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Fair Value | 9 Months Ended
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Sep. 30, 2025
Fair Value Disclosures [Abstract] |
Fair Value | Fair Value The following tables present the fair values of certain of the Company's assets and liabilities within the fair value hierarchy as defined in Note 1. Recurring Fair Value Measurements – The Company’s assets and liabilities measured at fair value on a recurring basis were as follows (in thousands):
| September 30, 2025
| Balance |  | Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |
Cash equivalents | $ | 1,474,496 |  |  | $ | 1,244,794 |  |  | $ | 229,702 |  |  | $ | — |
Marketable securities | 32,493 |  |  | 32,493 |  |  | — |  |  | — |
Derivative financial instruments | 116,748 |  |  | — |  |  | 116,748 |  |  | — |
Investments in Retained Notes | 80,204 |  |  | — |  |  | 80,204 |  |  | — |
Investments in Residual Interests | 12,086 |  |  | — |  |  | — |  |  | 12,086 |
| $ | 1,716,027 |  |  | $ | 1,277,287 |  |  | $ | 426,654 |  |  | $ | 12,086 |
Liabilities: |  |  |  |  |  |  |
Derivative financial instruments | 7,447 |  |  | — |  |  | 7,447 |  |  | — |
LiveWire warrants | $ | 2,204 |  |  | $ | 1,442 |  |  | $ | 762 |  |  |
| $ | 9,651 |  |  | $ | 1,442 |  |  | $ | 8,209 |  |  | $ | — |
| December 31, 2024
| Balance |  | Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |
Cash equivalents | $ | 1,275,561 |  |  | $ | 1,000,933 |  |  | $ | 274,628 |  |  | $ | — |
Marketable securities | 32,070 |  |  | 32,070 |  |  | — |  |  | — |
Derivative financial instruments | 19,839 |  |  | — |  |  | 19,839 |  |  | — |
| $ | 1,327,470 |  |  | $ | 1,033,003 |  |  | $ | 294,467 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |
Derivative financial instruments | $ | 35,020 |  |  | $ | — |  |  | $ | 35,020 |  |  | $ | — |
LiveWire warrants | 1,549 |  |  | 1,013 |  |  | 536 |  |  |
| $ | 36,569 |  |  | $ | 1,013 |  |  | $ | 35,556 |  |  | $ | — |
| September 30, 2024
| Balance |  | Level 1 |  | Level 2 |  | Level 3
Assets: |  |  |  |  |  |  |
Cash equivalents | $ | 1,847,818 |  |  | $ | 1,603,315 |  |  | $ | 244,503 |  |  | $ | — |
Marketable securities | 33,816 |  |  | 33,816 |  |  | — |  |  | — |
Derivative financial instruments | 19,804 |  |  | — |  |  | 19,804 |  |  | — |
| $ | 1,901,438 |  |  | $ | 1,637,131 |  |  | $ | 264,307 |  |  | $ | — |
Liabilities: |  |  |  |  |  |  |
Derivative financial instruments | $ | 14,235 |  |  | $ | — |  |  | $ | 14,235 |  |  | $ | — |
LiveWire warrants | 3,189 |  |  | $ | 2,086 |  |  | $ | 1,103 |  |  |
| $ | 17,424 |  |  | $ | 2,086 |  |  | $ | 15,338 |  |  | $ | — |
The following table presents the reconciliation for all Level 3 assets measured at fair value on a recurring basis (in thousands):
|  | Investments in Residual Interests
Fair value at December 31, 2024(a) |  | $ | — |
Initial Fair Value |  | 12,348
Investment Proceeds |  | (808)
Unrealized gain/(loss) included in Other Comprehensive Loss |  | 546
Fair value at September 30, 2025 |  | $ | 12,086 |
(a) No assets or liabilities were measured using Level 3 inputs as of September 30, 2024 so separate reconciliations of the balance from these periods have been excluded. Investments in Retained Notes and Residual Interests – As discussed in Note 10 of the Notes to Consolidated financial statements, the Company recorded investments in Retained Notes and Residual Interests in off-balance sheet VIEs. The initial fair value of the Retained Notes was $88.6 million and was estimated based on pricing currently available for transactions with similar terms and maturities (Level 2 inputs). The initial fair value of the Residual Interests was $12.3 million based on a discounted cash flow calculation using the key assumptions below (Level 3 inputs). Both investments are classified as available for sale (AFS) securities and, accordingly, are held at fair value remeasured through OCI in the Statement of comprehensive income. The initial and current period fair values of the Residual Interests were calculated using the following ranges of key assumptions:
| Initial Fair Value |  | September 30, 2025
Recovery rate on defaulted receivables | 50.00% |  | 50.00%
Prepayment speed | 1.40% |  | 1.40%
Expected cumulative lifetime losses | 1.56% - 2.65% |  | 1.53% - 2.82%
Weighted-average life (in years) | 0.85 - 2.49 |  | 0.77 - 2.53
Residual cash flows discount rate | 15.00% |  | 15.00%
The weighted average of the key assumptions utilized in calculating the initial and current period fair values of the Residual Interests were as follows:
| Initial Fair Value |  | September 30, 2025
Recovery rate on defaulted receivables | 50.00% |  | 50.00%
Prepayment speed | 1.40% |  | 1.40%
Expected cumulative lifetime losses | 2.33% |  | 2.39%
Weighted-average life (in years) | 1.91 |  | 1.90
Residual cash flows discount rate | 15.00% |  | 15.00%
Additionally, the fair value assumes that the Company, as servicer, does not exercise its option to purchase the underlying receivables at the earliest distribution date on which it is permitted to do so. The sensitivity of the fair value to immediate adverse changes in the key assumptions for the investment in Retained Notes at September 30, 2025 is as follows (dollars in thousands):
| September 30, 2025
Fair value of Retained Notes | $ | 80,204 |
Weighted-average life (in years) | 1.98
Discount rate |
Impact on fair value of a 50 bps adverse change | $ | (401) |
Impact on fair value of a 100 bps adverse change | $ | (745) |
The sensitivity of the fair value to immediate adverse changes in the key assumptions for the investment in Residual Interests at September 30, 2025 is as follows (dollars in thousands):
| September 30, 2025
Fair value of Residual Interests | $ | 12,086 |
Prepayment speed |
Impact on fair value of a 1.5% absolute prepayment speed adverse change | $ | (114) |
Impact on fair value of a 1.6% absolute prepayment speed adverse change | $ | (216) |
Expected cumulative lifetime losses |
Impact on fair value of a 25 bps adverse change | $ | (221) |
Impact on fair value of a 50 bps adverse change | $ | (436) |
Residual cash flows discount rate |
Impact on fair value of a 25 bps adverse change | $ | (53) |
Impact on fair value of a 50 bps adverse change | $ | (105) |
These sensitivities are hypothetical and should not be considered to be predictive of future performance. Changes in fair value generally cannot be extrapolated because the relationship of change in assumption to change in fair value may not be linear. Also, in these tables, the effect of a variation in a particular assumption on the fair value of the retained interest is calculated independently from any change in another assumption. In reality, changes in one factor may contribute to changes in another, which may magnify or counteract the sensitivities. Furthermore, the estimated fair values as disclosed should not be considered indicative of future earnings on these assets. The table below summarizes the unrealized positions for Residual Interests and Retained Notes (in thousands):
|  | September 30, 2025
|  | Amortized Cost |  | Unrealized Gains |  | Fair Value
Residual Interests |  | $ | 11,540 |  |  | $ | 546 |  |  | $ | 12,086 |
Retained Notes |  | 80,032 |  | 172 |  |  | 80,204 |
Total Beneficial Interests |  | $ | 91,572 |  |  | $ | 718 |  |  | $ | 92,290 |
The table below provides information regarding certain cash flows received from and paid to all motorcycle loan off-balance sheet securitized trusts during the three and nine months ended September 30, 2025 (in thousands):
Proceeds from sale of residual interests (a) | $ | 234,617 |
Servicing, late, and ancillary fees received | 3,695 |
Collection of retained securitization beneficial interests | $ | 9,353 |
(a) Excludes reduction of $109.2 million restricted cash deconsolidated. Refer to Note 6 to the Notes to Consolidated financial statements for further information. Nonrecurring Fair Value Measurements – Repossessed inventory was $38.0 million, $27.1 million and $24.3 million as of September 30, 2025, December 31, 2024 and September 30, 2024, respectively. There was not a fair value adjustment as of September 30, 2025 as the associated repossessed inventory was considered held for sale. The fair value adjustment of the repossessed inventory was a decrease of $18.4 million and $16.8 million as of December 31, 2024 and September 30, 2024, respectively. Fair value is estimated using Level 2 inputs based on the recent market values of repossessed inventory. Fair Value of Financial Instruments Measured at Cost – The carrying value of the Company's Cash and cash equivalents and Restricted cash approximates their fair values. The fair value and carrying value of the Company’s remaining financial instruments that are measured at cost or amortized cost were as follows (in thousands):
| September 30, 2025 |  | December 31, 2024 |  | September 30, 2024
| Fair Value |  | Carrying Value |  | Fair Value |  | Carrying Value |  | Fair Value |  | Carrying Value
Assets: |  |  |  |  |  |  |  |  |  |  |
Finance receivables held for sale, net | $ | 4,090,641 |  |  | $ | 4,080,885 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Finance receivables held for investment, net | $ | 1,841,091 |  |  | $ | 1,824,360 | a |  | $ | 7,342,319 |  |  | $ | 7,288,294 |  |  | $ | 7,865,082 |  |  | $ | 7,800,387 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |
Deposits, net | $ | 555,311 |  |  | $ | 554,468 |  |  | $ | 555,902 |  |  | $ | 550,586 |  |  | $ | 551,806 |  |  | $ | 549,010 |
Debt: |  |  |  |  |  |  |  |  |  |  |
Unsecured commercial paper | $ | 684,741 |  |  | $ | 684,741 |  |  | $ | 640,204 |  |  | $ | 640,204 |  |  | $ | 497,373 |  |  | $ | 497,373 |
Asset-backed U.S. commercial paper conduit facility | $ | 399,502 |  |  | $ | 399,502 |  |  | $ | 431,846 |  |  | $ | 431,846 |  |  | $ | 378,968 |  |  | $ | 378,968 |
Asset-backed Canadian commercial paper conduit facility | $ | 49,642 |  |  | $ | 49,642 |  |  | $ | 77,381 |  |  | $ | 77,381 |  |  | $ | 94,142 |  |  | $ | 94,142 |
Asset-backed securitization debt | $ | 63,107 |  |  | $ | 62,635 |  |  | $ | 1,955,006 |  |  | $ | 1,950,138 |  |  | $ | 2,258,289 |  |  | $ | 2,244,742 |
Medium-term notes | $ | 3,308,179 |  |  | $ | 3,219,793 |  |  | $ | 3,127,710 |  |  | $ | 3,114,013 |  |  | $ | 3,882,407 |  |  | $ | 3,836,572 |
Term loans | $ | 448,261 |  |  | $ | 448,261 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Senior notes | $ | 241,899 |  |  | $ | 297,247 |  |  | $ | 683,624 |  |  | $ | 746,800 |  |  | $ | 703,108 |  |  | $ | 746,618 |
(a) Excludes $59.1 million estimated recovery amount included in the allowance for credit losses. Finance Receivables held for sale, net - The carrying value of retail finance receivables held for sale is amortized cost. The fair value of finance receivables held for sale was based on the selling price of the finance receivables that was agreed upon with the counterparties in the HDFS Transaction (Level 2 inputs). Finance Receivables held for investment, net – The carrying value of retail and wholesale finance receivables held for investment is amortized cost less an allowance for credit losses. The fair value of retail finance receivables is generally calculated by discounting future cash flows using an estimated discount rate that reflects current credit, interest rate and prepayment risks associated with similar types of instruments. Fair value is determined based on Level 3 inputs. The amortized cost basis of wholesale finance receivables approximates fair value because they are generally either short-term or have interest rates that adjust with changes in market interest rates. Deposits, net – The carrying value of deposits is amortized cost, net of fees. The fair value of deposits is estimated based upon rates currently available for deposits with similar terms and maturities. Fair value is calculated using Level 3 inputs. Debt – The carrying value of debt is generally cost, net of unamortized discounts and debt issuance costs. The fair value of unsecured commercial paper is calculated using Level 2 inputs and approximates carrying value due to its short maturity. The fair value of debt provided under the term loan, the U.S. Conduit Facility and the Canadian Conduit Facility is calculated using Level 2 inputs and approximates carrying value since the interest rates charged under the term loan and facilities are tied directly to market rates and fluctuate as market rates change. The fair values of the medium-term notes and senior notes are estimated based upon rates currently available for debt with similar terms and remaining maturities (Level 2 inputs). The fair value of the fixed-rate debt related to on-balance sheet asset-backed securitization transactions is estimated based on pricing currently available for transactions with similar terms and maturities (Level 2 inputs). The fair value of the floating-rate debt related to on-balance sheet asset-backed securitization transactions is calculated using Level 2 inputs and approximates carrying value since the interest rates charged are tied directly to market rates and fluctuate as market rates change.

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (bbb)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 2: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 107 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-107 Reference 3: http://www.xbrl.org/2003/role/exampleRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 55 -Paragraph 100 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482078/820-10-55-100 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (c)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2E -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 6A -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (h) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Topic 820 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (g) -Publisher FASB -URI https://asc.fasb.org/1943274/2147482106/820-10-50-2 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Topic 940 -SubTopic 820 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478119/940-820-50-1 + Details
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