HARLEY-DAVIDSON ACHIEVES RECORD QUARTERLY REVENUE AND EARNINGS PER SHARE
13 July 2005 - Harley-Davidson Inc.

Harley-Davidson, Inc. today announced record earnings per share of 84 cents for the quarter ended June 26, 2005 compared to 83 cents for the year ago quarter.

Revenue for the quarter was $1.333 billion compared with $1.328 billion in the year ago quarter, a 0.4 percent increase. Net income for the quarter was $237.4 million, slightly lower than last year''s $247.2 million. During the second quarter, the Company repurchased 17.7 million shares of its common stock, in addition to the 2.9 million shares repurchased during the first quarter of this year.

''Harley-Davidson had a successful second quarter,'' said Jim Ziemer, Chief Executive Officer, Harley-Davidson, Inc. ''The Company produced record revenue despite lower motorcycle shipments compared to the year ago quarter. We shipped 77,000 motorcycles to our dealers as planned, while retail sales of Harley-Davidson(R) motorcycles grew to record levels of 114,000 units, up nearly 6 percent compared to the same period last year. In addition, we increased our stock repurchase investment to over $1 billion year-to-date. Earnings per share were at an all-time high for any quarter in our history,'' said Ziemer.

''During the quarter, our dealers'' retail sales continued to grow worldwide. European demand for Harley-Davidson motorcycles drove an increase of more than 23 percent in retail sales in that market. Retail sales in the remainder of our international markets grew more than 11 percent compared to last year''s second quarter. In the U.S., sales of Harley-Davidson motorcycles were at an all time high, up 3.2 percent over an exceptional increase of nearly 19 percent in the year-ago quarter,'' said Ziemer.

''For the full year, the Company is on course to ship our target of 329,000 Harley-Davidson motorcycles, yielding a shipment growth rate of 3.7 percent. At the end of the first quarter, we set expectations that this wholesale shipment volume would drive earnings per share growth of 5 - 8 percent for the year. Given the number of shares we repurchased during the first half of the year, 2005 earnings per share growth is now anticipated to be in the 10 - 13 percent range,'' he said.

''Harley-Davidson''s longer-term guidance remains at 7 - 9 percent annual growth in motorcycle unit shipments, supporting earnings per share growth in the mid-teens,'' said Ziemer.

Motorcycles and Related Products Segment

In line with prior guidance, motorcycle shipments during the second quarter of 2005 totaled 77,128 units, down 6 percent compared to the second quarter of 2004. Second quarter revenue from Harley-Davidson motorcycles was just over $1.0 billion, 1.4 percent lower than the second quarter last year.

Second quarter revenue from Parts and Accessories (P&A), which consists of Genuine Motor Parts(TM) and Genuine Motor Accessories(TM), totaled $237.8 million, a 3.3 percent increase over the year-ago quarter. For the longer term, the Company expects P&A revenue to grow at a rate slightly faster than the motorcycle unit growth rate.

General Merchandise revenue, which consists of MotorClothes(R) apparel and collectibles, was $63.4 million in the second quarter, up 19.5 percent compared to the same period last year. For the longer term, the Company expects General Merchandise revenue to grow at a rate less than the motorcycle unit growth rate.

Second quarter gross margin was 37.5 percent of revenue versus 37.9 percent in the year ago quarter. This slight decrease is due to lower motorcycle shipments and higher raw material costs, which have been partially offset by a stronger model mix. Higher operating expenses during the second quarter resulted in an operating margin of 24.0 percent compared to 25.2 percent in the same quarter last year. On a year-to-date basis, operating expenses as a percent of revenue were 13.5 percent in 2005 compared to 13.7 percent a year ago.

Motorcycle Retail Sales Data

Worldwide retail sales of Harley-Davidson motorcycles grew nearly 6 percent for the quarter, driven by strong performance in Europe and Japan which increased 23.6 and 10.4 percent respectively. On an industry-wide basis through May 2005, the 651+cc segment was down 2.6 percent in Europe, while the heavyweight market in Japan was down 6.0 percent for the same period.

In the United States for the second quarter, Harley-Davidson retail motorcycle sales finished up 3.2 percent compared to 2004. Similarly, the U. S. heavyweight motorcycle market finished up 4.4 percent in the second quarter. Data is listed in the accompanying tables.

Financial Services Segment

Harley-Davidson Financial Services (HDFS) reported operating income of $51.0 million, up $2.0 million or 4.1 percent compared to the year-ago quarter.

During the quarter, HDFS sold $775 million in retail motorcycle loans and recorded a gain of $14.0 million. This compares with a gain of $19.3 million on $626 million of loans securitized during the second quarter of 2004. The gain of 1.8 percent as a percentage of loans sold falls within management''s prior guidance. In this current competitive market and interest rate environment, HDFS expects future gains in the range of 1.3 to 2.0 percent.

Annualized credit losses on a managed portfolio basis during the first six months were 0.89 percent, compared to 0.63 percent in 2004. This increase is a result of lower recovery rates and a higher incidence of loss. Management''s annualized credit loss target remains at 1 percent or less.

For the full year 2005, HDFS operating income is expected to be slightly lower than that achieved in 2004. For the longer term, the Company expects the HDFS operating income growth rate to be slightly higher than the Company''s motorcycle unit growth rate.

Harley-Davidson, Inc. - Six Month Results

For the first six months of 2005, revenue totaled $2.57 billion, a 3.0 percent increase over the year-ago period. Earnings per share were $1.62, an increase of 6.6 percent compared to the same period last year.

Through the first six months of this year, shipments of Harley-Davidson motorcycles were 153,844 units, a 1.5 percent decrease compared to last year''s 156,124 units. Harley-Davidson motorcycle revenue was $1.99 billion, up 2.4 percent compared to last year''s $1.94 billion. P&A revenue totaled $414.7 million, a 3.8 percent increase over last year''s $399.3 million. General Merchandise revenue totaled $122.9 million, a 14.3 percent increase compared with $107.5 million during the same period in 2004.

HDFS operating income was $104.6 million, a 5.3 percent increase over last year''s $99.3 million.

Cash Flow

Cash and marketable securities decreased $876 million during the first six months in 2005 as the Company repurchased $1.0 billion of its common stock, contributed $102 million to post-retirement health care trusts, invested $75 million in capital expenditures and paid $80 million in dividends.

Recent Lawsuits - SEC Request for Information

On July 11, 2005, Harley-Davidson was advised by the Securities and Exchange Commission (SEC) that it is inquiring into matters relating generally to certain claims made in lawsuits recently filed by shareholders against the Company. The lawsuits were filed subsequent to our April 13, 2005 announcement to reduce our planned Harley-Davidson motorcycle shipment growth during 2005 by 10,000 units from our original target. The Company believes the lawsuits are without merit.

The Company disclosed this matter in a Form 8-K filed with the SEC on July 12, 2005. In light of the pending shareholder litigation, the Company was not surprised by the SEC''s inquiry. The Company is cooperating with the SEC.

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, guidance 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 disclaims any 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 and effectively manage operating costs including materials, labor and overhead, (ii) successfully manage production capacity and production changes, (iii) avoid unexpected supply chain issues, (iv) provide products, services and experiences that are successful in the marketplace, (v) develop and implement sales and marketing plans that retain existing customers and attract new customers in an increasingly competitive marketplace, (vi) sell all of its motorcycles and related products and services to its independent dealers and distributors , (vii) continue to develop the capacity of its distributor and dealer network, (viii) avoid unexpected changes and prepare for known requirements in the regulatory environment for its products, (ix) successfully adjust to fluctuations in foreign currency exchange rates, interest rates and commodity prices, (x) adjust to worldwide economic and political conditions, (xi) successfully manage the credit quality and recovery rates of HDFS''s loan portfolio, (xii) retain and attract talented employees and (xiii) detect any defects in our motorcycles to minimize delays in new model launches, recall campaigns, increased warranty costs or litigation. 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.

The Company''s ability to sell all of its motorcycles and related products and services also depends on the ability of the Company''s independent dealer network to sell them to retail customers. The Company depends on the capability of its independent dealers and distributors to develop and implement effective retail sales plans to create demand for the motorcycles and related products and services they purchase from the Company.

In addition, the Company''s independent dealers and distributors may experience difficulties in selling Harley-Davidson motorcycles and related products and services as a result of weather, economic conditions or other factors.

Risk factors are also disclosed in documents previously filed by the Company with the Securities and Exchange Commission.

Harley-Davidson, Inc.
Condensed Consolidated Statements of Income
(In thousands, except per share amounts)
(Unaudited)

Three Months Ended Six Months Ended
June 26, June 27, June 26, June 27,
2005 2004 2005 2004

Net revenue $1,333,264 $1,327,808 $2,568,728 $2,493,509
Gross profit 500,434 503,416 964,717 943,545
Operating expenses 181,084 168,333 346,510 341,364
Operating income from
motorcycles and
related products 319,350 335,083 618,207 602,181

Financial services income 85,302 81,060 174,114 161,554
Financial services expense 34,281 32,053 69,534 62,234
Operating income from
financial services 51,021 49,007 104,580 99,320

Corporate expenses 7,012 5,034 14,286 9,523
Total operating income 363,359 379,056 708,501 691,978
Investment income and
other, net 4,689 4,264 11,818 8,521
Income before provision
for taxes 368,048 383,320 720,319 700,499
Provision for income taxes 130,657 136,079 255,713 248,678
Net income $237,391 $247,241 $464,606 $451,821

Earnings per common share:
Basic $0.85 $0.84 $1.62 $1.53
Diluted $0.84 $0.83 $1.62 $1.52

Weighted-average common
shares:
Basic 280,577 294,304 286,685 296,039
Diluted 281,181 296,396 287,493 298,135

Harley-Davidson, Inc.
Condensed Consolidated Balance Sheets
(In thousands)

June 26, Dec. 31, June 27,
2005 2004 2004
(Unaudited) (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $319,720 $275,159 $379,142
Marketable securities 416,202 1,336,909 933,862
Accounts receivable, net 138,413 121,333 130,606
Finance receivables, net 1,046,489 1,207,124 954,918
Inventories 225,778 226,893 217,711
Other current assets 102,578 98,854 81,814
Total current assets 2,249,180 3,266,272 2,698,053
Finance receivables, net 752,363 905,176 633,450
Other long-term assets 1,264,515 1,311,845 1,393,237

Total assets $4,266,058 $5,483,293 $4,724,740

LIABILITIES AND SHAREHOLDERS'' EQUITY
Current liabilities:
Accounts payable and accrued expenses $628,695 $677,255 $654,477
Current portion of finance debt 7,994 495,441 96,977
Total current liabilities 636,689 1,172,696 751,454
Finance debt 800,000 800,000 670,000
Other long-term liabilities 140,433 142,278 219,261
Postretirement health care benefits 54,652 149,848 139,909
Shareholders'' equity 2,634,284 3,218,471 2,944,116

Total liabilities and shareholders''
equity $4,266,058 $5,483,293 $4,724,740

Harley-Davidson, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)

Six months ended
June 26, June 27,
2005 2004
Cash flows from operating activities:

Net income $464,606 $451,821
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation 106,474 104,864
Provision for long-term employee
benefits 41,482 33,978
Gain on current year securitizations (33,170) (44,498)
Net change in wholesale finance
receivables 127,946 76,366
Contributions to pension &
postretirement plans (109,000) -
Tax benefit from the exercise of
stock options - 11,860
Other 18,232 17,994
Net changes in current assets and
current liabilities (54,839) 8,577
Total adjustments 97,125 209,141
Net cash provided by operating
activities 561,731 660,962

Cash flows from investing activities:
Capital expenditures (75,430) (64,205)
Finance receivables, net 146,545 52,023
Collection of retained securitization
interests 53,751 60,603
Net change in marketable securities 920,539 55,702
Other, net (9,934) (9,618)
Net cash provided by investing
activities 1,035,471 94,505

Cash flows from financing activities:
Net decrease in finance debt (485,085) (218,100)
Dividends paid (80,486) (53,010)
Purchase of common stock for treasury (1,014,645) (473,468)
Excess tax benefits from share based
payments 6,171 -
Issuance of common stock under
employee stock plans 21,404 38,924
Net cash used in financing activities (1,552,641) (705,654)

Net increase in cash and cash
equivalents 44,561 49,813

Cash and cash equivalents:
At beginning of period 275,159 329,329
At end of period $319,720 $379,142

Note: Certain prior year amounts have been reclassified to conform to
the current year presentation.

Harley-Davidson, Inc.
Net Revenue and Motorcycle Shipment Data

Three Months Ended Six Months Ended
June 26, June 27, June 26, June 27,
2005 2004 2005 2004
NET REVENUE (in thousands)
Harley-Davidson(R)
motorcycles $1,006,105 $1,020,263 $1,985,056 $1,939,069
Buell(R) motorcycles 25,925 23,109 45,974 45,192
Parts & Accessories 237,754 230,146 414,658 399,334
General Merchandise 63,406 53,068 122,869 107,476
Other 74 1,222 171 2,438
$1,333,264 $1,327,808 $2,568,728 $2,493,509

HARLEY-DAVIDSON UNITS
Motorcycle shipments:
United States 58,997 65,102 119,875 124,846
Export 18,131 16,932 33,969 31,278
Total 77,128 82,034 153,844 156,124

Motorcycle product mix:
Touring 26,519 25,028 51,590 46,432
Custom 35,371 39,407 69,657 76,271
Sportster(R) 15,238 17,599 32,597 33,421
Total 77,128 82,034 153,844 156,124

Retail Sales of Harley-Davidson Motorcycles
First Six Months 2005

2005 2004

United States 143,683 141,407
Europe* 18,353 14,978
Japan 5,358 4,849
Canada 7,975 7,289
All other markets 5,530 4,271

Total Harley-Davidson Sales 180,899 172,794

Data Source
Harley-Davidson(R) sales and warranty registrations provided by H-D
dealers and compiled by the Company

Only Harley-Davidson(R) motorcycles are included in the Harley-Davidson
Motorcycle Sales data.

*Data for Europe includes Austria, Belgium, Denmark, Finland, France,
Germany, Greece, Italy, Netherlands, Norway, Portugal Spain, Sweden,
Switzerland, and the United Kingdom

Heavyweight (651+ cc) Market Data
Data Through Month Indicated

2005 2004

United States (June) 295,388 287,528
Europe* (May) 179,179 183,938
Japan (May) 17,198 18,287

Data Source
United States: Motorcycle Industry Council
Europe: Giral S.A.
Japan: JAIA

Data for remaining markets not available on a monthly basis

*Data for Europe includes Austria, Belgium, Denmark, Finland, France,
Germany, Greece, Italy, Netherlands, Norway, Portugal Spain, Sweden,
Switzerland, and the United Kingdom

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