OVERVIEW - Harley-Davidson USA

2016 Investor Relations Presentation

OVERVIEW MARCH 2016


INVESTOR PRESENTATION MARCH 2016

John Olin, Senior Vice President and CFO

Amy Giuffre, Director of Investor Relations

Contact: [email protected]

HARLEY-DAVIDSON, INC.

This presentation includes forward-looking statements that are subject to risks that could cause actual results to be

materially different. Those risks include, among others, matters we have noted in our latest earnings release and filings

with the SEC. Harley-Davidson disclaims any obligation to update information in this presentation. Additional

information and risk factors are included at the end of this presentation. The images in this presentation may not be

reproduced without consent.

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COMPETITIVE ADVANTAGES BRAND / PRODUCT / DISTRIBUTION / HDFS


BRAND

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HARLEY-DAVIDSON IS ONE OF THE STRONGEST, MOST RECOGNIZABLE

BRANDS. WE INSPIRE FREEDOM AND INDEPENDENCE AROUND THE WORLD


Model year 2016 includes 40 models priced from $6,849 to $40,299 U.S. MSRP

Full range of motorcycles targeted to meet the needs of diverse customer targets

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HARLEY-DAVIDSON MOTORCYCLES LOOK, SOUND AND FEEL

AUTHENTIC, PREMIUM AND CUSTOM

CORE

RIDERS

OUTREACH

RIDERS

INTERNATIONAL

RIDERS

PRODUCT LEADERSHIP


Over 1500 dealer points globally

Largely exclusive network – focused on H-D brand

Profitable and reinvesting in EXPERIENCE

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Seven Islands Harley-Davidson -

Mumbai, India

DEALER NETWORK

H-D Black Label

Concept Store,

Saigon

GROWING, GLOBAL DEALERS DELIVERING A PREMIUM EXPERIENCE

Alternative channels – Ecommerce,

Black Label, Smart Store Pop-Up retail


Largest financier of motorcycles - 1 of every 2 bikes sold in U.S.

Exclusive to Harley-Davidson dealers - consistent source of retail/wholesale financing

Experience - easy, responsive, provider of financing, insurance, extended service

Profitable business segment - strong margins and return on equity

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HARLEY-DAVIDSON FINANCIAL SERVICES

HDFS ENABLES AND ENHANCES THE HARLEY-

DAVIDSON PURCHASE EXPERIENCE


PERFORMANCE SUMMARY SEGMENTS / FINANCIAL RESULTS / RETAIL SALES / EXPECTATIONS

2016 Investor Relations Presentation 9

BUSINESS SEGMENTS

2015 REVENUE

$6.0 B

Motorcycles and Related

Products Segment

Motorcycles

$4.13B

Parts and

Accessories

$862.6M

General

Merchandise

$292.3M Financial Services

Segment

Insurance /

Other

$68.7M

Wholesale

Financing

$61.9M

Retail

Financing

$ 556.6M

Motorcycles

Parts and

Accessories

General Merchandise

Financial Services


FINANCIAL RESULTS

Motorcycles Segment operating income down on lower revenue driven by lower shipments and unfavorable currency exchange

– Strong gross margin percent – up 0.4 pts to 36.8% vs. PY

Financial Services Segment operating income up

Higher corporate interest expense behind recapitalization

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Consolid

ate

d –

Moto

rcycle

s a

nd R

ela

ted P

roducts

and F

inancia

l S

erv

ices S

egm

ents

REVENUE NET INCOME EPS

$6.0 $752.2 $3.69 Billion Million

(3.7)% (10.9)% (4.9)%

FY 2015 VS. 2014


U.S. 168,240 Europe [16 country]

36,894

Asia Pacific 32,258

Latin America 11,173

Canada 9,669

Other Intl. 6,393

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2015 RETAIL SALES

WW 264,627

[-1.3%]

2015 HARLEY-DAVIDSON MOTORCYCLE

RETAIL SALES (UNITS)

United States

• 2015 retail [-1.7%]

• 64% of total sales

International

• 2015 retail [-0.5%]

• 36% of total sales


Motorcycles and related products

segment

Motorcycle shipments 269,000 – 274,000 , up 1% to 3% vs. 2015 [Q1 78,000 – 83,000]

Gross margin % Down year/year

SG&A Flat to up modestly year/year – Down as a percent of revenue

Operating margin % 16% – 17%

Financial services segment

HDFS operating income Down modestly year/year

Harley-Davidson, Inc. Capital expenditures $255 - $275 million

Effective tax rate Approximately 34.5%

as of January 28, 2016

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GUIDANCE

2016 EXPECTATIONS


STRATEGY OBJECTIVES / FOCUS AREAS


OBJECTIVES

1. LEAD IN EVERY MARKET

2. GROW THE SPORT OF MOTORCYCLING IN THE U.S.

• Grow number of U.S. core customers and grow U.S. outreach customers at a

faster rate

3. GROW U.S. RETAIL SALES AND GROW INTERNATIONAL

RETAIL SALES AT A FASTER RATE

• Add 150 to 200 new international dealerships by 2020

4. GROW REVENUE AND GROW EARNINGS FASTER THAN

REVENUE THROUGH 2020

5. OUTPERFORM THE S&P 500

WE OUR EXECUTING OUR PLAN TO LEAD AND GROW


1. INCREASE PRODUCT AND BRAND AWARENESS

2. GROW NEW RIDERSHIP IN THE U.S.

3. INCREASE AND ENHANCE BRAND ACCESS

4. ACCELERATE THE CADENCE AND IMPACT OF

NEW PRODUCTS

FOCUS AREAS

WE ARE SHARPENING OUR FOCUS, INVESTING AND LEVERAGING OUR

STRATEGIC ADVANTAGES TO DRIVE DEMAND NOW AND INTO THE FUTURE

FOCUS AREAS

+65% Marketing

+35% Product Development

2016

INVESTMENT $70M


FOCUS ON AWARENESS

INCREASE AWARENESS OF OUR PRODUCTS AND BRAND

Improve brand and

product awareness

among all customers 7% CAGR to Outreach since 2010

#1 in sales to young adults,

African Americans, Hispanics,

women

More sales to young adults today

then to Boomers when they were

18-34

Extend brand reach

beyond core

customers

Continue US

outreach success

Core

Outreach

+65% marketing investment

More media, more experiences,

more retail progra2016:

- 50% more U.S. riding events Q1

- 100K+ demos in EMEA

- Brand in unexpected places

H-D New Motorcycle Purchasers

Source: Company data


Attract first-time riders

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Riding Academy

U.S. graduates +35% in 2016

-Dealers offering program +18% by 6/16

-Extend learn to ride for free program

FOCUS ON US RIDERSHIP

GROW NEW RIDERSHIP IN THE U.S.

Over the last 5 years, an increasing number of first-

time, on-road motorcyclists have purchased new

H-D motorcycles. For 2015 (Oct.), over 1/3 had not

owned a motorcycle previously (IHS Automotive, Polk; retail registrations, USA, 11/1/10-10/31/15 & 1/1/15 t

10/31/15)

Harley-Davidson 101

Bring new riders into the sport and intro them

to H-D experience

-Dealer-hosted, fun events to

engage diverse customers,

remove barriers

Owned a

motorcycle

previously

First-

Motorcycle

H-D New Motorcycle Purchasers


International dealership growth

40 dealerships added in 2015

Planned +150-200 dealerships by 2020

FOCUS ON ACCESS

INCREASE AND ENHANCE BRAND ACCESS

Enhance premium experience

Riding Academy and HDFS global expansion

Global operations expansion - H-D Canada subsidiary

2015

Developing innovative and new experiences to

inspire new and current riders

Grand Opening Chengdu, China

Smart Store, San Jose, CA Dec. 2015


FOCUS ON PRODUCT IMPACT

ACCELERATE CADENCE AND IMPACT OF NEW PRODUCTS

“Fatten the Tails” - Balanced approach to delivering products across the spectrum

2016 + 35% yr/yr investment in product development

Flexible manufacturing capability – produce closer to demand – right bike, right place, right time

Transformed product development organization and methodology - reduced time-to-market by 30%

“Fatten the Tails” Product Development Approach

Street

Iron 883 Fat Bob

Breakout

Softail Slim

Street Glide

Tri-Glide

Ultra Ltd

Road King

S models

CVO

Current Customer Future Customer

Offer customer-led products that grow

and diversify our customer base


SHAREHOLDER VALUE CAPITAL ALLOCATION


SHAREHOLDER VALUE

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CAGR 25% CAGR ++

Harley-Davidson consistently returns value to our shareholders

Curr

en

t Y

ea

r

Discretionary Share Repurchases Dividends Per Share

Mu

lti-Y

ea

r

* $750 million funded by debt issuance


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Through focused investment in growth, Harley-Davidson expects to :

Harley-Davidson ® StreetTM 750 Motorcycles

drive demand

increase impact

further broaden appeal and

deliver strong value to shareholders


The company intends that certain matters discussed in this presentation 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 generally be identified as such because the context of the statement will include words such as the

company "believes," "anticipates," "expects," "plans," or "estimates" or words of similar meaning. Similarly, statements that describe future plans, objectives, outlooks, targets,

guidance or goals are also forward-looking statements. 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 presentation. 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 presentation are only made as of the date of this presentation, and the company disclaims any obligation to publicly update such forward-looking

statements to reflect subsequent events or circumstances.

The company's ability to meet the targets and expectations noted depends upon, among other factors, the company's ability to (i) execute its business strategy, including making new

investments to drive demand for its products for the costs and on the timing that are within expectations, (ii) manage through changes in general economic conditions, including

changing capital, credit and retail markets, and political events, (iii) accurately estimate and adjust to fluctuations in foreign currency exchange rates, interest rates and commodity

prices, (iv) balance production volumes for its new motorcycles with consumer demand, including in circumstances where competitors may be supplying new motorcycles to the

market in excess of demand at reduced prices, (v) execute its marketing strategy of appealing to and growing sales to multi-generational and multi-cultural customers worldwide in an

increasingly competitive marketplace, (vi) develop and introduce products, services and experiences that are successful in the marketplace, (vii) continue to develop the capabilities of

its distributors and dealers and manage the risks that its independent dealers may have difficulty obtaining capital and managing through changing economic conditions and consumer

demand, (viii) successfully access the capital and/or credit markets on terms (including interest rates) that are acceptable to the company and within its expectations, (vix) effect

repurchases of its common stock at share prices that are within its expectations, (x) complete the transition to the new direct distribution model in Canada on the timing and for the

costs that are within its expectations, (xi) prevent a cybersecurity breach involving digital consumer, employee or dealer personal data, (xii) manage the impact that prices for and

supply of used motorcycles may have on retail sales of new motorcycles, (xiii) manage risks that arise through expanding international manufacturing, operations and sales, (xiv)

manage through the effects inconsistent and unpredictable weather patterns may have on retail sales of motorcycles, (xv) manage changes and prepare for requirements in

legislative and regulatory environments for its products, services and operations, (xvi) manage supply chain issues, including quality issues and any unexpected interruptions or price

increases caused by raw material shortages or natural disasters, (xvii) detect any issues with its motorcycles or any associated manufacturing processes to avoid delays in new model

launches, recall campaigns, increased warranty costs or litigation, ((xviii) implement and manage enterprise-wide information technology solutions, including solutions at its

manufacturing facilities, (xix) continue to realize production efficiencies at its production facilities and manage operating costs including materials, labor and overhead, (xx) execute its

flexible production strategy, (xxi) continue to manage the relationships and agreements that it has with its labor unions to help drive long-term competitiveness, (xxii) adjust to

healthcare inflation and reform, pension reform and tax changes, (xxiii) retain and attract talented employees, and (xxiv) manage the credit quality, the loan servicing and collection

activities, and the recovery rates of HDFS' loan portfolio.

In addition, the company could experience delays or disruptions in its operations as a result of work stoppages, strikes, natural causes, terrorism or other factors. Other factors are

described in risk factors that the company has disclosed in documents previously filed with the Securities and Exchange Commission.

The company's ability to sell its motorcycles and related products and services and to meet its financial expectations also depends on the ability of the company's independent dealers

to sell its motorcycles and related products and services to retail customers. The company depends on the capability and financial capacity of its independent dealers and distributors

to develop and implement effective retail sales plans to create demand for the motorcycles and related products and services they purchase from the company. In addition, the

company's independent dealers and distributors may experience difficulties in operating their businesses and selling Harley-Davidson motorcycles and related products and services

as a result of weather, economic conditions or other factors.

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FORWARD LOOKING STATEMENTS

OVERVIEW - Harley-Davidson USA

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