HARLEY-DAVIDSON, INC.

Previous wording

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.

Current wording

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," 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 July 30, 2025 and the remaining forward-looking statements in this report are made as of the date of the filing of this report (August 6, 2025), and the Company disclaims any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances.

Previous wording

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.

Current wording

Net income attributable to Harley-Davidson, Inc. was $107.6 million, or $0.88 per diluted share, in the second quarter of 2025 compared to $218.3 million, or $1.63 per diluted share, in the second quarter of 2024.

Previous wording

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.

Current wording

In the second quarter of 2025, HDMC segment operating income was $61.3 million, down $136.6 million from the second quarter of 2024. The decrease in operating income from the HDMC segment for the second quarter of 2025 was driven primarily by a planned decrease in motorcycle shipments as well as softer than expected retail demand. HDMC operating income was also impacted by unfavorable operating leverage on lower shipments, partially offset by favorable foreign currency impacts and pricing compared to the same quarter last year. Operating loss from the LiveWire segment in the second quarter of 2025 was $18.7 million compared to an operating loss of $28.2 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 second quarter of 2025 was $69.8 million, down $1.6 million compared to the prior year quarter due primarily to lower interest income, partially offset by a lower provision for credit losses.

Previous wording

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.

Current wording

Worldwide retail sales of new Harley-Davidson motorcycles in the second quarter of 2025 declined 15.5% compared to the second quarter of 2024. Retail sales were adversely impacted by depressed consumer sentiment, resulting from economic uncertainty, combined with high interest rates. Retail sales were down 17.0% in North America, 4.9% in EMEA and 21.4% in Asia-Pacific. Refer to the Harley-Davidson Motorcycles Retail Sales and Registration Data section for further discussion of retail sales results.

Previous wording

Incremental U.S. and Foreign Tariffs – 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.

Current wording

U.S. and Foreign Tariffs – During 2025, the U.S. has implemented or announced plans to implement new or increased tariffs on goods from various foreign countries, either generally or with respect to certain products, and certain of those foreign countries have implemented or announced plans to implement new or increased 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 or delayed the implementation of new or increased tariffs, either in whole or in part, while trade negotiations take place. During the first six months of 2025, the total cost of new or increased tariffs implemented in 2025 that the Company incurred was approximately $17 million(a).

Previous wording

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):

Current wording

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 limit 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 current tariff landscape, the Company estimated the potential impacts to it in 2025 of new or increased tariffs implemented or expected to be implemented in 2025 to be as follows (dollars in millions):

Previous wording

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.

Current wording

Interest Rates - Interest rates remained heightened in the first six 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.

Previous wording

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.

Current wording

New Products and Annual Launch Timing - The Company has announced plans to introduce a new small displacement motorcycle with a targeted entry price below $6,000, which the Company believes will be profitable, 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 preceding 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. Finally, the Company announced LiveWire will launch production versions of two concept mini-motorcycles, which represents a strategic shift in LiveWire's product portfolio to align with evolving customer preferences, broader electric vehicle adoption trends, and growing global demand for lightweight, urban-friendly mobility solutions.

Previous wording

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.

Current wording

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, on May 1, 2025, the Company withdrew 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; LiveWire motorcycle unit sales; and HDFS operating income, provision for credit losses, interest income and borrowing costs. The Company also withdrew its longer-term expectations for HDMC operating income in 2026 and beyond.

Previous wording

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.

Current wording

As the Company continues to move 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.

Previous wording

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.

Current wording

The Company revised its expectation for the LiveWire segment and now expects an operating loss of approximately $59 million to $69 million in 2025 and a total use of cash of approximately $50 million to $60 million in 2025. The Company's previous expectation for LiveWire in 2025 included an operating loss of approximately $59 million and a total use of cash of approximately $50 million.

Previous wording

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.

Current wording

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 $48 million during the first six months of 2025, primarily from logistics and supply chain initiatives. 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.

Previous wording

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.

Current wording

The Company continues to expect the range for capital investments in 2025 to be $200 million to $225 million and continues to expect it will invest in product development and capability enhancements that support The Hardwire strategic plan.

Previous wording

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.

Current wording

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 remains committed to 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 $500 million of discretionary share repurchases in the second half of 2025, assuming the HDFS Transaction successfully closes, resulting in a total expectation of $587.5 million of discretionary share repurchases in 2025. The Company previously expected $350 million of discretionary share repurchases in 2025. The Company purchased $250 million of shares on a discretionary basis during the third and fourth quarters of 2024 and $87.5 million during the first six months of 2025.

Previous wording

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.

Current wording

The Company reported operating income of $112.4 million in the second quarter of 2025 compared to $241.1 million in the same period last year. The HDMC segment reported operating income of $61.3 million in the second quarter of 2025, a decrease of $136.6 million compared to the second quarter of 2024. Operating loss from the LiveWire segment decreased $9.5 million compared to the second quarter of 2024. Operating income from the HDFS segment decreased $1.6 million compared to the second 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.

Previous wording

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.

Current wording

Other income, net in the second quarter of 2025 was lower than in the second quarter of 2024, due to the impact of an unfavorable change in the fair value of LiveWire's warrant liability in the second quarter of 2025 compared to the second quarter of 2024.

Previous wording

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.

Current wording

Diluted earnings per share was $0.88 in the second quarter of 2025, down 46.0% from the same period last year. Diluted weighted average shares outstanding decreased from 134.1 million in the second quarter of 2024 to 122.2 million in the second 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.

Previous wording

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.

Current wording

During the second quarter of 2025, retail sales in North America were down 17.0% driven by a 17.2% decline in the United States. Despite unfavorable retail performance in the second quarter of 2025, the Company is encouraged by retail results in North America at the start of July 2025 and expects North American retail sales in the second half of 2025 to grow compared to the same period last year(1). Outside of North America, retail sales were also down during the second quarter of 2025, including a 21.4% decrease in Asia Pacific and a 4.9% decrease in Europe.

Previous wording

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.

Current wording

U.S. retail sales were negatively impacted by depressed 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 six months of 2025 was due in part to a positive impact in the prior year associated with the launch of the Company's redesigned 2024 new model year Touring motorcycles, which is the Company's highest volume motorcycle family. 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 Japan and China.

Previous wording

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.

Current wording

Worldwide retail inventory of new motorcycles was approximately 49,000 units at the end of the second quarter of 2025, which was down approximately 28% from the end of the second quarter of 2024, as dealers reduced inventory levels in the current retail environment.

Previous wording

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.

Current wording

The Company shipped 35,837 motorcycles worldwide during the second quarter of 2025, which was 27.8% lower than the second quarter of 2024. Shipments to dealers in the second quarter of 2025 were lower than the second quarter of 2024 based on a planned decrease in motorcycle shipments and softer than expected retail demand as dealers adjusted inventory levels for the current retail environment. The Company shipped a greater proportion of its refreshed Cruiser models and a lower proportion of Grand American Touring models as the prior year included the launch of the Company's newly redesigned Touring motorcycles.

Previous wording

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):

Current wording

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

Previous wording

•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.

Current wording

•Revenue was favorably impacted by stronger 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, partially offset by unfavorable impacts from hedging activities.

Previous wording

•Raw material costs were higher compared to the prior year.

Current wording

•Raw material costs were lower compared to the prior year.

Previous wording

•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.

Current wording

•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 as well as higher tariff and logistics costs. These negative impacts were partially offset by supply-chain productivity gains.

Previous wording

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.

Current wording

During the second quarter of 2025, revenue decreased by $0.4 million, or 6.8%, compared to the second quarter of 2024. The decrease was primarily due to lower electric motorcycle volumes sold, partially offset by higher electric balance bike volumes sold during the quarter as compared to the same period last year. Cost of sales decreased by $2.4 million, or 28.9%, during the second quarter of 2025 compared to the second quarter of 2024 due to lower electric motorcycle volumes.

Previous wording

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.

Current wording

During the second quarter of 2025, selling, administrative and engineering expense decreased $7.6 million, or 28.7%, compared to the second quarter of 2024 largely as a result of cost reduction actions taken in the second half of 2024.

Previous wording

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.

Current wording

Interest income was lower for the second 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 increased $1.5 million largely due to higher investment income and licensing revenue.

Previous wording

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.

Current wording

The Company's effective income tax rate for the first six months of 2025 was 23.2% compared to 19.3% for the same period in 2024. The increase in the effective income tax rate for the six months ended June 30, 2025 was attributable to discrete income tax adjustments related to the realizability of future tax benefits.

Previous wording

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:

Current wording

The Company's U.S. market share of new 601+cc motorcycles decreased during the first six months of 2025 compared to the first six months of 2024 when the Company's market share benefited from the launch of its newly redesigned Touring motorcycles. The Company's European market share of new 601+cc motorcycles for first six months of 2025 was down compared to the first six months of 2024. Industry retail registration data for new motorcycles and the Company's market share was as follows:

Previous wording

(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.

Current wording

(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 six months 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.

Previous wording

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.

Current wording

Operating expenses were lower in the first six months of 2025 compared to the same period last year primarily due to lower people costs, including the cost of compensation and benefits, as well as lower warranty costs on lower volume, partially offset by increased marketing costs as the Company supports its dealers' marketing efforts during the riding season and costs related to the Company's proxy contest in connection with this year's annual meeting of shareholders.

Previous wording

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.

Current wording

The provision for credit losses was $14.0 million lower in the first six months of 2025 as compared to the prior year primarily due to a favorable change in the allowance for credit losses. The favorable change in the allowance for credit losses was primarily driven by a decrease in retail receivables partially offset by an increase in the wholesale reserve compared to the first six months of 2024. The Company's outlook on economic conditions and its probability weighting of its economic forecast scenarios at the end of the second quarter of 2025 were weighted towards more pessimistic scenarios given continued challenging macro‐economic conditions, including a persistently high interest rate environment and muted consumer confidence. The Company’s expectations surrounding its economic forecasts may change in future periods as additional information becomes available.

Previous wording

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)

Current wording

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 as well as cash generated from the HDFS Transaction as described in Key Factors.(1) Assuming the successful closing of the HDFS Transaction, the Company expects to fund approximately two-thirds of retail finance originations through the monthly sale of these retail loan originations to its counterparties in the HDFS Transaction as described in Key Factors. The Company expects to fund the origination of remaining 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)

Previous wording

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

Current wording

(a)Includes $29.3 million of cash and cash equivalents held by LiveWire Group, Inc.

Previous wording

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:

Current wording

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 credit ratings, as of June 30, 2025 were as follows:

Previous wording

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.

Current wording

Cash flow provided by operating activities in the first half of 2025 compared to the first half of 2024 was lower primarily due to lower net income and negative changes in working capital, partially offset by lower net cash outflows related to wholesale finance receivables. Working capital was negatively impacted by a smaller reduction in inventory compared to the prior year period, partially offset by a larger increase in accounts payable and accrued liabilities compared to the prior year period.

Previous wording

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 statementsin 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 statementsin the Company's Annual Report on Form 10-K for the year ended December 31, 2024. The Company has aliability 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.

Current wording

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 June 30, 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 statementsin 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 statementsin the Company's Annual Report on Form 10-K for the year ended December 31, 2024. The Company has aliability for unrecognized tax benefits of $13.5 million and related accrued interest and penalties of $8.3 million as of June 30, 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.

Previous wording

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)

Current wording

The Company’s most significant investing activities consist of capital expenditures and retail finance receivable originations and collections. Capital expenditures were $65.6 million in the first half of 2025 compared to $87.8 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)

Previous wording

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.

Current wording

Net cash outflows for finance receivables during the first half of 2025 decreased cash flows from investing activities by $284.0 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 funded its finance receivables net lending activity through the issuance of debt, discussed in "Financing Activities" below.