HARLEY-DAVIDSON NYSE-HOG RECENT

PRICE 40.51 P/ERATIO 24.6(Trailing:

Median: 20.0) P/E RATIO 1.46 YLD 1.0%
29.4 RELATIVE DIV’D VALUE
LINE
TIMELINESS 3 Raised 4/9/10 High:
Low:
32.0
21.4
50.6
29.5
56.0
32.0
57.3
42.6
52.5
35.0
63.8
45.2
62.5
44.4
75.9
47.9
74.0
44.4
48.1
11.5
30.0
8.0
36.1
21.3
Target Price Range
2013 2014 2015
SAFETY 3 Raised 9/6/91 LEGENDS
9.0 x ″Cash Flow″ p sh 120
TECHNICAL 4 Lowered 2/4/11 . . . . Relative Price Strength
2-for-1 split 4/00
100
80
BETA 1.50 (1.00 = Market) Options: Yes
Shaded areas indicate recessions 64
2013-15 PROJECTIONS 48
Ann’l Total
Price Gain Return
High 65 (+60%) 13% 32
Low 40 (Nil) 1% 24
Insider Decisions 20
M A M J J A S O N 16
to Buy 0 0 0 0 0 1 0 1 0 12
Options 0 2 0 0 0 0 0 0 0
to Sell 0 4 0 0 0 0 0 0 0
% TOT. RETURN 1/11 8
Institutional Decisions THIS VL ARITH.
1Q2010 2Q2010 3Q2010 STOCK INDEX
Percent 30 1 yr. 76.8 31.8
to Buy 133 167 143 shares 20
to Sell 200 180 184 3 yr. 5.9 35.8
traded 10
Hld’s(000) 205847 196701 190375 5 yr. -16.8 41.8
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 © VALUE LINE PUB. LLC 13-15
5.00 4.51 5.06 5.79 6.75 8.10 9.62 11.11 13.52 15.34 17.04 19.50 22.48 24.01 24.03 18.48 17.75 18.50 Sales per sh 26.60
.46 .51 .66 .80 .98 1.26 1.59 1.95 2.50 3.18 3.75 4.25 4.87 4.77 3.77 1.11 2.55 3.30 ‘‘Cash Flow’’ per sh 5.10
.34 .37 .48 .57 .69 .87 1.13 1.43 1.90 2.50 3.00 3.41 3.93 3.74 2.79 .06 1.38 2.05 Earnings per sh A 3.50
.04 .05 .06 .07 .08 .09 .10 .12 .14 .20 .41 .63 .81 1.06 1.29 .40 .40 .40 Div’ds Decl’d per sh B■ .80
.31 .38 .59 .61 .60 .55 .67 .96 1.07 .75 .73 .72 .85 1.02 1.00 .50 .75 1.00 Cap’l Spending per sh 1.50
1.40 1.65 2.19 2.71 3.37 3.84 4.65 5.80 7.38 9.81 10.94 11.25 10.68 9.96 9.09 9.00 9.40 10.65 Book Value per sh 14.55
308.63 299.54 302.68 304.65 305.86 302.72 302.07 302.80 302.66 301.51 294.31 274.00 258.05 238.49 232.76 234.31 235.00 235.00 Common Shs Outst’g C 235.00
18.3 17.5 21.6 21.4 25.2 32.4 36.5 32.2 26.8 17.8 19.0 15.5 14.7 15.4 12.2 NMF 20.7 Avg Ann’l P/E Ratio 15.0
1.20 1.17 1.35 1.23 1.31 1.85 2.37 1.65 1.46 1.01 1.00 .83 .79 .82 .73 NMF 1.30 Relative P/E Ratio 1.00
.6% .7% .5% .6% .4% .3% .2% .3% .3% .4% .7% 1.2% 1.4% 1.8% 3.8% 2.0% 1.4% Avg Ann’l Div’d Yield 1.5%
CAPITAL STRUCTURE as of 9/26/10 2906.4 3363.4 4091.0 4624.3 5015.2 5342.2 5800.7 5726.8 5594.3 4330.0 4176.6 4350 Sales ($mill) 6250
Total Debt $6137.2 mill. Due in 5 yrs. $2640 mill 21.0% 22.4% 23.3% 25.5% 27.7% 27.8% 27.7% 24.8% 20.9% 16.1% 20.0% 24.0% Operating Margin 30.0%
133.3 153.1 175.8 196.9 214.1 205.7 213.8 204.2 222.2 246.3 270 295 Depreciation ($mill) 375
LT Debt $4615.9 mill. (68% of Cap’l)
All debt of Financial Services div. 347.7 437.7 580.2 760.9 889.8 959.6 1043.2 933.8 654.7 14.6 325 480 Net Profit ($mill) 825
36.6% 35.0% 34.5% 34.7% 35.5% 35.5% 35.8% 35.5% 36.7% NMF 34.0% 35.0% Income Tax Rate 35.0%
Leases, Uncapitalized None 12.0% 13.0% 14.2% 16.5% 17.7% 18.0% 18.0% 16.3% 11.7% .3% 7.8% 11.0% Net Profit Margin 13.2%
Pension Assets-12/09 $1026.1 mill. 799.6 949.2 1076.5 1773.3 2093.6 2272.1 1954.9 1562.2 2774.1 2073.7 2052.8 2300 Working Cap’l ($mill) 2500
Oblig. $1284.7 mill. 355.0 380.0 380.0 670.0 800.0 1000.0 870.0 980.0 2176.2 4114.0 4520.6 3500 Long-Term Debt ($mill) 2000
Pfd Stock None
1405.7 1756.3 2232.9 2957.7 3218.5 3083.6 2756.7 2375.5 2115.6 2108.1 2206.9 2500 Shr. Equity ($mill) 3425
Common Stock 235,535,660 shs. 19.7% 21.1% 22.3% 21.1% 22.3% 23.8% 29.2% 28.4% 16.1% 2.0% 5.0% 8.0% Return on Total Cap’l 15.0%
as of 10/29/10 24.7% 24.9% 26.0% 25.7% 27.6% 31.1% 37.8% 39.3% 30.9% .7% 14.5% 19.0% Return on Shr. Equity 24.0%
MARKET CAP: $9.5 billion (Large Cap) 22.6% 22.9% 24.1% 23.7% 23.9% 25.5% 30.1% 28.3% 16.7% NMF 10.5% 23.0% Retained to Com Eq 18.5%
CURRENT POSITION 2008 2009 9/26/10 9% 8% 7% 8% 13% 18% 20% 28% 46% NMF 29% 20% All Div’ds to Net Prof 23%
($MILL.)
Cash Assets 593.6 1670.1 1549.5 BUSINESS: Harley-Davidson, Inc. manufactures heavyweight sales; R&D, 3.0%. ’09 depreciation rate: 8.3%. Has about 7,900
ReceivablesD 4118.7 1705.5 306.1 custom and touring motorcycles and related products. Also owns employees. Officers & directors own less than 1.0% of stock. (4/10
Inventory (LIFO) 400.9 323.0 319.1 Eaglemark Financial, a wholesale and retail finance unit. Sold Proxy). Chairman: Barry K. Allen. Chief Executive Officer and Presi-
Other 264.7 643.3 2324.0
Current Assets 5377.9 4341.9 4498.7 Holiday Rambler Corporation in 1995. Harley is the only major dent: Keith E. Wandell. Incorporated: Delaware. Address: 3700
Accts Payable 323.7 162.5 243.8 American manufacturer of heavyweight motorcycles. Has over West Juneau Ave., Milwaukee, Wisconsin 53208. Telephone: 414-
Debt Due 1738.6 1522.1 1521.3 1,000 dealers worldwide. Foreign business is approximately 29% of 342-4680. Internet: www.harley-davidson.com.
Other 541.5 583.6 690.8
Current Liab. 2603.8 2268.2 2455.9 Harley-Davidson finished 2010 with a The company’s restructuring efforts
positive year-over-year bottom-line remain on track. Harley has reduced its
ANNUAL RATES Past Past Est’d ’07-’09 showing. The motorcycle manufacturer cost estimate related to the overhaul activ-
of change (per sh) 10 Yrs. 5 Yrs. to ’13-’15
Sales 12.5% 8.5% 3.0% reported share net of $0.10 versus a loss of ities by $10 million-$25 million. Hence,
‘‘Cash Flow’’ 12.0% .5% 8.0% $0.63 a share in the prior-year period. these efforts are expected to result in one-
Earnings 12.0% -2.5% 8.0% (Results exclude debt restructuring and time charges of $495 million to $510 mil-
Dividends 28.0% 30.0% -2.0%
Book Value 11.0% -- 7.5% debt buyback charges of about $0.28 a lion into 2012. (The company will book ap-
share.) Harley benefited from a solid im- proximately $90 million of these charges
Cal- QUARTERLY SALES ($ mill.) Full provement in market share, a sharp rise this year, which we exclude from our
endar Mar.Per Jun.Per Sep.Per Dec.Per Year
in average transaction prices, and a share-earnings estimates and actuals as
2007 1178.0 1620.0 1541.0 1387.8 5726.8 better-than-expected gross margin. nonrecurring in nature.) Aggregate cost
2008 1306.0 1573.0 1423.0 1292.3 5594.3 We expect solid earnings growth this savings resulting from these measures are
2009 1290.6 1153.6 1121.3 764.5 4330.0
2010 1037.3 1135.1 1087.1 917.1 4176.6 year based on a few key factors. First, expected to be about $300 million per year
2011 1080 1200 1150 920 4350 the domestic economy seems to be on at completion.
firmer footing, as we expect gross domestic We believe that debt reduction will be
Cal- EARNINGS PER SHARE A Full product (GDP) growth of approximately in the cards over the next 3 to 5 years.
endar Mar.Per Jun.Per Sep.Per Dec.Per Year
3% in 2011. This year, the company ex- The company’s solid annual earnings
2007 .75 1.14 1.07 .78 3.74 pects to ship between 221,000 and 228,000 growth should result in healthy cash flow
2008 .79 .95 .71 .34 2.79 motorcycles, which represents a 5% to 8% from operations, which we believe will par-
2009 .50 .08 .11 d.63 .06
2010 .29 .59 .40 .10 1.38 increase relative to 2010. For the March tially be used to pay down long-term debt.
2011 .45 .70 .65 .25 2.05 quarter, Harley expects to ship between These neutrally ranked shares have
51,000 and 56,000 motorcycles. We believe risen sharply in price since our No-
Cal- QUARTERLY DIVIDENDS PAID B■ Full
endar
that Harley will ship more motorcycles to vember review. Nevertheless, they still
Mar.31 Jun.30 Sep.30 Dec.31 Year dealers then we expect dealers to sell at offer worthwhile total return potential for
2007 .26 .25 .25 .30 1.06 retail this year, which implies that dealer the pull to 2013–2015. Earnings Predict-
2008 .30 .33 .33 .33 1.29 inventory will return to more-attractive ability is subpar, which is noteworthy for
2009 .10 .10 .10 .10 .40 levels. What’s more, cost-cutting efforts conservative accounts.
2010 .10 .10 .10 .10 .40
2011 should help shore up earnings. Alan G. House February 11, 2011
(A) Primary earnings through 1996, diluted recurring items: ’09, 24¢. Next egs. report due available. Company’s Financial Strength B++
thereafter. Excludes extra. gains (losses) per late April. (C) In mill., adj. for stock split. Stock’s Price Stability 35
share: ’94, 3¢. Excl. Accounting chrg.: Excl. (B) Div’ds. historically paid in late March, June, (D) From 6/28/98 incl. finance receivables. Price Growth Persistence 10
disc. ops.: ’96, 15¢; ’09, (54¢). Excludes non- Sept. & Dec. ■ Dividend reinvestment plan Earnings Predictability 30
© 2011, Value Line Publishing LLC. All rights reserved. Factual material is obtained from sources believed to be reliable and is provided without warranties of any kind.
THE PUBLISHER IS NOT RESPONSIBLE FOR ANY ERRORS OR OMISSIONS HEREIN. This publication is strictly for subscriber’s own, non-commercial, internal use. No part To subscribe call 1-800-833-0046.
of it may be reproduced, resold, stored or transmitted in any printed, electronic or other form, or used for generating or marketing any printed or electronic publication, service or product.