“Once again Harley-Davidson achieved record revenue and earnings, making 2004 the nineteenth consecutive record year for the Company,” said Jeffrey L. Bleustein, Chairman and Chief Executive Officer. “We focused on exceeding the impressive results of our 100th Anniversary year by increasing motorcycle availability to improve customer satisfaction and by stimulating interest among prospective customers. U.S. retail sales for Harley-Davidson motorcycles increased more than 7 percent over last year, demonstrating that the dream of owning a Harley-Davidson® motorcycle remains extremely powerful,” said Bleustein.

“Our fourth quarter retail sales of Harley-Davidson motorcycles were up 6.7 percent in the U.S. over the same period in 2003 and up 14 percent in international markets,” he said.

“We expect to continue to grow in 2005 and ship 339,000 Harley-Davidson motorcycles during the year to support that growth. This is consistent with our established goals of satisfying demand for 400,000 motorcycles in 2007 and generating an annual earnings growth rate in the mid-teens,” said Bleustein.

Motorcycles and Related Products Segment – Fourth Quarter Results
Revenue from Harley-Davidson® motorcycles was $992.6 million, an increase of $47.3 million or 5.0 percent over the same period last year. Shipments of Harley-Davidson motorcycles totaled 80,587 units, an increase of 3,531 units or 4.6 percent over last year’s fourth quarter.

Revenue from Parts and Accessories (P&A), which consists of Genuine Motor Parts and Genuine Motor Accessories, totaled $157.9 million, an increase of $16.9 million, or 12.0 percent over the year-ago quarter. Revenue from General Merchandise, which consists of MotorClothes? apparel and collectibles, totaled $54.9 million, an increase of $4.2 million or 8.2 percent.

Gross margin was 37.8 percent of revenue, up from 35.9 percent in the prior year. Gross margin was favorably impacted primarily by manufacturing efficiencies and foreign currency exchange rates. Consistent with the higher gross margin, operating margin increased from 21.5 percent in 2003 to 23.0 percent in 2004.

Motorcycle Retail Sales Data
Retail sales of Harley-Davidson motorcycles for the year 2004 grew 7.1 percent in the U.S. and 1.5 percent internationally compared with the prior year. Retail sales of Harley-Davidson motorcycles grew in many of the Company’s international markets. However, overall retail sales in Europe decreased 5.3 percent.

“In response to the current market conditions and the strong Euro, Harley-Davidson is reducing suggested retail prices in 2005 on select motorcycle models in our European markets. This will make our motorcycles more affordable to a broader range of customers,” said Bleustein.

Financial Services Segment
Harley-Davidson Financial Services, Inc. (HDFS), a subsidiary of Harley-Davidson, Inc., reported fourth quarter operating income of $39.2 million, up $5.4 million or 15.9 percent compared to the year-ago quarter.

The segment’s performance was driven by continued strong marketplace acceptance of its finance and insurance products as well as positive foreign currency exchange.

Annualized credit losses net of recoveries on a managed portfolio basis were 0.81 percent during the year. This is better than the Company’s stated target of 1 percent.

Harley-Davidson, Inc. - Twelve Month Results
For the fiscal year ended 2004, total Harley-Davidson motorcycle shipments were 317,289 units compared with 291,147 units in 2003, a 9.0 percent increase. Harley-Davidson motorcycle revenue was $3.93 billion, an increase of $306.7 million or 8.5 percent.

P&A revenue totaled $781.6 million, a $68.8 million or 9.7 percent increase, while General Merchandise revenue totaled $223.7 million, a $12.3 million or 5.8 percent increase compared with 2003.

Full year operating income for HDFS was $188.6 million, an increase of $20.7 million or 12.3 percent compared to 2003.

Cash Flow – Twelve Month Results
As of December 31, 2004, cash and marketable securities were $1.61 billion. During the year the Company invested $213.6 million in capital expenditures, repurchased 10.6 million shares of Company stock for $564.1 million, paid $119.2 million in dividends and increased cash and marketable securities by $289.4 million.

Stock Option Accounting
In December 2004, the Financial Accounting Standards Board issued new rules requiring companies to recognize the expense of stock option grants in their income statements. Although the new rules are not effective until the Company’s third quarter of 2005, the Company will implement this change in accounting as of January 1, 2005. If the Company had elected to expense stock options in 2004 under the new standard, the effect would have been a $22.5 million pretax charge. The Company expects a similar charge in 2005.

2005 and Beyond
In addition to the previously stated motorcycle unit shipment goal, the Company expects growth in all of its product lines. Harley-Davidson expects the growth rate for P&A revenues to be slightly higher than the motorcycle unit growth rate, and the General Merchandise growth rate is expected to be lower than the motorcycle unit growth rate. The Company expects the HDFS growth rate to be slightly higher than the Company’s motorcycle unit growth rate.

Company Background
Harley-Davidson, Inc. is the parent company for the group of companies doing business as Harley-Davidson Motor Company, Buell Motorcycle Company and Harley-Davidson Financial Services. Harley-Davidson Motor Company, the only major U.S.-based motorcycle manufacturer, produces heavyweight motorcycles and offers a complete line of motorcycle parts, accessories, apparel, and general merchandise. Buell Motorcycle Company produces sport motorcycles. Harley-Davidson Financial Services provides wholesale and retail financing and insurance programs to Harley-Davidson dealers and customers.

Forward-Looking Statements
The Company intends that certain matters discussed in this release are “forward-looking statements” intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements can generally be identified as such because the context of the statement will include words such as the Company "believes," "anticipates," "expects," “plans,” or “estimates" or words of similar meaning. Similarly, statements that describe future plans, objectives, outlooks, targets or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Certain of such risks and uncertainties are described below. Shareholders, potential investors, and other readers are urged to consider these factors in evaluating the forward-looking statements and cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in this release are only made as of the date of this release, and the Company undertakes no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

The Company’s ability to meet the targets and expectations noted depends upon, among other factors, the Company's ability to (i) continue to realize production efficiencies at its production facilities through the implementation of innovative manufacturing techniques and other means, (ii) successfully implement production capacity increases in its facilities, (iii) successfully introduce new products and services, (iv) avoid unexpected supply chain issues, (v) sell all of the Harley-Davidson motorcycles it plans to produce, (vi) continue to develop the capacity of its distributor and dealer network, (vii) avoid unexpected changes in the regulatory environment for its products, (viii) successfully adjust to fluctuations in foreign currency exchange rates, interest rates and commodity prices, (ix) adjust to worldwide economic and political conditions, and (x) successfully manage the credit quality of HDFS’s loan portfolio.

In addition, the Company could experience delays in the operation of manufacturing facilities as a result of work stoppages, natural causes, terrorism or other factors. Risk factors are also disclosed in documents previously filed by the Company with the Securities and Exchange Commission.

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