Welcome everyone to the first quarter 2009 earnings results for Harley-Davidson, Inc. (Operator Instructions) I would now like to turn the call over to the Director of Investor Relations, Amy Guiffre.

Thank you, Patrick, and good morning everyone. Welcome to Harley-Davidson’s first quarter 2009 conference call. Today, Harley-Davidson CEO, Jim Ziemer, will provide comments on our business. Harley-Davidson CFO and Interim President of Harley-Davidson Financial Services, Tom Bergmann, will share the financial results for the quarter. At the close of our prepared comments, Tom and Jim will open the call to your questions. Before we begin, please note that this call is being web cast live on Harley-Davidson.com and will be available for replay throughout the next several weeks. It can also be accessed until April 23 by calling 706-645-9291 or 800-642-1687 in the U.S. The PIN number is 90951487#. 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 will turn the call over to the President and CEO of Harley-Davidson, Inc., Jim Ziemer.

Good morning. Thank you for calling in. As you know, at the end of this month I am retiring after 40 wonderful years with Harley-Davidson. So this is my last earnings call. If I add them all up I think it comes out to something like 80 or more calls, although who is counting. In the future, I look forward to listening in online and letting someone else field your great, thoughtful questions. I know my successor, Keith Wandell, is truly excited to join Harley-Davidson and is honored to have the opportunity to lead this amazing organization. He looks forward to getting to know those of you who cover Harley-Davidson. While I won’t take a lot of time on today’s call I do want to provide an update on a few things and also share a few perspectives. Obviously these are challenging times for Harley-Davidson as they are for most companies. While we prefer the challenges that come with managing in good times, we also have no doubt that our responsibility is to manage our company well in both good times and in times of challenge and to do so in a way that protects and enhances our Harley-Davidson brand and drives growth over the long-term. As a management team, we have been extremely determined to make what we believe are wise choices that will best equip Harley-Davidson for long-term success. In January we announced a clear, three-part strategy to guide Harley-Davidson through this difficult recession and at the same time strengthen our operations, our market presence and our financial results for the longer term. Tom is going to update you on a number of the details so I will just refresh on the high points. That strategy has three main thrusts. Investing in the Harley-Davidson brand, getting our cost…

Thank you Jim. Good morning everyone. As we exit the first quarter there is a lot of activity at Harley-Davidson. We continue to proactively strengthen our brand value and our premium positioning. Our national Screw It, Let’s Ride; Ride Free and Super Ride efforts continue to generate a lot of thought and reinforce the core values and strength of our brand. This year, our dealers have trained nearly 5,000 people to ride motorcycles through our Riders Edge New Rider Course which is up over last year. A few weeks ago, our Young Adult Outreach Team rode into Austin’s South by Southwest Music Festival where they created an impromptu hang out dubbed The Golden Horse Saloon. The spotlight was on the new 883 Iron Dark Custom and they made thousands of live impressions and even more on Facebook, MySpace and Twitter during the three-day festival. There is no doubt that the Harley-Davidson experience is alive in the marketplace with customers of all ages. In terms of the brand and the overall business, we continue to be focused on the long-term while we manage through the current economic environment. We are making progress towards restructuring our business and reducing our fixed cost structure. As promised, I will provide an update on the progress of the restructuring activities in just a few minutes. First, I will review the first quarter 2009 results for the motorcycles and related products segment. I will start by looking at our dealers’ retail sales. On a worldwide basis, retail sales of Harley-Davidson motorcycles by our dealers were down 12% compared to a year ago. In the U.S., first quarter 2009 retail sales of new Harley-Davidson motorcycles decreased 9.7% compared to the same period in 2008. In last year’s first quarter, U.S. retail sales decreased 12.8% compared to the…

Thanks Tom. That’s not in the script.

No, I went a little off script but it is very well deserved. With that, can we turn it over to questions?

(Operator Instructions) Your first question comes from the line of Timothy Conder – Wells Fargo. Timothy Conder – Wells Fargo: Jim, enjoy the retirement. It is well deserved and thanks for the job done over the years. A couple of questions gentlemen. Tom could you maybe give us a little more clarity given the reserves you took in the first quarter for HDFS what are your assumptions for credit losses that you now have built into the reserves for the year? Then, also a clarification on used pricing. If I heard your commentary right on HDFS you said that a little bit higher loss rate and then you mentioned something about recent auctions have been stabilizing. So you are basically saying in the first quarter you did see some erosion in used pricing but that is stabilizing?

First, on credit losses for 2009 as we took another look at the year and what is happening in the U.S. economy with unemployment we did increase our credit loss assumptions both for our held for sale portfolio as well as for our retained interest. Obviously that resulted in the write down for the quarter. Based on what we know today and based on what we see in the environment we thought it was prudent to take up those credit loss assumptions for the rest of the year. Regarding the used prices, we did see a decline in recovered values during the first quarter and auction prices went down. Some of that can be attributed to tighter dealer cash flows and less auction involvement during the winter months but we have seen in the last few weeks better results at our auctions. We have also done a lot of work to increase the number of auction sites and how we prepare the bikes for auction as well as doing online auction processing. So I think a combination of now that we are into riding season and the actions we are taking to improve our auction results we are starting to see a recovery in recovery values. Timothy Conder – Wells Fargo: So on that process does the Trade In/Trade Up program we heard from several dealers that was pretty successful but they potentially some of them even got a little heavy on used sportster inventory. Did that factor into the first quarter pricing in any way?

No, I don’t really think it had an impact during the first quarter here. You are referring to the Ride Free program which we are very happy with the results of that during the quarter. I don’t think that really impacted it during the first quarter here. Timothy Conder – Wells Fargo: Again, in your reserves on the credit losses do you feel pretty comfortable now that you have taken a pretty conservative stance with regard to the balance of the year given what you are seeing in the broad economy at this point?

Yes, every quarter we go through it and a lot develops during the quarter so we take a look at all the latest economic forecasts as well as our own credit models and based on what we know today, based on our own model I feel very good we made a good estimate for the rest of 2009. We will have to wait and see how the rest of the year plays out. So as you know, we have got tough headwinds with consumer confidence and unemployment but on the flip side you can see our portfolio is performing quite well in this environment as we have seen the seasonal decline in delinquencies that we see every spring and as well only to have an 11 basis point increase year-over-year I think says a lot about the performance of the portfolio. So I think we are doing a lot of right things but a lot of tough headwinds right now in the economy.

We have always been very conservative as we looked at these reserves. There are a lot of dynamics obviously as Tom mentioned with consumer confidence and the economy. At the same time, Harley-Davidson is doing quite well considering all the economic headwinds. Our retail sales in the U.S. were down 9.7. Total industry was down 22%. If you take Harley-Davidson out of that industry in comparison the industry was down 35%. So I think that helps too in managing the resale of repossessed motorcycles. Timothy Conder – Wells Fargo: Your tact with controlling inventories has been very good. Lastly, gross margins with guidance does that include or exclude the restructuring and the incremental restructuring is that built in as part of your union contract or was that something outside of the union contract, personnel adjustments that are provided for in the union contract?

The restructuring costs are outside of the gross margin line so it would have no impact there. The additional headcount action is really just a result as we have spent the last three months and our manufacturing teams have gone back and looked at ways to take volume out and implement the restructuring activities it really became more efficient ways to do it and it ended up with a revised number.

The next question comes from Craig Kennison - Robert W. Baird & Co., Inc. Craig Kennison - Robert W. Baird & Co., Inc.: Jim let me also congratulate you on an incredible 40-year run. Best wishes to you. On the TALF program can you give us an idea of what the appetite is for a deal? Is there a market for a non-TALF securitization?

As I have said, we are getting ready to prepare and we expect in the second quarter to come into the term asset backed market. The market has opened up, as you know with a few transactions being done. Based on our discussion with our underwriters and different potential investors we do think there is demand out there for a Harley-Davidson asset backed transaction. We think the best chances of success are making it a TALF eligible transaction. When we go-to-market we will see where the market it and where investor demand and appetite is but we want to make it TALF eligible and then that way we can both get non-TALF as well as TALF investors into the transaction. Craig Kennison - Robert W. Baird & Co., Inc.: Do you have a sense of the size of the transaction and the potential cost of debt?

Not at this point. We are looking at a lot of alternatives and how to structure the transaction. A lot of it is going to depend over the next month or two how the TALF market develops and how the asset backed market develops. So at this point in time I am reluctant to give you a particular size or cost of funding on the transaction. Craig Kennison - Robert W. Baird & Co., Inc.: You borrowed about $600 million from Berkshire and Davis at 15%. We calculate your blended cost of that closer to 7%. Where do you see the blended cost of that heading in the next 12-24 months and then how does that influence your outlook for HDFS?

As you pointed out, right you have to look at the blended cost of debt on the overall liability side of the business. As we look forward there is no doubt the capital markets have changed and it is getting more difficult to get competitive financing out there. But we are spending a lot of time, as you know, getting the funding lined up and doing it in a cost effective way. So a lot of our cost of funding from here really is just going to depend on how the capital markets evolve over the next 12 month time period. I think there is no doubt that is going to be one of our major challenges going forward, obtaining cost effective funding and that is going to force us to look at all the different things we do in HDFS and how we run the business to make sure we can offset any higher costs of funding and still get acceptable returns in the business. So it is clearly going to be a challenge for us going forward. I think will we go back to historical cost of financing rates that we experienced in the last 5-10 years? It will probably be some time before the market goes there. Should it get better than what we have experienced here in the last six months or so? Yes, we do think it will get better. So a lot is going to depend on market development here over the next year. Craig Kennison - Robert W. Baird & Co., Inc.: Finally, Jim now that the CEO search has concluded what characteristics was the Board looking for in the ideal candidate?

Obviously they were looking for a great track record of global success in the global market place, great leadership ability and focus and I think Keith Wandell fills that. He comes from Johnson Controls, a great and successful company. He has been there for 21 years and certainly was a driving force in their success as kind of the number two person over there. So we are fortunate in both his experience and his abilities that he comes to Harley-Davidson to make sure we take advantage of all the opportunities we have in front of us.

The next question comes from James Hardiman - FTN Midwest Securities Corp.

Congrats to Jim and best of luck in your future endeavors. First let’s start with HDFS. I don’t want to par force too much but I just want to make sure we are all on the same page. The $1 billion of need for 2009 that hasn’t changed. You got $600 million of that from the bond. I’m not sure how you are counting the dividend whether that is $0.50 for just a quarter or $200 million but I just wanted to focus on the statement you made that the upsizing you expect from the asset backed facility in conjunction with the re-upping of the commercial paper, which I am assuming if that is anything less than $950 will actually be a negative number, but I think you said combined those two would get you to that $1 billion. I just wanted to make sure I am looking at that the right way. Basically you are saying that the upsizing minus anything short of $950 will get you the rest of the way which I am assuming somewhere between $200-350 depending on how you count the dividend. Am I looking at that the right way?

Let me try to clarify it or make sure we all are on the same page. We do have $1 billion in funding need that I stated on the January 23 call. We did the $600 million unsecured debt transaction in February. We reduced our dividend. So in the first quarter we saved approximately $50 million on that dividend reduction. Depending on what assumptions you make going forward on the dividend you will also have additional cash savings for the rest of the year on the dividend. So we are well towards just with those two actions alone getting towards the $1 billion funding need. If I look at the asset backed conduit facility and the unsecured bank facility and look at the two of them together I expect when we increase the size of the conduit facility and also renew a substantial portion of the 364 day facility the two of those combined will be greater than the $950 million bank facility we have today and the $500 million we have outstanding. So when you look at the combination of those two combined that will give us an increased amount of credit availability.

It will get you over the $1 billion finish line is basically what you are saying?

Right.

I guess the question is are you using…obviously we have our own assumptions but are you using sort of $50 million in savings for the dividend or are you using $200 million to get to that assumption of across the $1 billion I guess is the way to put that.

I’m just looking at what our current dividend rate is relative to last year and counting that as savings going forward.

For the full year. I mean the assumption is the dividend isn’t coming back this year. In terms of your second quarter guidance, if retail is anything like it was in the first quarter your shipment guidance seems to suggest a pretty significant inventory draw down. Is there some reason to think that second quarter is going to be worse than the first quarter from a retail perspective? Conversely do you feel like you need to really draw down inventory pretty meaningfully or is it just an issue of being especially cautious?

It is kind of all those things. Number one is that as I compare the two years I look at the second quarter of 2009 versus 2008 there is a change in when we ended the current model year and opened up the new model year. We don’t ship out the new model year, 2010 in the case of this year until we have a dealer meeting in July. So that has an impact. Some of the reduction we are doing this year a lot of that happens with shut down days that occur in June just before the new model of the year. So it has a greater impact in the second quarter than any other quarter. Then there is no doubt that we are again taking a very conservative approach to the year in drawing down total dealer inventories for the year and that has an impact for the second quarter. A lot of things. In particular the cut off on the model year and in particular the reduction of shipments for the year during the second quarter.

Finally, the market share increase I think you said was 8% year-over-year. That is an unbelievable number. Great job on that. I guess, what is driving that? I know you talked about last year Honda dumping a lot of low price product on the market but I think that was more of a second quarter or third quarter item which in theory should be a tailwind for you this year given the fact that Honda is no longer doing that and if anything is raising their prices. What drove the market share in the first quarter and how should we think about that going forward?

I think some of the market share gain was a lot of the lackluster performance of the competition. Again, the competition if you look at the competition by itself their retail sales are down 35% to get to that total industry down 22%. Part of that was, as you point out, some of it was as they aggressively were pricing their prior year product and it is all competition. Honda obviously a big factor in that because they are number two in market share but they were aggressively pricing prior year product really for the first nine months last year. More aggressively in the second quarter as you point out but it still occurred in the first quarter. Again, we are going to do better because of our great brand than the competition. We are going to go down. Consumer confidence, access to capital effects everybody but it effects commodities a lot more than it does great brands. So I think our strong brand offset by the fact that they were extremely aggressive in pricing last year are two combinations of why there is such a big increase in our market share for the first quarter.

The next question comes from Robin Farley – UBS.

It looks like a lot of the out performance in Q1 was much better margins than were generally expected yet your full year margin guidance is unchanged and is lower than that. You mentioned in Q1 lower steel prices but I guess why would we not see better margins for the full year than given the out performance in Q1?

As I said on the call, we did have a good first quarter around our gross margin performance but if we still look out to the rest of the year we do have significant volume coming out which is going to impact the allocation of our fixed costs over those fewer units. As we also look at shipment mix for the full year we also expect that to have a negative impact and we don’t know where the dollar is going to be relative to the other currencies but based on our forecast we also expect exchange rates to be negative for the remainder of the year. We are pleased with the performance here in the first quarter but we still think due to those three items our gross margin guidance is appropriate at this time.

I was wondering if you could clarify Q2 will there be the same number of shut down days versus the prior year? Can you give me also in terms of the new model year the shipment start date which I know you said is July but at the start of Q3 it can impact Q2. Can you just clarify that?

The total number of shut down days because it is different plant by plant and that is driven by model and everything else. The number of shut down days as a direct answer to your question is significantly different, higher in 2009’s second quarter than it was in 2008’s second quarter. Again, like I said the new model cut off is different this year. It occurs at an earlier date and therefore there may be some production occurring but those units would not be shipped until the introduction of those 2010 model year in July.

Is it a week or two weeks? How different is the new model year start date?

It is a few production days earlier. You know Robin it is very prudent for us to leave the old model year and start producing the new model year to make sure we manage the appropriate amount of prior model year inventory. So we are moving it up slightly in order to make sure we get that cut off at the right time and start preparing for launch on the new model year in July.

My last question is in terms of the TALF funding I guess it is a two part question. One, can you talk about how you think the first and second round of TALF funding…has that been in line with your expectations or better or worse in terms of what you think the implications are for Harley? Also, when you outlined your financing needs it sounds like you were saying that maybe you feel like your liquidity is fine for the rest of the year even if you don’t do TALF securitization but I don’t want to put words in your mouth.

Yes. First, our perspective on the TALF market I think we are very pleased that the program has started and investors have started using it. Although I think it has been utilized less than initially expected and the utilization has been slower. I think the fact that it is up and running and investors are starting to use it and issuers are participating is a very good sign. I think as the market will continue to get more efficient as we go forward. I think it will also have the residual effect of just opening up the overall asset backed market and getting investor demand even for non-TALF transactions much higher in the market place. Overall we think it is a very good thing and it should start stimulating better demand for overall term asset backed securitization.

In terms of your liquidity position even if you don’t do a TALF transaction?

We can still meet the $1 billion need just with the activity that I outlined on the call. Clearly we would like to access the asset backed markets even with or without a TALF transaction in order to start working on our 2010 funding needs.

The next question comes from Felicia Hendrix – Barclays Capital. Felicia Hendrix – Barclays Capital : Also Jim I wanted to just wish you luck with the next chapter of your life. Please promise us you are not going to listen to future conference calls. Please.

No promises made. I will have some withdrawals if I don’t.

He’ll be calling me afterwards I’m sure. Felicia Hendrix – Barclays Capital : Telling you everything you did wrong, right? Just a couple of quick questions. One is I just wanted to tag on to TALF. You mentioned you would like to access it also to help for your funding issues for 2010. Should we assume you will start out 2010 with a similar liquidity need as you started out with in 2009?

It is really difficult to estimate a really solid number for 2010 funding needs now just giving the uncertainty around the level of securitizations we will do this year and so forth. It is hard for me to give you a good solid answer right now around that. Clearly we know we will have some funding need under some reasonable volume assumption and reasonable market share assumption for HDFS. I can’t give you a good number now other than to say we want to start chipping away at it. Felicia Hendrix – Barclays Capital : Just to switch gears I’m wondering is there any way you can parse out how much your Ride for Free promotion in the quarter drove some of your relatively strong sales performance in the quarter?

There is no doubt we believe the Ride Free promotion was a tremendous success. There were two parts to that promotion. One was urging people to come in and buy a sportster. Number two, people to come in with their prior owned sportster and trade in on a big twin motorcycle. We think it was a success. We are not going to give out the numbers on this program but at the same time if I were to pull every single one of those bikes out of our retail sales we still would have gained market share. We still would have performed better than the market. We think it was a great program and we believe our success in the quarter and in gaining retail sales and market share were driven by a combination of the program as well as our great brand. Felicia Hendrix – Barclays Capital : On that can you just talk a little more on the Super Ride program and if you are going to have any other kind of [inaudible] promotions planned for this year?

Well our marketing group is always looking at a lot of activity for the year. For now let’s focus on the Super Ride program. We are excited about this program because it is a national demo program and we don’t think anyone has ever really done this to this extent before in the industry. The program really lets any consumer walk into a dealership and pick a motorcycle off the floor and take it for a demo ride. We know from our past experience demo rides are one of our best conversion tools for riders. We are really excited about it. We rolled it out here at the beginning of April. It also involves an element of incentive compensation to the dealer sales person in order for him or her to get a consumer on a motorcycle. If they are able to do that and collect the consumer information we are able to also incentivize the sales person to get people on motorcycles, again and get them out on the road. Once you experience it we find they come back with smiles on their faces and are ready to purchase it. I think it is going to be a great program. We just kicked it off so it is too early to tell the early results of it. But we will wait and see. Felicia Hendrix – Barclays Capital : Quickly, moving to your international business March certainly did show improvement but the market is still lagging the U.S. and for the first time you are seeing some significantly higher inventory build there. I’m just wondering if you are implementing any kind of programs or promotional programs there to drive sales growth.

We continue to monitor those markets and each market is certainly different. Part of our reduction in production days in the second quarter will be to make sure we stay ahead of not building inventory in these markets. So we are adjusting our levels of production to kind of match what we currently see going on a market-by-market basis. Like you said, the March activity was a little stronger than we saw earlier year-to-date but we are monitoring each market by itself. Felicia Hendrix – Barclays Capital : Can you tell us how April is looking so far?

We wouldn’t give a mid-quarter update but like I said March finished stronger than January and February did.

The next question comes from Sharon Zackfia – William Blair. Sharon Zackfia – William Blair: I was just wondering if you could quantify the currency penalty in the quarter. I think in the past you have given the impact to operating income.

The impact on revenue was a negative $47 million about and from an operating EBIT standpoint it was about neutral.

The final question comes from the line of Edward Aaron - RBC Capital Markets.

Jim congratulations and good luck. On the gross margin can you help me reconcile the sequential improvement that you had? Because the actual shipment number was similar to Q4 if not, I think, maybe even a little bit lower and there was some significant sequential improvement in the gross margin. Then within that were there any changes to the accrual that you made for the trade up promotion in Q4?

Gross margin is a slight improvement. A little bit of it was volume but again the bulk of it was raw material prices. There were some other plusses and minuses in there with mix and other factors. On the accrual for the Ride Free program we reversed just a couple or few million of it so we were pretty close with our initial estimate.

Around mix at the retail level in the first quarter you talked about negative mix shift this year. It didn’t seem apparent to us from our checks that you really had a lot of negative mix shift at the dealer level in the quarter but there is obviously some seasonality there and you had that promotion so it is hard to…could use some help peeling back the onion on that.

Mix for the full year, as you look at it as I have always said you really can’t just look at one quarter because there is a lot that goes on in the manufacturing environment and the different order and phases and with the supply base and so forth. So be careful in looking at one quarter. As we look for the full year we continue to see in this economic environment that we think there is a more value conscious consumer out there and that would drive demand for different models in our product line up. So year-over-year again when we look at total mix we think it is going to be fairly unfavorable for us. Thank you for your time this morning. I appreciate your interest and for listening in and for your investing in Harley-Davidson. With that I will turn it back over to Amy for some final logistics.

Thanks Tom. If you would like to listen to a replay of this conference call 706-6745-9291 and enter pin 90951487# until April 23. Or access the conference at HarleyDavidson.com. If you have any questions please contact Harley Davidson’s Office of Investor Relations at 414-343-8002. Thanks and have a great day.

Thanks everybody for your well wishes.