FORM 11-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
Commission file number 33-35311
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Harley-Davidson
Retirement Savings Plan for Milwaukee
and Tomahawk Hourly Bargaining Unit Employees
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Harley-Davidson, Inc.
3700 West Juneau Avenue
Milwaukee, Wisconsin 53208
<PAGE>
REQUIRED INFORMATION
1. Not Applicable.
2. Not Applicable.
3. Not Applicable.
4. The Harley-Davidson Retirement Savings Plan for Milwaukee and
Tomahawk Hourly Bargaining Unit Employees (the "Plan") is subject to
the requirements of the Employee Retirement Income Security Act of
1974 ("ERISA"). Attached hereto is a copy of the most recent
financial statements and schedules of the Plan prepared in accordance
with the financial reporting requirements of ERISA.
Exhibits
23 Consent of Independent Auditors
<PAGE>
CONTENTS
Harley-Davidson Retirement Savings Plan for Milwaukee and
Tomahawk Hourly Bargaining Unit Employees
Page
Report of independent auditors 5
Financial statements
Statements of net assets available for plan benefits 6-7
Statements of changes in net assets available for plan
benefits 8-9
Notes to financial statements 10-17
Supplemental schedules Schedules
Assets held for investment 1
Transactions or series of transactions in excess of
5 percent of the current value of plan assets 2
A schedule of party-in-interest transactions has not been presented
because there were no party-in-interest transactions that are
prohibited by ERISA Section 406 and for which there is no statutory or
administrative exemption.
<PAGE>
Report of Ernst & Young, LLP, Independent Auditors
Plan Administrative Committee
Harley-Davidson Retirement Savings
Plan for Milwaukee and Tomahawk Hourly
Bargaining Unit Employees
We have audited the accompanying statements of net assets available for
plan benefits of Harley-Davidson Retirement Savings Plan for Milwaukee and
Tomahawk Hourly Bargaining Unit Employees (the Plan) as of December 31,
1996 and 1995, and the related statements of changes in net assets
available for plan benefits for the years then ended. These financial
statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for plan benefits of
the Plan at December 31, 1996 and 1995, and the changes in its net assets
available for plan benefits for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying
supplemental schedules of assets held for investment as of December 31,
1996, and transactions or series of transactions in excess of five percent
of the current value of plan assets for the year then ended, are presented
for purposes of complying with the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement
Income Security Act of 1974, and are not a required part of the basic
financial statements. The fund information in the statements of net
assets available for plan benefits and in the statements of changes in net
assets available for plan benefits is presented for purposes of additional
analysis rather than to present the net assets available for plan benefits
and changes in net assets available for plan benefits of each fund. The
supplemental schedules and fund information have been subjected to the
auditing procedures applied in our audits of the basic financial
statements and, in our opinion, are fairly stated in all material respects
in relation to the basic financial statements taken as a whole.
Milwaukee, Wisconsin ERNST & YOUNG LLP
June 6, 1997
<PAGE>
<TABLE>
HARLEY-DAVIDSON
RETIREMENT SAVINGS PLAN FOR MILWAUKEE AND
TOMAHAWK HOURLY BARGAINING UNIT EMPLOYEES
STATEMENT OF NET ASSETS
AVAILABLE FOR PLAN BENEFITS
December 31, 1996
<CAPTION>
Fidelity Fidelity Fidelity
Managed Investment International Harley- Asset
Income Grade Bond Growth and Davidson Manager
ASSETS Total Fund Fund Income Fund Stock Fund Income
<S> <C> <C> <C> <C> <C> <C>
Investments:
Interest in Harley-
Davidson Retirement
Savings Plan Master
Trust, comprised of:
Investments in
securities of
unaffiliated
issuers, at fair
value $11,680,170 $ 405,841 $1,741,888 $315,550 $ - $173,501
Investments in
securities of
affiliated issuer,
at fair value-common
stock of Harley-
Davidson, Inc. 10,348,948 - - - 10,348,948 -
Investments other than
securities -
Insurance group
annuity contracts,
at contract value
(Note D) 10,751,614 10,751,614 - - - -
Cash and cash
equivalents 497,860 453,585 - - 44,275 -
Notes receivable
from participants 1,778,160 - - - - -
---------- ---------- --------- ------- ---------- -------
Total investments 35,056,752 11,611,040 1,741,888 315,550 10,393,223 173,501
Other assets -
participant
contributions
receivable 185,157 52,605 9,218 5,620 43,261 3,230
---------- ---------- --------- ------- ---------- -------
Net assets available
for plan benefits $35,241,909 $11,663,645 $1,751,106 $321,170 $10,436,484 $176,731
========== ========== ========= ======= ========== =======
<CAPTION>
Fidelity Fidelity
Asset Fidelity Blue Chip
Manager Asset Growth Loan
ASSETS Growth Manager Fund Fund
<S> <C> <C> <C> <C>
Investments:
Interest in Harley-
Davidson Retirement
Savings Plan Master
Trust, comprised of:
Investments in
securities of
unaffiliated
issuers, at fair
value $834,951 $1,677,442 $6,530,997 $ -
Investments in
securities of
affiliated issuer,
at fair value-common
stock of Harley-
Davidson, Inc. - - - -
Investments other
than securities -
Insurance group
annuity contracts,
at contract value
(Note D) - - - -
Cash and cash
equivalents -
- - -
Notes receivable
from participants - - - 1,778,160
------- --------- --------- ---------
Total investments 834,951 1,677,442 6,530,997 1,778,160
Other assets -
participant
contributions
receivable 11,046 10,611 49,566 -
------- --------- --------- ---------
Net assets available
for plan benefits $845,997 $1,688,053 $6,580,563 $1,778,160
======= ========= ========= =========
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
HARLEY-DAVIDSON
RETIREMENT SAVINGS PLAN FOR MILWAUKEE AND
TOMAHAWK HOURLY BARGAINING UNIT EMPLOYEES
STATEMENT OF NET ASSETS
AVAILABLE FOR PLAN BENEFITS
December 31, 1995
<CAPTION>
Fidelity Fidelity Fidelity
Managed Investment International Harley- Asset
Income Grade Bond Growth and Davidson Manager
ASSETS Total Fund Fund Income Fund Stock Fund Income
<S> <C> <C> <C> <C> <C> <C>
Investments:
Interest in Harley-
Davidson Retirement
Savings Plan Master
Trust, comprised of:
Investments in
securities of
unaffiliated
issuers, at fair
value $8,481,238 $ 128 $1,595,058 $141,431 $ - $75,646
Investments in
securities
of affiliated
issuer, at fair
value-common stock
of Harley-Davidson,
Inc. 5,225,391 - - - 5,225,391 -
Investments other than
securities -
Insurance group
annuity contracts,
at contract value
(Note D) 10,519,474 10,519,474 - - - -
Cash and cash
equivalents 385,907 333,670 - - 52,237 -
Notes receivable
from participants 1,471,590 - - - - -
---------- ---------- --------- -------- --------- ------
Net assets available
for plan benefits $26,083,600 $10,853,272 $1,595,058 $141,431 $5,277,628 $75,646
========== ========== ========= ======= ========= ======
<CAPTION>
Fidelity Fidelity
Asset Fidelity Blue Chip
Manager Asset Growth Loan
ASSETS Growth Manager Fund Fund
<S> <C> <C> <C> <C>
Investments:
Interest in Harley-
Davidson Retirement
Savings Plan Master
Trust, comprised of:
Investments in
securities of
unaffiliated issuers,
at fair value $291,051 $1,344,363 $5,033,561 $ -
Investments in
securities of
affiliated issuer,
at fair value-common
stock of Harley-
Davidson, Inc. - - - -
Investments other than
securities -
Insurance group
annuity contracts,
at contract value
(Note D) - - - -
Cash and cash
equivalents -
- - -
Notes receivable
from participants - - - 1,471,590
------- --------- --------- ---------
Net assets available
for plan benefits $291,051 $1,344,363 $5,033,561 $1,471,590
======= ========= ========= =========
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
HARLEY-DAVIDSON
RETIREMENT SAVINGS PLAN FOR MILWAUKEE AND
TOMAHAWK HOURLY BARGAINING UNIT EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS
Year Ended December 31, 1996
<CAPTION>
Fidelity Fidelity Fidelity
Managed Investment International Harley- Asset
Income Grade Bond Growth and Davidson Manager
ADDITIONS Total Fund Fund Income Fund Stock Fund Income
<S> <C> <C> <C> <C> <C> <C>
Investment income:
Net appreciation
(depreciation) in
fair value of
investments (Note C) $ 4,018,754 $ - $ (55,778) $ 19,623 $ 3,598,737 $ (123)
Interest and
dividend income 1,584,468 636,139 105,870 11,100 48,399 8,475
---------- --------- -------- -------- --------- -------
Net investment income 5,603,222 636,139 50,092 30,723 3,647,136 8,352
Participant
contributions 4,457,418 1,262,501 238,773 141,452 995,464 86,618
---------- --------- -------- -------- --------- -------
10,060,640 1,898,640 288,865 172,175 4,642,600 94,970
DEDUCTIONS
Benefit payments and
withdrawals (902,331) (525,372) (25,259) - (192,602) -
Net transfers in
(out) - (562,895) (107,558) 7,564 708,858 6,115
---------- --------- -------- -------- -------- -------
(902,331) (1,088,267) (132,817) 7,564 516,256 6,115
---------- --------- -------- -------- -------- -------
Increase in net assets
available for plan
benefits 9,158,309 810,373 156,048 179,739 5,158,856 101,085
Net assets available
for plan benefits:
Beginning of year 26,083,600 10,853,272 1,595,058 141,431 5,277,628 75,646
---------- ---------- --------- -------- ---------- -------
End of Year $35,241,909 $11,663,645 $1,751,106 $321,170 $10,436,484 $176,731
========== ========== ========= ======== ========== =======
<CAPTION>
Fidelity
Asset Fidelity Fidelity
Manager Asset Blue Chip Loan
ADDITIONS Growth Manager Growth Fund Fund
<S> <C> <C> <C> <C>
Investment income:
Net appreciation
(depreciation) in
fair value of
investments (Note C) $ 25,705 $ 48,430 $ 382,160 $ -
Interest and
dividend income 68,920 127,645 440,461 137,459
-------- --------- --------- ---------
Net investment income 94,625 176,075 822,621 137,459
Participant
contributions 255,860 252,228 1,224,522 -
-------- --------- --------- ---------
350,485 428,303 2,047,143 137,459
DEDUCTIONS
Benefit payments and
withdrawals (745) (37,303) (88,126) (32,924)
Net transfers in
(out) 205,206 (47,310) (412,015) 202,035
-------- --------- --------- ---------
204,461 (84,613) (500,141) 169,111
-------- --------- --------- ---------
Increase in net assets
available for plan
benefits 554,946 343,690 1,547,002 306,570
Net assets available
for plan benefits:
Beginning of year 291,051 1,344,363 5,033,561 1,471,590
-------- --------- --------- ---------
End of Year $845,997 $1,688,053 $6,580,563 $1,778,160
======== ========= ========= =========
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
HARLEY-DAVIDSON
RETIREMENT SAVINGS PLAN FOR MILWAUKEE AND
TOMAHAWK HOURLY BARGAINING UNIT EMPLOYEES
STATEMENT OF CHANGES IN NET ASSETS
AVAILABLE FOR PLAN BENEFITS
Year Ended December 31, 1995
<CAPTION>
Fidelity
Strong Asset Fidelity Managed Investment
Allocation Insurance Balanced Income Income Grade Bond
ADDITIONS Total Fund Account Fund Fund Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Net appreciation in
fair value of invest-
ments (Note C) $1,131,211 $ 60,993 $ - $ 49,960 $ - $ - $ 76,193
Interest and
dividend income 1,261,543 15,919 - 13,875 214,039 416,466 72,115
--------- -------- --------- ------- --------- -------- --------
Net investment
income 2,392,754 76,912 - 63,835 214,039 416,466 148,308
Participant
contributions 4,162,778 97,534 - 123,600 635,969 915,035 166,171
--------- -------- --------- ------- --------- -------- --------
6,555,532 174,446 - 187,435 850,008 1,331,501 314,479
DEDUCTIONS
Benefit payments and
withdrawals (686,525) (29,480) - (12) (321,018) (295,424) (3,230)
Life insurance expense,
less increase in cash
surrender value (8,260) - (8,260) - - - -
Net transfers in
(out) - (1,599,002) (183,509) (1,649,627) (10,766,481) 9,817,195 1,283,809
--------- -------- --------- ------- --------- -------- --------
(694,785) (1,628,482) (191,769) (1,649,639) (11,087,499) 9,521,771 1,280,579
--------- -------- --------- ------- --------- -------- --------
Increase (decrease)
in net assets
available for plan
benefits 5,860,747 (1,454,036) (191,769) (1,462,204) (10,237,491) 10,853,272 1,595,058
Net assets available
for plan benefits:
Beginning of year 20,222,853 1,454,036 191,769 1,462,204 $10,237,491 - -
---------- --------- -------- --------- ---------- ---------- ---------
End of year $26,083,600 $ - $ - $ - $ - $10,853,272 $1,595,058
========== ========= ======== ========= ========== ========== =========
<CAPTION>
Fidelity Fidelity Fidelity
International Harley- Asset Asset Fidelity Fidelity
Growth and Davidson Manager Manager Asset Blue Chip Loan
ADDITIONS Income Fund Stock Fund Income Growth Manager Growth Fund Fund
<S> <C> <C> <C> <C> <C> <C> <C>
Investment income:
Net appreciation in
fair value of
investments (Note C) $ 285 $ 261,649 $ 1,616 $ 9,169 $ 118,780 $ 552,566 $ -
Interest and
dividend income 3,562 29,171 1,711 4,208 29,682 370,966 89,829
-------- ---------- ------- -------- --------- --------- -------
Net investment income 3,847 290,820 3,327 13,377 148,462 923,532 89,829
Participant
contributions 75,550 851,574 48,209 125,346 160,373 963,417 -
-------- ---------- ------- -------- --------- --------- -------
79,397 1,142,394 51,536 138,723 308,835 1,886,949 89,829
DEDUCTIONS
Benefit payments and
withdrawals - (14,470) - - (5,482) (17,409) -
Life insurance expense,
less increase in cash
surrender value - - - - - - -
Net transfers in
(out) 62,034 1,022,688 24,110 152,328 1,041,010 456,091 339,354
-------- ---------- ------- -------- --------- --------- ---------
62,034 1,008,218 24,110 152,328 1,035,528 438,682 339,354
-------- ---------- ------- -------- --------- --------- ---------
Increase (decrease) in
net assets available
for plan benefits 141,431 2,150,612 75,646 291,051 1,344,363 2,325,631 429,183
Net assets available
for plan benefits:
Beginning of year - 3,127,016 - - - 2,707,930 1,042,407
-------- ---------- ------- -------- --------- --------- ---------
End of year $141,431 $5,277,628 $75,646 $291,051 $1,344,363 $5,033,561 $1,471,590
======== ========== ======= ======== ========= ========= =========
</TABLE>
See notes to financial statements.
<PAGE>
HARLEY-DAVIDSON
RETIREMENT SAVINGS PLAN FOR MILWAUKEE AND
TOMAHAWK HOURLY BARGAINING UNIT EMPLOYEES
NOTES TO FINANCIAL STATEMENTS
December 31, 1996
Note A - Description of the Plan
The following brief description of the Harley-Davidson Retirement Savings
Plan for Milwaukee and Tomahawk Hourly Bargaining Unit Employees ("the
Plan"), is provided for general information purposes only. Participants
should refer to the Plan agreement for more complete information.
General - The Plan is a defined contribution plan that covers hourly
employees of Harley-Davidson Motor Company's (the "Company") Milwaukee and
Tomahawk plants subject to a union bargaining agreement and meeting
minimum eligibility requirements. It is subject to the provisions of the
Employee Retirement Income Security Act of 1974 ("ERISA"). Effective
May 1, 1995, the Plan Trustee was changed, the Plan adopted daily
valuation for each of its investment funds, and universal life insurance
policies were deleted as an investment option.
Contributions - Participants have the right to make salary deferral
contributions of not less than 1% or more than 15% of their base
compensation (as defined in the Plan); subject to certain Internal Revenue
Code limitations. Participants have the option of investing their
contributions in one or a combination of several different investment
funds. Such voluntary contributions are nonforfeitable, accounted for in
a separate Voluntary Contribution Account for each participant in the
various funds, and can be withdrawn as provided in the Plan. The Company
may make discretionary matching contributions; however, no such
contributions were made during 1996 or 1995.
Participant contributions below the statutory limit are made with
tax-deferred dollars under Section 401(k) of the Internal Revenue Code
(the "Code"). These contributions are excluded from the participant's
current wages for federal income tax purposes. No federal income tax is
paid for the tax-deferred contributions, earnings thereon or Company
contributions, if any, until the participant withdraws them from the Plan.
Participants' accounts - A separate account is maintained for each
applicable fund for each participant. Effective May 1, 1995, the account
balances are adjusted on a daily basis for participants' contributions,
net investment income, Company contributions, and distributions of
participants' benefits or withdrawals. Prior to May 1, 1995, account
balances were adjusted on a monthly basis.
Vesting - Participants are currently 100% vested in their accounts.
Payment of benefits - Benefit and withdrawal payments consist of the
following:
(1) Upon retirement, death, disability, or termination of employment, the
balance in a participant's separate account(s) is paid to the
participant or beneficiary in a lump sum.
(2) A participant may withdraw at any time all or any portion of the
vested balance of their separate account(s) that does not pertain to
contributions made under provisions of Section 401(k) of the Code.
(3) A participant may not withdraw prior to retirement, death,
disability, or termination of employment any portion of their
separate account(s) pertaining to contributions made under provisions
of Section 401(k) of the Code, except for financial hardships, as
defined in the Code, or after the participant attains age 59-1/2.
Investment provisions - The Plan's investments consist of its interest in
the commingled investments of the Harley-Davidson Retirement Savings Plan
Master Trust (Master Trust)and notes receivable from participants. The
Master Trust is a common trust arrangement under which investments of the
Plan and another Harley-Davidson defined contribution plan are commingled
(see Note C). The Plan's investment in the Master Trust is based on its
equity share of the Master Trust's investments (determined separately for
each of the Master Trust's investment accounts), which are described
below.
In accordance with Plan provisions, participants may direct their
contributions, and the corresponding Company contributions, if any, to be
invested in one or a combination of the following funds: Managed Income
Fund, Fidelity Investment Grade Bond Fund, Fidelity Blue Chip Growth Fund,
Fidelity International Growth and Income Fund, Harley-Davidson Stock Fund,
Fidelity Asset Manager: Income Fund, Fidelity Asset Manager Fund and
Fidelity Asset Manager: Growth Fund.
The Managed Income Fund seeks to preserve capital and achieve a
competitive level of income over time. The Managed Income Fund is a
combination of the Managed Income Portfolio and existing investment
contracts previously purchased by Harley-Davidson Motor Company. The
Managed Income Portfolio purchases investment contracts from high quality
financial institutions such as insurance companies or banks, "synthetic"
investment contracts that are composed of high quality bonds and a wrapper
which simulates the terms of conventional investment contracts, and money
market instruments for liquidity. The Fund's goal is to maintain a stable
$1 share price, but there is no guarantee that it will be able to do so.
Its yield will fluctuate. The Managed Income Fund is not a mutual fund
and is managed by Fidelity Management Trust Company (FMTC). Although
individual investment contracts are backed by the issuers of the debt,
shares of the Fund are not guaranteed by the Sponsor, FMTC or insured by
the FDIC.
The Fidelity Investment Grade Bond Fund seeks a high level of current
income. The Fund will invest in a broad array of securities that are
considered "investment-grade," which means that they are generally of
medium to high quality. These types of bonds generally provide lower
yields than those rated below investment-grade, but they also involve less
investment risk.
The Fidelity Blue Chip Growth Fund is a "capital growth" mutual fund and
seeks to grow the value of the investment over the long term. The Fund
invests in common stocks of well-known, established growth companies that
are generally considered industry leaders.
The Fidelity International Growth and Income Fund seeks both capital
growth and income. While the Fund focuses primarily on stocks which have
growth possibilities, it will keep at least 25% of its assets invested in
debt securities for the income they provide. The Fund invests primarily
in companies who mostly operate outside of the U.S. Although it will
generally spread its investments across six different countries, including
the U.S., the Fund may, at times invest all assets in a single country.
International investing may pose greater risks, as well as greater
potential rewards, than investments in domestic securities.
The Harley-Davidson Stock Fund consists primarily of Harley-Davidson
Common Stock, with a small portion of short-term instruments to allow for
daily transactions into and out of this option. The value of this Fund
will fluctuate and is tied directly to the performance of Harley-Davidson
Motor Company as well as general stock market trends.
The Fidelity Asset Manager: Income Fund seeks to provide a high level of
current income, but also considers the potential for capital appreciation.
The Fund can invest in all three investment classes: foreign (including
emerging markets) and domestic stocks, bonds and short-term instruments.
Based on the current outlook for market conditions, the Fund's manager can
gradually increase or decrease the amount that the Fund invests in each of
these asset classes. The Fund's investments in each of these classes can
range anywhere from 10% to 30% in stocks, 40% to 60% in bonds and 10% to
50% in short-term instruments, but over time, the general mix of these
investment classes (known as the Fund's "neutral mix") will include 20%
stocks, 50% bonds and 30% short-term instruments.
The Fidelity Asset Manager Fund seeks to provide high total return with
reduced risk over the long term. Total return is the combination of
income (from dividends and capital gains) and the change in the value of
the share price of the Fund. As an asset allocation fund, Asset Manager
invests in all three investment classes: foreign (including emerging
markets) and domestic stocks, bonds, and short-term instruments. The
Fund's manager may gradually adjust the combination of these investments
depending upon the current outlook for the various markets. As a result,
Asset Manager's investments can range anywhere from 30% to 70% in stocks,
20% to 60% in bonds, and 0% to 50% in short-term instruments. Over the
long term, the Fund will generally include the following combination of
these investments (known as its "neutral mix"): 50% stocks, 40% bonds, and
10% short-term instruments.
The Fidelity Asset Manager: Growth Fund focuses on maximizing total return
over the long term. Total return is the combination of income (from
dividends and capital gains) and the change in the value of the share
price of the Fund. As the most aggressive asset allocation fund that
Fidelity offers, Asset Manager: Growth can invest anywhere from 50% to
100% of its assets in stocks, 0% to 50% in bonds, and 0% to 50% in short-
term instruments. The Fund's "neutral mix," which represents the way the
Fund's investments will be allocated over the long term, includes 70%
stocks, 25% bonds and 5% short-term instruments.
Participants may borrow from their separate account balances subject to
Code provisions, which include a surtax on loans in excess of 50% of the
participant's vested separate account balance and require a market rate of
interest to be charged on the loans. The Plan administrator has
discretion to make such loans under the Plan and determine the rate of
interest for such loans (within Code guidelines). Amounts loaned to a
participant will not share in the allocation of the Plan earnings, but
will be credited with the interest earned on the loan balance payable by
the participant.
The Plan's security investments were held until April 30, 1995 by the
Marshall & Ilsley Trust Company under a nondiscretionary trust agreement
dated October 1, 1989. As of May 1, 1995 the Plan's security investments
were held by FMTC. The Administrative Committee directs the Trustee to
invest and reinvest amounts with the current investment managers.
Plan termination - While the Company has not expressed any intent to
terminate the Plan, it is free to do so at any time. In the event of
termination, Company contributions automatically become vested to the
extent of the balance in each participant's separate account(s).
Administrative expenses - Administrative expenses generally are paid by
the Company.
Note B - Summary of significant accounting policies
Valuation of investments - The investments in the mutual funds are stated
at fair value and are based on the quoted market or redemption values on
the last business day of the plan year. Securities traded on a national
securities exchange (including the Harley-Davidson, Inc. common stock) are
valued at the closing market price on the last business day of the plan
year.
The insurance group annuity contracts are fully benefit responsive and
therefore, are valued at contract value as reported by the Plan Trustee.
Contract value represents contributions made under the contract, plus
interest at the contract rate, less funds used to pay retirement and other
benefits.
Notes receivable from participants are stated at their unpaid principal
balances which approximates fair value.
Reclassifications - Certain prior year balances have been reclassified in
order to conform to current year presentation.
Use of estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could differ
from those estimates.
Note C - Investments
As indicated in Note A, the assets of the Master Trust include commingled
investments held for both the Plan and the Harley-Davidson, Inc.
Retirement Savings Plan for Salaried Employees (Salaried Plan). The
carrying amounts of the commingled investments and cash have been
allocated between the Plan and the Salaried Plan based on the respective
participants' interest, reduced by other allocable assets and liabilities.
A summary of the Master Trust's commingled investments and the Plan's
interest in those Master Trust investments at December 31, 1996 is as
follows:
Contract Value/
Cost Fair Value
Cash and cash equivalents $ 1,106,401 $ 1,106,401
Master Trust investments
at contract value:
Insurance company contracts 25,176,240 25,176,240
Master Trust investments
at fair value:
Securities of unaffiliated
issuers 31,074,460 34,470,238
Securities of affiliated
issuer-Common stock -
Harley Davidson, Inc. 18,275,976 32,354,776
---------- ----------
Commingled assets of the
Master Trust 75,633,077 93,107,655
Less amount allocated to
Salaried Plan 47,611,734 59,829,063
---------- ----------
Plan interest in Master Trust $28,021,343 $33,278,592
========== ==========
The Plan's interest in the fair values of the various Master Trust
investment categories is as follows at December 31, 1996:
Cash and cash equivalent $ 497,860
Insurance company contracts 10,751,614
Investments in securities of unaffiliated issuers 11,680,170
Investments in securities of affiliated issuer -
common stock of Harley-Davidson, Inc. 10,348,948
----------
$33,278,592
==========
Income earned by the commingled investments of the Master Trust and the
Plan's allocated share therein for the year ended December 31, 1996 and
for the period from inception of the Master Trust Agreement May 1, 1995
through December 31, 1995, is as follows:
Year Ended May 1, 1995-
Dec. 31, 1996 Dec. 31, 1995
Interest and dividend income $ 4,200,938 $2,493,098
Net realized and unrealized
appreciation in fair value
of investments 12,619,716 7,113,787
---------- ---------
Commingled investment income
earned by the Master Trust 16,820,654 9,606,885
Less amount allocated to
Salaried Plan 11,217,432 6,421,542
---------- ---------
Master Trust commingled investment
income allocated to the Plan $ 5,603,222 $3,185,343
========== =========
These amounts are included in the respective categories in the Statement
of Changes in Net Assets Available for Plan Benefits.
Investments that represent 5% or more of the Master Trust's net assets at
December 31, 1996 are as follows:
1996
Aetna group annuity contracts $25,176,240
Harley-Davidson Stock Fund 32,354,776
Fidelity Asset Manager 5,539,951
Fidelity Blue Chip Growth Fund 18,351,809
For the four months ended April 30, 1995, investments held by the Plan
(including investments bought, sold, as well as held during the year)
appreciated in fair value as follows (as determined by reference to quoted
market prices as discussed in Note B).
Four months ended
April 30, 1995
Net depreciation in fair value of
investments by investment type:
Mutual Funds $ (70,326)
Common stock -
Harley-Davidson, Inc. (973,147)
----------
$(1,043,473)
==========
Note D - Insurance group annuity contracts
The insurance group annuity contract owned by the Plan at December 31,
1996 and 1995 was group annuity contract #14490 with Aetna Life Insurance
Company and is stated at contract value which approximates fair value.
The crediting interest rate which approximates the average yield, is
adjusted semi-annually and is subject to contractually guaranteed minimum
rates. In 1996, the crediting interest rates were 5.90% and 6.21%. In
1995, the crediting interest rates were 6.61% and 5.95%.
Note E - Transactions with Parties-in-interest
The following Harley-Davidson, Inc. common stock transactions occurred
(includes the Plan's share of Master Trust transactions):
1996 1995
Cost of stock held at beginning
of year $3,988,426 $2,091,309
Cost of purchases during the year 4,749,893 2,256,228
Proceeds from sales during the year (3,220,292) (435,216)
Net gain 707,943 76,105
--------- ---------
Cost of stock held at end of year $6,225,970 $3,988,426
========= =========
Market value of stock held at
end of year $10,348,948 $5,225,391
========== =========
Shares held at end of year 220,190 181,753
======= ========
All transactions in Harley-Davidson, Inc. common stock were executed at
market prices on the dates of the transactions. The Plan received
dividends of approximately $48,000 and $30,000 on the common stock in
1996 and 1995, respectively.
Note F - Income tax status
The Plan received a favorable determination from the U.S. Treasury
Department on September 13, 1995 substantiating that the Plan is qualified
under Section 401(a) of the Code. As such, the Plan is exempt from
federal income taxes. Once qualified, a plan is required to operate in
conformity with the Code to maintain its qualification. The Company's
pension administration committee is not aware of any course of action or
series of events that would adversely affect the Plan's qualified status.
The Plan is intended to satisfy the requirements under Section 404(c) of
the ERISA, and therefore, provides that participants may choose to direct
their contributions and/or all or part of their account balances among any
of the Plan's eight investment alternatives every day.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this
annual report to be signed by the undersigned thereunto duly authorized.
Harley-Davidson
Retirement Savings Plan for
Milwaukee and Tomahawk Hourly
Bargaining Unit Employees
Date: June 27, 1997 By: /S/ James M. Brostowitz
James M. Brostowitz
Administrative Committee Member
<PAGE>
SUPPLEMENTAL SCHEDULES
Schedule 1
HARLEY-DAVIDSON
RETIREMENT SAVINGS PLAN FOR THE MILWAUKEE AND
TOMAHAWK HOURLY BARGAINING UNIT EMPLOYEES
ASSETS HELD FOR INVESTMENT
December 31, 1996
Shares or Current
Description face amount Cost value
Plan's share of Master Trust
assets:
Cash and cash equivalents 497,860 $ 497,860 $ 497,860
Mutual funds-
Fidelity:
Commingled assets of the
Managed Income Fund 405,841 405,841 405,841
Investment Grade Bond Fund 244,647 1,727,258 1,741,888
Blue Chip Growth Fund 199,786 5,587,224 6,530,997
International Growth and
Income Fund 16,141 298,202 315,550
Asset Manager: Income 14,944 172,605 173,501
Asset Manager 101,848 1,550,008 1,677,442
Asset Manager: Growth 51,067 804,761 834,951
---------- ----------
10,545,899 11,680,170
Common stock -
Harley Davidson, Inc. 220,190 6,225,970 10,348,948
Insurance group annuity -
administration contracts:
Aetna Life Insurance
Company group annuity
contract #14490 10,751,614 10,751,614 10,751,614
Participant loans, at various
interest rates (ranging from
7% to 11%) and maturities 1,778,160 1,778,160 1,778,160
---------- ----------
Total assets held for investment $29,799,503 $35,056,752
=========== ==========
<PAGE>
Schedule 2
HARLEY-DAVIDSON
RETIREMENT SAVINGS PLAN FOR THE MILWAUKEE AND
TOMAHAWK HOURLY BARGAINING UNIT EMPLOYEES
TRANSACTIONS OR SERIES OF TRANSACTIONS
IN EXCESS OF 5 PERCENT
OF THE CURRENT VALUE OF PLAN ASSETS
Year ended December 31, 1996
Cost of Proceeds
purchases from sales
Number of (1) during during Net
Description transactions the year the year gain
Category (iii)-Series of transactions in excess of 5% of plan assets
Bank common trust fund -
FMTC Insti Money Market
Fund 165P;205S $3,591,850 $3,591,850 $ -
Aetna Life Insurance
Company
Group Annuity Contracts 1P;4S 974,787 742,647 -
Mutual Funds:
Fidelity Blue Chip
Growth Fund 178P;120S 3,149,529 2,034,252 177,721
Common stock -
Harley-Davidson, Inc. 211P;129S 4,749,893 3,220,292 707,943
Note: The above transactions represent the Plan's share of Master Trust
transactions.
There were no category (i), (ii) or (iv) reportable transactions during
1996.
(1) P=Purchases; S=Sales
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
23 Consent of Independent Auditors
EXHIBIT 23
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement
(Form S-8 No. 33-35311) pertaining to the Harley-Davidson Retirement
Savings Plan for Milwaukee and Tomahawk Hourly Bargaining Unit Employees
(the Plan) of our report dated June 6, 1997, with respect to the financial
statements and schedules of the Plan included in this Annual Report (Form
11-K) for the year ended December 31, 1996.
Milwaukee, Wisconsin ERNST & YOUNG LLP
June 27, 1997
