Harley-DavidsonReports Record Q2 Sales and Earnings

12 July 2000

    MILWAUKEE - Harley-Davidson, Inc. today announced record sales and earnings 
for its second quarter ended June 25, 2000.  The Company's second quarter 
sales were $755.0 million, an increase of 24.0 percent over the second quarter 
last year.  Diluted earnings per share for the second quarter were 29 cents, 
a 33.4 percent increase compared to last year.

    "The market for Harley-Davidson(R) motorcycles continues to roar," said
Jeffrey L. Bleustein, chairman and chief executive officer of Harley-Davidson,
Inc.  "Our U.S. registrations are up 20 percent for the first five months of
the year, and they would be higher if not for short term production
constraints.  The U.S. heavyweight market has grown by over 25 percent during
the same period, making increased capacity for Harley-Davidson motorcycles
more important than ever.

    "We continue to work diligently with our suppliers and our employees to
increase motorcycle production while meeting the quality expectations of our
customers," said Bleustein.  "I am pleased to announce that through these
efforts we are increasing our target to 202,000 Harley-Davidson units for this
year.  This means that we will have accomplished our goal of producing 200,000
units per year by 2003 a full three years ahead of our original schedule.
Additionally, we are setting a target of 223,000 units for 2001."


    Motorcycles and Related Products Segment - Second Quarter Results

    Second quarter sales of Harley-Davidson motorcycles were $576.9 million,
an increase of 23.1 percent over the second quarter last year.  Shipments of
Harley-Davidson motorcycles in the second quarter totaled 53,329 units, up
8,558 units or 19.1 percent over last year.  Based on the Company's revised
annual target, third quarter production is expected to be 48,500 units.

    Buell(R) motorcycle sales for the second quarter totaled $20.2 million on
shipments of 3,280 units (including 1,325 new Buell Blast(TM) models),
compared to $12.5 million on shipments of 1,512 units last year.  The Company
is increasing Buell's production target to 11,000 units for the year 2000.

    Second quarter sales of Parts and Accessories (P&A), which consist of
Genuine Motor Parts and Genuine Motor Accessories, totaled $121.1 million, a
21.4 percent increase from the year-ago quarter.  General Merchandise second
quarter sales, which consist of MotorClothes(R) apparel and collectibles,
totaled $36.1 million, up 32.3 percent over the same period last year.

    "The strength of our P&A and General Merchandise sales continues to
surprise and delight us," commented Bleustein.  "On a longer term basis, we
expect growth rates for P&A revenues to continue to increase slightly faster
than Harley-Davidson's motorcycle unit growth rate.  We expect General
Merchandise to grow slightly slower than the motorcycle unit growth rate."

    Second quarter gross margin was 34.1 percent of revenue, down from
35.0 percent of revenue last year.  Gross margin was unfavorably impacted by
approximately $7 million in foreign exchange due to weakening European
currencies and a higher mix of lower margin product lines such as General
Merchandise and Buell motorcycles.

    Second quarter operating margin for the Motorcycles and Related Products
Segment was 16.9 percent of revenue, compared to 16.5 percent of revenue for
the same period last year.  The improvement in operating margin was the result
of operating expenses growing slower than the record second quarter sales.

    Harley-Davidson/Buell retail registrations are growing in all major
markets, with the U.S. up 20.0 percent through May, Europe up 7.8 percent
through April and Japan/Australia up 2.4 percent through April.


    Financial Services Segment - Second Quarter Results

    Harley-Davidson Financial Services, Inc. (HDFS) reported second quarter
operating income of $11.3 million, up 23.7 percent compared to the year-ago
quarter.


    Income tax rate

    The income tax rate for the second quarter of 2000 has been decreased to
35.2 percent versus 36.5 percent in 1999.  The Company expects an income tax
rate of 35.5 percent for the remainder of the year.


    Share Repurchase

    During the second quarter, Harley-Davidson repurchased approximately
1.5 million shares of its common stock, which brings the year-to-date total to
just under 1.8 million shares.


    Harley-Davidson, Inc. - Six Month Results

    For the six month period, sales totaled $1.44 billion, a 23.0 percent
increase over the year-ago period.  Diluted earnings per share were 55 cents,
an increase of 35.3 percent compared to the first six months last year.  When
the first quarter sale of the Harley-Davidson(R) Chrome VISA(R) card is
excluded, diluted earnings per share are 53 cents, an increase of
29.9 percent.

    Through the first six months of this year, Harley-Davidson motorcycle
revenue was $1.11 billion, a 22.9 percent increase while Buell motorcycle
revenue was $37.0 million, a 29.4 percent increase, compared with the same
period in 1999.

    For the first six months of 2000, P&A revenue totaled $216 million, a
23.6 percent increase while General Merchandise revenue totaled $69.6 million,
a 22.7 percent increase compared with the same period in 1999.

    For the first six months, HDFS operating income was $14.6 million, a
24.3 percent increase over last year.

    Harley-Davidson, Inc. is the parent company for the group of companies
doing business as Harley-Davidson Motor Company, Buell Motorcycle Company and
Harley-Davidson Financial Services, 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 and insurance programs to Harley-Davidson
dealers and customers.


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

                            Three Months Ended         Six Months Ended

                          June 25,      June 27,     June 25,     June 27,
                            2000          1999         2000         1999

    Net sales             $754,973      $608,716   $1,436,086    $1,167,283
    Gross profit           257,146       212,994      488,451       402,128
    Operating income
     Motorcycles and
      related products     127,228       100,140      239,868       191,617
     Financial services     11,282         9,118       14,614        11,760
     Corporate expenses     (2,259)       (2,624)      (5,264)       (5,426)
    Total operating income 136,251       106,634      249,218       197,951
    Interest income, net     3,424         1,992        6,296         3,481
    Gain on sale of
     credit card business       --            --       18,915            --
    Other income (expense),
     net                       189          (641)        (136)         (463)
    Income before provision
     for taxes             139,864       107,985      274,293       200,969
    Provision for income
     taxes                  49,277        39,415      103,479        73,355
    Net income            $ 90,587      $ 68,570    $ 170,814     $ 127,614

    Earnings per common share:
     Basic                    $.30          $.22         $.56          $.42
     Diluted                  $.29          $.22         $.55          $.41

    Weighted-average common shares:
     Basic                 303,337       306,162      303,123       306,128
     Diluted               308,104       311,212      307,914       311,292

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

                                     June 25,         Dec 31,       Jun 27,
                                       2000            1999          1999
                                   (unaudited)                    (unaudited)

    ASSETS
     Current assets:
      Cash and cash equivalents      $297,917        $183,415      $209,984
      Accounts receivable, net        115,743         101,708       100,813
      Finance receivables, net        451,983         440,951       369,218
      Inventories                     157,415         168,616       149,060
      Other current assets             50,760          54,304        49,745
     Total current assets           1,073,818         948,994       878,820

      Finance receivables, net        329,082         354,888       426,000
      Other long-term assets          782,326         808,195       757,370

    Total assets                   $2,185,226      $2,112,077    $2,062,190

    LIABILITIES AND SHAREHOLDERS' EQUITY
     Current liabilities:
      Current portion of finance
       debt                           $48,163        $181,163      $217,655
      Other current liabilities       422,066         336,991       324,273
     Total current liabilities        470,229         518,154       541,928

     Finance debt                     280,000         280,000       280,000
     Other long-term liabilities       81,749          77,124        62,895
     Postretirement health care
      benefits                         78,222          75,719        73,934
     Shareholders' equity           1,275,026       1,161,080     1,103,433

    Total liabilities and
     shareholders' equity          $2,185,226      $2,112,077    $2,062,190

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

                            Three Months Ended          Six Months Ended

                          June 25,       June 27,    June 25,      June 27,
                            2000           1999        2000          1999

    NET SALES (in thousands)
    Harley-Davidson(R)
     motorcycles          $576,949      $468,559   $1,112,199      $905,083
    Buell(R) motorcycles    20,188        12,518       36,950        28,565
    Parts & Accessories    121,101        99,714      215,967       174,749
    General Merchandise     36,067        27,255       69,562        56,706
    Other                      668           670        1,408         2,180
    Total net sales       $754,973      $608,716   $1,436,086    $1,167,283

    HARLEY-DAVIDSON UNITS
    Motorcycle shipments:
     United States          42,252        35,641       78,576        65,776
     Export                 11,077         9,130       23,810        20,176
    Total                   53,329        44,771      102,386        85,952

    Motorcycle product mix:
     Touring                  30.0%         27.1%        28.9%         27.0%
     Custom                   48.4          49.8         49.6          50.1
     Sportster(R)             21.6          23.1         21.5          22.9
    Total                    100.0         100.0        100.0         100.0

    BUELL UNITS
    Motorcycle shipments:
     Buell
      (excluding Blast(TM))  1,955         1,512        3,802         3,525
     Buell Blast(TM)         1,325            --        1,816            --
                             3,280         1,512        5,618         3,525

                      Year-to-date Heavyweight (651+ cc)
                   Motorcycle Retail Registrations (Units),
                        2000, through month indicated

                                     2000            1999         % change

    through May
    United States - Market          158,407         126,607         +25.1
    - HDI                            71,264          59,408         +20.0

    through April
    Europe - Market                 128,176         128,312          -0.1
    - HDI                             8,201           7,605          +7.8

    through April
    Japan/Australia - Market         20,809          21,795          -4.5
    - HDI                             4,056           3,962          +2.4

    HDI includes both Harley-Davidson and Buell motorcycles

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