HARLEY-DAVIDSON, INC. 2008 ANNUAL REPORT

HARLEY-DAVIDSON, INC. IS A GLOBAL LEADER IN FULFILLING DREAMS AND PROVIDING EXTRAORDINARY CUSTOMER EXPERIENCES THROUGH MUTUALLY BENEFICIAL RELATIONSHIPS WITH OUR STAKEHOLDERS.

WE’VE BUILT AN ENDURING BUSINESS… BY BUILDING THE WORLD’S GREATEST MOTORCYCLES. HARLEY-DAVIDSON, INC. 2008 ANNUAL REPORT

BY BUILDING THE WORLD’S GREATEST MOTORCYCLES. DEAR FELLOW SHAREHOLDERS: THESE ARE CHALLENGING TIMES FOR GET THE COST STRUCTURE RIGHT > While we prevalent source of funding — were largely closed For example: as do women and other diverse audiences. We are • And most important, we have a dedicated team of HARLEY-DAVIDSON. BUT MAKE NO MISTAKE — WE ARE TAKING A BOLD AND carefully managed the expansion of our production for much of 2008 and into 2009. • We introduced the Tri Glide™ motorcycle last July, heavily focused on converting that aspiration talented employees who are incredibly passionate DISCIPLINED APPROACH TO MEETING THE CHALLENGES HEAD-ON. FOR 106 capacity during the vigorous growth of the 1990s As I write this letter, the credit markets are which expands the Harley-Davidson experience into purchases, creating new generations of riders about leading Harley-Davidson back to growth. YEARS, THROUGH EVERY KIND OF ECONOMIC CYCLE, WE’VE BUILT AN ENDURING and early part of this decade, the past two years of progressing slowly and are still far from functioning and extends the riding lifecycle. In fact, there is for years to come. substantial shipment declines have altered the • BUSINESS. WE’VE BUILT IT THROUGH THE DETERMINATION AND TALENTS OF properly. We continue to work on putting various a current waiting list for Tri Glide and we are GROWING OUR CORE. We continue to develop new This is my 40th and final year at Harley-Davidson. economic dynamics of our business. Our fixed cost alternatives in place to fund the lending activities increasing its production. ways for existing riders to ride more and get As our Board of Directors moves through its MANY PEOPLE. WE’VE BUILT IT BY STAYING CLOSE TO OUR CUSTOMERS. AND AT structure is simply too high — especially in of HDFS and we believe we can continue to meet • We introduced the Iron 883™ in January, broad- more out of their experiences. We see solid growth process to identify my successor, please know that ITS CORE, WE’VE BUILT IT BY BUILDING THE WORLD’S GREATEST MOTORCYCLES. this environment. HDFS’ liquidity needs. ening the reach of Harley-Davidson authenticity potential across a broad spectrum of customers, I am completely determined to make sure the

As a result, we have announced a number of at a suggested retail price under $8,000. not only as new people come into the actions we take today will be judged 40 years from While our durability is being tested by one of the motorcycles in 2009 than last year, as we continue changes, including the planned consolidation INVEST IN THE BRAND > Great brands are built by • We rolled out our “Ride Free” Sportster® motorcycle Harley-Davidson family, but also as we extend now as disciplined, bold and effective. Working most challenging economic times since the to prudently manage our shipments consistent of some of our production facilities as well as our consistent investment in product development trade-up program, which allows customers their time in the saddle after years of riding. at Harley-Davidson continues to be a great privilege Great Depression, we are taking the actions required with the expected slowing of consumer spending. parts, accessories and general merchandise and marketing, in both good times and bad. While to buy a Sportster model and then receive full • EXPANDING GLOBALLY. New Harley-Davidson and, until the transition is fully completed, to deal with today’s challenges and sustain the distribution operations. Our objective is to reduce we are being careful to allocate our product manufacturer’s suggested retail price when motorcycle retail sales outside the U.S. grew I feel an intense personal obligation to provide the long-term vitality of Harley-Davidson. STRATEGY FOR THE CURRENT ECONOMIC excess capacity, gain significant efficiencies and development and marketing dollars wisely, we are they trade up later. “Ride Free” demonstrates our 10.3 percent in 2008, despite the global economic strong leadership this great company deserves. Our 2008 financial results clearly reflect the ENVIRONMENT > We know you rightly expect us to substantially adjust our cost structure. strongly committed to properly supporting the brand. disciplined approach to triggering consumer slowdown. While we expect a modest decline in I want to thank our employees, dealers and significant pressures being brought to bear on our manage the Company well in both good times We have a fundamental belief in American The Harley-Davidson brand consistently ranks purchases in ways that actually build brand value. overall international retail sales this year, we suppliers for their remarkable efforts in the face of business by this severe economic downturn. and bad. But even more so, we feel a strong sense manufacturing, and we’re proud of the leading role among the strongest of the strong. It is built • We opened the Harley-Davidson Museum in believe our international opportunities remain great challenges. Never has the Harley-Davidson Revenue decreased 2.3 percent to $5.59 billion, of stewardship, not just to guide Harley-Davidson we have played in demonstrating that American on personal relationships and deep connections our hometown of Milwaukee, creating a strong once the economy turns around. Our spirit been so apparent, and I am grateful to work primarily on an 8.2 percent decline in shipments successfully through the current economic manufacturing can indeed compete and win on a with customers, unmatched riding experiences, destination where riders and non-riders alike can acquisition of MV Agusta last August is an example with so many exceptional people. of Harley-Davidson® motorcycles as we lowered challenges, but to do so in a way that best protects sustained basis. We believe American manufacturing a proud history and, more than anything, the unique more fully experience our brand. of our global strategy in action, representing a Most especially, I thank our shareholders. Our our shipments in response to deteriorating market and enhances the Harley-Davidson brand as can thrive over the long term in a 21st century ability of our products to fulfill the dreams of every great opportunity to expand our footprint in Europe styling chief, the legendary Willie G. Davidson, conditions. Net income fell 29.9 percent to well as drives future growth over the long term. global economy if it continues to evolve, and we generation that comes along. Of course, the best way to strengthen the and deepen our offerings in high-performance often reminds Harley-Davidson riders that “We Ride $654.7 million, reflecting both the performance of We are determined to make wise choices in are determined to show the foresight required For example, our 105th Anniversary Celebration Harley-Davidson brand is to make our great motor- sport motorcycles, which account for more than With You.” You should know we feel the same sense the motorcycles business and lower profitability the short term that will best equip Harley-Davidson to make that progress happen at Harley-Davidson. last August drew larger crowds than the milestone cycles even greater. We have dedicated this 70 percent of the European market. of stewardship when it comes to our shareholders. at Harley-Davidson Financial Services (HDFS). for long-term success. 100th Anniversary, despite lagging consumer annual report to sharing with you how we are focused Even more important, please know how much Diluted earnings per share declined 25.4 percent Consequently, we have developed a clear OBTAIN FUNDING FOR HDFS > Harley-Davidson confidence and falling discretionary spending. more intensely than ever— despite the external We have the unique resources required to turn we appreciate the trust you show by riding with us. to $2.79. And at year-end, our share price was three-pronged strategy to guide Harley-Davidson Financial Services was profitable in 2008 and The 105th underscores the enormous appeal and challenges — on expanding this core strength and that long-term potential into reality. We’re determined to reward that trust by making 63.7 percent lower than when the year started. through this difficult recession and at the same remains a consistent source of wholesale financing drawing power of the Harley-Davidson brand and bringing products to market that resonate across • We have one of the world’s most recognized sure Harley-Davidson will indeed ride with discipline While these are disappointing results, it’s time strengthen our operations, our market for dealers and retail financing for customers. I believe bodes well for the future. It demonstrates the spectrum of riders. and powerful brands. Our brand is one that has and boldness, both today and for the long term. important to keep them in perspective. Despite presence and our financial results for the longer term. This is especially important, given the reduced how, even in a recession, people of all ages and from been built on uniquely satisfying products. consumers watching their discretionary spending Our three-pronged strategy is focused on: access to credit from other sources that consumers all walks of life are connecting with the richness LONG-TERM POTENTIAL > While the current circum- • We have the best motorcycle dealer network in Sincerely, more closely than at any time in recent history, 1) getting our cost structure right; 2) obtaining and dealers have faced. of the Harley-Davidson experience. It also speaks to stances are difficult, the long-term growth potential the world, comprised of dedicated local entre- our dealers sold 313,769 new Harley-Davidson funding for HDFS to help our dealers sell As with most finance companies, the turmoil in something we’ve known for a long time: for many of our business remains substantial, and we see three preneurs who live and breathe Harley-Davidson motorcycles worldwide, a 7.1 percent decline motorcycles and retail customers buy them; and the credit markets has substantially disrupted people, a Harley-Davidson motorcycle is anything but principal means for realizing that potential. in their communities. versus 2007, but more than a 217 percent increase 3) investing in the Harley-Davidson brand. the access that HDFS has to the capital needed to discretionary. It’s an essential statement of identity. • BROADENING OUR BASE. We know that younger • We have an amazing heritage of resilience and JAMES L. ZIEMER versus a decade ago. Our management team is executing this three- fund its lending activities. The asset-backed We are also expanding the brand and stimulating generations aspire to the attitude, authenticity durability, which helps enable us to manage President and Chief Executive Officer Looking ahead, we have announced our plan to pronged strategy with discipline and boldness. securitization markets — traditionally our most consumer interest and demand in many other ways. and adventure that our motorcycles represent, through challenges with poise and boldness. Harley-Davidson, Inc. ship 10–13 percent fewer Harley-Davidson IF THERE’S ONE THING THAT’S REMAINED UNCHANGED IN 106 YEARS AT WE BUILD MOTORCYCLES HARLEY-DAVIDSON, IT’S THAT EVERYTHING BEGINS WITH THE MOTORCYCLE. ALL OF IT. FROM THE INSPIRED DESIGN AND ENGINEERING OF A NEW FOR THOSE WHO… MODEL, TO THE STYLING OF A ONE-OF-A-KIND ACCESSORY, TO THE CREATION THE RESULT > The 2009 OF FUNCTIONAL RIDING GEAR, IT ALL STARTS WITH OUR BIKES AND THE V-Rod ® Muscle,™ a sophisticated ENDLESS POSSIBILITIES THEY PROMISE RIDERS. and responsive bike that pulsates with traffic-stopping style and performance. It’s a bike that beckons OUR MOTORCYCLES ENTICE ADVENTURE AND IGNITE PASSION. THEY INSPIRE sophisticated thrill-seekers —and CHANGE AND FULFILL DREAMS. AND IT DOESN’T HAPPEN BY CHANCE. those who may be considering Harley-Davidson for the first time. BY INVESTING IN THE DEVELOPMENT AND EVOLUTION OF OUR MOTORCYCLES— IN THE WAYS THAT MATTER MOST TO RIDERS— WE BUILD OUR BRAND, OUR ENTHUSIAST BASE AND, MOST IMPORTANTLY, OUR COMPANY.

CREATING AUTHENTICITY IN A WORLD OF IMITATION IS A VALUABLE AND ENDURING THING. AND THIS INDISPUTABLE TRUTH WILL ENSURE

HARLEY-DAVIDSON CONTINUES TO CAPTURE THE HEARTS AND IMAGINATIONS THE CONCEPT > Summon the OF MOTORCYCLE ENTHUSIASTS FOR GENERATIONS TO COME. racetrack with chiseled bodywork stretched taut over a long, low profile and super-wide rear tire. Combine with the free-revving performance of the liquid-cooled 1250 cc Revolution® V-Twin engine, co-developed with Porsche. …BREATHE FREEDOM.

THE 2009 TOURING CHASSIS

For those seeking more confidence, visibility, comfort and cargo space, Harley-Davidson has the answer: the three-wheel 2009 Tri Glide™ Ultra Classic.

CHANGE EVERYTHING, LOSE NOTHING > Mile The 2009 Touring family was born from decades of machine, with features that matter to Touring riders, after mile, a Harley-Davidson® Touring motorcycle is rider feedback — a wheels-up upgrade from the like precise, responsive maneuverability, like a trusted steed: faithful, comfortable and Harley-Davidson Styling and Engineering teams increased cargo capacity and greater comfort for responsive. It feeds the soul and clears the mind, that preserves the bikes’ distinctive look. rider and passenger. uniting a rider with the unbridled freedom of the Underneath the stunning bodywork is a chassis But the 2009 Touring family innovations are best open road. Whistle, and it’s practically at your side. that’s been reengineered all the way down to understood not by seeing them, but by feeling So how do you create a new breed without the pavement— incorporating a new frame, swingarm, them — on the throttle and in the corners, on the forsaking the bloodline? By changing everything engine mounting system, suspension, wheels and highway and back roads — mile after mile, where and sacrificing nothing. tires. The sum of these parts is a whole lot of it matters most to road warriors.

04 > HARLEY- DAVIDSON, INC. 2008 ANNUAL REPORT …VALUE AUTHENTICITY.

THE 2009 SOFTAIL® CROSS BONES™

HONORING OLD SCHOOL COOL > A rough, raw sprung seat and “cat’s eye” console. But designing a years ago, many of today’s government-required bike inspired by the post-war era, the Cross Bones™ bike that combines the aesthetic of a simpler era indicators such as turn signals, oil pressure motorcycle is pure Harley-Davidson. It delivers with modern technology isn’t that simple. The devil and high beams were merely options — and LED the kind of genuine, gritty street credibility is in the details. indicators would have seemed like science fiction. reserved for riders who know fact from fiction — Engineering found creative solutions to preserve With a mind toward authenticity, Engineering took like the master mechanics, the old-timers the old-school look. Wires and electronics, which great care to execute design elements. and the 100,000-milers. weren’t present back in the day, were hidden and The Cross Bones is the epitome of old school Styling’s vision was to deliver a ’40s look that rerouted. And replicating the classic “cat’s eye” cool — a bike for riders who covet the real deal. speaks to authenticity — right down to pinstripes, console was no small feat. That’s because sixty

06 > HARLEY- DAVIDSON, INC. 2008 ANNUAL REPORT THE 2009 SOFTAIL® CROSS BONES™ …PUSH THE EDGE.

THE 2009 SPORTSTER® XR1200™

INTRODUCING A LIQUID COOLED BUELL EXPANDING OUR REACH > Italian MV AGUSTA RACE-BRED TURNS STREET LEGAL > It started riders who are all about the giddyup. looks compact but delivers the right volume — of STREETFIGHTER > Buell Motorcycle Company motorcycle maker MV Agusta is revered for its as an icon. The legendary XR750 has dominated The XR1200 achieves its performance with exhaust and sound. celebrated its 25th anniversary in 2008 with racing heritage and prowess, and for its American dirt-track racing for more than 30 years. larger than normal intake and exhaust Initially released solely in European markets, the introduction of the 1125CR™ motorcycle luxurious dream machines. MV Agusta offers ® Among motorcycle adrenaline junkies, the two systems that deliver the cooling and airflow the XR1200 kicked up so much interest from to rave reviews by the motorcycle media. Styled two families of motorcycles: MV Agusta, with a nod to the nostalgic era of the café racer, a line of premium, high-performance sport letters “XR” are as worshipped as “H-D.” the engine demands. On the intake side, U.S. riders that it’s now available stateside. In fact, the 1125CR wields the muscle of a powerful, machines; and Cagiva,® a line of lightweight Inspired by that legacy, Styling and Engineering Styling and Engineering creatively tucked the hundreds of XR1200s were ordered by both liquid-cooled V-Twin engine and is one of nine motorcycles. Harley-Davidson, Inc. acquired FPO 2009 Buell ® Sportbike, Streetfighter, Adventure MV Agusta in August, strengthening our ability tamed the small, light XR750 racer into a gulping air intake under the fuel tank. On Harley-Davidson and competitive brand riders before Sportbike and Blast ® models. Riders with the to fulfill customer dreams — no matter comfortable and durable street-legal motorcycle: the exhaust side, Styling designed a unique they even arrived in dealerships. Now, a whole streetfighter attitude have responded feverishly how they translate. the XR1200,™ an aggressive-minded bike for upswept, straight-shot exhaust system that new XR legend is taking shape. to the year’s lineup —in North America, Buell retail sales were up 10 percent in 2008.

08 > HARLEY- DAVIDSON, INC. 2008 ANNUAL REPORT …LIVE WICKED.

THE 2009 DYNA® STREET BOB™

THE 2009 DYNA® FAT BOB™

DEEPER INTO DARKNESS > Dark Custom™ is mini ape-hanger handlebar and wrinkle-black trim, deeper, gnarlier tire tread. The massive stature of Harley-Davidson’s collection of raw, dark and the Street Bob model evokes the best in “garage the Dyna Fat Bob model now has an unmistakable stripped-down bikes for a new generation of riders — engineering” with all the modern conveniences street presence —fat tires with a distinctive no chrome or excess required. In this wicked tucked away. Young riders easily see the design fingerprint, to make an indelible impression. pack, you’ll find bikes like the Dyna® Street Bob® lineage, signaling the bike’s unrestrained clout. Across the line, the appeal of Dark Custom bikes and Dyna® Fat Bob™ ready to rumble. Beefy and brutish is the essence of the Dyna Fat is in their design authenticity, not only in the For the Street Bob motorcycle, Styling pictured Bob motorcycle. Styling slipped a big tire on the shade of paint or the power of their engines. For a modern distillation of classic “Bobber” design, front end, along with aggressive dual headlights, and riders coming of age today, Dark Custom bikes offer and stripped down the 2009 version just to this side the bike’s look was instantly muscled up. But a rare dose of honest, heart-pounding reality. of street-legal. With its solo seat, internally wired meaty wasn’t enough. Engineering helped design a

10 > HARLEY- DAVIDSON, INC. 2008 ANNUAL REPORT …FORM A BOND.

THE 2009 HERITAGE SOFTAIL® CLASSIC

FAMILY TRADITION > You’re on an open stretch repurchase rate among riders who currently own A removable king-size windshield provides the of highway, fists forward in the wind. Surrounding that model. That means they just can’t get enough. functionality needed for long trips while keeping you is a group of friends who you call family. For 2009, the Heritage Softail Classic model streamlined style at the ready for the next Underneath you is a pure American custom, a bike received a number of styling changes that amp up ticker-tape parade. that transforms your ride — and your world. the nostalgia, while Engineering’s Twin Cam 96™ Staying true to our heritage is one of the ways In this dream, the Heritage Softail® Classic V-Twin beats as the bike’s unmistakable heart and Harley-Davidson invests in the future. Like no motorcycle is your machine. A Harley-Davidson® soul. The front end adds new visual cues, plus taller other brand, we honor the past while accelerating best seller, it’s a bike that becomes a reality for handlebars to enhance the rider’s profile. The into the future. As always, our destination is the riders year after year. And they don’t stop there. fuel tank is emblazoned with new glass-filled,3-D customer loyalty earned only by Harley-Davidson. The Heritage Softail Classic motorcycle boasts a high badges and topped with a retro speedometer face.

12 > HARLEY- DAVIDSON, INC. 2008 ANNUAL REPORT …EVOKE ENVY.

THE 2009 CVO™ ULTRA CLASSIC® ELECTRA GLIDE® THE 2009 CVO™ ROAD GLIDE®

THE 2009 CVO™ SOFTAIL® SPRINGER®

THE 2009 CVO™ FAT BOB™

HAND BUILT WITH DETAILED CRAFTSMANSHIP > engineers and designers work together to create exclusive accessories and cutting edge paint, CVO Their desirability is undeniable. As the upper these factory customs that illustrate what is possible motorcycles command attention wherever they go. echelon of the motorcycle world, Harley-Davidson with Harley-Davidson Genuine Parts & Accessories. Production quantities are limited and each Custom Vehicle Operations (CVO) models stand For 2009, four limited edition CVO models were motorcycle is hand built by highly skilled proud as the most coveted custom motorcycles. born from the Fat Bob,™ Softail® Springer,® Road technicians. Combined with meticulous attention Introduced a decade ago, the exclusive CVO Glide® and Ultra Classic® Electra Glide.® Injected to detail and comfort, a CVO bike is as models fuel the imagination of any rider who with an abundance of breathtaking features inspirational as it is enviable. dreams about customization. A select group of and distinctive details like more powerful engines,

14 > HARLEY- DAVIDSON, INC. 2008 ANNUAL REPORT …LIVE THE PASSION.

AN ENDURING CELEBRATION > For riders, Stories of adventure, military service, rebellion and customers were drawn to Milwaukee from around Harley-Davidson celebrations are the best of times. survival leave visitors feeling more deeply connected the world — excited to use their vacation time Nothing stops the revelry — not even an with the brand. In many cases, Museum visitors hear to spend a week with Harley-Davidson and fellow uncertain economy, as proven by the 2008 summer the call of the road and experience our brand for the enthusiasts. Headliners Bruce Springsteen and celebrations of the Harley-Davidson Museum first time. And that is the Museum’s ultimate goal: the E Street Band and Foo Fighters rocked. Special opening and the 105th Anniversary. to bring everyone into the Harley-Davidson journey. exhibits inspired. Street parties grooved. And Crowning a 20-acre site in downtown Milwaukee, Just after the Museum opened, the 105th the motorcycle parade drew tears. the Harley-Davidson Museum is as much about Anniversary became the biggest Milwaukee celebra- Regardless of the economic storms of 2008, inspiring dreams as it is about enjoying motorcycles. tion yet. New riders, non-riders and long-standing Milwaukee was a pretty warm place to be.

16 > HARLEY- DAVIDSON, INC. 2008 ANNUAL REPORT FINANCIAL HIGHLIGHTS FINANCIAL PERFORMANCE SUMMARY

WORLDWIDE In thousands, except per-share amounts 2008 2007 2006 In 2008, Harley-Davidson’s net revenue decreased 2.3 an increase of 2.8 percent compared to 2007. in 2008, a 21.7 percent increase over 2007. period, retail sales of Harley-Davidson motorcycles NET REVENUE BY PRODUCT LINE Income statement data: percent to $5.59 billion compared to 2007, on an 8.2 Harley-Davidson continues to effectively manage Harley-Davidson has paid a dividend every year increased 6.5 percent in the Europe Region, 47.0 Dollars in millions Net revenue $ 5,594,307 $ 5,726,848 $ 5,800,686 percent reduction in shipments of Harley-Davidson® its balance sheet and realized a return on invested since 1993. percent in the Latin America Region, 11.7 percent in Cost of goods sold 3,663,488 3,612,748 3,567,839 motorcycles. Net income decreased 29.9 percent capital (ROIC) at the end of 2008 of 17.0 percent. Canada and 7.7 percent in the Asia Pacific Region. - > Gross profit 1,930,819 2,114,100 2,232,847 from the prior year to $654.7 million, reflecting both The Company’s share price declined 63.7 percent HARLEY DAVIDSON MOTORCYCLES Worldwide In 2008, the Company shipped 303,479 the performance of the Company’s motorcycle during 2008, further reflecting the impact of retail sales of Harley-Davidson motorcycles declined motorcycles to dealers worldwide, compared to Financial services income 376,970 416,196 384,891 business and lower profitability at Harley-Davidson macro-economic conditions on Harley-Davidson’s 7.1 percent in 2008 compared to 2007. 330,619 units in 2007. Financial services expense 294,205 204,027 174,167 Financial Services. performance. For the ten-year period ending on In the United States, 2008 retail sales of 218,939 Operating income from financial services 82,765 212,169 210,724 Revenue from sales of Harley-Davidson motorcycles December 31, 2008, Harley-Davidson shares Harley-Davidson motorcycles decreased 13.0 percent HARLEY-DAVIDSON FINANCIAL SERVICES > Selling, administrative and engineering expense 984,560 900,708 846,418 decreased to $4.28 billion in 2008, a decline of experienced a negative compound annual total return from 2007 and overall U.S. heavyweight market Financial Services operating income was $82.8 3.8 percent from 2007. Revenue from Genuine Parts of 2.2 percent per year, which compares to a registrations declined 7.0 percent. million in 2008 compared to $212.2 million in 2007, Income from operations 1,029,024 1,425,561 1,597,153 76.5 % HARLEY-DAVIDSON MOTORCYCLES . .$4,278.2 and Accessories in 2008 totaled $858.7 million, a positive compound annual total return of 13.9 percent For the full year 2008, retail sales of Harley-Davidson primarily due to lower securitization income and 9,495 22,258 27,087 15.3 % PARTS & ACCESSORIES ...... 858.7 Investment income 1.1 percent decrease from the previous year, and for the ten years ending December 31, 2007. The motorcycles in our international markets increased write-downs of finance receivables held for sale and 5.6 % GENERAL MERCHANDISE ...... 313.8 Interest expense 4,542 – – 2.2 % BUELL MOTORCYCLES ...... 123.1 General Merchandise revenue was $313.8 million, Company paid out dividends of $1.29 per share 10.3 percent compared to 2007. For the same investment in retained securitization interests. Income before provision for income taxes 1,033,977 1,447,819 1,624,240 0.4 % OTHER ...... 20.5 Provision for income taxes 379,259 513,976 581,087 TOTAL NET REVENUE $5,594.3 Net income $ 654,718 $ 933,843 $ 1,043,153

Weighted-average common shares: HARLEY-DAVIDSON, INC. WORLDWIDE Basic 234,225 249,205 264,453 VS. STANDARD & POOR’S 500 COMPOSITE INDEX NET REVENUE BY REGION In dollars Dollars in millions Diluted 234,477 249,882 265,273 Earnings per common share: Basic $ 2.80 $ 3.75 $ 3.94 191 , 25,000 Diluted $ 2.79 $ 3.74 $ 3.93 23 476 Dividends paid per common share $ 1.29 $ 1.06 $ 0.81 , 19 20,000 169 , 709 , 687 17

Balance sheet data: , 16 133 , 645 , 15 15

Working capital $ 2,774,124 $ 1,562,235 $ 1,954,956 14 544

, 15,000

Finance receivables held for sale 2,443,965 781,280 547,106 12 084 ,

Finance receivables held for investment, net 2,195,563 2,420,327 2,280,217 10 10,000 434 ,

. % ...... $ , . Total assets 7,828,625 5,656,606 5,532,150 7

68 7 UNITED STATES 3 843 9 956 , 5

16.2 % EUROPE ...... 904.1 1,738,649 1,119,955 832,491 257 Current debt , 650 , 4 , 5.0 % JAPAN ...... 279.4 3 5 000 224 152 , ,

Long-term debt 2,176,238 980,000 870,000 686 433 , 2 2 ,

4.6 % CANADA ...... 256.6 1 1 981 930 860 852 803 782 766 710 618 690 689 553 537 414 374 367 337 245 242 220 204 3.0 % AUSTRALIA ...... 168.1 Total debt 3,914,887 2,099,955 1,702,491 161 156 0 2.5 % REST OF WORLD ...... 142.2 Shareholder equity $ 2,115,603 $ 2,375,491 $ 2,756,737 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08

TOTAL NET REVENUE...... $ 5,594.3 Number of shareholders of record 89,298 90,748 88,995 S&P 500 H-D 20-YEAR COMPARISON OF YEAR-END VALUE OF $100 INVESTED DEC. 31, 1988. ASSUMES FOR BOTH HARLEY-DAVIDSON AND S&P THAT ALL DIVIDENDS ARE REINVESTED.

18 > HARLEY- DAVIDSON, INC. 2008 ANNUAL REPORT CORPORATE SUMMARY

HARLEY-DAVIDSON MOTORCYCLE HARLEY-DAVIDSON, INC. HARLEY-DAVIDSON, INC. HARLEY-DAVIDSON, INC. UNITED STATES 2008 BOARD OF DIRECTORS, WILLIAM B. DANNEHL RONALD M. HUTCHINSON MATTHEW S. LEVATICH SEC FORM 10-K HARLEY-DAVIDSON, INC. Executive Vice President, Senior Vice President, President and A copy of the Annual Report to WORLDWIDE SHIPMENTS NET REVENUE NET INCOME DILUTED EARNINGS PER SHARE 651+ CC MOTORCYCLE REGISTRATIONS Chief Organizational Product Development Managing Director, MV Agusta the Securities and Exchange Units in thousands Dollars in millions Dollars in millions In dollars H-D vs. Industry, units in thousands BARRY K. ALLEN MARKET SHARE Transformation Officer Commission on Form 10-K may Senior Advisor, Providence EDWARD M. KRISHOK COMPANY INFORMATION be obtained from the Company 48 .848.0 48.848.0 45.6 45.0 47.5 49.5 49.349.049.2 48.7 45.5 % Equity Partners PERRY A. GLASSGOW* Vice President, General Counsel without charge to the shareholders 2 . President, Allen Enterprises, LLC Vice President and Treasurer HARLEY-DAVIDSON, INC. or via the Company’s Web site 6 0 . 93 .

. MICHELLE A. KUMBIER 3700 West Juneau Avenue 043 801 349 , 3 , 727

3 (as of February 18, 2009). . , 74 594 1 . 5 5

, 1,100 RICHARD I. BEATTIE SUSAN K. HENDERSON Vice President and General P.O. Box 653 5 . 330 350 6,000 4.00 329 3 5 342 1 , . 317 Chairman, Simpson Thacher & Vice President, Communications Manager, Materials Management Milwaukee, WI 53201-0653 41 960

5 DIRECT STOCK REPURCHASE . 015 303 600 934 , 1,000 3

7 Bartlett LLP 414-343-4680 . 291 8 543.0 5 AND DIVIDEND 890

3.50 .

300 624 JAMES A. McCASLIN , 517.6 516.1 GAIL A. LIONE* 5,000 00 . REINVESTMENT PLAN

4 900 5 494.0

263 U.S. Source: Motorcycle Industry 3 .

479 JEFFREY L. BLEUSTEIN 79 Executive Vice President, President and Internet Addresses: .

091 500 To obtain information on our 461.2 , 2 761 3.00 Council (MIC) Chairman of the Board, General Counsel, Secretary and Chief Operating Officer 4 442.3 www.harley-davidson.com 6 800 234 . 250 50 Direct Stock Purchase and .

4,000 2 Harley-Davidson, Inc. Chief Compliance Officer www.buell.com 394.3 655 407 Dividend Reinvestment Plan, , 2 204 700 JEFFREY A. MERTEN . 2.50 The Company must rely on data 3 400 www.mvagusta.com please contact Computershare: 580 943

8 GEORGE H. CONRADES Vice President and General 200 340.0 JAMES L. ZIEMER* ,

90 compiled by an independent . 177 600 . 2 1 agency to obtain retail registration Executive Chairman, President and Manager, North American Sales MUSEUM INFORMATION:

453 3,000 2.00 Computershare Trust Company, N.A. , 150 275.6

267.9 Akamai Technologies, Inc. Chief Executive Officer Harley-Davidson Museum 438 2 500 300 43 data necessary for calculating 250 Royall Street 253.4 251.4 . 150 064 243.2 , JOHN A. OLIN

1 400 Canal Street 228.4 227.1 2 218.2 market share. The retail registra- Canton, MA 02021 209.9 348 400 13 1.50 . JUDSON C. GREEN *Corporate Officer Vice President and Controller Milwaukee, WI 53201

2,000 1 tion data for Harley-Davidson www.computershare.com 177.4

86 200 President and 267

. 877-436-8738 100 300 155.1 866-360-5339 toll-free 0 motorcycles included in this table - 69 2008 HARLEY DAVIDSON STEVEN R. PHILLIPS 134.5 214 . 1.00 Chief Executive Officer,NAVTEQ www.h-dmuseum.com 0 109.1 may differ slightly from the MOTOR COMPANY LEADERSHIP Vice President, 200 REGISTRAR AND 1,000 100 Harley-Davidson retail sales data DONALD A. JAMES Quality, Operational Excellence 50 .50 PLANT TOUR INFORMATION: 0 JOANNE M. BISCHMANN TRANSFER AGENT 100 presented elsewhere by the Chairman and and Technical Service 877-883-1450 Vice President, Licensing and COMPUTERSHARE TRUST company. The differences are not Chief Executive Officer, Deeley York, PA motorcycles 0 0 0 0 0 Special Events MARK-HANS RICHER COMPANY, N.A. significant and generally relate Harley-Davidson Canada/Fred Kansas City, MO motorcycles 9899 00 0102 03 060504 07 08 9899 00 0102 03 060504 07 08 9899 00 0102 03 060504 07 08 9899 00 0102 03 060504 07 08 98 99 00 01 02 03 060504 07 08 Senior Vice President and 250 Royall Street to the timing of data submissions Deeley Imports Ltd. Milwaukee, WI engines RODNEY J. COPES Chief Marketing Officer Canton, MA 02021 UNITED STATES INTERNATIONAL 10-YEAR COMPOUND ANNUAL GROWTH RATE: 10.5% 10-YEAR COMPOUND ANNUAL GROWTH RATE: 11.9% 10-YEAR COMPOUND ANNUAL GROWTH RATE: 15.0% H-D MOTORCYCLES INDUSTRY to the independent source. Vice President and 866-360-5339 toll-free SARA L. LEVINSON The following are among the Managing Director, Asia Pacific PATRICK SMITH or 312-360-5339 Former President of Company’s trademarks: HARLEY- Vice President, the Women's Group of Rodale, Inc. DAVIDSON, H-D, HARLEY, the Bar WILLIAM G. DAVIDSON General Merchandise CONTACT INVESTOR & Shield Logo, MOTORCLOTHES, N. THOMAS LINEBARGER Senior Vice President and RELATIONS AT: the MotorClothes Logo, RIDER’S HARLEY-DAVIDSON, INC. HARLEY-DAVIDSON, INC. HARLEY-DAVIDSON, INC. EUROPE President and Chief Operating Chief Styling Officer MARK VAN GENDEREN 877-HDSTOCK toll-free HARLEY-DAVIDSON, INC. Vice President and Managing EDGE, HARLEY OWNERS GROUP, 414-343-4782 CAPITAL EXPENDITURES DIVIDENDS PER SHARE YEAR-END STOCK PRICES 651+ CC MOTORCYCLE REGISTRATIONS Officer, Cummins, Inc. COMMON SHARES OUTSTANDING WILLIAM J. DAVIDSON Director, Latin America H.O.G., the H.O.G. Logo, SOFTAIL, or e-mail: investor.relations@ H-D vs. Industry, units in thousands Dollars in millions In dollars, adjusted for splits Shares outstanding, in millions In dollars, adjusted for splits Vice President, SPORTSTER, V-ROD, BUELL and MARKET SHARE GEORGE L. MILES, JR. harley-davidson.com President and Chief Executive Core Customer Marketing 2008 BUELL MOTORCYCLE the Pegasus Logo. The HARLEY- .2 6 . 16 7.2 7.1 7 . 1 8.1 . 7 . 97 9 . 58 10.0 10.3 % DAVIDSON trademark has been Officer, WQED Multimedia COMPANY LEADERSHIP Corporate Governance materials KARL M. EBERLE used since 1903 and the Bar and may be obtained via our Web 290 . 9 Shield trademark since at least . JAMES A. NORLING Senior Vice President, ERIK F. BUELL site at www.harley-davidson.com, 1 Manufacturing 1910. The BUELL trademark has 350 1.300 47 80 Chairman of the Board, Chairman and including our Code of Business .

323 350 4 3 . 3 .

. been used since 1984. With the 7 Chief Technical Officer,

. Chartered Semiconductor Conduct which is available in 70 450 0

060 ROBERT S. FARCHIONE .

. exception of the MV Agusta 3 Buell Motorcycle Company 290 Manufacturing Ltd. eight languages. In addition, we . 75 397 294 70 1 . 1 300 388 . . Vice President, OE Engineering 1 7

100 4 3 2 trademarks, substantially all of the

1 300 .

. 400 . . maintain an ethics hotline at . 9 274 7 60 3 2 5 . . 361 . 31 . . 8 2

. JON R. FLICKINGER . . JOCHEN ZEITZ Company’s trademarks are owned 258 6 800-688-2316. 49 . 8 336 6 335 . 333 60 333 . 242 Europe Source: Giral S.A. . FRED C. GATES

54 President and 323 350 6 322 by H-D Michigan, LLC, a subsidiary 321 Chief Executive Officer and 232 238 . 810 4

250 53 227 71 . 232 . . 51 250 20 0.900 .

. Vice President and General 219 0 Chief Operating Officer, of the Company, which also Communication with the Board 8 292 Chairman of the Board, Puma AG 213 . 47 46 203 46 50 300 The Company must rely on data Manager, York Vehicle Operations 198 Buell Motorcycle Company 8 75 manages the Company’s trademark c/o the Secretary of . . 182 200 625 compiled by an independent agency JAMES L. Z IEMER

. strategy and portfolio. The MV Harley-Davidson, Inc. 0.700 200 39 0

165 250 JAMES E. HANEY

03 2008 HARLEY-DAVIDSON . 40 to obtain retail registration data President and Chief Executive Agusta trademarks are owned by 3700 West Juneau Avenue Vice President and FINANCIAL SERVICES

32 Officer, Harley-Davidson, Inc. 150 200 necessary for calculating market MV Agusta Motor S.p.A. P.O. Box 653 150 69 Chief Information Officer LEADERSHIP . 405 Milwaukee, WI 53201-0653 . 0.500 30 share. The retail registration data 0 - 23 2008 HARLEY DAVIDSON SHAREHOLDER INFORMATION

97 150 for Harley-Davidson motorcycles . MICHAEL P. HEERHOLD 100 LEADERSHIP THOMAS E. BERGMANN © 2009 Harley-Davidson, Inc

100 16 included in this table may differ 20 Vice President and General Interim President, Harley-Davidson ANNUAL SHAREHOLDER 195

. 0.300 100 7

3 slightly from the Harley-Davidson . 0 Manager, Powertrain Operations, . 7 135 2008 HARLEY-DAVIDSON, INC.

3 Financial Services 9 MEETING . 5 2 8 . . 115 . 5 . . 1 . . . 098 . 0 088 41.0 . 38

. retail sales data presented Pilgrim Road 34 50 0 LEADERSHIP 29 0

26 The Annual Meeting of Share- 10 25 50 23 0

50 23 22 20 0.078 0.100 18 elsewhere by the company. The 2008 MV AGUSTA GROUP holders will convene at 10:30 a.m., 0 differences are not significant THOMAS E. BERGMANN* TIMOTHY K. HOELTER LEADERSHIP 0 0 0 CT, on Saturday, April 25, 2009, 0 98 99 00 01 02 03 060504 07 08 Executive Vice President and Vice President, 9899 00 0102 03 060504 07 08 9899 00 0102 03 060504 07 08 9899 00 0102 03 060504 07 08 and generally relate to the timing at the Harley-Davidson Museum, 0504 06 07 08 Government Affairs CLAUDIO CASTIGLIONI Design: VSA Partners, Inc., Chicago of data submissions to the Chief Financial Officer 400 Canal Street, H-D MOTORCYCLES INDUSTRY Chairman, MV Agusta Printing: Anderson Lithograph 10-YEAR COMPOUND ANNUAL GROWTH RATE: 32.4% 10-YEAR COMPOUND ANNUAL GROWTH RATE: -3.3% independent source. Milwaukee, WI 53201. Paper: CTI Glama Translucent, Sappi Somerset Gloss 20 > HARLEY- DAVIDSON, INC. 2008 ANNUAL REPORT HARLEY-DAVIDSON, INC. IS A GLOBAL LEADER IN FULFILLING DREAMS AND PROVIDING EXTRAORDINARY CUSTOMER EXPERIENCES THROUGH MUTUALLY BENEFICIAL RELATIONSHIPS WITH OUR STAKEHOLDERS.

HARLEY- DAVIDSON, INC. 3700 West Juneau Avenue, P.O. Box 653, Milwaukee, Wisconsin 53201-0653 WWW.HARLEY-DAVIDSON.COM SHOWN ON COVER THE 2009 SOFTAIL® CROSS BONES™ HARLEY- DAVIDSON, INC. 3700 West Juneau Avenue, P.O. Box 653, Milwaukee, Wisconsin 53201-0653 WWW.HARLEY-DAVIDSON.COM SHOWN ON COVER THE 2009 SOFTAIL® CROSS BONES™