HARLEY-DAVIDSON REPORTS BROAD IMPROVEMENT IN FULL-YEAR RESULTS FROM CONTINUING OPERATIONS FOR 2010 Company Generates Full-Year EPS of $1.11 from Continuing Operations Performance Reflects Strong Rebound at HDFS, Progress on Business Strategy and at Retail Company Forecasts 2011 Shipment Growth MILWAUKEE, Jan. 25, 2011 — Harley-Davidson, Inc. (NYSE: HOG) reported full-year 2010 income from continuing operations of $259.7 million, or $1.11 per share, compared to income of $70.6 million, or $0.30 per share, from continuing operations in 2009. For the fourth quarter of 2010, Harley-Davidson recorded a loss from continuing operations of $42.1 million, or $0.18 per share, which includes the impact of a one-time, $85.2 million charge from the Company’s early repurchase of senior unsecured notes during the quarter. Retail sales of new Harley-Davidson motorcycles in the fourth quarter were nearly level with the year-ago period, decreasing 1.0 percent worldwide and 0.2 percent in the U.S. The Company’s financial services unit, Harley-Davidson Financial Services, was a key contributor to 2010 earnings, with operating income from financial services of $181.9 million for the full year, including $43.5 million in the fourth quarter. Operating income from motorcycles and related products was $378.8 million for the full year, including an operating loss of $6.8 million in the fourth quarter. “We feel good about our 2010 results,” said Keith Wandell, President and Chief Executive Officer of Harley-Davidson, Inc. “Through the hard work of a lot of very dedicated and talented employees and dealers, we have made strong progress at transforming our business to be leaner, more agile and even more effective at delivering great products and customer experiences. “In 2010, we expanded our international footprint, saw improvement in our motorcycle segment results driven by the restructuring of our operations and returned HDFS to solid profitability. A strong, financially sound Harley-Davidson is key to our ability to invest in the business and grow. While there is still hard work ahead and we remain cautious in our outlook, I am confident that we are positioning Harley-Davidson to succeed and deliver value for all our stakeholders into the future,” Wandell said. 2010 Retail Harley-Davidson Motorcycle Sales Fourth Quarter: During the fourth quarter of 2010, retail sales of new Harley-Davidson motorcycles decreased 1.0 percent worldwide, down 0.2 percent in the U.S. and down 2.1 percent in international markets, compared to the prior-year quarter. Industry-wide U.S. heavyweight motorcycle (651cc-plus) retail unit sales decreased 14.8 percent in the fourth quarter compared to the year-ago period. Full Year: For the full year 2010, worldwide retail sales of Harley-Davidson motorcycles decreased 8.5 percent compared to 2009. U.S. retail sales of Harley-Davidson motorcycles decreased 11.7 percent for the full year, while the U.S. heavyweight market segment was down 14.6 percent, compared to 2009. In international markets, retail sales of new Harley-Davidson motorcycles decreased 1.9 percent for the full year compared to 2009. For the full year, dealers sold 222,110 new Harley-Davidson motorcycles worldwide at retail, including 143,391 in the U.S. “In the U.S., we are the market share leader in new on-road motorcycle sales, not only to Boomers but to young adults, women, African-American and Hispanic riders. In Europe, we moved into the number two market share spot for heavyweight motorcycles in 2010. For 2011, we plan to build on our position as one of the strongest brands in the world through our continued focus on customer-led products and experiences,” said Wandell. Fourth quarter and full year data are listed in the accompanying tables. Harley-Davidson Motorcycles and Related Products Segment Financial Results Fourth Quarter: Revenue from Harley-Davidson motorcycles in the fourth quarter of 2010 was $697.8 million, up 26.4 percent compared to the year-ago period. The Company shipped 44,481 Harley-Davidson motorcycles to dealers and distributors worldwide during the quarter, compared to shipments of 35,938 motorcycles in the fourth quarter of 2009. Revenue from Parts and Accessories totaled $149.4 million during the quarter, up 3.3 percent, and revenue from General Merchandise, which includes MotorClothes® apparel, was $61.5 million, down 7.9 percent compared to the year-ago period. Gross margin was 29.6 percent in the fourth quarter, compared to 20.3 percent in the year-ago period. Fourth-quarter 2010 gross margin benefited from favorability on product mix and foreign currency, while fourth-quarter 2009 gross margin was adversely affected by higher fixed costs spread over fewer units and the impact of exiting the Buell product line. The Company had an operating loss in the fourth quarter from motorcycles and related products of $6.8 million compared to an operating loss of $221.8 million in the year-ago period. Full Year: In 2010, the Company shipped 210,494 Harley-Davidson motorcycles, in line with its target range of 207,000 to 212,000 motorcycles. Full-year 2010 shipments were 5.6 percent lower than 2009, when the Company shipped 223,023 units. Revenue from Harley-Davidson motorcycles for the full year was $3.14 billion, a 1.2 percent decrease compared to 2009. Full-year P&A revenue was $749.2 million, a 2.4 percent decrease from the year-ago period. General Merchandise revenue was $259.1 million, an 8.2 percent decrease compared to 2009. Gross margin for the full year 2010 was 34.2 percent and operating margin was 9.1 percent, compared to 32.3 percent and 7.3 percent respectively in 2009. Financial Services Segment Fourth Quarter: The financial services segment recorded operating income of $43.5 million in the quarter, compared to an operating loss of $7.1 million in the year-ago quarter. The improvement in year-over-year operating income is largely the result of higher net interest income and lower provision for credit losses. Full Year: For the full year 2010, operating income from financial services was $181.9 million, compared to an operating loss of $118.0 million in 2009. Full-year 2009 results were affected by two non-recurring, non-cash charges totaling $101.1 million. Guidance In 2011, the Company expects to ship 221,000 to 228,000 Harley-Davidson motorcycles to dealers and distributors worldwide, an approximate five percent to eight percent increase compared to 2010. The Company expects to ship more motorcycles to U.S. dealers than it anticipates dealers will sell at retail in 2011, to return aggregate U.S. dealer inventory to what the Company believes is an appropriate level. In the first quarter of 2011, Harley-Davidson expects to ship 51,000 to 56,000 motorcycles. The Company expects 2011 gross margin to be between 34.0 percent and 35.0 percent. Harley-Davidson expects full-year capital expenditures of between $210 million and $230 million, including $60 million to $75 million to support restructuring activities. Restructuring Update The Company is lowering its cost estimates for previously announced restructuring activities which began in 2009 by $10 million to $25 million, and now expects the restructuring to result in total one-time charges of $495 million to $510 million into 2012, including charges of $85 million to $95 million in 2011. The Company expects to realize savings of $210 million to $230 million in 2011, and $275 million to $295 million in 2012, from restructuring activities initiated since early 2009. Upon completion of the restructuring activities, Harley-Davidson continues to expect to realize annual ongoing savings of $290 million to $310 million, beginning in 2013. In 2010, the Company incurred restructuring charges of $164 million and realized savings of $172 million. The Company and the unions representing its production employees in Kansas City, Mo. are scheduled to begin negotiations this week on a new labor agreement to replace the current contract which is set to expire in July 2012. The Company has advised the unions that the Kansas City operations must become more competitive and flexible if those operations are to remain viable. The Company expects to make a decision on the future of the Kansas City operations in early March 2011, and will provide any updated cost and savings information at such time as it discloses a final decision. Income Tax Rate For the full year 2010, the Company’s effective income tax rate from continuing operations was 33.5 percent, compared to 60.5 percent in 2009. The 2009 effective tax rate was unfavorably impacted by a one-time tax charge related to a Wisconsin tax law change and a non-deductible goodwill charge. In 2011, the Company expects its full-year effective tax rate from continuing operations to be approximately 35.0 percent. Cash Flow Cash and marketable securities totaled $1.16 billion as of Dec. 31, 2010, compared to $1.67 billion at year-end 2009. For the full year 2010, cash provided by operating activities from continuing operations was $1.16 billion, compared to $609.0 million in 2009, and capital expenditures were $170.8 million in 2010, compared to $116.7 million in 2009. In December 2010, Harley-Davidson repurchased $297.0 million (face value) of senior unsecured notes more than three years ahead of their Feb. 14, 2014 maturity date, at a price of $380.8 million, using cash on hand, and subsequently retired the debt. If held to maturity, Harley-Davidson would have incurred approximately $438 million in principal and interest payments over the remaining life of the notes. Discontinued Operations In the third quarter, the Company completed the divesture of its MV Agusta subsidiary. For the full year, Harley-Davidson incurred a $113.1 million loss, net of tax, from discontinued operations, comprised of operating losses as well as fair value adjustments. Including discontinued operations, the Company reported earnings per share of $0.62 for the full year. Company Background Harley-Davidson, Inc. is the parent company for the group of companies doing business as Harley-Davidson Motor Company (HDMC), Harley-Davidson Financial Services (HDFS) and Buell Motorcycle Company (Buell).