Title:
Baltimore Region Analysis Report
Course:
MGMT 781 – International Business Strategy
Instructor:
Dr. Alan Randolph
Prepared By:
Christiane Koffi
Oge Nwafor
Olubunmi Owolabi
Harry Spar
Vernell Thompson
Amy Wallace
Due Date:
March 5, 2007
1
Executive Summary
Through the eyes of Michael Porter and his Porter-Diamond Model, the Ireland team has
evaluated both Under Armour and Harley-Davidson and determined that Under Armour has
the greater global potential. Only nine years old, Under Armour has 75% of the market share
in micro fibers.1 As of September 2006, revenue was at $65 million and is projected to be at
$135 million by the end of 2007 (see fig. 1).2 Although these are two companies in two very
different industries, the flexibility of the Porter-Diamond model makes it possible to compare
and contrast them. Under Armour is a sporting goods company focusing on micro fiber
textiles while Harley-Davidson is a motorcycle company with a large emphasis on American
patriotism.
Looking at factor conditions, the founder of Under Armour, Kevin Plank, is a native of
Baltimore who played professional football at the collegiate level, which leads to a highly
specialized pool of skills. Under Armour products use high-tech micro fiber materials that
wick moisture away from the body, resulting in a need for applied technology. The company
gains capital by sponsoring well-known professional athletes. This in turn produces sales and
the capital is then funded via revolving credit facilities. For Harley-Davidson, Maryland is a
top steel-making state. Motorcycle parts are easily obtained and reasonably priced. The rising
cost of gasoline also makes motorcycles more attractive.
Although Harley-Davidson sells a certain kind of lifestyle and has a waiting list for its
product, this is not unique to the Baltimore area. For Under Armour, the Baltimore region is
very demanding in regards to the level of performance of its professional and collegiate
athletes. High-ranking professional and collegiate teams pressure Under Armour to create
superior products in order to be competitive in the market.
These companies have different strategies, competitors and structure. A family-owned
business, Under Armour is a company for Athletes by Athletes. By defining Under Armour's
market as any instance in which people need clothes to stay cool, warm, or dry, the company
has great growth potential. It counts on its strong brand image to attract high school athletes
who of course, seek to emulate their role models. Its main competitors are Nike, Reebok and
Adidas. Under Armour’s stateside minifactory, the 4th Quarter Shop, also allows it to handle
last-minute orders and engenders loyalty among retailers.3 Harley-Davidson’s appeal is its
almost limitless customization options, coupled with a superior sales and after-sale-service.
Top competitors are Triumph, Polaris and BMW.
The Baltimore region is highly populated with companies supporting and related to the
apparel industry. Harley-Davidson has many suppliers and dealers around the Baltimore area.
The Baltimore area also boasts many motorcycle repair and maintenance shops.
Undoubtedly, Under Armour will face some stiff competition from other sporting goods
companies such as Nike and Reebok who now have similar products on the market. In order
to stay competitive, the company has to grow beyond its niche, developing new products and
1
www.smartmoney.com
www.businessweek.com
3
http://www.fastcompany.com/magazine/97/under-armour-fasttake.html
2
2
innovations that will not only differentiate it from similar products in the market but also
reach new customers while holding on to its customer base.
Analysis: Harley-Davidson
Facts on The Industry
The motorcycle industry is thriving in Baltimore and the surrounding areas. This area is also
host to some of the largest motorcycle shows on the east coast. The 24th Annual Baltimore
International Motorcycle Show takes place annually at the Baltimore Convention Center. The
Baltimore show features the only fully draped and carpeted show in the industry. Every type
of motorcycle is showcased. There are a growing number of middle-aged white-collar
professionals in the Baltimore area who are living out their dreams. Their disposable income
has increased and they have $20,000.00 to spend on a Harley-Davidson motorcycle.
History of the Motorcycle
German, Gottlieb Daimler invented the first gas-powered motorcycle in 1885, which was an
engine attached to a wooden bike. That marked the moment in history when the dual
development of a viable gas-powered engine and the modern bicycle collided. The founders
of the Harley-Davidson motorcycle revolutionized this invention.
Harley-Davidson Motorcycle Company was established in 1903 by William Harley and
Walter, William, and Arthur Davidson, who built their first three motorcycles in Milwaukee.
In 1909, the company introduced its trademark bike -- a 2-cylinder, v-twin engine, able to
reach speeds of 60 mph. However, a few years later the competition was becoming stiffer.
During World War I, the demand for United States motorcycles overseas grew tremendously.
As a result, Harley-Davidson became a leader in innovative engineering in the 1920's. With
the introduction of the front brake and gas tanks, Harley was quickly developing its mystic
appearance. The industry, which was thriving after World War I, was diminishing quickly as a
result of the Great Depression. As one of only two remaining motorcycle companies, HarleyDavidson survived because of exports and sales to the police and military.
In the last fifty years, the motorcycle industry has experienced highs and lows in popularity.
We are once again approaching the highest registered motorcycle numbers yet. We are seeing
many more models of Cruisers and Sport Bikes offered every year.
With gas and oil prices going through the roof and supplies of the non-renewable resource
getting lower everyday, motorcycles should continue to grow in demand. Even in first world
countries (like the UK) people are riding them due to the savings in gas, oil, and insurance.
Industry Leaders/Key Competitors
Harley-Davidson’s main competitors are BMW, Polaris Industries and Triumph Motorcycles.
Other competitors in the sportster bike market include Suzuki, Kawasaki, Yamaha, and
Honda. The baby boomers drive the market and classically styled cruiser bikes account for
about one of every three motorcycles sold, making them the biggest segment.
Harley-Davidson competes with other companies who have a solid international perspective.
The strongest of these competitors include Honda, Suzuki and Kawasaki. As is the case with
many other U.S. companies, Harley-Davidson now seeks to strengthen its international
3
presence. The primary way to do that is by establishing a competitive advantage. According
to Michael Porter, a firm may possess two types of competitive advantage. Competitive
advantage is a function of either providing comparable buyer value more efficiently than
competitors (low cost), or performing activities at comparable cost but in unique ways that
create more buyer value than competitors and, hence, command a premium price
(differentiation). Harley-Davidson seeks to compete not by providing the lowest cost
motorcycles but by differentiating its motorcycles through customization and excellent
customer and after-sales service.
Strengths and Weaknesses
Strengths include a strong brand image. They are selling a lifestyle and experience, not just a
motorcycle. Consumer desires are perfectly met. There is a high level of flexibility in every
part of the design, engineering, fabrication, and distribution. There is a consistent and high
level of research and development and opportunities to uncover unforeseen market niches.
Harley-Davidson motorcycles have a distinct exhaust sound that is well known by motorcycle
enthusiasts. Their loyal fan base is also a plus. The company has managed to reduce inventory
costs by using a push-based supply chain, thereby reducing cost and increasing revenue.4
Harley-Davidson employs a pull-based strategy where things are more demand driven.
A major weakness is long delivery times for motorcycles. Production time is longer than offthe-shelf buying. There is currently more demand than supply. Also, the company has a
lingering biker image problem. The Harley also boasts a hefty price tag. The bikes are more
expensive than the Japanese brands. Also, as baby boomers age, Harley motorcycles might be
seen as something for the older generation.
Factor Conditions
According to Michael Porter, disadvantages in factors of production cause innovation.
Adverse conditions such as labor shortages or scarce raw materials force firms to develop new
methods, which ultimately leads to a competitive advantage. This is the case with HarleyDavidson. Although Maryland and Pennsylvania are among the top steel-making states (see
figure 3), cheap imports of steel from abroad (e.g., Japan) affected the US steel industry
adversely. In 2003, there were only about 160,000 steelworkers in the U.S.-- down from more
than 800,000 in the 1960s. The dire conditions forced Harley-Davidson to overhaul its
management style, come out with more innovative products and engage in a huge marketing
campaign, aimed at improving the brand image.
The company was successful at this and in 1987, with a year of tariff protection still to run, it
petitioned for early termination of its five-year tariff deal. These days, Harley actively
campaigns against international tariffs, so it can sell more motorcycles overseas.5
The Baltimore area is full of motorcycle repair facilities, tire shops, and parts companies.
Harley-Davidson, for example, has a sales floor along with their parts and repair facility on
the same premises. This gives customers an added bonus from their purchase.
4
5
See Fig. 2
http://www.socialistworker.org/2003-2/477/477_13_SteelPolitics.shtml
4
Demand Conditions
Harley owners have traditionally had a higher education and income level than other
motorcycle owners. They tend to be older. The new focus for Harley-Davidson is in attracting
a younger group of people. About half of all new Harley-Davidson sales are to people
switching from other brands. More women are participating in motorcycling. This shows up
in sales of the Sportster 883 model, 9% of which are female riders.6 Harley has a broad
consumer population, from blue-collar craftsmen and bearded, beer-bellied "motorheads" to a
growing legion of chief executives, investment bankers and high-profile entertainers. The
profile of the typical Harley owner has steadily gone up during the past decade, in both age
and household income (from 32 to 46 years and from $30,000 to $80,000), as more whitecollar baby boomers have bought the bikes to fulfill a lifelong dream. As of 1997, 31 percent
of all Harley owners were college graduates.
Consequently, Harley-Davidson is the only major U.S. maker of motorcycles and the nation's
number one seller of heavyweight motorcycles. Harley-Davidson offers 24 models of touring
and custom cycles. Harley has held the largest share of the U.S. heavyweight motorcycle
market since 1986.7 The onset of World War I was a boom for Harley-Davidson. As the
population of America grows older with the Baby Boom generation reaching retirement age
and with increased average income, there is increased demand for these motorcycles.
Related Industries
The key to Harley-Davidson's success is adopting beneficial relationships with HarleyDavidson's dealers and suppliers and taking a strategic approach to purchasing. The company
has adopted single-source relationships with electronic/electrical systems suppliers. These
suppliers provide systems such as lighting systems, instrumentation, ignitions and
entertainment systems. One service provider in particular is Eastern Performance Cycles.
They offer full custom services and logistics. Another provider is Independent Motorcycle
Transport. They are a 24/7 motorcycle towing service. And lastly, the American Cycle
Fabrication Company provides fabrication services. Harley-Davidson has developed a
comprehensive program designed to promote their customers’ confidence in their
workmanship and customization abilities.
Supporting Industries
Harley-Davidson also utilizes several firms to assist customers after sales. One such company
is Geico Direct. They offer specialized insurance serves for racing bikes as well as regular
street bikes. Geico Direct allows Harley-Davidson customers to customize their insurance
policies to their personal preferences.
Firm Strategy
Sustaining competitive advantage over the long-term is difficult for firms, and even entire
industries. Companies that develop successful products not only listen to their customers, but
also develop an organizational architecture to quickly assimilate new concepts and ideas into
tangible, quality products. The competitive strategy used by Harley-Davidson—a highly
differentiated range of products combined with a build-to-order manufacturing capability—
6
7
http://stroked.virtualave.net/custprofile.htm
http://www.businessinfo.cc/db/29/mul45.shtml
5
enabled them to survive intense Japanese competition and define a new product concept in a
highly mature market. The lessons from Harley-Davidson embody a corporate turnaround and
success story useful on many levels for manufacturing firms, but also illustrate elements of
success for other organizations.
Firms practicing differentiation seek to design highly distinctive products or services that
create high value for their customers, thus justifying a premium price. According to author
John Slocum, “In order to have a differentiated strategy, the firm must have a niche and a
focus which separates them from the competition.” In the case of Harley, they separate
themselves in the buying experience and on after-sales service.8 The attention to physical
uniqueness as well as intangible sources of value enables firms to build this strong
competitive advantage. A differentiated strategy also relies on relationship management and
image. Developing corporate mystique or image requires great attention to product features,
pre-and post-purchase service, and relationship management.
Firm Structure
Supplier connectivity is a vital element in Harley-Davidson’s supply chain program. Their
programs are based on long-term contracts, focus on quality, and stabilized production.
Suppliers working with Harley-Davidson understand that clear expectations exist between
both. A tight supply chain, high quality vertical information system, and branded packaging
and design are integral to successfully executing this strategy. Harley-Davidson has
experienced enhanced product development and relationship management providing accurate,
timely information about consumer needs and purchase patterns. Highly distinctive products
create high value for customers, thus justifying a premium price.
Industry Rivalry
The best example of an industry rival for Harley-Davidson is Triumph Motorcycles. Their
motorcycles are very similar to some Harley models. They have a store in Frederick, which is
right outside of Baltimore. They offer special financing, a website that offers details on
motorcycle shows in the area, as well as a range of pricing options. This type of “in your
face” competition is what keeps Harley-Davidson moving forward in the area of motorcycle
design and service. These motorcycles are quite similar at a glance. The likeness is so
pronounced that a non-motorcycle enthusiast may not be able to tell the difference.
8
http://www.cox.smu.edu/article/research/research.do/89
6
Analysis: Under Armour
Facts on the Industry
The performance athletic underwear and apparel industry is a high part of Baltimore’s
industrial activities with Under Armour being one of its biggest names. Under Armour has
risen to the top of the industry. Under Armour is the official supplier of MLB and the NHL,
specializing in sport-specific garments; the company dresses its consumers from head (Cold
Weather Hood) to toe (Team Sock). It earned accolades from several sources in late 2001,
including being named Apparel Supplier of the Year from Sporting Goods Business, and a
Victor Award for the best New Product Launch from the Sports Authority, the nation's largest
sporting goods chain.
History of Under Armour
Former University of Maryland’s football player Kevin Plank founded the company in 1995.
Plank had captained the Terrapin special teams. It started with Kevin Plank’s simple plan to
make a superior T-shirt that provided compression and wicked perspiration off skin rather
than absorb it. The shirt worked with your body to regulate temperature and enhance
performance.
Under Armour developed its performance apparel for men, women and youth with product
lines that impact all levels of activity from everyday to extreme sport activity covering all
climates and conditions. This diversity has allowed them to impact virtually every market.
Presently they have five lines:
•
•
•
•
•
Coldgear
Loosegear
Turfgear
Allseasonsgear
Heatgear
In just over a decade of existence, Under Armour has many accomplishments to its name. In
1996: Kevin Plank developed his first micro fiber T-shirt to keep athletes dry during workouts
and games. He founded Under Armour Athletic Apparel. In 1997, twelve college football
teams and ten National Football League (NFL) teams begin wearing Under Armour garments.
By 1998, the company struck a deal with Sports Robe, the wardrobe and uniform provider for
the Warner Bros. film Any Given Sunday. By 2001, it had begun national print advertising,
providing apparel for the XFL football league and had in place supply agreements with MLB,
NHL and NFL. By 2003, its products were available in over 2500 stores and it had launched
its Women’s Performance Gear product line and the company had over 500 employees here in
Baltimore.
In 2005, Under Armour released its IPO. The stock had the second highest increase in share
price ever for the first day of trading, debuting at $13 and closing at $26. In the same year it
entered into a five-year deal to be the official outfitters for Auburn University.
In 2006 Under Armour joined Nike and Reebok as the only other authorized footwear
supplier for the NFL. In February 2007, Chicago Cubs announced a deal allowing Under
Armour to advertise their logo above the green giant on the green outfield.
7
Industry Leaders/ Key Competitors
Under Armour’s key competitors are Nike, Reebok and Adidas. Others include makers of
undergarments and personal clothing items such as Calvin Klein, Columbia Sports, Fruit of
the Loom, Jockey, Hanes, L.L Bean, Victoria Secrets and Warnaco Swimsuits amongst
others.
Under Armour also competes with other giant MNC companies who have been in the
business for a while. Under Armour is hard at work to strengthen and break through on the
global level as some of its big named competitors (e.g. Nike and Reebok) have.
Strengths and Weaknesses
A weakness if that as an establishment within the Textile, Textile Product and Apparel
Manufacturing Industry, Under Armour’s growth capacity will be influenced by a variety of
external market conditions.
The single most important factor affecting the industry is a constant change in trade
regulations. With many of Under Armour’s manufacturing facilities located outside of the
United States, the company has to manage a variety of different import/export restrictions. As
a small player in a large retail trade market, Under Armour may become vulnerable to
competition especially if regulations change rapidly, ultimately affecting the delivery of their
products. Merger and acquisition trends in the industry may also be a threat to Under
Armour. Historically, this market has been dominated by larger organizations. To remain
successful, Under Armour will need to have a clear strategy in place.
Sedentary lifestyles coupled with a rapid decline in group sports are a major weakness for this
industry. Sporting good/merchandise industry has been experiencing a decline of about 2 to
5% yearly.
Some of the strengths include the increasing advancements in technology within this industry.
Across the board these advancements will better utilize the workforce, decrease material
costs, and increasing production. Another strength is that this market is extremely dynamic.
Researchers in the emerging fabric industry are constantly investigating new ways to
incorporate these fabrics into everyday fashion. International production is a strength for this
industry. In addition to lower labor cost, international production may present opportunities
for easier product globalization.
Under Armour product innovation has the comparative advantage of differentiation. The
company has developed five product lines that are derived from the micro fiber. The main
advantages to this fabric were its ability to:
•
•
•
Wick moisture away from the skin keeping people dry
Reduce sweat and regulates body temperature due to breath ability
Keep players comfortable by being lightweight
8
Factor Conditions
Under Armour is a perfect fit for the Porter Diamond Model. The model suggests that a
company’s location, contrary to popular belief, has a large impact on the global competition
of the company. Michael Porter discusses and emphasizes the impact of factor conditions. A
few factor conditions for Under Armour are a specialized skill pool, applied technology, and
sources of capital. It is specifically these types of specialized factors that can give an
organization a competitive advantage. The key factor conditions from yesteryear such as
transportation, and telecommunications are now viewed as necessities and no longer sources
of advantage. A company has an advantage when it or the environment it is in, creates these
key factors, because similar companies can simply duplicate all other factors. As stated
earlier, Kevin Plank was a former University of Maryland football player. This means that as
CEO, he brought to the boardroom firsthand knowledge that other sports clothing companies
do not have. Under Armour therefore has a specialized pool of knowledge. Under Armour
introduces and uses new technologies, which continuously improve the product such as their
moisture wicking fabrics. Lastly a major source of capital is through marketing. The company
sponsors athletes and by doing this, sales are made and capital can then be funded via a
revolving credit facilities.
Demand Conditions
The competitiveness of a company is determined by its demand conditions. The local
customers, whom are demanding and sophisticated, add much needed input and at times
criticism to better a corporation. It is the local customers that are most often heard and
considered, due to their joint working relationships and high visibility. These customers in
turn, are pressuring companies to improve their product, or service. This type of pressure is a
healthy pressure that a good corporation can use to become a great corporation. Under
Armour for example, filled customer demand by manufacturing a product that is conducive
for hot weather sports activities. America is very demanding in regards to the level of
performance of their professional and collegiate athletes. Nowhere is this more evident than in
the ridiculous salaries professional athletes receive. Under Armour therefore constantly works
to improve performance. Aside from performance demands, Under Armour is also known to
meet the demands of the non-professional consumers. This is why Under Armour has
different lines of product and style – the company has recently crossed over to a fashionable
“street brand,” selling clothing to not only the soccer stars, but now the soccer moms as well.
Related Industries & Supporting Industries
Sporting Goods: Under Armour, which was founded here in Baltimore, is well known for its
sports from college level all the way to the professional level. Baltimore is richly blessed
with College teams like the Terrapin of the University of Maryland, The Tigers of Towson;
State’s Ravens; the State’s Orioles and many more sports from other colleges and club sides.
Maryland has the advantage of being located near other States that are highly sports oriented.
When Under Armour started out in 1995, Plank was able to convince Georgia Tech to
purchase the first sale of Under Armour clothing sold. Plank’s method for marketing and
retaining clients was simple -- he believed that if you create product for the people who will
appreciate it most, then it would sell. By 1997 Plank was fortunate to have twelve college
teams and Ten National NFL teams on his clientele list.
9
Under Armour works closely with other supporting good companies. In 1998 Under Armour
struck a deal with Sports Robe, the wardrobe and uniform provider for the Warner Bros. film
Any Given Sunday.
The Micro fiber Industry: Under Armour products are made from a material called Micro
fiber, which it introduced in 1986. The Chinese market is currently the largest source of
Micro fiber in the international market. Trade between the U.S and China has grown in the
more recent years and it has become easier with the advent of globalization to have factories
in China that produce these sporting outfits at a cheaper rate in large volumes for sales all
around the world. There are also a number of Micro fiber Industries right here in the heart of
Baltimore, an example of such companies is Luxe’s Micro fiber, which proves to be a cheap
way of sourcing the materials as transportation cost of obtaining the material is reduced.
Textile Industry: As far back as the 1840s Baltimore was a prosperous seaport and the center
of a growing textile Industry. Baltimore is also still highly ranking in the textile industry
today.
Undergarment Industry: Because Under Armour started out making high tech undergarments
that could wick sweat and other moisture out of fabric, it is in competition with other
undergarment makers. Traditional undergarment makers such as Hanes for Jockeys and
Victoria Secrets for women compete in the same markets.
Technological Industry: Under Armour utilizes technology to create in the creation of its
products and also for maintaining database information of their consumers. Such examples of
these include: LockerTag™ Technology, Under Armour® Metal™ technology, and
TurfGear® technology. Quoted in a statement by the Company “We use Secure Sockets
Layer (SSL), the industry-standard encryption technology that ensures safe Internet
transmission of your personal information”.9
Firm Strategy
Under Armour's mission is to provide the world with technically advanced products
engineered with our superior fabric construction, exclusive moisture management, and proven
innovation. The company focuses on what consumers needs and interests are because this is
what sells. Under Armour spends a lot of resources staying ahead of the competition,
designing state-of-the-art sports equipments for its consumers. The question on many minds
including that of direct competitors is how big Under Armour will grow. Under Armour’s
employees and top competitors like Nike and Adidas, have approximately 75% of the market
share -- definitely on the right track.
Firm Structure
The company has thrived because of this marketing capability. Under Armour utilizes wellknown professionals to market its products while at the same time drawing the youth through
the idolization of their favorite players to Under Armour. Under Armour uses a lot of
technology, research and development in marketing its products. Under Armour is sold on the
stock Exchange Market, where it shares is traded daily.
9
http://www.underarmour.com/cust_service
10
Industry Rivalry
The Industry rivals of Under Armour include all the players in the undergarment and Sporting
Industries. Under Armour is affordable, and the gear is found in every aspect of sports. It is
in strong competition with Multinational Companies such as Nike, Reebok and Adidas and is
managing to hold its own. Under Armour has become an industry standard even as Nike,
Reebok and other companies try desperately to overtake Under Armour as the performance
apparel leader.
Conclusion
We believe that Under Armour has a good chance at of doing well on the global market. It is a
young company, still in its growth phase and its innovations will keep it moving in the right
direction. This will continue to be a viable industry because it deals in the basic goods –
apparel and undergarments. As long as consumers buy these, Under Armour will continue to
be in business. With sports being a major part of the American culture, the pressure will stay
on Under Armour to continue to come out with top-of-the-line gear for both athletes and nonathletes.
We have examined the economy and culture of Ireland and have found sports to be a big part
of their culture and even their tourism. Ireland is very involved in international sports,
participating in the Olympics, FIFA World Cup, International Rugby competitions, Horse
Racing Competitions, Golf, Snooker and in the Disabled Olympics. The 2006 Ryder Cup was
held in Ireland. The Irish Tourism Product Development Strategy Group plans to invest EUR
540 million between 2007 and 2013.10 Of this, sports play a key role. In a news statement
dated February 28, 2007, the Irish Sports Council declared that it has budgeted EUR 7.285
million to fund its elite professional sports.11
We believe that this would make a good market for international expansion for Under
Armour. The company could become a major player in this market by targeting and getting a
large share of the planned sports and investment. Under Armour would be successful in this
country if it targets professional big names to win the market. The country’s love for sports
and the sophistication of the Ireland people in various sports arenas make this an extremely
attractive market.
10
11
http://www.nwipp-newspapers.com/dn/free/308027020745950.php
http://www.irishsportscouncil.ie/pressandpub-news-latest-article.aspx
11
References
Chen, Andrew; Route to Building Competitive Advantage: Harley Davidson 9/2004
Mitchel, Doug. Harley-Davidson : An American classic ISBN 0-7853-2052-0
Wagner, Herbert. Harley-Davidson Lore. Origins through Panhead, ISBN 0-8118-2533-7
http://www.bizjournals.com/baltimore/stories/2005/09/26/story6.html
http://ezinearticles.com/Underarmor-Gear
http://www.wikipedia.org/wiki/Under_Armour
http://www.allperformanceapparel.com
http://www.underarmour.com/cust_service
12
Figure 1
Under Armour Revenue Chart, 2005 – 2007
Source: Business Week Magazine
13
Figure 2
Harley-Davidson, Inc. Consolidate Balance Sheet
ASSETS
2006
2005
2004
2003
2002
Cash and cash equivalents
$238,397
$140,975
$275,159
$329,329
$192,458
Marketable Securities
658,133
905,197
1,336,909
993,331
603,270
Accounts receivable, net
143,049
122,087
121,333
112,406
108,694
Finance receivables, net (2002, 2003)
-
-
-
1,001,990
855,771
Finance receivables held for sale (2004, 2005, 2006)
547,106
299,373
456,516
-
-
Finance receivables held for investment, net (2004, 2005, 2006)
1,554,260
1,342,393
1,167,522
-
-
Inventories
287,798
221,418
226,893
207,726
218,156
Deferred income taxes
73,389
61,285
60,517
51,156
41,430
Prepaid expenses and other current assets
48,501
52,509
38,337
33,189
46,807
3,550,633
3,145,237
3,683,186
2,729,127
2,066,586
Finance receivables held for investment, net
725,957
600,831
488,262
735,859
589,809
Property, plant and equip, net
1,024,469
1,011,612
1,024,665
1,046,310
1,032,596
Goodwill
58,800
56,563
59,456
53,678
49,930
Other assets (incl. Prepaid pension costs)
172,291
440,966
227,724
358,114
122,296
Current assets:
Total current assets
$5,532,150 $5,255,209 $5,483,293 $4,923,088 $3,861,217
Total assets
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
$283,477
$270,614
$244,202
$223,902
$226,977
Accrued & other liabilities
479,709
397,525
433,053
407,566
380,496
Current portion of finance debt
832,491
204,973
495,441
324,305
382,579
1,595,677
873,112
1,172,696
955,773
990,052
Total current liabilities
Finance debt
870,000
1,000,000
800,000
670,000
380,000
Deferred income taxes
-
155,236
51,432
125,842
29,478
Postretirement health care benefits
201,126
60,975
149,848
127,444
105,419
Other long-term liabilities (incl. Pension liability)
108,610
82,281
90,846
86,337
123,353
Common stock
3,343
3,310
3,300
3,266
3,254
Additional paid in capital
766,382
596,239
533,068
419,455
386,284
5,460,629
4,630,390
3,844,571
3,074,037
2,372,095
(206,662)
58,653
(12,096)
47,174
(46,266)
Shareholders' equity
Retained earnings
Accumulated
comprehensive income (loss)
Treasury stock
other
(3,266,955) (2,204,987) (1,150,372) (586,240)
(482,360)
-
-
-
-
(92)
Total shareholders' equity
2,756,737
3,083,605
3,218,471
2,957,692
2,232,915
Total liabilities and shareholders' equity
$5,532,150 $5,255,209 $5,483,293 $4,923,088 $3,861,217
Unearned compensation
Source: HarleyDavidson.Com
14
Source: US Department of Commerce
15