Harley-Davidson Motor Company page 2 our mission Our Mission WE FULFILL DREAMS THROUGH THE EXPERIENCES OF MOTORCYCLING, BY PROVIDING TO MOTORCYCLISTS AND TO THE GENERAL PUBLIC AN EXPANDING LINE OF MOTORCYCLES AND BRANDED PRODUCTS AND SERVICES IN SELECTED MARKET SEGMENTS. It takes more than just building and selling motorcycles to fulfill the dreams of our customers. It takes unforgettable experiences. The experiences can vary. They can be as simple as Saturday morning coffee and conversations at the local Harley-Davidson dealership, as familiar as a twilight ride with local Harley Owners Group® (H.O.G.®) members or as ambitious as a ride across a continent. If there’s one secret to our enduring brand and the passion it ignites in our riders, it’s that we deliver these experiences, rather than merely a collection of products and services. And we’re dedicated to creating experiences and developing relationships with all of our stakeholders – customers, employees, investors, suppliers, governments and society. That’s what sets Harley-Davidson apart from the crowd and why our brand strength is legendary. page 3 page 4 historical milestones Historical Milestones 1903 William S. Harley and the Davidson brothers – Walter and Arthur – handcraft their first three motorcycles in Milwaukee, Wis. William A. Davidson later joins the enterprise. 1909 Introduction of the first Harley-Davidson® V-Twin engine. 1917-1918 Production of 20,000 military motorcycles to serve the U.S. Allied forces in World War I. 1930s Harley-Davidson and Indian are the sole U.S. motorcycle manufacturers to survive the Great Depression. 1941-45 Nearly all of Harley-Davidson’s manufacturing output supports the World War II effort of the U.S. and its Allies, with more than 90,000 motorcycles used by the Allied forces. 1947 To meet the exploding, postwar demand for motorcycles, Harley-Davidson acquires a second manufacturing plant – the Capitol Drive facility in Wauwatosa, Wis. 1957 The lightweight and sporty XL Sportster® model is introduced. 1965 Privately-held family ownership ends with the first public stock offering. 1969 Merger with American Machine and Foundry (AMF). 14,000 motorcycles produced annually. 1971 Introduction of the FX Super Glide® model – a hybrid of the Electra-Glide® and Sportster® models – and the start of the “factory custom.” 1973 Motorcycle final assembly moves to York, Pa., to meet growing demand. 1977 The FXRS Low Rider® joins the Harley-Davidson model line, establishing the “factory custom” phenomenon. 1981 Thirteen members of Harley-Davidson’s senior management purchase the company from AMF in a leveraged buyout and implement new quality management and manufacturing methods. 1982 Harley-Davidson successfully petitions the U.S. federal government for tariffs on imported Japanese motorcycles flooding the U.S. market. 1983 Harley Owners Group (H.O.G.) is established. 1984 Introduction of the Evolution® V-Twin engine and the first Softail® model. 1986 Return to public ownership. . . Harley-Davidson stock begins trading at $11 per share at its Initial Public Offering. The Motor Company regains its top position in the U.S. super heavyweight market. 1987 At the request of Harley-Davidson, tariffs on Japanese motorcycles end one year ahead of schedule. Harley-Davidson is listed on the New York Stock Exchange under the symbol HDI. 1991 The Dyna family of motorcycles makes its debut with the FXDB Sturgis®. 1993 Harley-Davidson Financial Services is founded. 1995 Harley-Davidson formalizes its unique Partnership relationship with its unionized workforce. 1998 Harley-Davidson acquires Buell Motorcycle Company, opens a new powertrain plant in Menomonee Falls, Wis. and builds a new final assembly plant in Kansas City, Mo. 1999 The Twin Cam 88® powertrain is introduced on the Dyna and Touring models. 2000 Stock splits for the fifth time since 1986. 2001 The Harley-Davidson VRSCA V-Rod® is introduced for the 2002 model year. It’s the first production motorcycle with a liquid-cooled engine in Company history. 2003 More than 1 million people help launch Harley-Davidson’s second century. The 100th Anniversary year is capped by a massive celebration in Milwaukee. page 5 page 6 our products & services Our Products & Services Since 1903, Harley-Davidson has produced the most enduring and recognizable motorcycles in the world. No other motorcycle has the look, the sound and the feel of our two-wheeled pieces of art. The motorcycle defines Harley-Davidson, but a wide range of other products and services is available to increase the enjoyment of the experience or give newcomers a taste of our world. A complete line of Genuine Motorcycle Parts & Accessories, apparel and branded merchandise offers our riders thousands of custom, personalized options for their bikes and themselves. Buell Motorcycle Company produces a line of sport motorcycles for riders who get their kicks from cornering and pushing their skills to the limit. And Harley-Davidson Financial Services offers a variety of financing and insurance options to help make the dream of owning a motorcycle a reality. Building the world’s best motorcycles is possible only because so many Harley-Davidson employees are both enthusiasts and customers. Their passion for our products creates the ideal working environment, where employees care about what they design, build and sell. We find that riders have their own ideas about what makes a Harley® motorcycle great. That’s why we offer thousands of attractive accessories to customize every model and why you rarely see two Harley-Davidson® motorcycles that are exactly alike. Likewise, expressing individuality is why we offer a full line of quality riding apparel as part of our MotorClothes™ apparel line. page 7 page 8 the family The Family From the moment a person is first drawn to Harley-Davidson, to their purchase and personalization of their motorcycle, and ultimately to the exhilaration of riding and sharing their dream with fellow riders, they are joining a large family. It’s a family that includes the people who design our products and build the motorcycles, those employees and suppliers who help make it all happen behind the scenes, and our dealers. We all understand that fulfilling the dreams of our customers is a tall order – one that we all strive to deliver on. Harley-Davidson and Buell dealers also know that fulfilling dreams is more than merely selling motorcycles. They know it’s about a relationship built on trust and dependability, good service and meaningful advice. Building and maintaining relationships with their customers is one of the things Harley-Davidson dealers do best. There are more than 1,300 Harley-Davidson dealerships in 60 countries worldwide, and each is more than just a place to buy our motorcycles. They are starting points and destinations, a place to talk to friends and meet other riders. Of course, full-service Harley-Davidson dealerships offer all the new motorcycles, parts and accessories, MotorClothes products, other merchandise and service. In addition, satellite stores located in shopping malls and other high-traffic locations offer added convenience to anyone in search of Harley-Davidson gear and collectibles. No one understands the family of Harley-Davidson riders better than the people who comprise the Harley Owners Group (H.O.G.) and the Buell Riders Adventure Group (BRAG®). With nearly 900,000 members worldwide, H.O.G. is the foundation of an extended family of riders and, like BRAG, gives enthusiasts loads of reasons to ride. These groups offer members a wide array of events, rides and member benefits that increase their enjoyment of riding. This is the Harley-Davidson family. Everyone is welcome. page 9 page 10 our values Our Values Tell the Truth. Be Fair. Keep Your Promises. Respect the Individual. Encourage Intellectual Curiosity. These are our values. They are the heart of how we run our business. They guide our actions and serve as the framework for the decisions and contributions our employees make at every level of the Company. More than just a list of “feel good” buzzwords, our values define the character of Harley-Davidson just as much as the motorcycles that bear the Harley-Davidson name. They reflect how we relate to each other and to all of our stakeholders, including our customers, dealers and suppliers. The company fosters these values by actively communicating their importance and encouraging employee involvement and development. We believe that our business will be most successful if we tap the contributions of each of our people. We live and work in a world where people have differing perspectives and unique backgrounds. The better we can reflect that diversity in our employees and in our planning and implementation, the more successful we will be as individuals and as a company. The future growth and viability of Harley-Davidson depends on our ability to value both differences and similarities among our employees. This is why we go to such great lengths to foster diversity. Harley-Davidson would not be where it is today without the passion of all those who work for the Company and their desire to make a difference in our business, while expanding their own horizons. Employees are the engine of our performance and the foundation of the Company’s success. page 11 page 12 employee involvement Employee Involvement One of the things that sets Harley-Davidson’s culture apart from other businesses is employee involvement. The participation of our employees in the business has been an essential component of our success. In fact, at Harley-Davidson, we consider our employees to be our greatest competitive advantage. In order to maximize employee involvement, traditional hierarchy and layers of management have been minimized, and an “open door” policy extends throughout the Company, all the way to the C.E.O.’s office. Easy access to senior management speaks volumes about our belief that every employee is expected to communicate and contribute his or her thoughts. Employees aren’t allowed to check their brains at the door or avoid responsibility or accountability. In fact they are expected to take the initiative to identify problems and solve them. In the late 1980s we created the Harley-Davidson Business Process with the goal of better aligning employees’ contributions with the Company’s goals. The idea is for the Company to share its vision so that all of our people can put their efforts into working in the same direction. To make that possible, salaried and unionized employees are full participants in many key business decisions at Harley-Davidson. Through our unique Partnering Agreement, important studies are conducted and decisions are determined jointly between company management and leaders of our two unions, the International Association of Machinists (IAM) and the Paper, Allied-Industrial, Chemical and Energy Workers (PACE.) We believe Partnering is one of the ways we can benefit from the thinking of all our employees, and we know that employee involvement has been an enabler of our success. We also recognize the contributions of our employees in a number of ways, including a bonus plan tied to the Company’s performance. page 13 page 14 leadership circles Leadership Circles Harley-Davidson operations are grouped into three broad, functional areas as depicted in the chart below. These “Circles,” as they are called, encourage a highly collaborative culture and well-coordinated decision making. The Create Demand Circle includes the marketing and sales functions for motorcycles, parts & accessories, and apparel; customer service; motorcycle styling; our owners groups; rider skills training; and the museum and archives. The Produce Products Circle includes the engineering function; manufacturing operations; materials and cost management; styling; and quality functions. The Provide Support Circle includes finance; human resources; legal; government affairs; information services; communication; strategic planning; and new-business development. Circle leaders jointly manage their respective circle business and develop strategy. No single individual is the circle leader. Rather, the leadership role of each circle moves to different members based on the issue being addressed. All three circles overlap to create the Leadership and Strategy Council (LSC). The LSC consists of members from each Circle, as well as the Chief Operating Officers of Harley-Davidson Motor Company, Buell Motorcycle Company and Harley-Davidson Financial Services, and the Chief Executive Officer of Harley-Davidson, Inc. The LSC is responsible for making decisions on business issues that impact the entire Company, developing high-level policies and advising the C.E.O. Create Demand Leadership and Strategy Council Provide Support Produce Products page 15 page 16 sharing our success Sharing Our Success At Harley-Davidson, we believe that being a leader in our industry includes a responsibility for bettering society. That’s why we support the needs of the communities in which we work and why we encourage our employees to get involved as volunteers. A Strong Foundation. Each year, a portion of the Company’s profits is earmarked for the Harley-Davidson Foundation. The Foundation was formed in the early 1990s, and has consistently provided support to non-profit organizations and specific endeavors that will improve the quality of life in the communities in which Harley-Davidson does business. To allow the Company to have the greatest impact with its donations, the Foundation focuses the lion’s share of its giving on education and community revitalization. Additionally, the Foundation supports arts and culture, health initiatives and the environment. Dollars for Hours. Through a Volunteer Matching-Hours Program, Harley-Davidson employees are encouraged to volunteer and commit their time and talent to non-profit community organizations. The hours they contribute are matched with a company contribution to the organization. Muscular Dystrophy Association. Harley-Davidson has been a corporate sponsor of the M.D.A over the course of more than two decades. The Harley-Davidson family of employees, customers, suppliers and dealers has raised more than $50 million for the fight against neuromuscular diseases since our relationship began. page 17 page 18 operations & tours Operations & Tours Harley-Davidson, Inc. employs some 9,000 people worldwide. Corporate headquarters are in Milwaukee, Wis. The Company’s domestic production facilities are located in the Milwaukee area, East Troy and Tomahawk, Wis.; York, Pa.; and Kansas City, Mo. Other key business operations are located in Chicago, Ill.; Franklin, Wis.; Talladega, Ala.; Valley View, Ohio; Ann Arbor, Mich.; Carson City and Reno, Nev.; and Plano, Tex. Harley-Davidson also maintains operations in strategic international markets, including throughout the continent of Europe, and in Brazil and Japan, to support its worldwide dealer and distributor network. Plant tours are conducted regularly at powertrain operations in Milwaukee, vehicle operations in York, and vehicle and powertrain operations in Kansas City. We welcome the opportunity to show you around! Please call in advance for tour hours and information: 877-883-1450. page 19 www.harley-davidson.com © 2004 H-D®. All Rights Reserved. Printed in the U.S.A.