LiveWire Group, Inc.

5. Income Taxes

The income tax provision has been calculated using the separate return method, which is meant to reflect how taxes would have been recorded, had the Company filed its own tax return.

The income tax provision for the years ended December 31, consists of the following (in thousands):

The components of loss before income taxes for the years ended December 31, were as follows (in thousands):

The table below provides the updated requirements of ASU 2023-09 for 2025. See Note 2, Summary of Significant Accounting Policies — Accounting Standards Adopted in 2025 for additional details on the adoption of ASU 2023-09. The Company has adopted the ASU on a prospective basis.

Income tax provision differs from the amount that would be provided by applying the statutory U.S. corporate income tax rate for the year ended December 31, 2025 due to the following items (in thousands):

During the year ended December 31, 2025, state taxes in California, Minnesota, New York and Wisconsin made up the majority of the tax effect in this category.

As previously disclosed for the years ended December 31, 2024 and 2023, prior to the adoption of ASU 2023-09, the effective income tax rate differs from the statutory federal income tax rate as follows:

The Company generated operating losses in each of the years presented. The income tax provision (benefit) recognized related to these losses was zero for each of the years ended December 31, 2025, 2024, and 2023. Operating results of the U.S. entities are included in the consolidated U.S. federal and combined state tax returns of H-D and these tax attributes have been fully utilized by H-D and are no longer available to the Company for future use. Future income tax provisions (benefits) may be impacted by future changes in the utilization of LiveWire attributes by H-D. The difference between the benefit at the statutory rate and the income tax provision (benefit) related to these operating losses is reflected in the table above as unbenefited losses.

After an assessment of the positive and negative evidence regarding the realizability of the separate state NOLs reflected in the financials, it was determined a valuation allowance continues to be required on separate state NOLs. Additionally, it was necessary to assess the positive and negative evidence of the realizability of the U.S. federal and consolidated state net deferred tax asset balance remaining after H-D utilization of LiveWire attributes for the periods ended December 31, 2025 and 2024. After such an assessment, it was determined a valuation allowance continues to be required. The difference between the benefit at the statutory rate and the income tax provision (benefit) related to these valuation allowances is reflected in the table above as valuation allowance.

The Company’s non-US entities generated both income tax and operating losses for a net income tax provision of $153 thousand, $12 thousand, and $7 thousand for the years ended December 31, 2025, 2024, and 2023, respectively. Non-US operating losses cannot be utilized by H-D, therefore a deferred tax asset was recorded. After assessment of the positive and negative evidence regarding realizability of the non-US deferred tax assets, it was determined the deferred tax assets are more likely than not to be realized andno valuation allowance was recorded.

The principal components of the Company’s deferred income tax assets and liabilities as of December 31, include the following (in thousands):

The net deferred tax liability balance increased from December 31, 2025 to December 31, 2024 primarily due to an increase in the deferred tax liability balance related to tax basis amortizable goodwill that is not amortized for book purposes.

The tax operating loss and tax credit carryforwards, calculated on the separate return method for allocating tax expense, have been utilized by H-D in the consolidated tax return, and therefore are not available to the Company in future periods. Under the terms of the Company’s Tax Matters Agreement with H-D, LiveWire will receive no compensation from H-D for the use of such attributes, but they may be used to offset any future liabilities that may be owed by LiveWire to H-D under the Tax Matters Agreement. In addition, these tax loss and credit carryforwards would not have been realized on a separate return basis. As a result, consistent with prior periods, neither the deferred tax assets nor the full valuation allowances have been recorded for these hypothetical attributes. For the period from the close of the Business Combination and effective date of the Tax Matters Agreement, the unrecorded tax net operating loss and tax credit carryforward, unbenefited by LiveWire, was $77,741 thousand.

The Company recognizes interest and penalties related to unrecognized tax benefits in the income tax (benefit) provision. There wereno unrecognized tax benefits as of December 31, 2025 and 2024.

The Company made $14 thousand in foreign income tax payments for the year ended December 31, 2025. The Company made $7 thousand in foreign income tax payments for the year ended December 31, 2024 and didnot make any income tax payments for the year ended December 31, 2023.

LiveWire and its subsidiaries are currently members of H-D’s consolidated, combined, unitary and other similar groups for federal, state and local income tax purposes. The consolidated group files U.S. federal and various state income tax returns which are no longer subject to examination before 2019. LiveWire has separate state and non-US filing requirements that will remain open to tax authority examination through 2029.