Overview

The Company’s 2009 financial results were affected by the difficult economy, as well as costs associated with restructuring the business. During 2009, the Company initiated several significant restructuring activities to reduce its cost structure and also initiated a plan to exit the Buell product line and divest MV. In connection with the decision to sell the MV business, its financial results have been presented as a discontinued operation for all periods presented.

Income and diluted earnings per share from continuing operations in 2009 were $70.6 million and $0.30, respectively, each down 89.7% compared to 2008. The results of continuing operations reflect the effects of lower Harley-Davidson motorcycle shipments, restructuring and Buell product line exit costs, and non-cash charges related to Financial Services. The loss from discontinued operations, which includes MV’s operating losses and a fair value adjustment, was $125.8 million net of tax, or $0.54 per diluted share. Including discontinued operations, the Company incurred a net loss of $55.1 million, or $0.24 per diluted share for 2009.

Retail sales of Harley-Davidson motorcycles by independent dealers were also impacted by the difficult economy. Worldwide retail sales of new Harley-Davidson motorcycles declined 22.7% in 2009 compared to last year. In 2009, U.S. retail sales of Harley-Davidson motorcycles were down 25.8% and international retail sales were down 15.4% as compared to 2008. On an industry-wide basis, retail sales of heavyweight motorcycles in the United States declined 36.7% during 2009.

Please refer to the “Results of Operations 2009 Compared to 2008” for additional details concerning the results for 2009.

The Company intends that certain matters discussed in this report 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 by reference to this footnote or 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 report. Certain of such risks and uncertainties are described in close proximity to such statements or elsewhere in this report, including under the caption “Risk Factors” in Item1A and under “Cautionary Statements” in Item7 of this report. 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 report are made only as of the date of the filing of this report (February 23, 2010), and the Company disclaims any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

28

Table of Contents

Overview

The Company’s financial results continue to be impacted by the difficult economic environment and the related cost of restructuring its business. Net income and diluted earnings per share for the first quarter of 2009 were down 37.4% and 36.7%, respectively, compared to the first quarter of 2008. Net income during the quarter was affected by costs associated with restructuring activities; write-downs related to the fair value of finance receivables held for sale and the investment in retained securitization interests; and a one-time tax expense that resulted from an unanticipated change in Wisconsin tax law.

Retail sales of Harley-Davidson motorcycles also continued to be impacted by the difficult economy, with worldwide retail sales of Harley-Davidson motorcycles down 12.0% in the first quarter of 2009 as compared to the prior year quarter. In the U.S., retail sales of Harley-Davidson motorcycles in 2009 were down 9.7% and international retail sales were down 17.2% as compared to 2008. In the first quarter of 2009, the Company offered a motorcycle trade-up program as described below in Outlook. While the Company was mildly encouraged by the fact that the U.S. retail sales rate declined less in the first quarter than in the prior two quarters due in part to sales incentives offered by the Company during the period, it remains cautious and continues to expect 2009 to be an extremely challenging business environment.⁽¹⁾

Overview

The Company’s 2008 results were impacted by the difficult economic environment including lower consumer confidence and significant disruptions in global capital markets. The Company’s 2008 net revenue and net income were down 2.3% and 29.9%, respectively, compared to 2007. Operating income for the Motorcycles segment was down 21.5% while operating income for the Financial Services segment decreased 61.0%. Diluted earnings per share were $2.79 in 2008, a 25.4% decrease compared to last year’s $3.74.

The Company’s independent dealer network was also impacted by the economy, with worldwide retail sales of Harley-Davidson motorcycles down 7.1% in 2008 as compared to 2007. In the U.S., retail sales of Harley-Davidson motorcycles in 2008 were down 13.0%, while international retail sales were up 10.3% as compared to 2007. However, international retail sales growth slowed to 0.7 % during the fourth quarter of 2008 as a result of deteriorating economic conditions outside the U.S.

Overview

Overview

The Company’s collective bargaining agreement with the Pennsylvania-IAM (Union) covering approximately 2,800 workers at its assembly plant in York, Pennsylvania expired on February 2, 2007. Prior to the expiration of that contract, the union voted to reject a proposed new collective bargaining agreement for employees and authorized a strike which began immediately following the expiration of the contract. On February 22, 2007, the Company reached a new agreement with the Union, ending the strike. The new contract with the York Union employees is a three-year agreement expiring in February 2010.

The disruption caused by the strike had a significant impact on the Company’s business. As a result of the strike, the Company lost approximately four weeks of production at its York, Pennsylvania assembly facility and interrupted production at some of the Company’s other manufacturing locations.

During the first quarter of 2007, the Company’s shipments of Harley-Davidson^® motorcycles were 11,745 units lower than in the first quarter of 2006. Primarily as a result of this decrease in shipments, the Company’s net revenue for the first quarter of 2007 was $1.18 billion, down 8.3% versus the same quarter last year. Net income and diluted earnings per share for the first quarter of 2007 were also down 18.0% and 14.0%, respectively, compared to the first quarter of 2006. The decrease in diluted earnings per share includes the benefit of fewer weighted average shares outstanding when compared to the same quarter last year. Weighted-average shares outstanding were 15.4 million shares lower in the first quarter of 2007 compared to the same quarter last year, as a result of the Company’s repurchases of common stock occurring over the last year.

For the first quarter of 2007, worldwide retail sales of Harley-Davidson motorcycles decreased 1.3% versus the same period last year. In the United States, retail sales of Harley-Davidson motorcycles decreased 5.9% during the first quarter of 2007 when compared to the same quarter last year. Internationally, retail sales were up 16.5% over the first quarter of 2006 with increases of 25.7% in Europe, 14.0% in Canada and 16.7% in other foreign markets more than offsetting a 7.7% decrease in Japan.

⁽¹⁾ Note Regarding Forward-Looking Statements
The Company intends that certain matters discussed in this report 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 by reference to this footnote or 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 report. Certain of such risks and uncertainties are described in close proximity to such statements or elsewhere in this report, including under the caption “Cautionary Statements” included in this report, and in Item 1A “Risk Factors” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2006. 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 report are made only as of the date of the filing of this report (May 3, 2007), and the Company disclaims any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

14

Overview(1)

The Company’s net revenue for 2006 was $5.80 billion, up 8.6% over 2005 driven by a 6.1% increase in shipments of Harley-Davidson® motorcycles over 2005.  Net income and diluted earnings per share for 2006 were up 8.7% and 15.2%, respectively, over 2005.  The increase in diluted earnings per share includes the benefit of fewer weighted-average shares outstanding when compared to the prior year.  Weighted-average shares outstanding were lower in 2006 than in 2005 as a result of the Company’s repurchases of common stock occurring over the last two years.

The Company’s independent dealer network also reported growth over prior year with increases in retail motorcycle unit sales during 2006.  Worldwide dealer retail sales of Harley-Davidson motorcycles were up 8.5% in 2006 over 2005.  In the United States, retail sales of Harley-Davidson motorcycles grew 5.9% during 2006 when compared to the prior year.  Internationally, retail sales were up 18.6% over 2005 with increases of 14.6% in Europe, 16.3% in Japan and 15.9% in Canada.

Retail sales growth during 2006 was due in part to a positive worldwide response to the Company’s new 2007 models.  In July 2006, independent dealers began offering the Company’s new 2007 model year motorcycles.  The Company’s 2007 model offering includes the new larger Twin Cam 96TM engine and a new six-speed transmission for all Touring and Softail motorcycles, the addition of electronic fuel injection on all Sportster models and a number of new models and features.

In addition, the Company believes that the continued momentum in international dealer retail sales is also due in part to the strategies that it has been implementing over the last couple of years.  These strategies include improvements within the international dealer base, enhanced marketing programs and a more effective and efficient distribution of motorcycles worldwide.

Overview

The Company’s net revenue for the third quarter of 2006 was $1.64 billion, up 14.3% over the same quarter last year driven by a 10.8% increase in shipments of Harley-Davidson^® motorcycles over the third quarter of 2005. Net income and diluted earnings per share for the third quarter of 2006 were up 18.0% and 25.0%, respectively, over the third quarter of 2005. The increase in diluted earnings per share includes the benefit of fewer weighted average shares outstanding when compared to the same quarter last year. Weighted-average shares outstanding were 14.3 million shares lower in the third quarter of 2006 compared to the same quarter last year, as a result of the Company’s repurchases of common stock occurring over the last year. The Company’s independent dealer network also reported increases in retail motorcycle unit sales during the third quarter of 2006.

For the third quarter of 2006, worldwide dealer retail sales of Harley-Davidson motorcycles were up 8.9% over the same period last year. In the United States, retail sales of Harley-Davidson motorcycles grew 6.7% during the third quarter of 2006 when compared to the same quarter last year. Internationally, retail sales were up 18.7% over the third quarter of 2005 with increases of 9.9% in Europe, 13.7% in Japan and 30.2% in Canada.

In July 2006, independent dealers began offering the Company’s new 2007 model year motorcycles. The Company’s 2007 model offering includes the new larger Twin Cam 96^TM engine and a new six-speed transmission for all Touring and Softail motorcycles, the addition of electronic fuel injection on all Sportster models, and a number of new models and other features.

In addition, the Company believes that the continued momentum in international dealer retail sales is due in part to the strategies that it has been implementing over the last couple of years. These strategies include improvements within the international dealer base, enhanced marketing programs and a more effective and efficient distribution of motorcycles worldwide.

14

During the first nine months of 2006, Harley-Davidson dealers delivered a worldwide retail sales growth rate of 8.9% over the same period in 2005. The Company continues to be pleased with worldwide retail sales and believes its dealers are positioned to continue their retail momentum.⁽¹⁾ At the same time, the Company continues to monitor the economy and its potential impact on the Company’s business.

Overview⁽¹⁾

The Company’s net revenue for the second quarter of 2006 was $1.38 billion, up 3.3% over the same quarter last year, due primarily to a 3.5% increase in shipments of Harley-Davidson^® motorcycles over the second quarter of 2005. The Company’s independent dealer network also reported increases in retail motorcycle unit sales during the second quarter of 2006.

For the second quarter of 2006, worldwide dealer retail sales of Harley-Davidson motorcycles were up 10.0% over the same period last year. In the United States, retail sales of Harley-Davidson motorcycles grew 8.1% during the second quarter of 2006 when compared to the same quarter last year. Internationally, retail sales were up 17.3% over the second quarter of 2005 with increases in Europe and Japan of 15.6% and 15.8%, respectively. The Company believes that the continued momentum in international dealer retail sales is due in part to the strategies that it has been implementing over the last couple of years such as improvements within the international dealer base, enhanced marketing programs, and a more effective and efficient distribution of motorcycles worldwide.

During the twelve month period ended June 2006, Harley-Davidson dealers have delivered a worldwide retail sales growth rate of 8.6% over the same twelve months in the prior years. The Company continues to be pleased with worldwide retail sales and believes its dealers are positioned to continue this retail momentum. At the same time, the Company continues to monitor the strength of the economy and its impact on the Company’s business.

The Company believes that a significant part of the Company’s independent dealers’ success depends on the selection of products they are able to offer customers. Over the last several years, the Company has been working to increase the range and availability of its motorcycles at dealers to improve the customer experience. The Company believes that increased availability leads to dealers providing wider selections of motorcycles at manufacturer’s suggested retail prices and, as a result, the Company is better positioned to attract retail buyers that are new to the brand or new to the sport of motorcycling.

14

In addition, starting in July 2006, independent dealers will be offering the Company’s new 2007 model year motorcycles including the new larger Twin Cam 96^TM engine and six-speed transmission for all Touring, Softail^® and Dyna ^TM motorcycles, the addition of electronic fuel injection on all Sportster^® models, and a number of new models and other features. The worldwide average wholesale and manufacturer’s suggested retail prices on 2007 model year motorcycles are approximately 1% higher than prices on 2006 model year motorcycles.

The Company’s wholesale shipment target for the third quarter of 2006 is 97,000 Harley-Davidson motorcycles. The 2006 third quarter shipment target represents a 10.7% increase over shipments in the third quarter of last year and would result in a 6.2% increase in shipments for the first nine months of 2006 as compared to 2005. The Company’s wholesale shipment target for calendar year 2006 remains between 348,000 and 352,000 Harley-Davidson motorcycles. The Company believes that the prospects for retail growth remain strong and support a wholesale unit shipment growth rate in the range of 5% to 9% annually and an annual earnings per share growth rate of 11% to 17%.

Overview⁽¹⁾

The Company’s net revenue for the first quarter of 2006 was $1.29 billion, up 4.0% over the same quarter last year, due primarily to a 3.6% increase in shipments of Harley-Davidson^® motorcycles over the first quarter of 2005. Net income and diluted earnings per share also grew during the first quarter of 2006, with increases over the prior year quarter of 3.2% and 11.7%, respectively. The increase in diluted earnings per share includes the benefit of fewer weighted average shares outstanding when compared to the same quarter last year. The decrease in weighted-average shares outstanding was driven primarily by the Company’s repurchase of 20.6 million shares of common stock that occurred during 2005.

The Company’s independent dealer network also reported increases in retail motorcycle unit sales during the first quarter of 2006. Through the first three months of 2006, worldwide retail sales of Harley-Davidson motorcycles were up 6.9% over the same period last year. In the United States, retail sales of Harley-Davidson motorcycles grew 5.8% during the quarter. Internationally, retail sales were up 11.6% over the first quarter of 2005 with increases in Europe and Japan of 6.6% and 16.3%, respectively. Retail sales data is compiled by the Company from sales and warranty registrations provided by the Company’s independent dealers.

The Company’s wholesale shipment target for the second quarter of 2006 is 78,000 Harley-Davidson 2006 model year motorcycles. The Company is also planning to produce 13,000 Harley-Davidson 2007 model year motorcycles during the second quarter. The Company is planning to begin production of its 2007 model year motorcycles in the later part of the second quarter to prepare for the new 2007 model introduction in mid-July 2006; however, these 2007 motorcycles will not be shipped to dealers until the third quarter of 2006. The Company’s wholesale shipment target for calendar year 2006 remains between 348,000 and 352,000 Harley-Davidson motorcycles. The Company believes that the prospects for retail growth remain strong and support a wholesale unit growth rate in the range of 5 to 9 percent annually and an annual EPS growth rate of 11% to 17%.

13

Over the last several years, the Company has been working to increase the availability of its motorcycles at dealers to improve the customer experience. The Company believes that increased availability leads to independent dealers providing wider selections of motorcycles at manufacturer’s suggested retail prices and, as a result, the Company is better positioned to attract retail buyers that are new to the brand or new to the sport of motorcycling. The Company understands that improving the availability of its motorcycles to customers results in retail purchases that will track more closely with the riding season, requiring the Company and its independent dealers to balance the economies of level production with a more seasonal retail sales pattern.

The Company’s net revenue for 2005 was $5.34 billion, up 6.5% over last year, on 329,017 wholesale shipments of Harley-Davidson motorcycles. Revenue growth during 2005 was due primarily to a 3.7% increase in shipments of Harley-Davidson motorcycles combined with a favorable change in the mix of motorcycles shipped when compared to 2004. Net income and diluted earnings per share also grew during 2005 with increases over prior year of 7.8% and 13.7%, respectively. The increase in diluted earnings per share includes the benefit of fewer weighted-average shares outstanding when compared to the prior year. The Company’s outstanding shares have decreased as a result of common stock repurchases totaling 21.4 million shares during 2005.

The Company’s independent dealer network also reported increases in retail motorcycle unit sales during 2005 with worldwide retail sales of Harley-Davidson^® motorcycles increasing 6.2% over the prior year. Management believes the Company’s lineup of 2006 model year motorcycles, introduced in July 2005, helped drive worldwide retail sales growth during 2005. In the United States, 2005 retail sales of Harley-Davidson motorcycles grew 4.2% over 2004. Outside of the United States, retail sales of Harley-Davidson motorcycles grew 15.0% during 2005 when compared with 2004. During 2005, retail sales increased in all of the Company’s major international markets. The retail sales data reported above is compiled by the Company from sales and warranty registrations provided by the Company’s independent dealers.

Management believes the prospects for growth in retail sales of Harley-Davidson motorcycles remain strong and support a wholesale unit growth rate in the range of 5% to 9% annually and an annual EPS growth rate of 11% to 17%. The Harley-Davidson motorcycle shipment target for 2006 is in the range of 348,000 to 352,000 units, with planned wholesale shipments of 79,000 motorcycles during the first quarter of 2006.

Over the last several years the Company has been working to increase the availability of its motorcycles at dealers to improve the customer experience. The Company believes that increased availability will lead to independent dealers providing wider selections of motorcycles at manufacturer’s suggested retail prices and, as a result, the Company will be better positioned to attract retail buyers that are new to the brand or new to the sport of motorcycling. The Company understands that improving the availability of its motorcycles to customers may result in retail purchases that will track more closely with the riding season, requiring the Company and its independent dealers to balance the economies of level production with a more seasonal retail sales pattern.

Overview⁽¹⁾

The Company’s net revenue for the third quarter of 2005 was $1.43 billion, up 10.0% over the same quarter last year, due primarily to an 8.7% increase in shipments of Harley-Davidson motorcycles over the third quarter of 2004. Net income and diluted earnings per share also grew during the third quarter of 2005, with increases over prior year of 15.7% and 24.7%, respectively. The increase in diluted earnings per share includes the benefit of fewer weighted average shares outstanding when compared to the same quarter last year. The Company’s outstanding shares have decreased as a result of common stock repurchases totaling 20.6 million shares through the nine months of 2005.

The Company’s independent dealer network also reported increases in motorcycle unit sales during the third quarter of 2005. In the United States, retail sales of Harley-Davidson^® motorcycles grew 12.1% during the quarter, and in Europe and Japan, retail sales were up 11.5% and 13.1%, respectively. Through the first nine months of 2005, worldwide retail sales of Harley-Davidson motorcycles were up 6.9%. Retail sales data is compiled by the Company from sales and warranty registrations provided by the Company’s independent dealers.

The Company’s 2005 third quarter results keep it on track with its previously disclosed annual guidance for 2005. The Company’s shipment target for 2005 remains at 329,000 Harley-Davidson motorcycles, supporting a 2005 earnings per share growth rate in the range of 10% to 13%. Management is pleased with the positive response to the Company’s 2006 motorcycles and believes it has great new products and customer experiences planned for 2006. However, looking ahead, management is watching the economy carefully. Considering the uncertainty related to consumer confidence, increasing fuel prices and rising interest rates, the Company has set a shipment target range of 348,000 to 352,000 Harley-Davidson motorcycles for 2006. Consistent with this outlook, the Company has changed long-term guidance for Harley-Davidson motorcycle wholesale unit growth at 5% to 9% annually. The Company believes this will support a long-term earnings per share growth target in the range of 11% to 17%.

14

Overview⁽¹⁾

The Company’s net revenue for the second quarter of 2005 was $1.333 billion up from $1.328 billion in the same quarter last year. The Company shipped 77,128 Harley-Davidson units during the second quarter of 2005, a decrease of 4,906 units from the second quarter of 2004. Net income in the second quarter of 2005 was $237.4 million compared to $247.2 million in the same quarter last year. Diluted earnings per share for the second quarter were $.84 per share, up from $.83 per share during the second quarter of 2004, on weighted-average shares of 281.2 million and 296.4 million, respectively.

The Company’s second quarter shipments of Harley-Davidson motorcycles were lower than shipments in the same quarter last year, as a result of management’s previously announced decision to revise its 2005 full year shipment target. In April 2005, the Company lowered its 2005 annual Harley-Davidson motorcycle shipment target from 339,000 units to the current target of 329,000 units. This decision was made after retail sales of Harley-Davidson motorcycles in the United States during the first quarter of 2005 were down 0.9% from same period last year—falling short of management’s expectations. While remaining optimistic about retail sales growth for the remainder of 2005, management believed it was prudent to limit its short-term production growth, maintaining a level of demand that was in excess of supply. The production changes related to this reduction in motorcycle shipments were made in the second quarter of 2005. Despite the impact of reduced motorcycle shipments for the second quarter of 2005, the Company increased its consolidated quarterly revenue through a stronger motorcycle product mix and increases in revenue from Parts & Accessories and General Merchandise.

In addition, diluted earnings per share for the second quarter of 2005 were higher than the second quarter of 2004, benefiting from the Company’s repurchase of 20.6 million shares of its common stock during the first half of 2005.

Overview⁽¹⁾

During the first quarter of 2005, the Company’s revenue was $1.24 billion, up 6.0% from the same quarter last year driven by a 3.5% increase in wholesale shipments of Harley-Davidson motorcycles.

Retail sales of Harley-Davidson^® motorcycles in the United States during the first quarter of 2005 were down 0.9% from same period last year—falling short of Management’s expectations. The Company remains optimistic about retail sales growth for the remainder of 2005, however, it believes it is prudent to limit its short-term production growth, maintaining a level of demand that is in excess of supply. The Company’s shipments of Harley-Davidson motorcycles are now planned to increase from last year’s 317,000 units to a revised target of 329,000 units in 2005, down from the original target of 339,000 units. The 329,000 unit target for 2005 represents a 3.7% growth rate over 2004 shipments. The Company believes that the 10,000 unit reduction will occur almost entirely in the second quarter and will involve reducing planned production of 2005 Model Year motorcycles. Revised quarterly shipments for 2005 are expected to be as follows: 77,000 units in the second quarter, 87,500 units in the third quarter and 87,500 units in the fourth quarter.

Reducing the 2005 Harley-Davidson motorcycle shipment target also results in a change to the Company’s previous target for earnings growth in 2005. The Company now expects 2005 earnings to grow by approximately 5% to 8% in 2005 compared to the Company’s previous mid-teens earnings growth rate objective.

This volume adjustment may also prevent the Company from attaining its previous goal to satisfy demand for 400,000 Harley-Davidson motorcycle units in 2007. However, the Company’s long-term unit growth projection of 7% to 9% annually and its projection for an annual mid-teens earnings growth rate remain unchanged for 2006 and beyond.

15

The “% Change” figures included in the following section have been calculated using unrounded dollar amounts and may differ from calculations using the rounded dollar amounts presented.

Overview⁽¹⁾

During the first quarter of 2005, the Company’s revenue was $1.24 billion, up 6.0% from the same quarter last year driven by a 3.5% increase in wholesale shipments of Harley-Davidson motorcycles.

Retail sales of Harley-Davidson^® motorcycles in the United States during the first quarter of 2005 were down 0.9% from same period last year—falling short of Management’s expectations. The Company remains optimistic about retail sales growth for the remainder of 2005, however, it believes it is prudent to limit its short-term production growth, maintaining a level of demand that is in excess of supply. The Company’s shipments of Harley-Davidson motorcycles are now planned to increase from last year’s 317,000 units to a revised target of 329,000 units in 2005, down from the original target of 339,000 units. The 329,000 unit target for 2005 represents a 3.7% growth rate over 2004 shipments. The Company believes that the 10,000 unit reduction will occur almost entirely in the second quarter and will involve reducing planned production of 2005 Model Year motorcycles. Revised quarterly shipments for 2005 are expected to be as follows: 77,000 units in the second quarter, 87,500 units in the third quarter and 87,500 units in the fourth quarter.

Reducing the 2005 Harley-Davidson motorcycle shipment target also results in a change to the Company’s previous target for earnings growth in 2005. The Company now expects 2005 earnings to grow by approximately 5% to 8% in 2005 compared to the Company’s previous mid-teens earnings growth rate objective.

This volume adjustment may also prevent the Company from attaining its previous goal to satisfy demand for 400,000 Harley-Davidson motorcycle units in 2007. However, the Company’s long-term unit growth projection of 7% to 9% annually and its projection for an annual mid-teens earnings growth rate remain unchanged for 2006 and beyond.

15

The “% Change” figures included in the following section have been calculated using unrounded dollar amounts and may differ from calculations using the rounded dollar amounts presented.