Harley-Davidson, Inc. Reports Record Third Quarter Performance

13 October 1999

    MILWAUKEE, Oct. 11 -- Harley-Davidson, Inc. today
announced record sales and earnings for its third quarter ended September 26,
1999.  The Company's third quarter sales were $623.2 million, an increase of
20.5 percent over the third quarter last year. Earnings per share for the
third quarter were 42 cents, a 25.0 percent increase compared with last year.
"During the third quarter we launched a completely redesigned Softail(R)
family consisting of seven models, all of which are powered by our new Twin
Cam 88B(TM) counterbalanced engine, " said Jeffrey L. Bleustein, chairman and
chief executive officer of Harley-Davidson, Inc.
    "Based upon the positive reception of our new model year 2000 products by
the motorcycle press, our dealers and our customers, and the continuing
strength of the worldwide heavyweight motorcycle market, we have increased our
Harley-Davidson(R) motorcycle production target for 1999 to 175,000 units,"
said Bleustein.  "With this same confidence in the motorcycle market and our
production capabilities, we are establishing a production target of 193,000
Harley-Davidson motorcycles for the 2000 calendar year."

    Motorcycles and Related Products Segment  --  Third Quarter Results
    Third quarter sales of Harley-Davidson motorcycles were $455.7 million, an
increase of 18.9 percent over the third quarter last year.  Shipments of
Harley-Davidson motorcycles totaled 42,615 units, up 6,187 units or 17.0
percent over last year.
    Buell(R) motorcycle sales for the quarter totaled $16.7 million on
shipments of 1,984 units, an increase of $7.5 million or 915 units relative to
last year.
    Sales of Parts and Accessories (P&A), which consist of Genuine Motor
Parts(TM) and Genuine Motor Accessories(TM), totaled $109.6 million, a
21.5 percent increase from the year-ago quarter. Third quarter sales of
General Merchandise, which consists of MotorClothes(R) apparel and
collectibles, totaled $40.9 million, up 22.2 percent over the same period last
year.
    Third quarter gross margin was 32.8 percent of revenue, down slightly from
33.1 percent of revenue last year.  Additional costs associated with the most
extensive product launch in recent company history and the effect of a higher
proportion of lower margin Sportster(R) motorcycles resulted in a lower gross
margin.
    Third quarter operating margin for the Motorcycles and Related Products
Segment was 15.4 percent of revenue, which is identical to last year's record
third quarter operating margin.  "These record earnings and margin are
noteworthy considering the significant investments that we are making in our
future and the aggressive product launch that we executed during the quarter,"
said Bleustein.
    The worldwide heavyweight motorcycle market continues to grow rapidly. In
the U.S., total industry retail registrations have grown at 22.7 percent,
while registrations of Harley-Davidson and Buell motorcycles have grown at
25.7 percent through August, increasing the Company's market share.  Harley-
Davidson and Buell are also gaining market share in both the Europe and
Asia/Pacific markets.  (See table that follows for more detail.)

    Financial Services Segment
    Harley-Davidson Financial Services, Inc. (formerly Eaglemark Financial
Services, Inc.), a subsidiary of Harley-Davidson, Inc., reported third quarter
operating income of $7.5 million, up $3.9 million compared to the year-ago
quarter.  The subsidiary financed 22.5 percent of the Company's U.S.
motorcycle retail sales compared with 19.9 percent during the year ago period.
It has further benefited from the increase in Harley-Davidson's U.S. retail
sales volume.

    Share Repurchase
    During the third quarter, Harley-Davidson repurchased approximately
1.4 million shares of its common stock.  This brings the 1999 year-to-date
repurchase to a total of 2.4 million shares.

    Nine Month Results
    For the nine month period, sales totaled $1,790 million, a 19.3 percent
increase over the year-ago period.  Diluted earnings per share were $1.24, an
increase of 26.0 percent compared to the first nine months last year.
    Through the first nine months of this year, Harley-Davidson motorcycle
revenue was $1,361 million, an 18.8 percent increase, while Buell motorcycle
revenue was $45.3 million, a 29.9 percent increase compared with the same
period in 1998.
    For the first nine months of 1999, P&A revenue totaled $284.4 million, a
22.1 percent increase, while General Merchandise revenue totaled $97.6
million, a 14.6 percent increase compared with the same period in 1998.

    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 be statements that describe the Company's
future plans, objectives, targets or goals. Such forward-looking statements
are subject to certain risks and uncertainties that could cause actual results
to differ materially from those anticipated as of the date of this release.
Certain of such risks and uncertainties are described below. Shareholders,
potential investors, and other readers are urged to consider these factors in
evaluating the forward-looking statements and cautioned not to place undue
reliance on such forward-looking statements. The forward-looking statements
included in this release are only made as of the date of this release, and the
Company undertakes no obligation to publicly update such forward-looking
statements to reflect subsequent events or circumstances.
    The Company's ability to reach targeted production objectives depends
upon, among other factors, (i) continued realization of production
efficiencies at its manufacturing facilities; (ii) successful implementation
of production capacity increases in its facilities; (iii) the sale of all
motorcycles the Company has the capacity to produce; (iv) product
availability; and (v) successful introduction of new products. In addition,
the Company could experience delays in the operation of manufacturing
facilities, work stoppages, difficulty with suppliers, natural causes or other
factors. Risk factors are also disclosed in securities documents previously
filed by the Company with the Securities and Exchange Commission.
    Harley-Davidson, Inc. is the parent company for Harley-Davidson Motor
Company, Buell Motorcycle Company and Harley-Davidson Financial Services, Inc.
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 and sport-touring motorcycles.  Harley-
Davidson Financial Services, Inc. provides wholesale and retail financing,
insurance and credit card programs to Harley-Davidson dealers and customers.

    TABLES FOLLOW

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

                              Three Months Ended         Nine Months Ended

                              Sep. 26,    Sep. 27,      Sep. 26,     Sep. 27,
                                1999        1998         1999          1998

    Net sales                $623,193    $517,198    $1,790,476    $1,500,889
    Gross profit              204,658     171,139       606,786       498,542
    Operating income
    Motorcycles and related
     products                  95,907      79,870       287,524       234,167
    Financial services          7,514       3,599        19,274        12,539
    Corporate expenses         (2,024)     (3,330)       (7,450)       (8,521)
    Total operating income    101,397      80,139       299,348       238,185
    Interest income, net        2,090       1,056         5,571         2,442
    Other income (expense), net  (556)      1,287        (1,019)         (508)
    Income before provision
     for taxes                102,931      82,482       303,900       240,119
    Provision for income taxes 37,569      30,110       110,924        87,647
    Net income                $65,362     $52,372      $192,976      $152,472

    Earnings per common share:
      Basic                      $.43        $.34         $1.26         $1.00
      Diluted                    $.42        $.34         $1.24          $.99

    Weighted-average common shares:
      Basic                   152,196     152,434       152,770       152,069
      Diluted                 154,604     154,903       155,294       154,558


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

                                          Sep. 26,     Dec. 31,     Sep. 27,
                                            1999         1998         1998
                                         (unaudited)               (unaudited)
    ASSETS
    Current assets:
      Cash and cash equivalent           $163,834      $165,170      $122,146
      Accounts receivable, net            125,554       113,417       112,305
      Finance receivables, net            419,955       360,341       337,924
      Inventories                         166,812       155,616       145,019
    Other current assets                   53,369        50,419        52,105
    Total current assets                  929,524       844,963       769,499

    Finance receivables, net              389,263       319,427       352,866
    Other long-term assets                766,991       755,819       695,492

    Total assets                       $2,085,778    $1,920,209    $1,817,857

    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities:
      Current portion of finance debt    $173,974      $146,742      $132,413
      Other current liabilities           388,427       321,773       302,177
    Total current liabilities             562,401       468,515       434,590

    Finance debt                          280,000       280,000       280,000
    Other long-term liabilities            66,652        69,700        63,510
    Postretirement health care benefits    74,183        72,083        70,605
    Total shareholders' equity          1,102,542     1,029,911       969,152

    Total liabilities and
     shareholders' equity              $2,085,778    $1,920,209    $1,817,857


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

                               Three Months Ended        Nine Months Ended

                              Sep. 26,    Sep. 27,     Sep. 26,     Sep. 27,
                                1999       1998          1999         1998

    NET SALES (in thousands)
    Harley-Davidson(R)
     motorcycles             $455,650    $383,336    $1,360,733    $1,145,554
    Buell(R) motorcycles       16,749       9,234        45,314        34,893
    Parts & Accessories       109,604      90,222       284,353       232,826
    General Merchandise        40,919      33,473        97,625        85,164
    Other                         271         933         2,451         2,452
    Total net sales          $623,193    $517,198    $1,790,476    $1,500,889

    HARLEY-DAVIDSON UNITS
    Motorcycle shipments:
       United States           31,764      27,126        97,540        79,776
       Export                  10,851       9,302        31,027        28,887
          Total                42,615      36,428       128,567       108,663

    Motorcycle product mix:
        Touring                  27.8%       26.3%         27.2%         25.1%
        Custom                   47.3        49.9          49.2          52.3
        Sportster                24.9        23.8          23.6          22.6
           Total                100.0       100.0         100.0         100.0

    BUELL UNITS
    Motorcycle shipments        1,984       1,069         5,509         3,916


          Available 651cc+ Motorcycle Retail Registrations (Units).

                                             1999       1998    % change

    UNITED STATES (August YTD)             207,529    169,090    +22.7
      HDI                                   95,755     76,190    +25.7

    EUROPE (July YTD)                      242,086    213,345    +13.5
      HDI                                   15,156     12,957    +17.0

    JAPAN/AUSTRALIA (July YTD)              40,084     39,155     +2.4
      HDI                                    7,067      6,379    +10.8

    TOTAL                                  489,699    421,590    +16.2
      HDI                                  117,978     95,526    +23.5

    HDI includes both Harley-Davidson and Buell motorcycles

    Sources:  Motorcycle Industry Council, Giral S.A., JAMA, ABS