Good morning. My name is Elsa and I will be your conference operator today. At this time, I would like to welcome everyone to the Harley-Davidson fourth quarter and year-end 2007 earnings conference call. (Operator Instructions) It is now my pleasure to turn the floor over to your host, Amy Giuffre, Director of Investor Relations. Madam, you may begin your conference.

Thank you, Elsa. Good morning, everyone and welcome to Harley-Davidson's fourth quarter 2007 conference call. Over the course of the next hour, we will comment on our fourth quarter and full year financial performance, worldwide retail sales of Harley-Davidson motorcycles, and other thoughts about our business and our outlook for 2008. Harley-Davidson CFO Tom Bergmann will speak to you in a moment regarding Harley-Davidson's motorcycle and related products financial results. Tom will also speak to you about the financial results of our financial services segment as we are in the process of identifying a new CFO at Harley-Davidson Financial Services. Following Tom, Saiyid Naqvi, President of Harley-Davidson Financial Services, will share his thoughts on HDFS. Jim Ziemer will wrap up our prepared comments with his perspective on the business and our outlook for 2008. We will then open the phone lines for questions. Before we begin, I would like to remind you that this call is being recorded and a replay will be available after 11:00 a.m. Central Time this morning. Please dial 706-645-6291 and enter pin number 29424918-pound. The recording will be available through February 1st. It is also being webcast live on harley-davidson.com. The webcast will be available for replay throughout the next several weeks before being archived on the investor relations section of the Harley-Davidson website. Our comments today will include 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 call. Now I would like to turn the call over to the CFO of Harley-Davidson Inc., Tom Bergmann.

Thanks, Amy. Good morning, everyone. For those of you who haven’t had a chance to meet Amy or weren’t on the call last quarter, Amy is our new Director of Investor Relations at Harley-Davidson. Mark Van Genderen is turning his talents to his new job as managing director of Latin America. Let’s get started with a brief overview of the fourth quarter. As you can see in this morning’s release, we implemented our previously announced plan to reduce wholesale motorcycle shipments during the quarter, which resulted in lower shipments, revenue, and earnings for the fourth quarter of 2007 compared to the fourth quarter of 2006. Specifically, revenue for the quarter was $1.39 billion, or down 7.7% compared to the year-ago quarter. Net income was $186.1 million, a decrease of 26.3%. Diluted earnings per share were $0.78, or down 19.6%. In addition, during the quarter the company bought back 3.2 million shares of our common stock at a cost of $153.3 million. This brought total share repurchase activity for 2007 to 20.4 million shares at a total cost of $1.153 billion. Turning to the fourth quarter of 2007 results for the motorcycles and related products segment compared to the fourth quarter of 2006, wholesale Harley-Davidson motorcycle shipments were 81,206 units, a decrease of 12.5%. Domestic shipments of 59,092 units for the quarter were down 20.7% from the fourth quarter of 2006. This shipment volume represented 72.8% of the total volume shipped to our worldwide dealers, down from 80.2% a year ago. International shipments of 22,114 units were up 20.5% compared to the same quarter last year. International shipments grew to 27.2% of our total worldwide fourth quarter shipment volume compared to 19.8% in the fourth quarter of 2006. For the full year, domestic shipments represented 73.1% of the total shipments, down…

Thank you, Tom and good morning. In addition to getting to know our employees since joining HDFS in February of last year, my principal focus has been on understanding the needs of Harley-Davidson dealers and customers. The dealers are our primary clients and as such, their satisfaction is paramount to the success of our business. I’ve been impressed with their passion for the brand and loyalty to Harley-Davidson but most of all, I’ve been impressed with their commitment to improving the customer experience. As I met with dealers, two key themes emerged; they want a better overall experience for their retail customers and they want us to make it easier to do business with HDFS. To address these issues, we had to shift our focus and become more customer-centric. This involves taking a fresh look at all of our customer related processes and systems and changing the way we work with the dealers. To do this, we piloted a new operational structure in the third quarter of 2007. This new structure, which was implemented on January 2nd, is designed to improve our decision-making process and enhance service levels by utilizing cross-functional teams to deliver retail, loan, and insurance products. Under this new structure, dealers work closely with dedicated teams who can help fulfill all their retail, financing, and insurance needs. We also introduced a new loan origination system which simplifies and streamlines the loan application and decision-making process and generates faster credit decisions. Now this customer-centric model is already making a difference with the dealers and the additional improvements that are planned for 2008 will strengthen our relationship with them even further. Also, in 2007 we made changes to our underwriting and loss mitigation activities to adapt to the volatile market conditions. In terms of loss mitigation, we increased the…

Great. Thank you, Sai. Now let’s take a look at some consolidated financial results. The company’s fourth quarter effective income tax rate was 35.5% compared to 35.1% in the same quarter last year. Fourth quarter 2006 effective tax rate was lower primarily due to the retroactive reinstatement of the federal research & development tax credit. The effective income tax rate for the full year of 2007 was 35.5% compared to 35.8% in 2006. So all in all, net income was $186.1 million in the fourth quarter, down 26.3% or $66.3 million from the same period last year. Diluted earnings per share for the fourth quarter were $0.78, a decrease of 19.6% from the year-ago period. Moving on to cash flow, the company had another strong year of cash flow generation. Operating cash flow for the full year was $798.1 million. This compares to $761.8 million in 2006. For the full year of 2007, depreciation was $204.2 million and capital expenditures were $242.1 million. The increase in capital spending was primarily driven by investments in the Harley-Davidson Museum and the expansion of the Milwaukee Powertrain manufacturing facilities. This compares to $214 million in depreciation and $219.6 million in capital expenditures for the same period in 2006. In 2008, capital expenditures are expected to be between $240 million and $260 million, which is primarily driven by an increased investment in our manufacturing capabilities and product program activities. Now I will turn it over to Jim Ziemer who will provide his perspective on the business and our outlook for 2008.

Thanks, Tom. As you’ve heard and seen on the results this morning, the weak U.S. economy made 2007 a challenging year for Harley-Davidson. The bright spot in 2007 performance is our growth in the markets outside the U.S. The 17.4% fourth quarter growth was on top of nearly a 30% growth in the fourth quarter in 2006. Here at home, the picture is very different. Consumer confidence is low and housing and credit issues persist. All this adds up to a weak retail sales environment for major discretionary purchases, including our motorcycles. And while a year like this is not a pleasure for me as CEO, I am convinced that we are taking the right actions under the circumstances to ensure the long-term success of Harley-Davidson. For 105 years, the Harley-Davidson brand has represented the ultimate in personal expression. It is among the most admired brands in the world and protecting it is one of my highest priorities. That is why early last year, we made an important commitment to our worldwide dealer network. We told them that the company would ship fewer motorcycles than we anticipated they would sell at retail during 2007. And based on how the U.S. economy was shaping up by late summer, we had to act to help keep our commitment and therefore, we had a temporary shutdown of our production facilities in the fourth quarter. Worldwide dealer inventories are lower today than they were a year ago but some dealers are still experiencing uncomfortable inventory levels. Others have shortages on certain models or colors. Over time, we expect our new allocation system will address these issues but because I believe protecting our brand is so important, because many of our U.S. dealers are uncertain about the current state of the economy, we recently recommitted…

(Operator Instructions) Our first question is coming from Tim Conder with Wachovia. Please go ahead.

Thank you, Operator. A couple of questions, gentlemen and also; Amy, congratulations and the same thing to Mark. Jim or Tom, whoever wants to address this, can you maybe talk about what level you would feel comfortable on a cash on the balance sheet? And where we are going with this is would you burn the cash levels down more to accelerate your share repurchase? Because it just appears that it’s going to be difficult to get there on the production side, given the current state of the overall global market. And then, maybe in relation to the cash question with HDFS -- in December, you issued $400 million in debt. Was that a timing issue or are you anticipating, given your comments, Tom, in the credit markets that you will keep more on the balance sheet, so to speak, with the securitizations, at least in the near term, given the state of the credit markets.

A couple of questions -- on the first one regarding share repurchase and cash on the balance sheet, clearly we’ve been very aggressive over the last several years on buying back our shares and last year was no exception with buying back over $1.1 billion. So clearly we feel that the shares are undervalued at these levels and are committed throughout 2008 to continue our share repurchase activity. We ended the year with under $500 million of cash on the balance sheet and I think we will continue to look at what is the right capital structure for the company and the right amount of cash on the balance sheet. There’s an ongoing dialog that Jim and I have, along with other management members, as well as the board. But at this point in time, I think we’ve got an appropriate balance sheet but we will continue to have ongoing dialog regarding the cash balance. Looking at HDFS and the issuance of $400 million of medium-term notes in the fourth quarter, it’s really part of a longer term capital market strategy about diversifying our funding sources in the capital markets and making sure we have significant financial flexibility in all the different ways we can fund our business. So at that point in time in the fourth quarter, we opted to do a non-secured MTN transaction, which from a pricing perspective was more attractive than the securitization market. As we go forward, the securitization market will be our primary vehicle for financing HDFS but we will continue to look at other sources of financing, such as MTNs and commercial paper programs and other vehicles as well. So I think you can look for us over time to diversify that funding source.

Okay, and then one last question here; you continue to see some growth in the operating expenses. More holistically I guess with whether it’s from the gross margin side or through operating expenses, any point or anything that you guys have looked at as to what your negative operating leverage could be, say if production is down a percent or two or whatever? Because obviously the company hasn’t been here in its past history but again, you’re doing the right thing in the near-term for the business on a long-term basis. But any comment again from what a negative leverage factor would be, on an operating leverage basis?

I mean basically, looking at the company and you talk about looking at where we are at right now, a quick reminder; although 2007 is not exactly where we would have like to have ended up, 2007 is the second-highest retail year we’ve ever had in the history of Harley-Davidson. I mean, we’re looking at this as again, an economic cycle. We will get through it. We are investing quite heavily in the business in the areas of engineering, product development, marketing, and people development. And when this economy pulls out, we’re going to be well-positioned to grow this company quite well. We’re not going to speculate that this economy takes a bigger tank than it already is right now but I think that for the conditions we currently know, we’ve positioned ourselves quite well.

Okay, so again, at this point you are going to continue to invest and view it more as a short-term issue and not looking at some more dramatic cost cuts, so to speak?

That is correct but as Tom pointed out in his commentary, we look at this on a regular basis to make sure that we are continuing to get the signs from all of our markets and the business in general.

Okay. Okay, we’ll follow-up with Amy and Tom later. Thank you.

Thank you. Our next question is coming from Craig Kennison with Robert W. Baird. Please go ahead.

Good morning, everyone. A couple of questions -- first of all, could you address how the allocation process has affected pricing in the marketplace at all? And then also address your negotiation status with the Milwaukee union? Thanks.

Sure. Maybe I’ll start out on the first on, allocation, and I’ll let Jim address the Milwaukee negotiation. Just a little background, we did introduce a new allocation system in the second half of 2007 and it has been overall, very well-received by the dealers and we are in the early stages of implementing it but already seeing some positive early signs and getting good feedback from the dealers. So I think it will take a little more time as we go through a full year and cycle of the allocation system to really optimize it but clearly we’re making good progress and working closely with the dealers, and it’s really helping us on a forward-looking basis, getting the right motorcycles in the right place at the right time. So it’s early but we are pleased with it. From a pricing standpoint in the marketplace, we still, based on the data we see, pricing still remains solid on new motorcycles with bikes on average selling at or slightly above MSRP. With that, I’ll let Jim talk about the current negotiations.

The negotiations, a little background -- on March 31, 2008, our current Wisconsin operations contract with the unions expires. We are set to go into good faith negotiations between the company and management. I would not -- it would not be wise to discuss what we are discussing but we are looking for a mutually beneficial relationship and a contract that benefits both parties. And at this time, we feel that we’ll be successful in accomplishing that.

If I could just follow-up, your Q1 production guidance in some ways is almost flat with last year when you took a month off of production related to a prior strike. Does the current guidance anticipate any work stoppage at all? Thanks.

No, it does not, Craig. We’re just being cautious with the economic environment. We just want to be cautious in our approach and we have taken our production daily line rates down in light of that. And we also have plans in the first quarter to have a significant amount of motorcycles being shipped to our international markets, so those bikes will be on the water and will not be counted as shipments in the first quarter as well. So it’s really a combination of just being cautious with our production day rates and then continuing to ship units off to our international markets.

Thank you.

Thank you. Our next question is coming from Hakan Ipekci with Merrill Lynch. Please go ahead.

Thank you. Two topics, one is on the margins. Looking at your first quarter versus fourth quarter, it seems -- of ’07, you produced almost 20% more in the fourth quarter. You did not have a strike yet your margins were almost 200 basis points lower, so you mentioned the fixed cost absorption but what are some of the other factors causing this drop-off within the year? And as we look forward and we make our production assumptions, is 18% margin on the 80,000 unit production a set -- a reasonable assumption or were there some unusual things happening in the fourth quarter?

If you look at the fourth quarter of the year, when we decided to take the units out in September, part of that process of taking the units out is we did a temporary plant shutdown for a week or so at our manufacturing facilities after Thanksgiving, and that obviously impacted the volume which impacted our fixed cost absorption. In addition during the quarter, we also had significant investment in new model content, as well as raw material surcharges continued to plague us in the quarter and we recorded just over $6 million in raw material surcharges in the fourth quarter as well. So there were a number of factors that drove the margin decrease in the fourth quarter of 2007. Looking forward, we’ve given guidance for 2008 that in total operating margins will be down and that’s really a factor of several things, but as Jim mentioned previously, we’re going to continue to invest in the business for the long-term so it will fuel our international growth and then when things turn here in the U.S., we’ll be very well-positioned for it.

I see. The other question is on the retail -- it seems there was some underperformance in the U.S. for Harley relative to the heavy weight as well as the overall on-highway. What do you think drove that? And then, again going back to the quarter, the MIC data indicated there was a substantial drop-off in December. Did you see that as well? And as you look into January, can you make any comments on what you are seeing?

No doubt, as we reported the numbers, retail sales for the fourth quarter, that we were down quite a bit and a little bit more than the industry. And during the course of the quarter, I think as you look at MIC data that came out, there was a good indication that the quarter was trending downward. But I don’t think with the U.S. economy and the consumer confidence being where it was that that was totally unexpected as we went through the quarter. And since our products -- number one, as we look at either the fourth quarter or the first quarter, there are -- those are the two smallest quarters in retail sales and there are -- when small changes occur on small numbers, there are some big percentages. At the same time, we continue to look at this and we look at it and we talk to our dealers and their confidence, and I think that although the fourth quarter did trend down during the quarter and was the lower quarter versus prior year of any of our four quarters, I think that we still have confidence with the current guidance. We are not going to -- your second part of your question, we don’t give mid-quarter guidance on retail sales.

Okay. Thank you.

Thank you. Our next question is coming from Ed Aaron with RBC Capital Markets. Please go ahead.

A couple of questions; first, you said recently that your guidance for ’08 sort of operated under the assumption that 2008 economic environment would be similar to 2007, but you didn’t change your guidance. Is that still your assumption or are you now planning for a weaker economy in the U.S. but feel better about your international business? And then I have another question after that.

You know, in September we made an announcement and we took out production and we took a very cautious approach and we were looking at the signs. Obviously when we made that decision, we were looking at a very dismal August we were coming off of. So I think that we had a pretty dreadful view of the fourth quarter and I think we adjusted. So for our view of the current state of affairs based on August last year, which had some -- was a very down quarter, I think was very appropriate and we are still consistent with that approach. I think the way we [inaudible] based on that data, and that was on some pretty disappointing August retail sales, I think that we are still consistently in that range of retail sales that we were looking at. And at the same time, that being said, I think Tom said it many times in his discussion here, that we will continue to look at all the data to make sure that things are changing and we will make the appropriate adjustments.

Just to add on, I think Jim’s got it. There is no doubt we think 2008 is going to be a challenging year for us and for the industry. And you know, when we put the guidance out, things -- probably the indications have gotten a little, have deteriorated a little further, so it’s going to be a challenging year. But as Jim said, our guidance was built around a cautious approach to the year and we are going to look at the environment very closely and watch it and we’ll make the appropriate changes if we need to at any point in time. But the good thing is the international business, as you mentioned, continues to do very well and we are continuing to be very pleased with the progress we are making in the markets and it continues to deliver strong results and we see that continuing in 2008. And as Jim mentioned in his comments earlier, we also have the 105th anniversary going on this year, which is going to draw a lot of media attention and do a lot of brand-building activities. We’ve got a lot of out-reach activities going on. So 2008 is a big year for the company and we think that could help also support the guidance we have out there for the year. So all in all, we’re pretty excited around some of the marketing initiatives we have and all the activity around the 105th anniversary this year.

There is no doubt that we have more marketing activities than anybody I could imagine with the 105th and the new products and the entertainment and museum all opening up. We’ve got a lot of things that we’ve put in place for this year.

Great. Thank you. And then, could you elaborate a little bit on your current access to the securitization market? Are you able to securitize receivables right now? And if so, do you think you would have access to all of the tranches?

HDFS, as you know, has been in the securitization market since the mid-1990s and has a very solid track record and a very solid name in the market. We did a transaction in the third quarter last year in difficult market conditions. We do have access to the securitization market. I’m comfortable we could go into that market and access it at this point in time. Clearly the cost of accessing the market has gone up, not only for us but for all issuers, so it’s not really a matter of access. It’s really a question of the cost and is that the most efficient way to support the growth at HDFS. Regarding the different classes and fixed versus floating, that really is changing a lot based on market conditions and what’s in the market, so how we ultimately structure a transaction would really depend on feedback from investors and what the real current market conditions are. We are obviously watching it closely and we’ll make a decision here in the first quarter how we are going to go about funding the business.

But just to be clear on your guidance for break even gain on sale assumptions, that is assuming the current market conditions, so basically if you went and securitized all of the tranches today that you think you could be at break even?

Yeah, I think that’s right. As you know, in any securitization transaction, there are a lot of variables and a lot of factors that move around the up-front gain you record. But based on what we know today and our assumptions, we think we could access the market at a break-even rate.

One more quick one, if I could -- you mentioned plans to ship fewer bikes than your dealers sell. Can you give us some kind of order of magnitude on what that spread will look like? Is it 1,000 fewer or 10,000 fewer?

No, we’re not going to give guidance on what the inventory level is but I think that we look at that and we put some cushion on that number, as evidenced by our retail significantly exceeding our wholesale last year but we’re not going to give guidance on that gap.

Okay. Thanks, guys.

Thank you. Our next question is coming from James Hardiman with FTN Midwest Securities. Please go ahead.

Just two questions here, one a quick follow-up on the securitization gains; obviously the third quarter securitization gain was, as a percentage of the receivables, about as low as memory, as we’ve seen in recent memory. But that was impacted by a few different factors, not just the cost of getting that securitization done but also lower than normal rates being given to borrowers. So as you look at this first quarter break-even gain, is it mainly the cost of getting it done or is it also that you’re having some unusually low borrowing rates that you are giving out due to some of the promotions that you have going on?

There’s a couple of factors, James, that drive that gain and clearly, as I mentioned, the cost of accessing the securitization markets have gone up. And then as well, if you look on our side of it, there still are some lower rate promo loans that would be part of the securitization transaction, that would be included in this securitization, as well as our higher assumptions on credit losses compared to history. We’ve also at this point in time have a higher credit loss assumption. So when you take those three factors into account, that pretty much puts the basis for our guidance around the gain in the securitization transaction we are contemplating.

Okay, and so the cost associated with getting this thing done, the interest rates that investors will accept, has that -- that’s actually gotten worse since the August securitization?

Yeah, pricing has gone up, even from the August time period. Again, not only for us but for the entire market.

Okay, and then my second question, I was wondering if you could just flesh out a little bit more sort of how you’ve been able to remain so strong internationally, and I guess especially in the Canadian market, and where you expect that to go if -- you know, when you look at some of the economies of some of the countries that you do business in, are they correlated to the U.S. market? Sort of what you are seeing internationally and whether or not we can expect that to continue?

I’ll answer that question -- on retail sales outside the U.S., we are strong in all the markets outside the U.S. without exception when you look at it on a total year basis, whether it be Canada or Europe or Australia or Japan, and the markets of Latin America. That’s driven by many different things. Their economies are doing well. Certainly the weak dollar has contributed to some of that but as we continue to build a distribution network and we acquire some of our independent distributors over the last five, six years, I mean, we are doing things and rationalizing the dealer networks in many of the countries we sell into. We’ve acquired in the last year the Australian distributors. We have just recently acquired the distributorship in Mexico, so we continue to take on that strategy so that as we own the distribution network, we can operate that for the long-term health of the business and sell customers the experience that helps make us strong and differentiates us from our competition. But it’s many different things. It’s growing the dealer network, putting in dealers that can continue this experience. It’s the weak dollar -- it’s many different variables that have continued to drive our international growth. The bottom line, I think it’s -- a lot of the efforts that we started putting into the international markets four, five, six years ago are beginning to pay dividends now.

So as you look forward to 2008 and as you grow your dealer network, do you expect that growth to continue at, above, or below the 2007 pace?

It all depends on market by market. I mean, if you look at Europe at a percentage growth rate, that is a much more mature market. Dealer growth rate there would not be as great as -- and I think Japan would be very similar in the growth rate of dealers as Europe. As we look at some of our other markets, they will grow at a very good rate, as we’ve seen -- as Tom commented, that markets besides the larger market that had a 29% growth rate not only for the fourth quarter but had a 20% growth rate for the whole year. And as we enter those markets, the growth rate of the dealers will be commensurate as we grow those markets.

Thanks, guys.

Thank you. Our next question is coming from Felicia Hendrix with Lehman Brothers. Please go ahead.

My first question is Tom, I wanted you to just clarify something that you said about the shipments in the first quarter. You said that since the international bikes are going to be basically on a boat, they are not going to be considered part of your shipments in the first quarter. So what I’m trying to get my arms around is the majority of the unit guidance for the first quarter U.S. shipments?

No, we’re still have a significant amount of international shipments. I was just highlighting the fact that we also, because of the strong growth, will have an increased number of units in transit over the quarter end this period. But the major factor driving the first quarter shipment guidance really is just the lower production day rates and the cautious view we’re taking to the year.

Okay, and then in the fourth quarter, your domestic shipments were down 20%, international was up 20%. For the domestic kind of pattern, or maybe not the word pattern is not the direct word, but the domestic, the down 20% in the fourth quarter, do you think that that’s the kind of rate we’ll see throughout ’08?

I’m not going to comment on specific rates but you’ve got to be careful when you look at any quarter and the mix between international and U.S. It can vary quite significantly depending on product availability, both here in the U.S. as well as where we need to put product to feed the growth in the international markets. So I would just caution you to be careful looking at any one quarter and drawing any conclusions. On a long-term basis though, we have said that we expect our international shipment growth rate to grow faster than our domestic growth rate.

More importantly, as the allocation system in the U.S. kicks in, it will not only get us closer to the mix we need to adjust to the more seasonal nature, and so a lot of times -- and also, since we have the long supply chain getting to Europe, we’ve got to ship the bikes out a month, month-and-a-half earlier. So those shipping patterns, seasonality, mix issues, and then demand issues within market all drive that. So there’s many different factors, so to come out and say that that growth rate or decline would continue, it would be hard to forecast.

Okay. Regarding your market share, do you know -- you gave us the data of registrations, what you were down in the quarter, what the market was down in the quarter. Do you know what the number, what the overall heavyweight market was down excluding Harley? What I’m trying to figure out is are you guys losing market share?

I don’t have that specific number now. We can get it to you afterwards, but for the full year, our market share was down slightly relative to the entire industry. And at the end of the day, we really don’t run the business specifically or to focus on market share. So the important thing I think you look at is by far, we still continue to be a strong leader or be the leader in the heavyweight motorcycle industry. And if you look at the change in market share over the last year, it’s pretty small and our market share continues to stay right around that 45% to 50% here in the U.S. for a number of years. And then in the international markets, you see we continue to pick up market share.

Staying on top of what Tom said, although we don’t run the business for market share, we’ll look at those things for indications and as Tom said, I think we finished the year at 48%-plus of market share versus 49. I think we did lose -- I think it was less than 1% of market share, so we have three times the market share of our number two competitor. I think that’s Honda at about 16%. We continue to look at it but we certainly have a very good percent of the U.S. market.

Okay. Regarding your securitization write-down, can you specify which pools might have driven that decision, which pools does it pertain too?

There were several pools and they all related to 2004, 2004, 2006 securitization transactions.

Okay.

Thanks, Felicia. We need to move on. We have a couple more questions I’d like to get to.

Thank you. Our next question is coming from Robin Farley with UBS. Please go ahead.

Thanks. Just trying to understand your guidance better, since your EPS guidance hasn’t really changed from September, October, despite kind of worsening sales in the fourth quarter. You said you are going to ship fewer than you sell but your moderate revenue growth guidance for ’08 kind of implies that production would only be down kind of low single digits, at the worst maybe even flat. Am I interpreting that wrong? And I guess I’m just trying to -- if that’s what you are -- that you are anticipating that that sales environment would be kind of flat to maybe up slightly in ’08? I guess I’m just trying to makes sense of that versus the declines we saw in the fourth quarter. And I’ve got one more clarification question.

I’ll handle that one first. Robin, as we’ve talked about before several times, we really don’t give any annual shipment guidance or production guidance. We’ve given the moderate revenue guidance and as Jim and I said, clearly things since we first gave the guidance in the September time period, things have deteriorated slightly here in the U.S. And when we gave that guidance, we were taking some of those factors into account. Clearly there’s a lot that goes into the bottom line of delivering our EPS guidance and that’s really management’s challenge this year, is to work through the challenging economy here in the U.S., continue to grow our international business, allocate capital smartly, and the share repurchase activities or other business initiatives to drive growth. And we’re prepared to do that. It’s going to be a challenging year but at this point in time, with all the activities around the 105th and international, we’re at this point in time comfortable with the guidance.

Okay, so I guess the idea of moderate revenue growth, you’re saying that you are comfortable you can get to that, even if production were going to be down more than 5%? I guess I am just trying to get a, to see if there is some other lever that I’m not thinking of that could get you to moderate revenue growth. Obviously there is --

Robin, again, we don’t comment on -- I don’t comment on production levels. We’ve given moderate revenue growth. You can run your own models but there are many levers that we have, as I just mentioned, whether it’s on the expense line or other businesses or international growth, et cetera.

Okay, and then the other clarification was just I think the opening comments, there’s a comment about recovery values stabilizing in HDFS. And I guess just given that new bike sales declined kind of worsened through the quarter, can you help us understand how you see the recovery value stabilizing?

We clearly saw a trend in the latter part of 2007 of stabilizing used bike prices and if you look at used Harley-Davidson sales in 2007, they were very strong. Some of our data from R.L. Polk and so forth shows that through November, used motorcycle sales were up over 8%. So I think clearly the used market is very strong, which you would expect in this economic, challenging time in the U.S., as some people are opting for a used Harley instead of a new. So I think that strong used performance has a lot to do with the stabilization of used bike prices.

Thanks.

Thank you. Our last question is coming from Bob Simonson with William Blair. Please go ahead.

Thank you. There’s a lot of moving parts for the HDFS in the year ahead, I recognize that. But Jim or Tom, is your guidance for the corporation overall, is HDFS in terms of income within the boundaries that you’ve given? In other words, are you anticipating that they will have a better or a more difficult comparison versus the motorbike company?

Well, we’ve taken the current economic environment into account when we looked at HDFS’ financial plans for the year, so clearly we’ve taken the environment they are operating in into account in our overall guidance for the corporation. We know it’s going to be a challenging year and as Sai mentioned in his comments, we expect higher losses and higher delinquencies in 2008 to 2007, and we’ve incorporated that into the guidance. On the positive side, you’ve seen HDFS continue to gain market share in the right way through the performance networking program they have. They’ve really done a nice job of bringing more dealer business into HDFS, as well as all the different customer initiatives and operational initiatives. So they are operating in a very challenging environment but at the same time, the team down there is really making a lot of progress on both customer service and operational efficiency. So yes, long story, but HDFS is included in our overall guidance.

But is it in line with the performance of the bike company or the manufacturing company? Or is it assumed to be less?

We discontinued giving HDFS as part of our overall guidance a year or so ago now, so I’m not going to comment other than to say the business model is pretty solid, as you saw. They were able to deliver $212 million of op-income last year.

Last quick question -- your CapEx last year and your estimate for this year, how much is the museum in there? And if I subtract it out, what’s the going forward CapEx level into the future?

Going forward, we gave our guidance of 240 to 260. We spent about $40 million on the museum last year and we’ll spend another 20, 25 or so in 2007. So you can look at that as a one-time investment in CapEx. But we do have still a significant investment in capital and some of our product development programs and an expansion project going on here in Milwaukee for our Powertrain operations. We have slowed that down, given the slowdown in demand but we’ll continue over the next several years to invest in that expansion plan. So going forward in 2008, again it’s 240 to 260. Beyond that, it’s probably -- that is probably not a bad run-rate to consider at this point in time.

The number minus the museum spending, or just the aggregate of 250-ish?

I would just say there’s a lot of things depending on the growth model and the growth in international that we may have to invest in, so I -- we don’t give specific guidance out beyond 2008 but I would just think in the ballpark of where we are today going forward is not bad.

Thank you very much.

This is a capital intensive business but at the same time, we have outstanding returns on our capital that are world-class and we look at those things, but -- we continue to look at those things in growing the business and some of that is -- a lot of that is prior capital as well as some of the manufacturing aspects. I think that we’ve done a fantastic job of getting a good return on our capital investments.

Thank you.

I think we’re at the end.

Yeah. Thank you, everyone, for your time this morning. I appreciate your interest and your investment in Harley-Davidson. Let met run it back to Amy for some final logistics.

Thanks, Tom. Remember that a taped replay of this conference call will be heard by calling 706-645-6291 and entering pin number 29424918-pound until February 1st, or by accessing it on Harley-Davidson's website. If you have any questions, please contact me at Harley-Davidson's office of investor relations at 414-343-8002. Thanks again and have a great day, everyone.

Thank you. That does conclude today’s Harley-Davidson conference call. You may disconnect your lines at this time and have a wonderful day.