Part I – Financial Information This section presents the unaudited consolidated financial statements for Q2 2025 and 2024, detailing financial performance, position, and cash flows, alongside notes on segment operations and a key HDFS transaction [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section provides the unaudited consolidated financial statements for Q2 2025 and 2024, covering operations, balance sheets, cash flows, and equity, with detailed accounting notes [Consolidated Statements of Operations](index=3&type=section&id=Consolidated%20Statements%20of%20Operations) This statement details the company's revenues, operating income, and net income for the three and six months ended June 30, 2025 and 2024 Consolidated Statements of Operations Highlights (Unaudited) | Metric (in millions, except per share) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Revenue** | $1,307.1 | $1,618.9 | $2,636.3 | $3,348.5 | | **Operating Income** | $112.4 | $241.1 | $272.9 | $504.2 | | **Net Income Attributable to Harley-Davidson, Inc.** | $107.6 | $218.3 | $240.7 | $453.2 | | **Diluted Earnings Per Share** | $0.88 | $1.63 | $1.95 | $3.34 | [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) This statement presents the company's assets, liabilities, and equity as of June 30, 2025, December 31, 2024, and June 30, 2024 Consolidated Balance Sheet Highlights (Unaudited) | Metric (in billions) | June 30, 2025 | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | :--- | | **Total Assets** | $12.05 | $11.88 | $12.76 | | **Total Liabilities** | $8.74 | $8.72 | $9.33 | | **Total Equity** | $3.31 | $3.16 | $3.43 | [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This statement outlines the cash flows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Consolidated Cash Flow Highlights (Unaudited) | Metric (in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $509.5 | $577.6 | | **Net Cash Used by Investing Activities** | ($89.9) | ($397.0) | | **Net Cash (Used) Provided by Financing Activities** | ($416.5) | $182.0 | | **Net Increase in Cash, Cash Equivalents and Restricted Cash** | $15.5 | $351.8 | [Notes to Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) These notes provide detailed disclosures on accounting policies, segment performance, revenue breakdown, and significant subsequent events - The company operates in three reportable segments: **Harley-Davidson Motor Company (HDMC)**, **LiveWire**, and **Harley-Davidson Financial Services (HDFS)**[25](index=25&type=chunk) Disaggregated Revenue by Major Source (Six Months Ended June 30) | Revenue Source (in millions) | 2025 | 2024 | | :--- | :--- | :--- | | **HDMC Motorcycles** | $1,641.9 | $2,290.2 | | **HDMC Parts and accessories** | $330.3 | $360.1 | | **LiveWire** | $8.8 | $11.2 | | **HDFS Interest income** | $424.5 | $433.9 | - The company's effective income tax rate for the six months ended June 30, 2025, was **23.2%**, an increase from **19.3%** for the same period in 2024[39](index=39&type=chunk) - On July 30, 2025, the company entered into a significant transaction involving its HDFS segment, including the sale of the majority of existing retail finance receivables and a portion of future originations, along with equity investments in HDFS by two counterparties. The transaction is expected to close in the second half of 2025[137](index=137&type=chunk)[139](index=139&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the Q2 2025 net income decline, driven by lower HDMC operating income and retail sales, and outlines key impacts, revised HDFS guidance, and planned share repurchases [Overview](index=48&type=section&id=Overview) This section provides a high-level summary of the company's Q2 2025 financial performance, highlighting key drivers of income changes and retail sales trends Q2 2025 Financial Highlights vs. Q2 2024 | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Net Income Attributable to Harley-Davidson, Inc.** | $107.6 million | $218.3 million | | **Diluted EPS** | $0.88 | $1.63 | - The decrease in operating income was primarily driven by the HDMC segment, which saw income fall by **$136.6 million** due to a planned decrease in motorcycle shipments and softer than expected retail demand[144](index=144&type=chunk) - Worldwide retail sales of new Harley-Davidson motorcycles declined by **15.5%** in Q2 2025 compared to Q2 2024, with North America down **17.0%**[145](index=145&type=chunk) [Key Factors Impacting the Company](index=49&type=section&id=Key%20Factors%20Impacting%20the%20Company) This section details significant external and internal factors influencing the company's operations, including tariffs, interest rates, and strategic transactions - The company incurred approximately **$17 million** in tariff-related costs in the first six months of 2025 and estimates the potential full-year impact to be between **$50 million** and **$85 million**[146](index=146&type=chunk) - A significant transaction for the HDFS segment is expected to close in H2 2025, involving the sale of over **$5 billion** in existing retail finance receivables and a reduction of over **$4 billion** in HDFS debt[148](index=148&type=chunk) - The company plans to introduce new models, including a small displacement motorcycle priced below **$6,000**, and shift its annual new model year launch from January to the preceding fall[153](index=153&type=chunk) [Guidance](index=50&type=section&id=Guidance) This section presents the company's revised financial outlook for 2025, including segment operating income expectations and planned capital allocation - The company revised its 2025 guidance for the HDFS segment, now expecting operating income of approximately **$525 million to $550 million**, which includes a benefit of **$275 million to $300 million** from the HDFS transaction[156](index=156&type=chunk) - LiveWire segment's expected operating loss for 2025 is revised to approximately **$59 million to $69 million**[158](index=158&type=chunk) - The company plans to execute **$500 million** of discretionary share repurchases in the second half of 2025, assuming the HDFS transaction successfully closes[161](index=161&type=chunk) [Results of Operations](index=51&type=section&id=Results%20of%20Operations) This section provides a detailed analysis of the financial performance for each operating segment, including revenue and operating income drivers HDMC Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Operating Income** | $61.3 million | $197.9 million | | **Operating Margin** | 5.9% | 14.7% | | **Motorcycle Shipments** | 35,837 units | 49,660 units | HDFS Segment Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Operating Income** | $69.8 million | $71.4 million | | **Provision for Credit Losses** | $49.7 million | $56.0 million | - For the first six months of 2025, worldwide retail sales of new Harley-Davidson motorcycles were down **18.1%** compared to the prior year, driven by declines in North America (**-20.1%**) and Asia Pacific (**-24.5%**)[193](index=193&type=chunk)[194](index=194&type=chunk) [Liquidity and Capital Resources](index=62&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's cash position, available liquidity, and cash flow activities from operations, investing, and financing - As of June 30, 2025, the company had **$1.59 billion** in cash and cash equivalents and total available liquidity of **$3.60 billion**[220](index=220&type=chunk) - Net cash provided by operating activities for the first six months of 2025 was **$509.5 million**, a decrease from **$577.6 million** in the same period of 2024, primarily due to lower net income and negative changes in working capital[224](index=224&type=chunk)[225](index=225&type=chunk) - Cash outflows for share repurchases were **$93.1 million** in the first half of 2025, compared to **$209.7 million** in the same period last year[229](index=229&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=69&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages market risks from foreign currency, commodity prices, and interest rates using derivatives, with no material changes since 2024 - The company is exposed to market risks from fluctuations in foreign currency exchange rates, commodity prices, and interest rates, and uses derivative financial instruments to mitigate these risks[256](index=256&type=chunk) - The HDMC segment's most significant foreign currency exposures relate to the **Euro**, **Australian dollar**, **Japanese yen**, and **Canadian dollar**, among others[257](index=257&type=chunk) - The HDFS segment is affected by changes in interest rates on its financial receivables and debt, and uses interest rate caps and cross-currency swaps to manage these risks[260](index=260&type=chunk)[262](index=262&type=chunk) [Controls and Procedures](index=70&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirmed the effectiveness of disclosure controls and procedures as of June 30, 2025, with no material changes to internal controls - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report (June 30, 2025)[264](index=264&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[265](index=265&type=chunk) Part II – Other Information This section provides additional information on legal proceedings, updated risk factors, equity security sales, and other relevant disclosures [Legal Proceedings](index=70&type=section&id=Item%201.%20Legal%20Proceedings) This section details ongoing legal matters, including a Japan FTC investigation into Harley-Davidson Japan KK regarding alleged improper sales quotas - The Japan Fair Trade Commission (Japan FTC) is investigating the company's subsidiary, **Harley-Davidson Japan KK**, for alleged improper activity, including setting excessive sales quotas for dealers[268](index=268&type=chunk) - The company is cooperating with the Japan FTC's investigation and does not expect the matter to result in material costs[268](index=268&type=chunk)[269](index=269&type=chunk) [Risk Factors](index=72&type=section&id=Item%201A.%20Risk%20Factors) This section updates risk factors, emphasizing global tariff impacts and the critical dependency on attracting and retaining skilled employees, especially during CEO transition - The global tariff landscape, with new tariffs from the U.S. and retaliatory tariffs from other countries, poses a significant risk that could negatively impact the company's ability to sell products at current prices and increase the cost of raw materials[270](index=270&type=chunk)[271](index=271&type=chunk) - The company's future success is highly dependent on attracting and retaining skilled personnel, and any perceived uncertainties related to the search for a new CEO and the subsequent transition could adversely affect operations[272](index=272&type=chunk)[273](index=273&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=73&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details equity share acquisitions for tax withholding, reports no discretionary repurchases in Q2 2025, and notes new share repurchase authorizations - The company did not repurchase any shares on a discretionary basis during the quarter ended June 30, 2025[275](index=275&type=chunk) - In July 2025, the Board of Directors authorized a new plan to repurchase up to **15.0 million shares** of common stock[275](index=275&type=chunk) - During Q2 2025, the company acquired **1,873 shares** from employees to satisfy withholding tax obligations related to vested stock awards[279](index=279&type=chunk) [Other Information](index=74&type=section&id=Item%205.%20Other%20Information) This section confirms no director or Section 16 officer adopted or terminated Rule 10b5-1 trading arrangements during Q2 2025 - No director or Section 16 officer adopted or terminated a Rule 10b5-1 trading arrangement during the quarter ended June 30, 2025[280](index=280&type=chunk) [Exhibits](index=74&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including the Term Loan Agreement, CEO/CFO certifications, and XBRL data files - The exhibits filed with this report include a Term Loan Agreement dated July 1, 2025, CEO/CFO certifications (Rule 13a-14(a) and 18 U.S.C. §1350), and XBRL data files[283](index=283&type=chunk)

Harley-Davidson named Topgolf Callaway executive Artie Starrs as its new CEO, replacing Jochen Zeitz. https://t.co/sx1XT1lYy4 ...

Core Insights - Harley-Davidson, Inc. reported second-quarter 2025 adjusted earnings of 88 cents per share, missing the Zacks Consensus Estimate of 99 cents and down from $1.63 per share in the same quarter last year [1][8] - Consolidated revenues totaled $1.31 billion, a decline of 19% year-over-year [1] Segmental Highlights - Revenues from the Motorcycle and Related Products segment fell 23% year-over-year to $1.04 billion, missing the forecast of $1.15 billion due to lower motorcycle shipments [2] - Worldwide motorcycle shipments decreased by 28% to 35,800 units, lagging behind the estimate of 40,923 units [2] - Revenues from motorcycle sales were $778 million, down 27% year-over-year [2] - Operating income for the motorcycle segment dropped 69% year-over-year to $61 million, below the estimate of $83.4 million [2] Retail Performance - Harley-Davidson retailed 42,300 motorcycle units globally, a decline of 15% year-over-year, and below expectations of 46,094 units [3] - Retail motorcycle sales in North America decreased by 17% to 28,900 units [3] - Sales in EMEA declined by 5%, while Asia Pacific and Latin America saw declines of 21% and 11%, respectively [3] Parts, Accessories, and Financial Services - Revenues from parts and accessories decreased by 4% year-over-year to $187 million, slightly exceeding the estimate of $185.3 million [4] - Apparel revenues fell 13% year-over-year to $55 million, missing the forecast of $67.7 million [4] - Harley-Davidson Financial Services reported revenues of $257 million, down 2% year-over-year and below the estimate of $289.6 million [4] LiveWire Performance - Total shipments for LiveWire were 55 units, a decline of 65% from the previous year [5] - Revenues for LiveWire decreased by 7% to $6 million, surpassing the estimate of $2.9 million [5] - Operating loss for LiveWire narrowed from $28 million to $19 million, which was wider than the projected loss of $15 million [5] Financial Position - Selling, general, and administrative expenses increased to $237.4 million from $235.2 million year-over-year [6] - Harley-Davidson paid dividends of 18 cents per share and did not repurchase any shares in the second quarter [6] - As of June 30, 2025, the company had cash and cash equivalents of $1.59 billion, with long-term debt decreasing to $4.37 million from $4.47 million at the end of 2024 [6] Guidance Updates - The company has withheld its 2025 HDMC financial outlook due to tariff uncertainties but updated guidance for LiveWire and HDFS [7] - For LiveWire, the expected operating loss is now projected to be between $59 million and $69 million, down from the previous estimate of $70 million to $80 million [7] - HDFS anticipates full-year 2025 operating income to range between $525 million and $550 million following a new partnership with KKR and PIMCO [9]

Leadership Change - Harley-Davidson appoints Artie Starrs, former head of Topgolf, as the new CEO [1]

Leadership Change - Harley-Davidson appoints Arthur Starrs, former head of Topgolf, as its new president and chief executive [1]

Core Insights - Harley-Davidson has appointed Artie Starrs as the new President and CEO, effective October 1, 2025, succeeding Jochen Zeitz [1][4] - Artie Starrs brings extensive experience from Topgolf, where he led significant revenue growth and global expansion [2][3] - The transition aims to enhance Harley-Davidson's connection with its riders and attract new customers [2][4] Leadership Transition - Jochen Zeitz will remain as Chairman, President, and CEO until October 1, 2025, after which he will serve as a senior advisor until February 2026 [4][5] - Troy Alstead has been appointed to succeed Zeitz as Chairman of the Board effective October 1, 2025 [4][5] - The Board expressed gratitude for Zeitz's leadership and contributions during challenging times [5] Company Background - Harley-Davidson, Inc. is the parent company of Harley-Davidson Motor Company and Harley-Davidson Financial Services, focusing on innovation and adventure [6] - The company aims to maintain its status as the most desirable motorcycle brand globally, offering customizable motorcycles and related experiences [6] - Harley-Davidson has a controlling interest in LiveWire Group, Inc., the first publicly traded all-electric motorcycle company in the U.S., aiming to lead in the electric motorcycle market [7]

Group 1 - KKR has announced a long-term strategic partnership with Harley-Davidson's financial services company, HDFS, with a transaction value of $5 billion (approximately 36 billion RMB) [1] - Harley-Davidson has faced declining sales among younger consumers, prompting the company to sell its financial services division [5][6] - The sale of HDFS is part of Harley-Davidson's strategy to reduce its financial burden amid a significant drop in motorcycle sales and revenue [5][6] Group 2 - KKR's recent financial performance shows a 17% increase in management fee income to $887 million, with adjusted net income reaching $1.1 billion [8] - KKR raised $28 billion (over 200 billion RMB) in the last three months, increasing its total assets under management to $686 billion [8] - KKR's investment strategy remains active, with significant capital allocated to various sectors, including a focus on the Asian market [9][10]

Core Viewpoint - KKR has announced a strategic partnership with Harley-Davidson's financial services company HDFS, with a transaction value of $5 billion (approximately 36 billion RMB) [4][5]. Group 1: KKR and Harley-Davidson - KKR has a historical connection with Harley-Davidson, having previously shown interest in acquiring the company about a decade ago [4]. - The acquisition of HDFS is part of Harley-Davidson's strategy to divest non-core assets amid declining sales and market challenges, particularly among younger consumers [9][10]. - Harley-Davidson's overall revenue decreased by 19% to $130.7 million in Q2, with motorcycle shipments down 28% year-over-year [9][10]. Group 2: Financial Performance and Market Context - KKR's management fee income grew by 17% to $887 million in the last quarter, with adjusted net income reaching $1.1 billion, slightly exceeding market expectations [11]. - KKR raised $28 billion (over 200 billion RMB) in the last three months, increasing its total assets under management to $686 billion, aiming for $1 trillion by 2029 [11][12]. - KKR's private equity portfolio shows that about 60% of its investments are valued at over 1.5 times their cost, indicating strong performance in its investment strategy [12].

Financial Performance - Harley-Davidson expects to have $1250 million (12.5 亿) in new discretionary cash [1] Corporate Strategy - Harley-Davidson 通过出售近 10% 的融资部门股份获得资金 [1]

Core Insights - Harley-Davidson reported Q2 2025 results with GAAP revenue of $1,307 million, exceeding analyst expectations of $1,099 million, but GAAP earnings per share (EPS) fell to $0.88, below the anticipated $0.96 [1][2] - Year-over-year metrics showed significant declines: revenue decreased by 19%, operating income dropped by 53%, and EPS fell by 46% [1][2] - Management did not provide full-year guidance due to uncertainties related to global tariffs and weak demand for discretionary goods [1] Financial Performance - Q2 2025 GAAP EPS was $0.88, down 46% from $1.63 in Q2 2024 [2] - GAAP revenue was $1,307 million, a 19.3% decline from $1,619 million in Q2 2024 [2] - Operating income fell to $112 million, a 53.5% decrease from $241 million in the previous year [2] - Net income attributable to Harley-Davidson, Inc. was $108 million, down 50.5% from $218 million in Q2 2024 [2] - HDMC operating margin contracted to 5.9%, down from 14.7% a year earlier [2] Business Overview - Harley-Davidson manufactures heavyweight motorcycles known for their distinctive style and brand image, and operates Harley-Davidson Financial Services and LiveWire, its electric motorcycle business [3] - The company has a global presence supported by a widespread dealer network and a robust lifestyle brand [3] Strategic Developments - A significant strategic move involved selling a 4.9% stake in its financial services arm to KKR and PIMCO, unlocking $1.25 billion in discretionary cash [5] - This transaction is expected to fund $450 million in debt repayment and $500 million in share repurchases in the second half of 2025 [5] Market Trends - The core motorcycle segment experienced a contraction, with global retail sales down 15% and shipments falling 28% [6] - North America retail sales declined by 17%, while the Asia-Pacific region saw a 21% drop, attributed to weak demand in China and Japan [6] - Dealer inventory levels were 28% lower compared to Q2 2024 [6] Product Innovation - New product launches included the limited CVO Road Glide RR, targeting both affordability and profitability in smaller displacement and classic motorcycle segments [7] - Parts and accessories revenue decreased by 4%, and apparel revenue was down 13% due to slowed discretionary spending [7] Electric Motorcycle Segment - LiveWire revenue was subdued at $6 million, with units delivered plunging 65% to just 55 [8] - Future investments in LiveWire are restricted to an existing $100 million credit line, with expected operating losses of $59–69 million for full year 2025 [9] Financial Services - Harley-Davidson Financial Services segment revenue slipped 2% to $257 million, maintaining a high margin of 27.1% [10] - Operating income for Financial Services is estimated at $525–550 million for the year, reflecting benefits from the recent transaction [12] Dividend and Share Repurchase - The company continued dividend payments, distributing $0.18 per share, a slight increase from the previous year's $0.1725 [11] - Plans to accelerate share repurchases with proceeds from the KKR and PIMCO transaction in the second half of 2025 [11]