HARLEY-DAVIDSON DELIVERS GROWTH
January 29 2013.


A strong fourth-quarter 2012 capped a year of gains for Harley-Davidson, Inc. (NYSE: HOG), marked by solid growth in earnings and retail new motorcycle sales.

Fourth-quarter income from continuing operations was $70.6 million on consolidated revenue of $1.17 billion, compared to income from continuing operations in the year-ago period of $54.6 million on consolidated revenue of $1.18 billion. Fourth-quarter 2012 earnings per share were $0.31, up 29.2% compared to EPS of $0.24 in the year-ago quarter.

For the full year, Harley-Davidson income from continuing operations was $623.9 million on consolidated revenue of $5.58 billion, compared to full-year 2011 income from continuing operations of $548.1 million on consolidated revenue of $5.31 billion. Full-year 2012 EPS was $2.72, up 16.7% from EPS of $2.33 in 2011.

Worldwide retail sales of new Harley-Davidson motorcycles grew 7.5% in the quarter and 6.2% for the full year, compared to the year-ago periods.

"Thanks to the outstanding efforts of our employees, dealers and suppliers, Harley-Davidson achieved its growth and restructuring goals in 2012," said Keith Wandell, chairman, president and chief executive officer.

"The ambitious restructuring of our manufacturing operations, aimed at delivering better responsiveness for customers and greater operating efficiency, is now largely behind us," Wandell said. "Motorcycle sales grew in 2012, fueled by exceptional products and retail experiences. Together with our dealers, we grew sales to U.S. outreach customers faster than to core customers, grew U.S. market share and continued to expand internationally.

"Harley-Davidson's purpose is to fulfill the dreams of personal freedom for people around the world. Through our strategy, we believe the company is poised to deliver on that purpose like never before," Wandell said.

Retail Harley-Davidson Motorcycle Sales
For the full year 2012, retail unit sales of new Harley-Davidson motorcycles grew 6.2% worldwide, with increases of 6.6% in the U.S. and 5.6% internationally compared to 2011. Dealers sold 249,849 new Harley-Davidson motorcycles worldwide in 2012, with retail unit sales up 39.2% in the Latin America region, 14.3% in the Asia Pacific region and 6.2% in the North America region (U.S. and Canada) and down 3.0% in the EMEA region compared to 2011.

In the fourth quarter, retail sales of new Harley-Davidson motorcycles increased 7.5% worldwide, compared to the prior-year period, with unit sales up 8.4% in the U.S. and up 6.3% in international markets. Dealers sold 43,405 new Harley-Davidson motorcycles worldwide in the quarter, with retail unit sales up 23.5% in the Latin America region, 14.8% in the Asia Pacific region and 7.3% in the North America region and down 3.3% in the EMEA region compared to last year's fourth quarter.

Industry-wide U.S. heavyweight new motorcycle (651cc-plus) retail unit sales increased 4.0% in 2012 compared to 2011.


Harley-Davidson Motorcycles and Related Products Segment Results
Fourth-Quarter Results: Fourth-quarter operating income from motorcycles and related products was $53.1 million, a 49.4% increase compared to operating income of $35.6 million in the year-ago period. Operating income in the quarter benefited from lower restructuring costs and higher gross margin compared to the prior-year period.

Revenue from motorcycles during the fourth quarter of 2012 of $771.1 million was down 2.6% compared to the year-ago period. The Company shipped 47,067 motorcycles to dealers and distributors worldwide during the quarter. In the year-ago period, the Company shipped 50,730 motorcycles. Fourth-quarter shipments were in line with guidance and consistent with the Company's previously announced plans for lower shipments in the quarter related to the implementation of seasonal surge production at York in the first half of 2013. The Company believes surge production will provide the flexibility to produce more motorcycles closer to customer demand during the prime selling season.

Revenue from motorcycle parts and accessories totaled $161.6 million during the quarter, up 0.2%, and revenue from general merchandise, which includes MotorClothes¬ģ apparel and accessories, was $74.0 million, up 6.8%, compared to the year-ago period.

Gross margin was 31.8% in the fourth quarter of 2012, compared to 31.2% in the fourth quarter of 2011. Fourth-quarter operating margin from motorcycles and related products was 5.3%, compared to operating margin of 3.5% in last year's fourth quarter.

Twelve-Month Results: For the full year 2012 the Company shipped 247,625 motorcycles to dealers and distributors, a 6.2% increase compared to 2011. Full-year revenue from motorcycles grew 5.9% to $3.76 billion, revenue from parts and accessories grew 5.3% to $859.9 million and revenue from general merchandise grew 9.2% to $299.4 million, compared to 2011. Gross margin for the full year was 34.8% and operating margin was 14.5%, compared to 33.4% and 12.0% respectively in 2011.

Financial Services Segment Results
Operating income from financial services was $63.0 million in the fourth quarter of 2012, a 10.9% increase compared to operating income of $56.8 million in last year's fourth quarter. Full-year 2012 operating income from financial services was $284.7 million, a 5.9% increase compared to operating income of $268.8 million in 2011. Results for the fourth quarter and full year reflect continued improvement in credit loss performance year over year and lower interest expense.


Harley-Davidson expects to ship 259,000 to 264,000 motorcycles to dealers and distributors worldwide in 2013, an approximate 4-1/2% to 6-1/2% increase from 2012. In the first quarter of 2013, the Company expects to ship 71,000 to 76,000 motorcycles, an approximate increase of 10% to 18% from the year-ago period. The Company's first-quarter shipment plan reflects the implementation of surge production at York in the first half of 2013. The Company expects full-year 2013 gross margin of 35.25% to 36.25 %. The Company expects capital expenditures of $200 million to $220 million in 2013.