“Last week at our annual dealer meeting in Nashville, Tennessee, we introduced our new line of 2008 models including the spectacular, limited edition 105th Anniversary motorcycles. A new Dyna Fat Bob motorcycle, along with the ground-breaking new Rocker and the Rocker C models, completely redefine the custom motorcycle category. And to top that off, we unveiled significant new features for our touring motorcycles, a major power increase for the VRSC models, and the first liquid-cooled Buell motorcycle, the 1125R. Products like these reaffirm our heavyweight category leadership,” said Ziemer.

The Company expects to ship between 91,000 and 95,000 Harley-Davidson motorcycles during the third quarter of 2007. For the full year of 2007, Harley-Davidson continues to expect EPS growth in the range of 4 - 6 percent compared to 2006 based on moderate revenue growth, lower operating margin, and the benefits of our strong free cash flow. Looking ahead to 2008 and 2009, the Company expects solid revenue growth, operating margin improvement and the continued benefits of strong free cash flow to drive EPS growth in the range of 11 - 17 percent.

“While we remain comfortable with this guidance, U.S. retail sales of Harley-Davidson motorcycles in the first half of the year have not met our expectations. As a result, we will continue to closely monitor the retail environment and regularly assess our planned wholesale shipments throughout the remainder of 2007,” said Ziemer.

Motorcycles and Related Products Segment – Second Quarter Results
Revenue from Harley-Davidson motorcycles was $1.25 billion, an increase of $226.4 million or 22.0 percent versus the same period last year. Shipments of Harley-Davidson motorcycles totaled 95,117 units, an increase of 15,321 units or 19.2 percent compared to last year’s second quarter.

Revenue from Parts and Accessories (P&A), which consists of Genuine Motor Parts and Genuine Motor Accessories, totaled $263.4 million, an increase of $11.7 million or 4.6 percent over the year-ago quarter. Revenue from General Merchandise, which consists of MotorClothes apparel and collectibles, totaled $72.7 million, an increase of $5.6 million or 8.4 percent over the year-ago quarter.

Gross margin for the second quarter of 2007 was 37.4 percent of revenue compared to 37.5 percent for the second quarter last year. Second quarter operating margin increased to 23.8 percent from 23.6 percent in the second quarter of 2006.

Motorcycle Retail Sales Data
During the second quarter, worldwide retail sales of Harley-Davidson motorcycles decreased 1.2 percent compared to the prior year second quarter. In the U.S., retail sales of Harley-Davidson motorcycles decreased 5.5 percent for the quarter. The heavyweight motorcycle market in the U.S. decreased 6.2 percent for the same period.

Retail sales of Harley-Davidson motorcycles grew 13.6 percent in international markets during the second quarter of 2007 compared to the second quarter of 2006. Second quarter retail sales increased 13.7 percent in Europe; Canada was up 9.9 percent; and Japan was up 5.2 percent. All other international markets combined were up 27.4 percent.

Financial Services Segment
Harley-Davidson Financial Services (HDFS) reported second quarter operating income of $65.2 million, an increase of $9.0 million or 15.9 percent compared to the year-ago quarter. The increase is primarily due to a higher securitization gain, increased net interest income and growth in fee income.

Income Tax Rate
The Company's second quarter effective income tax rate was 35.5 percent compared to 36.0 percent in the same quarter last year. This decrease primarily reflects the reinstatement of the federal research and development tax credit.

Harley-Davidson, Inc. - Six Month Results
For the first six months of 2007, revenue totaled $2.80 billion, a 5.1 percent increase over the year-ago period. Earnings per share were $1.89, an increase of 6.8 percent compared to the same period last year.

Through the first six months of this year, shipments of Harley-Davidson motorcycles were 162,878 units, a 2.2 percent increase compared to last year’s 159,302 units. Harley-Davidson motorcycle revenue was $2.15 billion, up 5.4 percent compared to last year’s $2.04 billion. P&A revenue totaled $451.6 million, a 3.9 percent increase over last year’s $434.7 million. General Merchandise revenue totaled $148.8 million, a 9.7 percent increase compared to $135.6 million during the same period in 2006.

HDFS operating income was $124.1 million, a 15.1 percent increase over last year’s $107.9 million.

Cash Flow
Cash and marketable securities totaled $723.4 million as of July 1, 2007. Cash flow from operations was $1.06 billion, and capital expenditures were $86.0 million during the first six months of 2007. For the full year of 2007, capital expenditures are expected to be between $300 million and $325 million.

Stock Repurchase
The Company repurchased 6.7 million shares of its common stock at a cost of $429.9 million during the second quarter of 2007. On July 1, 2007, the Company had 251.2 million shares of common stock outstanding.

As of July 1, 2007, there are 15.2 million shares remaining on a board-approved share repurchase authorization. An additional board-approved share repurchase authorization is in place to offset option exercises.