Additional Balance Sheet and Cash Flow Information

9 Months Ended

Sep. 30, 2025

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Additional Balance Sheet and Cash Flow Information

Investments in Marketable Securities – The Company’s investments in marketable securities consisted of the following (in thousands):


	September 30, 2025		December 31, 2024		September 30, 2024

Mutual funds	$	32,493	$	32,070	$	33,816

Mutual funds, included in Other long-term assets on the Consolidated balance sheets, are carried at fair value with gains and losses recorded in income. Mutual funds are held to support certain deferred compensation obligations.

Inventories, net – Substantially all inventories located in the U.S. are valued using the last-in, first-out (LIFO) method. Other inventories are valued at the lower of cost or net realizable value using the first-in, first-out (FIFO) method. Motorcycle finished goods inventories include motorcycles that are ready for sale and motorcycles that are substantially complete but awaiting installation of certain components. Inventories, net consisted of the following (in thousands):


	September 30, 2025		December 31, 2024		September 30, 2024
Raw materials and work in process	$	294,480	$	353,819	$	299,296
Motorcycle finished goods	255,339		411,442		399,699
Parts and accessories and apparel	98,431		110,591		119,260
Inventory at lower of FIFO cost or net realizable value	648,250		875,852		818,255
Excess of FIFO over LIFO cost	(136,064)		(130,059)		(136,391)
	$	512,186	$	745,793	$	681,864

Deposits – HDFS offers brokered certificates of deposit to customers indirectly through contractual arrangements with third-party banks and/or securities brokerage firms through its bank subsidiary. The Company had $554.5 million, $550.6 million, and $549.0 million, net of fees, of interest-bearing brokered certificates of deposit outstanding as of September 30, 2025, December 31, 2024, and September 30, 2024, respectively. The liabilities for deposits are included in Short-term deposits, net or Long-term deposits, net on the Consolidated balance sheets based upon the term of each brokered certificate of deposit issued. Each separate brokered certificate of deposit is issued under a master certificate, and as such, all outstanding brokered certificates of deposit are considered below the Federal Deposit Insurance Corporation insurance coverage limits.

Future maturities of the Company's certificates of deposit as of September 30, 2025 were as follows (in thousands):


2025	28,000
2026	277,304
2027	196,704
2028	18,500
2029	15,200
Thereafter	19,790
Future maturities	555,498
Unamortized fees	(1,030)
	$	554,468

Operating Cash Flow – The reconciliation of Net income to Net cash provided by operating activities was as follows (in thousands):


	Nine months ended
	September 30, 2025		September 30, 2024
Cash flows from operating activities:
Net income	$	611,709	$	563,605
Adjustments to reconcile Net income to Net cash provided by operating activities:
Depreciation and amortization	126,339		119,568
Amortization of deferred loan origination costs	43,871		54,461
Amortization of financing origination fees	9,773		10,363
Income related to long-term employee benefits	(41,287)		(40,076)
Employee benefit plan contributions and payments	(5,091)		(3,781)
Stock compensation expense	25,838		39,820
Net change in wholesale finance receivables related to sales	(183,006)		(211,800)
Provision for credit losses	(198,427)		175,017
Origination of finance receivables held for sale	(414,009)		—
Collections from finance receivables held for sale	16,916		—
Gain on sale of securitization beneficial interests	(26,958)		—

Deferred income taxes	92,122		(1,815)
Other, net	19,360		19,557
Changes in current assets and liabilities:
Accounts receivable, net	(46,415)		(36,529)
Finance receivables – accrued interest and other	11,279		2,325
Inventories, net	262,287		253,373
Accounts payable and accrued liabilities	75,039		(12,903)

Other current assets	37,563		(530)
	(194,806)		367,050
Net cash provided by operating activities	$	416,903	$	930,655

Gain on sale of securitization beneficial interests – As discussed in Note 10 of the Notes to Consolidated financial statements, the Company consolidates certain SPEs, which are considered VIEs under U.S. GAAP and which hold certain assets and liabilities, including finance receivables, restricted cash, and debt. In the third quarter of 2025, HDFS entered into an agreement with two counterparties ("HDFS Transaction") that included the sale of 95% of its residual interests in retail finance receivables that were previously transferred to certain special purpose entities (SPEs) through on-balance sheet asset-backed securitization transactions. This sale of securitization beneficial interests resulted in the deconsolidation of assets and liabilities held by certain SPEs under U.S. GAAP. The sale of securitization beneficial interests resulted in the non-cash deconsolidation of $1.87 billion of Finance receivables held for investment, net and $1.67 billion of asset-backed securitization debt held by the VIEs that were previously consolidated. As a result of the sale of securitization beneficial interests, the Company received $234.6 million in cash consideration. On the Consolidated statements of cash flows, this amount was reduced by $109.2 million of restricted cash that was deconsolidated, resulting in a $125.4 million of net cash inflow included within Proceeds from sale of securitization beneficial interests, net within Cash flows from investing activities on the Consolidated statements of cash flows. The sale of securitization beneficial interests also resulted in a gain on the sale of $27.0 million included within Cash flows provided by operating activities. Refer to Note 7 of the Notes to Consolidated financial statements for further discussion about the HDFS Transaction.