaukee County Circuit Court on July22, 2005 and November16, 2005, against some or all of the following current or former directors and officers of the Company: Jeffrey L. Bleustein, James L. Ziemer, James M. Brostowitz, Barry K. Allen, Richard I. Beattie, George H. Conrades, Judson C. Green, Donald A. James, Sara L. Levinson, George L. Miles, Jr., James A. Norling, James A. McCaslin, Donna F. Zarcone, Jon R. Flickinger, Gail A. Lione, Ronald M. Hutchinson, W. Kenneth Sutton, Jr. and John A. Hevey. The lawsuits also name the Company as a nominal defendant. In general, the shareholder

19.Subsequent Events

19.Subsequent Events
	9 Months Ended Sep. 27, 2009 USD / shares
Notes to Financial Statements [Abstract]
19.Subsequent Events	19. Subsequent Events On-Balance Sheet Securitization On October9, 2009, HDFS transferred $897.4 million of U.S. retail motorcycle finance receivables to a SPE, which in turn issued $700.0 million of secured notes, with various maturities and interest rates, to investors. This term asset-backed securitization transaction was eligible collateral under the TALF program. The notes are secured by future collections of the purchased U.S. retail motorcycle loans. The structure of this term asset-backed securitization transaction did not satisfy the requirements for accounting sale treatment under ASC Topic 860; therefore, the securitized U.S. retail motorcycle loans, resulting secured borrowings and other related assets and liabilities of the SPE will be included in the Companys consolidated financial statements as HDFS is the primary and sole beneficiary of the SPE. Discontinuation of Buell Product Line and Planned MV Divestiture On October15, 2009, the Company unveiled major elements of its business strategy to drive growth through a single-minded focus of efforts and resources on the unique strengths of the Harley-Davidson brand and to enhance productivity and profitability through continuous improvement. On October14, 2009, the Companys Board of Directors approved and the Company committed to the discontinuation of its Buell product line and divestiture of MV as part of this strategy. The Company plans to stop production of Buell motorcycles at the end of October 2009. Remaining inventories of Buell motorcycles, accessories and apparel, while they last, will continue to be sold through authorized dealerships. Warranty coverage will continue as normal for Buell motorcycles and the Company will provide replacement parts and service through dealerships. The decision will result in a reduction over time of about 80 hourly production positions and about 100 non-production, primarily salaried positions. Employment will end for a majority of Buell employees December18, 2009. Buell is not considered a separate and distinct operation under Statement of Financial Accounting Standards (SFAS) No.144, Accounting for the Impairment or Disposal of Long-Lived Assets (ASC Topic 360) due to its integration within the Harley-Davidson business systems and distribution network. Accordingly, the financial results related to Buell will continue to be included in the Companys consolidated financial statements according to their respective line items. The Company expects to incur approximately $125 million in one-time costs related to the discontinuation of the Buell product line, approximately 60% of which will involve cash expenditures. The Company expects to incur approximately $115 million of that amount in 2009 and the remainder in 2010. The $125 million is comprised of approximately $70 million in costs associated with sales incentives, inventory write-downs and other incremental operating costs; approximately $14 million of fixed-asset impairment charges (incurred during the third quarter 2009 as discussed in Note 5); approximately $9 million of one-time termination benefits; and approximately $32 million of other costs including payments

Document Information

Document Information
	9 Months Ended Sep. 27, 2009 USD / shares
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-09-27

Entity Information

Entity Information (USD $)
	9 Months Ended Sep. 27, 2009	Oct. 23, 2009
Entity [Text Block]
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		234,443,032