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Fair Value
 9 Months Ended
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
BalanceLevel 1Level 2Level 3
Assets:
Cash equivalents$1,474,496 $1,244,794 $229,702 $— 
Marketable securities32,493 32,493 — — 
Derivative financial instruments116,748 — 116,748 — 
Investments in Retained Notes80,204 — 80,204 — 
Investments in Residual Interests12,086 — — 12,086 
$1,716,027 $1,277,287 $426,654 $12,086 
Liabilities:
Derivative financial instruments7,447 — 7,447 — 
LiveWire warrants$2,204 $1,442 $762 
$9,651 $1,442 $8,209 $— 
 December 31, 2024
Balance Level 1Level 2Level 3
Assets:
Cash equivalents$1,275,561 $1,000,933 $274,628 $— 
Marketable securities32,070 32,070 — — 
Derivative financial instruments19,839 — 19,839 — 
$1,327,470 $1,033,003 $294,467 $— 
Liabilities:
Derivative financial instruments$35,020 $— $35,020 $— 
LiveWire warrants1,549 1,013 536 
$36,569 $1,013 $35,556 $— 
 September 30, 2024
Balance Level 1Level 2Level 3
Assets:
Cash equivalents$1,847,818 $1,603,315 $244,503 $— 
Marketable securities33,816 33,816 — — 
Derivative financial instruments19,804 — 19,804 — 
$1,901,438 $1,637,131 $264,307 $— 
Liabilities:
Derivative financial instruments$14,235 $— $14,235 $— 
LiveWire warrants3,189 $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 ValueSeptember 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)
1.911.90
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
80,032172 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, 2025December 31, 2024September 30, 2024
 Fair ValueCarrying ValueFair ValueCarrying ValueFair ValueCarrying 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.