# Harley-Davidson, Inc.: Form 10-Q for the period ended Mar 31, 2025

- Company: [Harley-Davidson, Inc.](/companies/hog.md) (CIK 793952)
- Form: 10-Q
- Filed: 2025-05-06
- Accepted by EDGAR: May 6, 2025, 12:00 ET
- Period: 2025-03-31
- Accession: 0000793952-25-000111
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/793952/000079395225000111/hog-20250331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/793952/000079395225000111/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2025-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2025-01-01 to 2025-03-31 | $1.08bn | us-gaap:RevenueFromContractWithCustomerExcludingAssessedTax |
| Cost of revenue | 3 months, 2025-01-01 to 2025-03-31 | $770.8m | us-gaap:CostOfGoodsAndServicesSold |
| Selling, general and administrative | 3 months, 2025-01-01 to 2025-03-31 | $255.7m | us-gaap:SellingGeneralAndAdministrativeExpense |
| Operating income | 3 months, 2025-01-01 to 2025-03-31 | $160.5m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2025-01-01 to 2025-03-31 | $7.7m | us-gaap:InterestExpenseNonoperating |
| Income tax | 3 months, 2025-01-01 to 2025-03-31 | $47.2m | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2025-01-01 to 2025-03-31 | $133.1m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2025-01-01 to 2025-03-31 | $1.07 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2025-01-01 to 2025-03-31 | $1.07 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2025-01-01 to 2025-03-31 | 124,724,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2025-01-01 to 2025-03-31 | $141.5m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2025-01-01 to 2025-03-31 | $30.0m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Dividends paid | 3 months, 2025-01-01 to 2025-03-31 | $22.9m | us-gaap:PaymentsOfDividends |
| Share repurchases | 3 months, 2025-01-01 to 2025-03-31 | $93.1m | us-gaap:PaymentsForRepurchaseOfCommonStock |
| Cash and equivalents | at 2025-03-31 | $1.93bn | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2025-03-31 | $5.65bn | us-gaap:AssetsCurrent |
| Total assets | at 2025-03-31 | $12.38bn | us-gaap:Assets |
| Current liabilities | at 2025-03-31 | $3.62bn | us-gaap:LiabilitiesCurrent |
| Long-term debt | at 2025-03-31 | $4.96bn | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2025-03-31 | $1.84bn | us-gaap:LongTermDebtCurrent |
| Short-term borrowings | at 2025-03-31 | $498.5m | us-gaap:ShortTermBorrowings |
| Shareholders' equity | at 2025-03-31 | $3.18bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 65,744 characters.

Unless the context otherwise requires, all references to the “Company” include Harley-Davidson, Inc. and all its subsidiaries. Harley-Davidson, Inc. operates in three segments: Harley-Davidson Motor Company (HDMC), LiveWire and Harley-Davidson Financial Services (HDFS).

The “% Change” figures included in the Results of Operations sections were calculated using unrounded dollar amounts and may differ from calculations using the rounded dollar amounts presented. Certain “% Change” deemed not meaningful (NM) have been excluded.

### (1) Note Regarding Forward-Looking Statements

The Company intends that certain matters discussed in this report 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 by reference to this footnote or because the context of the statement will include words such as the Company “believes,” “anticipates,” “expects,” “plans,” "projects," “may,” “will,” “estimates,” “targets,” “intends,” "forecasts," "seeks," "sees," "should," "feels," "commits," "assumes," "envisions," "potential," or words of similar meaning. Similarly, statements that describe or refer to future expectations, future plans, strategies, objectives, outlooks, targets, guidance, commitments 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, unfavorably or favorably, from those anticipated as of the date of this report. Certain of such risks and uncertainties are described in close proximity to such statements or elsewhere in this report, including under the caption "Cautionary Statements" in this Item 2, as well as in *Item 1A. Risk Factors,* as well as in *Item 1A. Risk Factors* of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Shareholders, potential investors, and other readers are urged to consider these factors in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements included in the "Key Factors Impacting the Company" and the “Guidance” sections in this Item 2 are only made as of May 1, 2025 and the remaining forward-looking statements in this report are made as of the date of the filing of this report (May 6, 2025), and the Company disclaims any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

**Overview**(1)

Net income attributable to Harley-Davidson, Inc. was $133.1 million, or $1.07 per diluted share, in the first quarter of 2025 compared to $234.9 million, or $1.72 per diluted share, in the first quarter of 2024.

In the first quarter of 2025, HDMC segment operating income was $116.3 million, down $122.2 million from the first quarter of 2024. The decrease in operating income from the HDMC segment for the first quarter of 2025 was driven primarily by a planned decrease in motorcycle shipments. HDMC operating income was also impacted by unfavorable operating leverage on lower shipments, partially offset by favorable pricing and lower operating expenses compared to the same quarter last year. Operating loss from the LiveWire segment in the first quarter of 2025 was $19.8 million compared to an operating loss of $29.2 million in the prior year quarter due primarily to lower operating expenses from cost reduction actions taken in the second half of 2024. Operating income from the HDFS segment in the first quarter of 2025 was $64.0 million, up $10.2 million compared to the prior year quarter due primarily to a lower provision for credit losses and lower operating expenses, partially offset by lower interest and other income.

Worldwide retail sales of new Harley-Davidson motorcycles in the first quarter of 2025 declined 21.3% compared to the first quarter of 2024. Retail sales were adversely impacted by a decline in consumer sentiment, resulting from economic uncertainty, combined with high interest rates. Retail sales were down 24.0% in North America, 1.7% in EMEA and 27.7% in Asia-Pacific. Refer to the Harley-Davidson Motorcycles Retail Sales and Registration Data section for further discussion of retail sales results.

### Key Factors Impacting the Company(1)

*Incremental U.S. and Foreign Tariff*s – In January 2025, the global tariff landscape began to quickly change with the U.S. implementing tariffs on goods from various foreign countries, either generally or with respect to certain products, and certain of those foreign countries implementing rebalancing tariffs on goods from the U.S., either generally or with respect to certain products. In certain circumstances, the U.S. and certain foreign countries temporarily suspended tariffs they had recently implemented, either in whole or in part. Since then, the U.S. has continued to impose tariffs on imported goods, and affected countries have responded by imposing tariffs on U.S. goods. During the first quarter of 2025, the total cost of new tariffs incurred by the Company was not material.

Depending on the outcome of trade negotiations and other factors, the U.S. and foreign countries may sustain, amend, suspend or withdraw recently-announced tariffs or implement new tariffs. If recently-announced tariffs are sustained or new tariffs are implemented, it will likely increase the Company’s cost of raw materials, components, finished motorcycles, parts and accessories and apparel and affect its ability to sell products domestically and internationally at or near current prices. The Company's U.S.-centric manufacturing footprint and sourcing limits its exposure to tariffs, however based on the portions of the Company's business that are exposed directly or indirectly to tariffs and the magnitude of potential incremental tariffs, the impact to the Company could be material. Given uncertainty concerning the outcome of trade negotiations, the Company is unable to estimate the ultimate impact of incremental tariffs on the Company going forward. However, based on the tariff landscape as of April 29, 2025, the Company estimated the potential impact of tariffs in 2025, to be as follows (dollars in millions):

|  | Tariff | Potential Impact(a) |
| --- | ---: | --- |
| China | 145% | $75 - $100 |
| Mexico | 25% | $15 -$ 25 |
| Canada | 25% | ~$20 |
| EU | 31% | $0 - $5 |
| Rest of world | 10% - 25% | $15 - $20 |
| Steel and aluminum | 25% | ~$5 |
| Total |  | $130 - $175 |

(a) Includes the direct cost of import and export tariffs paid by the Company as well as indirect impacts such as supplier price increases, and excludes the benefit of any future mitigation actions or changes in demand.

The Company plans to continue its efforts to mitigate the impact of tariffs including engaging with governments to advocate for consideration of motorcycles in trade negotiations; moving inventory into markets ahead of tariff effective dates; evaluating sourcing options and pricing for its products; and prudently managing cost.

*Interest Rates* - Interest rates remained heightened in the first three months of 2025 after an interest rate decline in the latter part of 2024. This follows a significant increase during 2022 and 2023 as central banks attempted to reduce inflation. The current higher interest rate environment has adversely impacted HDFS' interest income margin due to a higher cost of funds that is only partially offset by increased interest rates on financing products sold by HDFS. Additionally, higher interest rates have adversely impacted consumer discretionary purchases, like purchases of the Company's motorcycles, as higher borrowing costs have made these purchases less affordable or impacted the consumer's ability to obtain financing.

*Potential HDFS Investment* - As part of its current strategy, the Company is evaluating a potential investment into HDFS if the following objectives are met:

- The investment demonstrates the class-leading returns of HDFS as a driver of value for Harley-Davidson shareholders, including a premium valuation as compared to HDFS's book value.
- It establishes a value-enhancing long-term strategic partnership.
- It secures a long-term funding option that would maintain and possibly lower the overall cost of funding and improve the competitiveness of HDFS.
- It supports the Company's commitment to maintain and improve service and support across the range of HDFS products.

The Company is not pursuing a full sale of HDFS. There is no assurance that this investment will materialize or that any transaction that the Company executes will meet the Company’s objectives.

*New Products and Annual Launch Timing* - The Company has announced plans to introduce a new small displacement motorcycle and an iconic classic cruiser starting next year. The Company also plans to introduce more innovation in its Touring and Trike motorcycle platforms. In addition, the Company plans to begin to shift the timing of its annual new model year launch from January to the fall to create additional retail selling opportunities later in each calendar year. The Company plans to start with the shift of certain models this year but the overall shift is expected to continue into future years.

### Guidance(1)

Given uncertainty related to the potential impact of tariffs, including impacts on the cost of the Company’s products, as well as the potential impacts on consumer demand and broader macro-economic conditions, the Company has withdrawn its forward-looking expectations for 2025 related to Harley-Davidson motorcycle retail unit sales; earnings per share; HDMC motorcycle shipments, revenue and operating income margin; and HDFS operating income, provision for credit losses, interest income and borrowing costs. The Company has also withdrawn its longer-term expectations for HDMC operating income in 2026 and beyond.

As the Company moves forward through the macroeconomic uncertainty, it remains committed to supporting reduced dealer inventory levels and continues to expect a reduction of approximately 10% in 2025 year-end dealer inventory of new Harley-Davidson motorcycles as compared to the end of 2024.

The Company has revised its expectations for the LiveWire segment and now expects an operating loss of approximately $59 million in 2025 and a total use of cash of approximately $50 million in 2025. The Company has withdrawn its expectation for LiveWire motorcycle unit sales in 2025 given the ongoing economic uncertainty. The Company's previous expectations for LiveWire in 2025 included motorcycle sales of 1,000 to 1,500 units, an operating loss of $70 million to $80 million and a total use of cash of approximately $60 million.

The Company plans to continue its multi-year cost productivity initiative to eliminate incremental cost. The Company achieved productivity savings of approximately $257 million from 2022 to 2024 and an additional $24 million during the first quarter of 2025. The Company expects to achieve annual productivity savings of $100 million in 2025 and 2026, resulting in $457 million in total productivity savings by the end of 2026.

The Company now expects the range for capital investments in 2025 to be $200 million to $225 million, down from its prior expectation of $225 million to $250 million, and continues to expect it will invest in product development and capability enhancements that support The Hardwire strategy. The Company's focus remains on core product innovation, investments in manufacturing to automate and reduce costs to improve productivity as well as planned investments for LiveWire.

The Company's capital allocation priorities to fund profitable growth through The Hardwire initiatives, to pay dividends, and to execute share repurchases on a discretionary basis remain unchanged. The Company continued to execute its plan to repurchase approximately $1 billion of shares on a discretionary basis in aggregate from the third quarter of 2024 through the end of 2026 including $350 million of discretionary share repurchases in 2025. The Company purchased $250 million shares on a discretionary basis during the third and fourth quarters of 2024 and $87.5 million during the first quarter of 2025.

### Results of Operations for the Three Months Ended March 31, 2025

### Compared to the Three Months Ended March 31, 2024

### Consolidated Results

*(in thousands, except earnings per share)*

|  | Three months ended March 31, 2025 | March 31, 2024 | Increase (Decrease) | % Change |
| --- | ---: | ---: | ---: | ---: |
| Operating income - HDMC | $116,272 | $238,445 | $(122,173) | (51.2)% |
| Operating loss - LiveWire | (19,809) | (29,241) | 9,432 | (32.3) |
| Operating income - HDFS | 64,036 | 53,875 | 10,161 | 18.9 |
| Operating income | 160,499 | 263,079 | (102,580) | (39.0)% |
| Other income, net | 16,273 | 20,564 | (4,291) | (20.9) |
| Investment income | 8,941 | 14,404 | (5,463) | (37.9) |
| Interest expense | 7,686 | 7,679 | 7 | 0.1 |
| Income before income taxes | 178,027 | 290,368 | (112,341) | (38.7)% |
| Income tax provision | 47,230 | 58,135 | (10,905) | (18.8) |
| Net income | 130,797 | 232,233 | (101,436) | (43.7)% |
| Less: Loss attributable to noncontrolling interests | 2,307 | 2,708 | (401) | (14.8) |
| Net income attributable to Harley-Davidson, Inc. | $133,104 | $234,941 | $(101,837) | (43.3)% |
| Diluted earnings per share | $1.07 | $1.72 | $(0.65) | (37.8) |

The Company reported operating income of $160.5 million in the first quarter of 2025 compared to $263.1 million in the same period last year. The HDMC segment reported operating income of $116.3 million in the first quarter of 2025, a decrease of $122.2 million compared to the first quarter of 2024. Operating loss from the LiveWire segment decreased $9.4 million compared to the first quarter of 2024. Operating income from the HDFS segment increased $10.2 million compared to the first quarter of 2024. Refer to the HDMC Segment, LiveWire Segment and HDFS Segment sections for a more detailed discussion of the factors affecting operating results.

Other income, net in the first quarter of 2025 was lower than in the first quarter of 2024, impacted by a smaller benefit related to a decrease in the fair value of LiveWire's warrant liability in the first quarter of 2025 compared to the first quarter of 2024.

The Company's effective income tax rate for the first quarter of 2025 was 26.5% compared to 20.0% for the first quarter of 2024. The increase in the effective income tax rate for the three months ended March 31, 2025 was attributable to discrete income tax adjustments related to the realizability of future tax benefits.

Diluted earnings per share was $1.07 in the first quarter of 2025, down 37.8% from the same period last year. Diluted weighted average shares outstanding decreased from 136.9 million in the first quarter of 2024 to 124.7 million in the first quarter of 2025, driven by the Company's discretionary repurchases of common stock. Refer to Liquidity and Capital Resources for additional information concerning the Company's share repurchase activity.

### Harley-Davidson Motorcycles Retail Sales and Registration Data

### Harley-Davidson Motorcycle Retail Sales(a)

Retail unit sales of new Harley-Davidson motorcycles were as follows:

|  | Three months ended March 31, 2025 | March 31, 2024 | Increase (Decrease) | % Change |
| --- | ---: | ---: | ---: | ---: |
| United States | 19,207 | 25,726 | (6,519) | (25.3)% |
| Canada | 1,685 | 1,760 | (75) | (4.3) |
| North America | 20,892 | 27,486 | (6,594) | (24.0) |
| Europe/Middle East/Africa (EMEA) | 5,175 | 5,264 | (89) | (1.7) |
| Asia Pacific | 4,362 | 6,034 | (1,672) | (27.7) |
| Latin America | 581 | 621 | (40) | (6.4) |
|  | 31,010 | 39,405 | (8,395) | (21.3)% |

(a) Data source for retail sales figures shown above is new sales warranty and registration information provided by dealers and compiled by the Company. The Company must rely on information that its dealers supply concerning new retail sales, and the Company does not regularly verify the information that its dealers supply. This information is subject to revision.

During the first quarter of 2025, retail sales in North America were down 24.0% driven by a 25.3% decline in the United States. In the later part of the first quarter and into the second quarter, North American retail sales showed some improvement based on a comparison of February, March and April to the same month last year, where the rate of decline improved from February to March and from March to April. Outside of North America, retail sales were also down during the first quarter of 2025, including a 27.7% decrease in Asia Pacific and a 1.7% decrease in Europe.

U.S. retail sales were negatively impacted by a decline in consumer sentiment resulting from economic uncertainty, combined with high interest rates which adversely impacted consumer discretionary spending. In addition, the decline in retail sales during the first quarter of 2025 was due in part to a positive impact in the prior year associated with the launch of the Company's newly redesigned 2024 new model year Touring motorcycles. Retail sales declines in Asia Pacific, Canada and Europe were also primarily due to challenging macroeconomic conditions with the decline in Asia Pacific primarily driven by lower sales in China and Japan.

Worldwide retail inventory of new motorcycles was approximately 56,000 units at the end of the first quarter of 2025, which was down approximately 19% from the end of the first quarter of 2024, as dealers reduced inventory levels in the current retail environment. Retail inventory of new motorcycles is based on dealer inventory units at the end of each quarter.

### Motorcycle Registration Data and Market Share – 601+cc(a)(d)

The Company's U.S. market share of new 601+cc motorcycles decreased during the first three months of 2025 compared to the first three months of 2024 on lower retail sales relative to the industry. The Company's European market share of new 601+cc motorcycles for the first three months of 2025 was down compared to the first three months of 2024. Industry retail registration data for new motorcycles and the Company's market share was as follows:

| Industry new motorcycle registrations: | Three months ended March 31, 2025 | March 31, 2024 | (Decrease) Increase | % Change |
| --- | ---: | ---: | ---: | ---: |
| United States(b) | 52,418 | 61,185 | (8,767) | (14.3)% |
| Europe(c) | 95,145 | 125,072 | (29,927) | (23.9)% |
| Harley-Davidson market share data: |  |  |  |  |
| United States(b) | 36.2% | 41.6% | (5.4) | pts. |
| Europe(c) | 2.5% | 4.6% | (2.1) | pts. |

(a) Data includes on-road models with internal combustion engines with displacements greater than 600cc's and electric motorcycles with kilowatt (kW) peak power equivalents greater than 600cc's (601+cc). On-road 601+cc models include dual purpose models, three-wheeled motorcycles and autocycles.

(b) United States industry data is derived from information provided by Motorcycle Industry Council. This third-party data is subject to revision and update.

(c) Europe data includes Austria, Belgium, Denmark, Finland, France, Germany, Italy, Luxembourg, Netherlands, Norway, Spain, Sweden, Switzerland, and the United Kingdom. Industry data is derived from information provided by Management Services Helwig Schmitt GmbH. This third-party data is subject to revision and update.

(d) New motorcycle registrations for the industry and Harley-Davidson are provided by or derived from third-party sources. New motorcycle registrations include consumer registrations (retail registrations) and to a lesser extent manufacturer, distributor and dealer registrations (non-retail registrations), for example, to register demonstration fleets. In the later part of 2024, manufacturers (including the Company), distributors and dealers registered some motorcycles through non-retail registrations to qualify the motorcycles under the new Euro 5+ emissions standard to allow for subsequent retail sale after December 31, 2024. This included approximately 3,700 non-retail registrations of new Harley-Davidson motorcycles in 2024, which in turn adversely impacted the number of new Harley-Davidson motorcycle registrations during the first quarter of 2025. While the Company believes industry registrations for Europe were impacted in a similar manner, it does not have access to information necessary to confirm this.

### HDMC Segment

### Harley-Davidson Motorcycle Unit Shipments

Motorcycle unit shipments were as follows:

|  | Three months ended March 31, 2025 Units | Mix % | March 31, 2024 Units | Mix % | Unit Increase (Decrease) | Unit % Change |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| U.S. motorcycle shipments | 24,865 | 64.4% | 41,577 | 72.1% | (16,712) | (40.2)% |
| Worldwide motorcycle shipments: |  |  |  |  |  |  |
| Grand American Touring(a) | 23,678 | 61.3% | 35,356 | 61.3% | (11,678) | (33.0)% |
| Cruiser | 11,860 | 30.8% | 15,691 | 27.2% | (3,831) | (24.4) |
| Sport and Lightweight | 2,108 | 5.4% | 4,963 | 8.6% | (2,855) | (57.5) |
| Adventure Touring | 955 | 2.5% | 1,662 | 2.9% | (707) | (42.5) |
|  | 38,601 | 100.0% | 57,672 | 100.0% | (19,071) | (33.1)% |

(a) Includes Trike

The Company shipped 38,601 motorcycles worldwide during the first quarter of 2025, which was 33.1% lower than the first quarter of 2024. Shipments to dealers in the first quarter of 2025 were lower than the first quarter of 2024 as dealers adjusted inventory levels for the current retail environment, consistent with the Company's expectations. The Company continued to prioritize Grand American Touring models, which are those most desired by customers. The Company shipped a greater proportion of its refreshed Cruiser models, which have higher average selling prices as compared to Sport and Lightweight models, which comprised a lower proportion of shipments compared to the first quarter of 2024.

### Segment Results

Condensed statements of operations for the HDMC segment were as follows (dollars in thousands):

| Revenue: | Three months ended March 31, 2025 | March 31, 2024 | Increase (Decrease) | % Change |
| --- | ---: | ---: | ---: | ---: |
| Motorcycles | $863,863 | $1,221,540 | $(357,677) | (29.3)% |
| Parts and accessories | 143,433 | 166,193 | (22,760) | (13.7) |
| Apparel | 57,322 | 64,112 | (6,790) | (10.6) |
| Licensing | 3,058 | 8,930 | (5,872) | (65.8) |
| Other | 13,829 | 15,331 | (1,502) | (9.8) |
|  | 1,081,505 | 1,476,106 | (394,601) | (26.7) |
| Cost of goods sold | 766,261 | 1,015,036 | (248,775) | (24.5) |
| Gross profit | 315,244 | 461,070 | (145,826) | (31.6) |
| Operating expenses | 198,972 | 222,625 | (23,653) | (10.6) |
| Operating income | $116,272 | $238,445 | $(122,173) | (51.2)% |
| Operating margin | 10.8% | 16.2% | (5.4) | pts. |

49

The estimated impact of significant factors affecting the comparability of net revenue, cost of goods sold and gross profit from the first quarter of 2024 to the first quarter of 2025 were as follows (in millions):

|  | Net Revenue | Cost of Goods Sold | Gross Profit |
| --- | ---: | ---: | ---: |
| Three months ended March 31, 2024 | $1,476.1 | $1,015.0 | $461.1 |
| Volume | (445.2) | (305.0) | (140.2) |
| Price and sales incentives | 22.7 | — | 22.7 |
| Foreign currency exchange rates and hedging | (11.8) | (11.9) | 0.1 |
| Shipment mix | 39.7 | 28.2 | 11.5 |
| Raw material prices | — | 0.8 | (0.8) |
| Manufacturing and other costs | — | 39.2 | (39.2) |
|  | (394.6) | (248.7) | (145.9) |
| Three months ended March 31, 2025 | $1,081.5 | $766.3 | $315.2 |

Factors affecting the comparability of net revenue, cost of goods sold and gross profit from the first quarter of 2024 to the first quarter of 2025 were as follows:

- The decrease in volume was primarily due to lower motorcycle shipments.
- Revenue was positively impacted by favorable pricing on new model year motorcycles.
- Revenue was unfavorably impacted by weaker average foreign currency exchange rates relative to the U.S. dollar compared to the same quarter last year. Cost of sales was favorably impacted by balance sheet remeasurements, resulting in a slightly favorable impact to gross profit.
- Changes in the shipment mix had a favorable impact on gross profit as the Company shipped a higher proportion of Cruiser models and a lower proportion of Sport and Lightweight models. The Company also benefited from a shift toward more profitable models within the Grand American Touring family.
- Raw material costs were higher compared to the prior year.
- Manufacturing and other costs were negatively impacted by unfavorable manufacturing leverage related to higher fixed costs per unit resulting from lower production and shipment volumes. These negative impacts were partially offset by supply-chain productivity gains.

Operating expenses were lower in the first quarter of 2025 compared to the same period last year primarily related to lower people costs, including the cost of compensation and benefits, and decreases in other discretionary spending as the Company continued to focus on cost discipline and increased productivity.

### LiveWire Segment

### Segment Results

Condensed statements of operations for the LiveWire segment were as follows (in thousands, except unit shipments):

|  | Three months ended March 31, 2025 | March 31, 2024 | (Decrease) Increase | % Change |
| --- | ---: | ---: | ---: | ---: |
| Revenue | $2,743 | $4,704 | $(1,961) | (41.7)% |
| Cost of goods sold | 4,524 | 8,645 | (4,121) | (47.7) |
| Gross profit | (1,781) | (3,941) | 2,160 | (54.8) |
| Selling, administrative and engineering expense | 18,028 | 25,300 | (7,272) | (28.7) |
| Operating loss | $(19,809) | $(29,241) | $9,432 | (32.3)% |
| LiveWire motorcycle unit shipments | 33 | 117 | (84) | (71.8)% |

During the first quarter of 2025, revenue decreased by $2.0 million, or 41.7%, compared to the first quarter of 2024. The decrease was primarily due to lower electric balance bike and electric motorcycle volumes sold during the quarter as compared to the same period last year. Cost of sales decreased by $4.1 million, or 47.7%, during the first quarter of 2025 compared to the first quarter of 2024 due to lower electric balance bike and electric motorcycle volumes.

During the first quarter of 2025, selling, administrative and engineering expense decreased $7.3 million compared to the first quarter of 2024 largely as a result of cost reduction actions taken in the second half of 2024.

### HDFS Segment

### Segment Results

Condensed statements of operations for the HDFS segment were as follows (in thousands):

| Revenue: | Three months ended March 31, 2025 | March 31, 2024 | Increase (Decrease) | % Change |
| --- | ---: | ---: | ---: | ---: |
| Interest income | $209,469 | $211,335 | $(1,866) | (0.9)% |
| Other income | 35,492 | 37,462 | (1,970) | (5.3) |
|  | 244,961 | 248,797 | (3,836) | (1.5) |
| Expenses: |  |  |  |  |
| Interest expense | 88,934 | 88,739 | 195 | 0.2 |
| Provision for credit losses | 53,334 | 61,010 | (7,676) | (12.6) |
| Operating expense | 38,657 | 45,173 | (6,516) | (14.4) |
|  | 180,925 | 194,922 | (13,997) | (7.2) |
| Operating income | $64,036 | $53,875 | $10,161 | 18.9% |

Interest income was lower for the first quarter of 2025 compared to the same period last year, primarily due to lower average outstanding finance receivables at a higher average yield. Other income decreased $2.0 million largely due to lower insurance-related and licensing revenue. Interest expense increased due to higher average interest rates on lower average borrowings.

The provision for credit losses decreased $7.7 million compared to the first quarter of 2024 driven by a favorable change in the allowance for credit losses and lower actual credit losses. The favorable change in the allowance for credit losses was due to a larger decrease in retail receivables compared to the first quarter of 2024, partially offset by an increase in the wholesale reserve. The allowance for credit losses considers current economic conditions and the Company’s outlook on future conditions. At the end of the first quarter of 2025, the Company's outlook on economic conditions and its probability weighting of its economic forecast scenarios was weighted toward more pessimistic scenarios given continued challenging macro-economic conditions, including a persistently high interest rate environment, ongoing elevated inflation levels, muted consumer confidence, and risk of a recession.

Total credit losses were favorable on lower retail credit losses partially offset by unfavorable wholesale credit losses. Annualized losses on the Company's retail portfolio were 3.79% during the first quarter of 2025 compared to 3.74% in the first quarter of 2024. The annualized loss rate at March 31, 2025 was negatively impacted by a decline in average outstanding retail finance receivables as compared to March 31, 2024. The 30-day delinquency rate for retail motorcycle loans at March 31, 2025 increased to 4.47% from 4.00% at March 31, 2024. While delinquency performance remains elevated as retail customers continue to be challenged by factors connected to the macro-economic environment such as inflationary pressures and economic uncertainty, retail credit losses moderated on improved repossession volume and stabilizing recovery values at auction. Wholesale credit losses were unfavorable on the charge-off of finance receivables related to troubled dealers.

Operating expenses decreased $6.5 million compared to the first quarter of 2024 due in part to lower amortization, reduced advertising expense, and favorable foreign currency remeasurements.

Changes in the allowance for credit losses on finance receivables were as follows (in thousands):

|  | Three months ended March 31, 2025 | March 31, 2024 |
| --- | ---: | ---: |
| Balance, beginning of period | $401,183 | $381,966 |
| Provision for credit losses | 53,334 | 61,010 |
| Charge-offs, net of recoveries | (61,339) | (62,615) |
| Balance, end of period | $393,178 | $380,361 |

### Other Matters

### Commitments and Contingencies

The Company is subject to lawsuits and other claims related to product, product recall, commercial, employee, environmental and other matters. In determining costs to accrue related to these items, the Company carefully analyzes cases and considers the likelihood of adverse judgments or outcomes, as well as the potential range of possible loss. Any amounts accrued for these matters are monitored on an ongoing basis and are updated based on new developments or new information as it becomes available for each matter. Refer to *Note 14 of the Notes to Consolidated financial statements* for a discussion of the Company's commitments and contingencies.

### Liquidity and Capital Resources

The Company’s strategy is to maintain a minimum of twelve months of its projected liquidity requirements through a combination of cash and cash equivalents and availability under its credit facilities. The Company believes its current cash, cash equivalents and availability under its credit facilities are sufficient to meet its liquidity requirements, consistent with this strategy.

The Company expects to fund its on-going operations (excluding the origination of finance receivables) and its capital allocation priorities including capital expenditures, dividends and discretionary share repurchases primarily with cash flows from operating activities and cash and cash equivalents on hand.(1) The Company expects to fund the origination of finance receivables primarily with unsecured debt, unsecured commercial paper, asset-backed commercial paper conduit facilities, committed unsecured bank facilities, asset-backed securitizations and brokered certificates of deposit.(1)

The Company’s cash and cash equivalents and availability under its credit and conduit facilities at March 31, 2025 were as follows (in thousands):

|  |  |
| --- | ---: |
| Cash and cash equivalents(a) | $1,931,175 |
| U.S. commercial paper conduit facility: |  |
| Asset-backed U.S. commercial paper conduit facility(b) | 1,500,000 |
| Borrowings against committed facility | (531,260) |
| Net asset-backed U.S. commercial paper conduit committed facility availability | 968,740 |
| Availability under credit and conduit facilities: |  |
| Credit facilities | 1,420,000 |
| Commercial paper outstanding | (498,500) |
| Net credit facility availability | 921,500 |
|  | $3,821,415 |

(a) Includes $46.2 million of cash and cash equivalents held by LiveWire Group, Inc.

(b) Includes facilities expiring in the next 12 months, which the Company expects to renew prior to expiration.(1)

To access the debt capital markets, the Company relies on credit rating agencies to assign short-term and long-term credit ratings. Generally, lower credit ratings result in higher borrowing costs and reduced access to debt capital markets. A credit rating agency may change or withdraw the Company's ratings based on its assessment of the Company's current and future ability to meet interest and principal repayment obligations. The Company’s short-term debt ratings affect its ability to issue unsecured commercial paper. The Company’s short- and long-term debt ratings, as of March 31, 2025 were as follows:

|  | Short-Term | Long-Term | Outlook |
| --- | --- | --- | --- |
| Moody’s | P3 | Baa3 | Stable |
| Standard & Poor’s | A3 | BBB- | Stable |
| Fitch | F2 | BBB+ | Stable |

The Company recognizes that it must continue to monitor and adjust its business to changes in the lending environment. The Company intends to continue with a diversified funding profile through a combination of short-term and long-term funding vehicles and to pursue a variety of sources to obtain cost-effective funding.(1) HDFS segment results could be negatively affected by higher costs of funding and increased difficulty of raising, or potential unsuccessful efforts to raise, funding in the short-term and long-term capital markets.(1) These negative consequences could in turn adversely affect the Company’s business and results of operations in various ways, including through higher costs of capital, reduced funds available through HDFS to provide loans to dealers and their retail customers, and dilution to existing shareholders through the use of alternative sources of capital.

### Cash Flow Activity

The Company's cash flow activities were as follows (in thousands):

|  | Three months ended March 31, 2025 | March 31, 2024 |
| --- | ---: | ---: |
| Net cash provided by operating activities | $141,534 | $103,997 |
| Net cash provided (used) by investing activities | 61,395 | (112,500) |
| Net cash provided (used) by financing activities | 150,185 | (25,925) |
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | 3,299 | (7,020) |
| Net increase (decrease) in cash, cash equivalents and restricted cash | $356,413 | $(41,448) |

### Operating Activities

Cash flow provided by operating activities in the first three months of 2025 compared to the first three months of 2024 benefited primarily from lower net cash outflows related to wholesale finance receivables, partially offset by lower net income.

The Company's ongoing operating cash requirements include those related to existing contractual commitments which it expects to fund with cash inflows from operating activities. The Company's purchase orders for inventory used in manufacturing generally do not become firm commitments until 90 days prior to expected delivery. The Company's material contractual operating cash commitments at March 31, 2025 relate to leases, retirement plan obligations and income taxes. The Company's long-term lease obligations and future payments are discussed further in *Note 9 of the Notes to Consolidated financial statements* in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. There are no required qualified pension plan contributions in 2025. The Company’s expected future contributions and benefit payments related to its defined benefit retirement plans are discussed further in *Note 14 of the Notes to Consolidated financial statements* in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. The Company has a liability for unrecognized tax benefits of $10.5 million and related accrued interest and penalties of $7.5 million as of March 31, 2025. The Company cannot reasonably estimate the period of cash settlement for either the liability for unrecognized tax benefits or accrued interest and penalties. The Company continues to expect that it will fund its ongoing operating cash requirements related to the origination of finance receivables with the issuance of debt.

### Investing Activities

The Company’s most significant investing activities consist of capital expenditures and retail finance receivable originations and collections. Capital expenditures were $30.0 million in the first three months of 2025 compared to $46.4 million in the same period last year. The Company's 2025 plan includes capital investments, all of which the Company expects to fund with net cash flow generated by operations.(1)

Net cash inflows for finance receivables during the first three months of 2025 increased cash flows from investing activities by $157.1 million compared to net cash outflows for finance receivables in the same period last year due to lower retail finance receivable originations, partially offset by lower retail finance receivable collections. The Company funds its finance receivables net lending activity through the issuance of debt, discussed in "Financing Activities" below.

### Financing Activities

The Company’s financing activities consist primarily of dividend payments, share repurchases, and debt activity.

The Company paid dividends of $0.180 and $0.173 per share totaling $22.9 million and $24.4 million during the first three months of 2025 and 2024, respectively.

Cash outflows for share repurchases were $93.1 million in the first three months of 2025 compared to $107.8 million in the same period last year. Share repurchases during the first three months of 2025 include $87.5 million or 3.4 million shares of common stock related to discretionary repurchases and $5.6 million or 0.2 million shares of common stock employees surrendered to satisfy withholding taxes in connection with the vesting of restricted stock units and performance shares. On July 18, 2024, the Company's Board of Directors authorized the Company to repurchase up to 24.4 million additional shares of its common stock on a discretionary basis. As of March 31, 2025, there were 18.1 million shares remaining on a board-approved share repurchase authorization.

Financing cash flows related to debt and brokered certificates of deposit activity resulted in net cash inflows of $0.3 billion in the first three months of 2025 compared to net cash inflows of $0.1 billion in the same period last year. The Company’s total outstanding debt and liability for brokered certificates of deposit consisted of the following (in thousands):

| Outstanding debt: | March 31, 2025 | March 31, 2024 |
| --- | ---: | ---: |
| Unsecured commercial paper | $498,500 | $938,719 |
| Asset-backed Canadian commercial paper conduit facility | 68,275 | 88,333 |
| Asset-backed U.S. commercial paper conduit facility | 531,260 | 502,521 |
| Asset-backed securitization debt, net | 1,658,745 | 1,644,626 |
| Medium-term notes, net | 3,797,100 | 3,288,993 |
| Senior notes, net | 746,981 | 746,258 |
|  | $7,300,861 | $7,209,450 |
| Deposits, net | $513,330 | $441,168 |

Refer to *Note 9 of the Notes to Consolidated financial statements* for a summary of future principal payments on the Company's debt obligations. Refer to *Note 6 of the Notes to Consolidated financial statements* for a summary of future maturities on the Company's certificates of deposit.

*Deposits –* HDFS offers brokered certificates of deposit to customers indirectly through contractual arrangements with third-party banks and/or securities brokerage firms through its bank subsidiary. The Company had $513.3 million and $441.2 million, net of fees, of interest-bearing brokered certificates of deposit outstanding as of March 31, 2025 and March 31, 2024, respectively. The deposits are classified as short- and long-term liabilities based upon the term of each brokered certificate of deposit issued. Each separate brokered certificate of deposit is issued under a master certificate, and as such, all outstanding brokered certificates of deposit are considered below the Federal Deposit Insurance Corporation insurance coverage limits.

*Credit Facilities –* In April 2024, the Company extended its existing $710.0 million five-year credit facility that was due to mature in April 2025 so that it now matures in April 2029 and amended the language of its existing $710.0 million five-year credit facility that matures in April 2027 so that it conforms in all respects to the April 2029 credit facility other than maturity date. The five-year credit facilities (together, the Global Credit Facilities) bear interest at variable rates, which may be adjusted upward or downward depending on certain criteria, such as credit ratings. The Global Credit Facilities also require the Company to pay a fee based on the average daily unused portion of the aggregate commitments. The Global Credit Facilities are committed facilities primarily used to support the Company's unsecured commercial paper program.

*Unsecured Commercial Paper –* Subject to limitations, the Company could issue unsecured commercial paper of up to $1.42 billion as of March 31, 2025 supported by the Global Credit Facilities, as discussed above. Outstanding unsecured commercial paper may not exceed the unused portion of the Global Credit Facilities. Maturities may range up to 365 days from the issuance date. The Company intends to repay unsecured commercial paper as it matures with additional unsecured commercial paper or through other means, such as borrowing under the Global Credit Facilities, borrowing under its asset-backed U.S. commercial paper conduit facility or through the use of operating cash flow and cash on hand.

*Medium-Term Notes –* The Company had the following unsecured medium-term notes issued and outstanding at March 31, 2025 (in thousands):

| Principal Amount | Rate | Issue Date | Maturity Date |
| ---: | ---: | --- | --- |
| $700,000 | 3.35% | June 2020 | June 2025 |
| $758,051(a) | 6.36% | April 2023 | April 2026 |
| $500,000 | 3.05% | February 2022 | February 2027 |
| $700,000 | 6.50% | March 2023 | March 2028 |
| $500,000 | 5.95% | June 2024 | June 2029 |
| $660,587(b) | 5.61% | March 2025 | March 2030 |

(a) €700.0 million par value remeasured to U.S. dollar at March 31, 2025

(b) €610.0 million par value remeasured to U.S. dollar at March 31, 2025

The U.S. dollar-denominated medium-term notes provide for semi-annual interest payments and the foreign currency-denominated medium-term notes provide for annual interest payments. Principal on the medium-term notes is due at maturity. Unamortized discounts and debt issuance costs on the medium-term notes reduced the outstanding balance by $21.5 million and $14.1 million at March 31, 2025 and March 31, 2024, respectively. There were no medium-term note maturities during the first quarter of 2025 or 2024.

*Senior Notes –* In July 2015, the Company issued $750.0 million of unsecured senior notes in an underwritten offering. The senior notes provide for semi-annual interest payments and principal due at maturity. $450.0 million of the senior notes mature in July 2025 and have an interest rate of 3.50%, and $300.0 million of the senior notes mature in July 2045 and have an interest rate of 4.625%. The Company used the proceeds from the debt to repurchase shares of its common stock in 2015.

*On-Balance Sheet Asset-Backed Canadian Commercial Paper Conduit Facility –* In June 2024, the Company renewed and amended its revolving facility agreement (Canadian Conduit) with a Canadian bank-sponsored asset-backed commercial paper conduit. Under the renewed and amended agreement, the Canadian Conduit is contractually committed, at the Company's option, to purchase eligible Canadian retail motorcycle finance receivables for proceeds up to C$165.0 million, which was a C$40.0 million increase in the total commitment. The transferred assets are restricted as collateral for the payment of the associated debt. Availability under the Canadian Conduit is based on, among other things, the amount and credit performance of eligible Canadian retail motorcycle finance receivables held as collateral.

The terms for this debt provide for interest on the outstanding principal based on prevailing market interest rates plus a specified margin. The Canadian Conduit also provides for a program fee and an unused commitment fee based on the unused portion of the total aggregate commitment. There is no amortization schedule; however, the debt is reduced monthly as available collections on the related finance receivables are applied to outstanding principal. Upon expiration of the Canadian Conduit, any outstanding principal will continue to be reduced monthly through available collections. The expected remaining term of the related receivables is approximately 4 years. Unless earlier terminated or extended by mutual agreement between the Company and the lenders, as of March 31, 2025, the Canadian Conduit had an expiration date of June 30, 2025.

As a result of elevated credit losses on the Canadian retail motorcycle finance receivables held as collateral, the Company was unable to draw on the Canadian conduit during the first quarter of 2025, and that inability continues. Access to the facility will resume once credit losses return to levels required by the Canadian Conduit. The Company plans to fund Canadian retail motorcycle originations with other existing funding sources until access resumes. During the first quarter of 2024, the Company transferred $34.9 million of Canadian retail motorcycle finance receivables to the Canadian Conduit for proceeds of $28.6 million.

*On-Balance Sheet Asset-Backed U.S. Commercial Paper Conduit Facilities VIE –* In November 2024, the Company renewed its $1.50 billion revolving facility agreement (the U.S. Conduit Facility) with third-party banks and their asset-backed U.S. commercial paper conduits. Under the revolving facility agreement, the Company may transfer U.S. retail motorcycle finance receivables to an SPE, which in turn may issue debt to those third-party banks and their asset-backed U.S. commercial paper conduits. Availability under the U.S. Conduit Facility is based on, among other things, the amount and credit performance of eligible U.S. retail motorcycle finance receivables held by the SPE as collateral.

Under the U.S. Conduit Facility, the assets of the SPE are restricted as collateral for the payment of the debt or other obligations arising in the transaction and are not available to pay other obligations or claims of the Company’s creditors. The terms for this debt provide for interest on the outstanding principal based on prevailing commercial paper rates if funded by a conduit lender through the issuance of commercial paper. The interest rate on all borrowings, if not funded by a conduit lender through the issuance of commercial paper, is based on the Secured Overnight Financing Rate (SOFR), with provisions for a transition to other benchmark rates in the future, if necessary. In addition to interest, a program fee is assessed based on the outstanding debt principal balance. The U.S. Conduit Facility also provides for an unused commitment fee based on the unused portion of the total aggregate commitment. There is no amortization schedule; however, the debt is reduced monthly as available collections on the related finance receivables are applied to outstanding principal. Upon expiration of the U.S. Conduit Facility, any outstanding principal will continue to be reduced monthly through available collections. The expected remaining term of the related receivables held by the SPE is approximately 5 years. Unless earlier terminated or extended by mutual agreement of the Company and the lenders, as of March 31, 2025, the U.S. Conduit Facility had an expiration date of November 21, 2025.

During the first quarter of 2025, the Company transferred $179.5 million of U.S. retail motorcycle finance receivables to an SPE which, in turn, issued $155.0 million of debt under the U.S. Conduit Facility. During the first quarter of 2024, the Company transferred $334.8 million of U.S. retail motorcycle finance receivables to an SPE which, in turn, issued $306.0 million of debt under the U.S. Conduit Facility.

*Asset-Backed Securitization VIEs –* For all of its asset-backed securitization transactions, the Company transfers U.S. retail motorcycle finance receivables to separate VIEs, which in turn issue secured notes with various maturities and interest rates to investors. All of the notes held by the VIEs are secured by future collections of the purchased U.S. retail motorcycle finance receivables. The U.S. retail motorcycle finance receivables included in the asset-backed securitization transactions are not available to pay other obligations or claims of the Company's creditors until the associated debt and other obligations are satisfied. Restricted cash balances held by the VIEs are used only to support the asset-backed securitizations.

The accounting treatment for the asset-backed securitizations depends on the terms of the related transaction and the Company’s continuing involvement with the VIE. The Company's current outstanding asset-backed securitizations do not meet the criteria to be accounted for as a sale because, in addition to retaining servicing rights, the Company retains a financial interest in the VIE in the form of a debt security. These transactions are treated as secured borrowings, and as such, the retail motorcycle finance receivables remain on the balance sheet with a corresponding obligation reflected as debt. There is no amortization schedule for the secured notes; however, the debt is reduced monthly as available collections on the related retail motorcycle finance receivables are applied to outstanding principal. The secured notes currently have various contractual maturities ranging from 2026 to 2032.

There were no on-balance sheet asset-backed securitization transactions during the first quarter of 2025 or 2024.

*Intercompany Agreements –* Harley Davidson, Inc. has a support agreement with Harley-Davidson Financial Services Inc. whereby, if required, Harley-Davidson, Inc. agrees to provide Harley-Davidson Financial Services Inc. with financial support to maintain Harley-Davidson Financial Services Inc.’s fixed-charge coverage at 1.25 and minimum net worth of $40.0 million. Support may be provided at Harley-Davidson, Inc.'s option as capital contributions or loans. No amount has ever been provided to Harley-Davidson Financial Services Inc. under the support agreement.

On February 14, 2024, Harley-Davidson, Inc. entered into a Convertible Delayed Draw Term Loan Agreement (the Convertible Term Loan) with LiveWire Group, Inc. and a wholly-owned subsidiary of LiveWire Group, Inc. whereby LiveWire may obtain term loans in one or more advances up to an aggregate principal amount of $100.0 million. The outstanding principal under the Convertible Term Loan bears interest at a floating rate per annum, as calculated on the date of each advance and as of each June 1 and December 1 thereafter. The interest rate is calculated based on the sum of (i) the forward- looking term rate based on SOFR for a six-month interest period, plus (ii) 4.00%. The Convertible Term Loan does not include affirmative covenants impacting the operations of LiveWire. The Convertible Term Loan includes negative covenants restricting the ability of LiveWire to incur indebtedness, create liens, sell assets, make investments, make fundamental changes, make dividends or other restricted payments and enter into affiliate transactions. The Convertible Term Loan has a maturity date of the earlier of (i) 24 months from the date of the first draw on the loan or (ii) October 31, 2026. In the event that the Convertible Term Loan cannot be settled in cash by LiveWire at maturity, unless otherwise agreed between Harley-Davidson, Inc. and LiveWire, the Convertible Term Loan will be converted to equity of LiveWire Group, Inc. at a conversion price per share of LiveWire Group, Inc. common stock equal to 90% of the volume weighted average price per share of common stock for the 30 trading days immediately preceding the conversion date. As of March 31, 2025, there had been no draws and there was no outstanding balance under the Convertible Term Loan.

The Company believes headwinds facing the broader powersports and discretionary leisure industries are even more complicated in the electric vehicle (EV) segment of the market. The Company believes indicators points to a much later EV adoption than originally anticipated given a lack of government incentives and a notably less favorable regulatory environment, combined with a slower expansion of charging infrastructure. The Company is evaluating all options for its investment in LiveWire while LiveWire will continue evaluating all options for its business, including seeking external capital if and when needed. In addition, LiveWire plans to continue to drive additional significant cost savings to reduce cash usage and operating losses with the intention to get to a sustainable business model with the existing funds available. The Company does not plan to make additional investments in LiveWire beyond availability under the Convertible Term Loan of up to $100 million.

*Operating and Financial Covenants –* Harley-Davidson Financial Services Inc. and the Company are subject to various operating and financial covenants related to the credit facilities and various operating covenants under the medium-term and senior notes and the U.S. and Canadian asset-backed commercial paper conduit facilities. The more significant covenants are described below.

The operating covenants limit the Company’s and Harley-Davidson Financial Services Inc’s ability to:

- Assume or incur certain liens;
- Participate in certain mergers or consolidations; and
- Purchase or hold margin stock.

Under the current financial covenants of the Global Credit Facilities, the ratio of Harley-Davidson Financial Services Inc.’s consolidated debt, excluding secured debt, to Harley-Davidson Financial Services' consolidated allowance for credit losses on finance receivables plus Harley-Davidson Financial Services Inc’s consolidated shareholders' equity, excluding accumulated other comprehensive loss (AOCL), cannot exceed 10.0 to 1.0 as of the end of any fiscal quarter. In addition, the ratio of the Company's consolidated debt to the Company's consolidated debt and consolidated shareholders’ equity (where the Company's consolidated debt in each case excludes that of Harley-Davidson Financial Services Inc. and its subsidiaries, and the Company's consolidated shareholders’ equity excludes AOCL), cannot exceed 0.7 to 1.0 as of the end of any fiscal quarter. No financial covenants are required under the medium-term or senior notes or the U.S. or Canadian asset-backed commercial paper conduit facilities.

As of March 31, 2025, Harley-Davidson Financial Services Inc. and the Company remained in compliance with all of the then existing covenants, other than the Canadian Conduit discussed above.

### Cautionary Statements

Important factors that could affect future results and cause those results to differ materially from those expressed in the forward-looking statements include, among others, the Company’s ability to: (a) execute its business plans and strategies, including without limitation the Hardwire strategic plan, each of the pillars, and the evolution of LiveWire as a standalone brand; (b) manage supply chain and logistics issues, including without limitation quality issues, unexpected interruptions or price increases caused by supplier volatility, raw material shortages, inflation, war or other hostilities, including the conflict in Ukraine, or natural disasters and longer shipping times and increased logistics costs; (c) manage and predict the impact that new, reinstated or adjusted tariffs may have on the Company's ability to sell products domestically and internationally, and the cost of raw materials and components, including tariffs recently imposed or that may be imposed by the U.S. on foreign goods or rebalancing or other tariffs recently imposed or that may be imposed by foreign countries on U.S. goods; (d) accurately analyze, predict and react to changing market conditions, interest rates, and geopolitical environments, and successfully adjust to shifting global consumer needs and interests; (e) accurately predict the margins of its segments in light of, among other things, tariffs, rebalancing trade measures, inflation, foreign currency exchange rates, the cost associated with product development initiatives and the Company's complex global supply chain; (f) maintain and enhance the value of the Harley-Davidson brand, including detecting and mitigating or remediating the impact of activist collective actions, such as calls for boycotts and other brand-damaging behaviors that could harm the Company's brand or business; (g) manage through changes in general economic and business conditions, including changing capital, credit and retail markets, and the changing domestic and international political environments, including as a result of the conflict in Ukraine; (h) successfully access the capital and/or credit markets on terms that are acceptable to the Company and within its expectations; (i) successfully carry out its global manufacturing and assembly operations; (j) develop and introduce products, services and experiences on a timely basis that the market accepts, that enable the Company to generate desired sales levels and that provide the desired financial returns, including successfully implementing and executing plans to strengthen and grow its leadership position in Grand American Touring, large Cruiser and Trike, and grow its complementary businesses; (k) perform in a manner that enables the Company to benefit from market opportunities while competing against existing and new competitors; (l) manage the impact that prices for and supply of used motorcycles may have on its business, including on retail sales of new motorcycles; (m) prevent, detect and remediate any issues with its motorcycles, or any issues associated with the manufacturing processes to avoid delays in new model launches, recall campaigns, regulatory agency investigations, increased warranty costs or litigation and adverse effects on its reputation and brand strength, and carry out any product programs or recalls within expected costs and timing; (n) successfully manage and reduce costs throughout the business; (o) continue to develop the capabilities of its distributors and dealers, effectively implement changes relating to its dealers and distribution methods, including the Company's dealer footprint, and manage the risks that its dealers may have difficulty obtaining capital and managing through changing economic conditions and consumer demand; (p) realize the expected business benefits from LiveWire operating as a separate public company, which may be affected by, among other things: (i) the ability of LiveWire to execute its plans to develop, produce, market and sell its electric vehicles; (ii) the demand for and consumer willingness to adopt two- and three-wheeled electric vehicles; and (iii) other risks and uncertainties indicated in documents filed with the SEC by the Company or LiveWire Group, Inc., including those risks and uncertainties noted in *Risk Factors* under *Item 1.A* of LiveWire Group Inc.'s most recent Annual Report on Form 10-K; (q) manage the quality and regulatory non-compliance issues relating to the brake hose assemblies provided to the Company by Proterial Cable America, Inc. in a manner that avoids future quality or non-compliance issues and additional costs or recall expenses that are material; (r) maintain a productive relationship with Hero MotoCorp as a distributor and licensee of the Harley-Davidson brand name in India; (s) successfully maintain or achieve a manner in which to sell motorcycles in Europe, China, and the Company's Association of Southeast Asian Nations (ASEAN) countries that does not subject its motorcycles to incremental tariffs; (t) manage its Thailand corporate and manufacturing operation in a manner that allows the Company to avail itself of preferential free trade agreements and duty rates, and sufficiently lower prices of its motorcycles in certain markets; (u) retain and attract talented employees and leadership, and eliminate personnel duplication, inefficiencies and complexity throughout the organization; (v) accurately estimate and adjust to fluctuations in foreign currency exchange rates, interest rates and commodity prices; (w) manage the credit quality, the loan servicing and collection activities, and the recovery rates of Harley-Davidson Financial Services' loan portfolio; (x) prevent ransomware attacks or cybersecurity incidents and data privacy breaches and respond to related evolving regulatory requirements; (y) adjust to tax reform, healthcare inflation and reform and pension reform, and successfully estimate the impact of any such reform on the Company’s business; (z) manage through the effects inconsistent and unpredictable weather patterns may have on retail sales of motorcycles; (aa) implement and manage enterprise-wide information technology systems, including systems at its manufacturing facilities; (bb) manage changes, prepare for, and respond to evolving requirements in legislative and regulatory environments related to its products, services and operations, including increased environmental, safety, emissions or other regulations; (cc) manage its exposure to product liability claims in a manner that avoids or successfully mitigates the impact of substantial jury verdicts, including the successful resolution or appeal of the verdict in the product lawsuit against the Company in which, in August 2024, a jury awarded approximately $288 million in damages to the plaintiffs, which was subsequently reduced to $81 million, and manage exposure in commercial or contractual disputes; (dd) continue to manage the relationships and agreements that the Company has with its labor unions to help drive long-term competitiveness; (ee) explore a third-party investment in HDFS in a manner consistent with the Company's objectives and that does not adversely affect its business; (ff) manage risks related to outsourced functions and use of artificial intelligence; (gg) achieve anticipated results with respect to the Company's preowned motorcycle program, Harley-Davidson Certified, the Company's H-D1 Marketplace, and Apparel and Licensing; (hh) optimize capital allocation in light of the Company's capital allocation priorities; (ii) manage impacts of activist shareholders or activist campaigns; (jj) manage the Company's share repurchase strategy; and (kk) manage issues related to climate change and related regulations.

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

HDFS' retail credit losses have normalized in recent quarters to higher levels after a period of historically low levels of credit losses. Further, the Company believes that HDFS's retail credit losses will continue to change over time due to changing consumer credit behavior, macroeconomic conditions, including the impact of inflation and HDFS's efforts to increase prudently structured loan approvals to sub-prime borrowers. In addition, HDFS’s efforts to adjust underwriting criteria based on market and economic conditions and the actions that the Company has taken and could take that impact motorcycle values may impact HDFS's retail credit losses.

The Company's operations, demand for its products, and its liquidity could be adversely impacted by changes in tariffs, inflation, work stoppages, facility closures, strikes, natural causes, widespread infectious disease, terrorism, war or other hostilities, including the conflict in Ukraine and the Red Sea conflict, or other factors. Refer to *Risk Factors* under *Item 1.A* of this report and *Risk Factors* under *Item 1.A* of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 for a discussion of additional risk factors and a more complete discussion of some of the cautionary statements noted above.

## Market risk

As filed, 4,996 characters.

The Company is exposed to market risk from changes in foreign currency exchange rates, commodity prices and interest rates. To reduce such risks, the Company selectively uses derivative financial instruments. All hedging transactions are authorized and executed pursuant to regularly reviewed policies and procedures, which prohibit the use of financial instruments for speculative trading purposes. Sensitivity analysis is used to manage and monitor foreign currency exchange rate and interest rate risks. Further disclosure relating to the fair value of the Company's derivative financial instruments is included in *Note 8 of the Notes to Consolidated financial statements.*

### HDMC Segment

The Company sells its motorcycles and related products internationally and in most markets those sales are made in the foreign country’s local currency. As a result, the HDMC segment operating results are affected by fluctuations in the value of the U.S. dollar relative to foreign currencies. The Company’s most significant foreign currency exchange rate risk resulting from the sale of motorcycles and related products relates to the Euro, Australian dollar, Japanese yen, Brazilian real, Canadian dollar, Mexican peso, Chinese yuan, Singapore dollar, Thai baht and Pound sterling. The Company utilizes foreign currency contracts to mitigate the effect of certain currencies' fluctuations on HDMC segment operating results. The foreign currency contracts are entered into with banks and allow the Company to exchange currencies at a future date, based on a fixed exchange rate. There have been no material changes to the foreign currency exchange rate market risk information included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

The Company purchases commodities for the use in the production of motorcycles. As a result, HDMC segment operating income is affected by changes in commodity prices. The Company uses derivative financial instruments on a limited basis to hedge the prices of certain commodities. There have been no material changes to the commodity market risk information included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

### LiveWire Segment

LiveWire sells its electric motorcycles, electric balance bikes and related products internationally, and in most markets, those sales are made in the foreign country’s local currency. As a result, LiveWire’s operating results are affected by fluctuations in the values of the U.S. dollar relative to foreign currencies; however, the impact of such fluctuations on LiveWire’s operations to date have not been material given the majority of LiveWire’s sales are currently in the U.S. LiveWire plans to expand its business and operations internationally and expects its exposure to currency rate risk to increase as it grows its international presence.

### HDFS Segment

The Company has interest rate-sensitive financial instruments including financial receivables, debt and interest rate derivative financial instruments. As a result, HDFS operating income is affected by changes in interest rates. The Company utilizes interest rate caps to reduce the impact of fluctuations in interest rates on its asset-backed securitization transactions. There have been no material changes to the interest rate market risk information included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

HDFS also has short-term commercial paper and debt issued through the commercial paper conduit facilities that is subject to changes in interest rates, which it does not hedge. There have been no material changes to the interest rate market risk information included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

The Company has foreign currency denominated medium-term notes, and as a result, HDFS operating income is affected by fluctuations in the value of the U.S. dollar relative to foreign currencies and interest rates. At March 31, 2025, this exposure related to the Euro. The Company utilizes cross-currency swaps to mitigate the effect of the foreign currency exchange rate and interest rate fluctuations related to foreign currency denominated debt. During the first quarter of 2025, the Company entered into cross-currency swap agreements to mitigate foreign exchange risk on Euro-denominated medium-term notes issued within the period. The Company estimates that a 10% adverse change in the underlying foreign currency exchange rate and interest rate would result in a $65.1 million decrease in the fair value of these swap agreements. There have been no other material changes to the foreign currency exchange rate and interest rate market risk information included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

Refer to the Company's Annual Report on Form 10-K for the year ended December 31, 2024 for further information concerning the Company's market risk.

## Controls and procedures

As filed, 1,702 characters.

*Evaluation of Disclosure Controls and Procedures –* In accordance with Rule 13a-15(b) of the Securities Exchange Act of 1934 (the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q, the Company’s management evaluated, with the participation of the Company’s President and Chief Executive Officer and the Chief Financial Officer, the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based upon their evaluation of these disclosure controls and procedures, the President and Chief Executive Officer and Chief Financial Officer have concluded that the disclosure controls and procedures were effective as of the end of the period covered by this Quarterly Report on Form 10-Q to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time period specified in the Securities and Exchange Commission rules and forms, and to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its President and Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding disclosure.

*Changes in Internal Controls –* There were no changes in the Company's internal control over financial reporting during the quarter ended March 31, 2025 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

## Risk factors

As filed, 9,578 characters.

An investment in Harley-Davidson, Inc. involves risks, including the risk factors discussed in *Item 1A. Risk Factors* of the Company's Annual Report on Form 10-K for the year ended December 31, 2024, which have not materially changed except as set forth below. The following risk factors have been updated to reflect new developments and emerging risks related to governmental actions related to tariffs and international trade and the pending activist campaign by H Partners, one of the Company's largest shareholders.

- **Changes in national policy, governmental actions related to tariffs or international trade agreements, as well as shifts in social, political, regulatory, and economic conditions or laws and policies governing foreign trade, manufacturing, development, and investment in the regions where the Company operates, can significantly impact the Company's business. Such changes could lead to negative sentiments towards the Company, potentially depressing economic activity or restricting access to suppliers or customers, and thereby have a material adverse effect on the Company's business, results of operations and outlook.** In January 2025, the global tariff landscape began to quickly change with the U.S. implementing tariffs on goods from various foreign countries, either generally or with respect to certain products, and certain of those foreign countries implementing rebalancing tariffs on goods from the U.S., either generally or with respect to certain products. In certain circumstances the U.S. and certain foreign countries temporarily suspended tariffs they had recently implemented, either in whole or in part. Since then, the U.S. has continued to impose tariffs on imported goods, and affected countries have responded by imposing tariffs on U.S. goods. In April 2025, the U.S. announced a baseline tariff of 10% on goods from all countries and instituted additional individualized reciprocal tariffs for countries with which the U.S. has significant trade deficits. The U.S. continues to implement new, reinstated or adjusted tariffs, and the Company expects that it will continue with this practice. Foreign countries subject to these U.S. tariffs continue to implement new, reinstated or adjusted rebalancing tariffs, and the Company expects that foreign countries will continue with that practice. For

example, in February 2025, the U.S. imposed additional tariffs on imports from China, and China responded with retaliatory tariffs on U.S. goods. The U.S. and foreign countries may also amend, suspend or withdraw their respective recently-enacted tariffs at any time. If the recently-enacted tariffs are not amended, suspended or withdrawn, it is likely to negatively impact the Company’s ability to sell products domestically and internationally at or near current prices as tariffs impact the cost of raw materials, components and motorcycles.

For example, in 2018, the U.S. implemented tariffs on steel and aluminum imports into the U.S. from the EU, and in response, the EU implemented incremental rebalancing tariffs of 25% on certain products imported into the EU, including non-electric motorcycles. In April 2021, the incremental rebalancing tariffs started to apply, resulting in a 31% duty on the Company’s motorcycles imported into the EU from its manufacturing facilities in the U.S. and Thailand. These incremental tariffs were suspended in October 2021 pending negotiations between the U.S. and EU and were recently further suspended until July 14, 2025. Further, if the U.S. and EU are unable to reach a solution on the steel and aluminum tariffs, the EU has amended its 2018 incremental rebalancing tariffs on motorcycles, removing the additional tariff of 50% on U.S.-origin motorcycles and amending the tariff to 25%, effective July 14, 2025.

The U.S. tariffs and rebalancing tariffs that were recently enacted or that may be enacted have contributed to uncertainty about current global economic conditions. In addition to impacting the cost of motorcycles, sustained uncertainty could increase the cost of components and raw materials used to make the Company’s motorcycles and other products and result in a global economic slowdown and long-term changes to global trade. Higher production costs could make the Company’s motorcycles and other products less affordable for consumers, both in the U.S. and in foreign countries, and negatively impact consumer demand.

- **The Company’s operations are dependent upon attracting and retaining skilled employees, including skilled labor, executive officers and other senior leaders. The Company’s future success depends on its continuing ability to: (i) identify, hire, develop, motivate, retain and promote skilled personnel for all areas of its organization; (ii) effectively execute reorganization actions within expected costs and realize the expected benefits of those actions; and (iii) attract qualified and experienced independent directors for its Board of Directors.** The Company is highly dependent on its senior management, other key personnel and its Board. The loss of key personnel or independent directors could adversely affect the Company’s operations and profitability. The current activist campaign by one of the Company’s largest shareholders, H Partners, contesting the composition of the Company's senior management and Board could adversely impact the Company's ability to attract and retain skilled employees and employees' productivity. An activist campaign of the type the Company is currently experiencing demands considerable time and attention from senior management, other key personnel and the Board, redirecting their focus away from implementing and overseeing the Company’s strategy. Any perceived uncertainties regarding the Company's future direction and control, its ability to execute its strategy, or alterations to the composition of its Board or senior management team as a result of the activist campaign could create a perception of instability or a shift in business direction, affecting the Company’s ability to attract or retain qualified personnel or independent directors. Further, the Company’s current and future total compensation arrangements, which include benefits and incentive awards, may not be successful in attracting new employees and retaining and motivating the Company’s existing employees. In addition, the Company must cultivate and sustain a work environment where employees are engaged and energized in their jobs to maximize their performance, and the Company must effectively execute reorganization actions. If the Company does not succeed in attracting new personnel, retaining existing personnel, implementing effective succession plans and motivating and engaging personnel, including executive officers, the Company may be unable to develop and distribute products and services and effectively execute its plans and strategies.
- **Activist shareholders or activist campaigns could cause the Company to incur substantial costs, hinder the execution of the Company’s strategy or have other adverse impacts on the Company.** The Company may receive proposals from shareholders requesting certain corporate actions that may not align with the Company’s business strategies or the interests of the Company’s other shareholders or be the target of activist campaigns aimed at pressuring the Company to take actions that do not align with the Company’s business strategies or the interests of the Company’s shareholders. For example, one of the Company’s largest shareholders, H Partners, launched an activist campaign during this year’s proxy season contesting the composition of the Company's senior management and Board. If the composition of the Company's senior management and Board are ultimately impacted by H Partner's activist campaign, it may adversely affect the Company's rigorous and comprehensive CEO search process, its ongoing Board refreshment efforts, and the execution of the Company's Hardwire strategic plan. A proxy contest is costly and time-consuming, requiring the Company to retain advisors on these matters, including legal, financial, and public relations, and requires significant time and attention by our Board and management, disrupting the Company’s operations by diverting their attention. Furthermore, the Company may become involved in legal

proceedings stemming from the activist campaign, and such actions would serve as a further distraction to the Board and management and may require the Company to incur substantial additional costs. Any perceived uncertainties regarding the Company's future direction and control, its ability to execute its strategy, or alterations to the composition of its Board or senior management team as a result of the activist campaign could create a perception of instability or a shift in business direction. These perceived uncertainties may lead to the loss of potential business opportunities, hinder the pursuit of strategic initiatives, or restrict the Company’s ability to attract or retain qualified personnel and business partners, affecting the Company’s business, operating results, and the market price and volatility of its common stock.

The Company disclaims any obligation to update these risk factors or any other forward-looking statements. The Company assumes no obligation, and specifically disclaims any such obligation, to update these risk factors or any other forward-looking statements to reflect actual results, changes in assumptions or other factors affecting such forward-looking statements.

Filed May 6, 2025.
Source: SEC EDGAR, the filing index for accession 0000793952-25-000111. Last ingested by Listed: Nov 6, 2026, 16:30 ET. No prices; not investment advice.