What changed in HARLEY-DAVIDSON, INC.'s 10-K — 2023 vs 2024

Item 1. Business for additional market share information.

Industry registration data for new motorcycles was as follows: 2024 2023 Increase % Change United States (b) 253,156 256,710 (3,554) (1.4) % Europe (c) 516,260 473,486 42,774 9.0 % (a) Data includes on-road models with internal combustion engines with displacements greater than 600cc's and electric motorcycles with kilowatt peak power equivalents greater than 600cc's (601+cc).

On-road 601+cc models include dual purpose models, three-wheeled motorcycles and autocycles. (b) United States industry data is derived from information provided by Motorcycle Industry Council. This third-party data is subject to revision and update. (c) Europe data includes Austria, Belgium, Denmark, Finland, France, Germany, Italy, Luxembourg, Netherlands, Norway, Spain, Sweden, Switzerland, and the United Kingdom.

Industry data is derived from information provided by Management Services Helwig Schmitt GmbH. This third-party data is subject to revision and update. 34 (d) New motorcycle registrations for the industry and Harley-Davidson are provided by or derived from third-party sources.

New motorcycle registrations include consumer registrations (retail registrations) and to a lesser extent manufacturer, distributor and dealer registrations (non-retail registrations), for example, to register demonstration fleets.

In the later part of 2024, manufacturers (including the Company), distributors and dealers registered some motorcycles through non-retail registrations to qualify the motorcycles under the new Euro 5+ emissions standard to allow for subsequent retail sale after December 31, 2024.

As a result, Harley-Davidson new motorcycle registrations for Europe in 2024 included a higher proportion of non-retail registrations in 2024 compared to 2023 and 2022. While the Company believes industry registrations for Europe in 2024 were impacted in a similar manner, it does not have access to information necessary to confirm this.

HDMC Segment Harley-Davidson Motorcycle Unit Shipments Wholesale motorcycle unit shipments were as follows: 2024 2023 Unit Unit Units Mix % Units Mix % Increase (Decrease) % Change Motorcycle Units: United States 94,075 63.2 % 113,867 63.3 % (19,792) (17.4) % International 54,787 36.8 % 66,117 36.7 % (11,330) (17.1) 148,862 100.0 % 179,984 100.0 % (31,122) (17.3) % Motorcycle Units: Grand American Touring (a) 85,757 57.6 % 92,683 51.6 % (6,926) (7.5) % Cruiser 46,235 31.1 % 63,945 35.5 % (17,710) (27.7) Sport and Lightweight 12,335 8.3 % 18,228 10.1 % (5,893) (32.3) Adventure Touring 4,535 3.0 % 5,128 2.8 % (593) (11.6) 148,862 100.0 % 179,984 100.0 % (31,122) (17.3) % (a) Includes Trike HDMC shipped 148,862 motorcycles worldwide during 2024, which was 17.3% lower than during 2023.

The reduction in shipments was consistent with the Company's plan for 2024, which included aligning wholesale and retail sales as dealers and the Company acted to adjust dealer inventory levels for the current retail environment.

The motorcycles shipped during 2024 compared to 2023 included a higher mix of Grand American Touring motorcycles as a percent of total shipments to improve availability of models most desired by customers following the introduction of all-new Grand American Touring motorcycles.

Segment Results Condensed statements of operations for the HDMC segment were as follows (in thousands): 2024 2023 Increase (Decrease) % Change Revenue: Motorcycles $ 3,137,331 $ 3,798,977 $ (661,646) (17.4) % Parts and accessories 651,964 698,095 (46,131) (6.6) Apparel 237,270 244,333 (7,063) (2.9) Licensing 22,748 28,599 (5,851) (20.5) Other 72,593 74,590 (1,997) (2.7) 4,121,906 4,844,594 (722,688) (14.9) Cost of goods sold 2,967,068 3,278,052 (310,984) (9.5) Gross profit 1,154,838 1,566,542 (411,704) (26.3) Operating expenses 876,994 905,391 (28,397) (3.1) % Operating income $ 277,844 $ 661,151 $ (383,307) (58.0) % Operating margin 6.7 % 13.6 % (6.9) pts. 35 The estimated impacts of the significant factors affecting the changes in revenue, cost of goods sold and gross profit from 2023 to 2024 were as follows (in millions): Revenue Cost of Goods Sold Gross Profit 2023 $ 4,844.6 $ 3,278.1 $ 1,566.5 Volume (736.5) (495.7) (240.8) Price (33.1) — (33.1) Foreign currency exchange rates and hedging (17.5) (0.8) (16.7) Shipment mix 64.4 73.4 (9.0) Raw material prices — (14.4) 14.4 Manufacturing and other costs — 126.5 (126.5) (722.7) (311.0) (411.7) 2024 $ 4,121.9 $ 2,967.1 $ 1,154.8 The following factors affected the changes in net revenue, cost of goods sold and gross profit from 2023 to 2024: • The decrease in volume was primarily due to lower wholesale motorcycle shipments. • Revenue was adversely impacted by the elimination of the pricing surcharge late in 2023 and a fine-tuned pricing strategy for 2024 partially offset by higher promotional costs in the fourth quarter of 2023 that did not recur in 2024. • Revenue and gross profit were negatively impacted by weaker foreign currency exchange rates relative to the U.S. dollar as well as less favorable net foreign currency impacts associated with balance sheet remeasurements recorded in cost of goods sold. • Changes in the shipment mix of motorcycles had a favorable impact on revenue due primarily to a shift away from Cruiser models to higher priced Grand American Touring models during 2024 compared to 2023.

The impact of shipment mix on gross profit was adversely impacted by incremental costs primarily within the Grand American Touring motorcycle family related to new product features and upgrades included on the Company's model year 2024 motorcycles.

Shipment mix was also negatively impacted by unfavorable changes in mix within apparel and licensing. • Raw material costs were lower than in the prior year. • Manufacturing and other costs were negatively impacted by unfavorable manufacturing leverage related to higher fixed costs per unit resulting from lower production volumes, continued moderate inflation and payment of a ratification bonus related to new collective bargaining agreements with hourly employees in Wisconsin.

These negative impacts were partially offset by supply-chain productivity gains. Operating expenses were lower in 2024 compared to 2023 due to lower people costs, including the cost of compensation and benefits, and decreases in other discretionary spending as the Company continued to focus on cost discipline and increased productivity.

LiveWire Segment Segment Results Condensed statements of operations for the LiveWire segment were as follows (in thousands, except unit shipments): 2024 2023 (Decrease) Increase % Change Revenue 26,358 38,298 (11,940) (31.2) Cost of goods sold 38,872 44,254 (5,382) (12.2) Gross profit (12,514) (5,956) (6,558) 110.1 Selling, administrative and engineering expense 97,125 110,853 (13,728) (12.4) Operating loss $ (109,639) $ (116,809) $ 7,170 (6.1) % LiveWire motorcycle unit shipments 612 660 (48) (7.3) % During 2024, revenue decreased by $11.9 million, or 31.2%, compared to 2023.

The decrease was primarily due to lower volumes of electric balance bikes and electric motorcycles as well as a lower average prices on electric motorcycles. Cost of 36 sales decreased by $5.4 million, or 12.2%, during 2024 compared to 2023 on lower volumes of electric balance bikes and electric motorcycles.

During 2024, selling, administrative and engineering expense decreased $13.7 million, or 12.4%, compared to 2023 largely as a result of lower product development costs and cost reduction initiatives.

HDFS Segment Segment Results Condensed statements of operations for the HDFS segment were as follows (in thousands): 2024 2023 (Decrease) Increase % Change HDFS revenue: Interest income $ 890,836 $ 802,078 $ 88,758 11.1 % Other income 147,702 151,508 (3,806) (2.5) 1,038,538 953,586 84,952 8.9 HDFS expenses: Interest expense 371,766 332,380 39,386 11.8 Provision for credit losses 247,225 227,158 20,067 8.8 Operating expenses 171,125 159,306 11,819 7.4 790,116 718,844 71,272 9.9 Operating income $ 248,422 $ 234,742 $ 13,680 5.8 % Interest income was higher in 2024 compared to 2023, primarily due to higher average outstanding finance receivables at a higher average yield.

Other income decreased largely due to lower licensing revenue partially offset by higher insurance-related income. Interest expense increased due to higher average interest rates on higher outstanding debt and deposits.

The provision for credit losses increased $20.1 million compared to 2023 due to higher actual retail and wholesale credit losses partially offset by a favorable change in the allowance for credit losses.

The favorable change in the allowance for credit losses was largely due to a decrease in retail receivables, partially offset by a larger increase in the wholesale reserve on increased portfolio risk, as compared to 2023. The allowance for credit losses considers current economic conditions and the Company's outlook on future conditions.

At the end of 2024, the Company's outlook on economic conditions and its probability weighting of its economic forecast scenarios was weighted toward more pessimistic scenarios given continued challenging macro-economic conditions, including a persistently high interest rate environment and muted consumer confidence. The Company's expectations surrounding its economic forecasts may change in future periods as additional information becomes available.

Annual retail credit losses on the Company's retail motorcycle loans were 3.31% during 2024 compared to 3.00% in 2023. The 30-day delinquency rate for retail motorcycle loans at December 31, 2024 increased to 5.34% from 5.09% at December 31, 2023.

The unfavorable retail credit loss and delinquency performance were driven by several factors connected to the macro-economic environment and the related customer and industry dynamics, including the impact of higher motorcycle payments and general inflationary pressures on retail customers. Additionally, the Company continues to experience downward pressure on recovery values at auction.

Wholesale credit losses were $1.5 million higher than 2023 driven by the charge-off of finance receivables related to two troubled dealers.

Operating expenses were higher in 2024 compared to 2023 due in part to increased repossession costs, insurance-related expenses, and foreign currency losses, partially offset by lower employee-related costs. 37 Changes in the allowance for credit losses on finance receivables were as follows (in thousands): 2024 2023 Balance, beginning of period $ 381,966 $ 358,711 Provision for credit losses 247,225 227,158 Charge-offs, net of recoveries (228,008) (203,903) Balance, end of period $ 401,183 $ 381,966 At December 31, 2024, the allowance for credit losses on finance receivables was $378.4 million for retail receivables and $22.8 million for wholesale receivables.

At December 31, 2023, the allowance for credit losses on finance receivables was $367.0 million for retail receivables and $14.9 million for wholesale receivables. Refer to Note 6 of the Notes to Consolidated financial statements for further discussion regarding the Company’s allowance for credit losses on finance receivables.

Results of Operations 2023 Compared to 2022 Consolidated Results (in thousands, except earnings per share) 2023 2022 Increase (Decrease) Operating income - HDMC $ 661,151 $ 677,087 $ (15,936) Operating loss - LiveWire (116,809) (85,315) (31,494) Operating income - HDFS 234,742 317,506 (82,764) Operating income 779,084 909,278 (130,194) Other income, net 71,808 48,652 23,156 Investment income 46,771 4,538 42,233 Interest expense 30,787 31,235 (448) Income before income taxes 866,876 931,233 (64,357) Income tax provision 171,830 192,019 (20,189) Net income 695,046 739,214 (44,168) Less: Loss attributable to noncontrolling interests 11,540 2,194 9,346 Net income attributable to Harley-Davidson, Inc. $ 706,586 $ 741,408 $ (34,822) Diluted earnings per share $ 4.87 $ 4.96 $ (0.09) The Company reported operating income of $779.1 million in 2023 compared to $909.3 million in 2022.

The HDMC segment reported operating income of $661.2 million compared to $677.1 million in 2022. Operating loss from the LiveWire segment increased $31.5 million compared to 2022. Operating income from the HDFS segment decreased $82.8 million compared to 2022.

Refer to the HDMC Segment, LiveWire Segment and HDFS Segment discussions for a more detailed analysis of the factors affecting operating results. Other income, net in 2023 was impacted by higher non-operating income related to the Company's defined benefit plans, partially offset by a loss related to an increase in the fair value of LiveWire's warrants.

Investment income increased in 2023 as compared to 2022 driven by higher income from cash equivalents and investments in marketable securities. The Company's effective income tax rate for 2023 was a 19.8% expense compared to a 20.6% expense for 2022. The Company's 2023 effective tax rate was favorably impacted by discrete income tax benefits recorded during the year.

Refer to Note 3 of the Notes to Consolidated financial statements for further discussion regarding the Company’s effective tax rate. Diluted earnings per share was $4.87 in 2023 compared to $4.96 in 2022.

Diluted weighted average shares outstanding decreased from 149.4 million in 2022 to 145.1 million in 2023 primarily due to repurchases of common stock, which benefited diluted earnings per share. 38 Harley-Davidson Motorcycle Retail Sales and Registration Data Harley-Davidson Motorcycle Retail Sales (a) Retail unit sales of new Harley-Davidson motorcycles were as follows: 2023 2022 Increase (Decrease) % Change United States 98,468 109,190 (10,722) (9.8) % Canada 7,422 7,924 (502) (6.3) North America 105,890 117,114 (11,224) (9.6) Europe/Middle East/Africa (EMEA) 27,005 30,510 (3,505) (11.5) Asia Pacific 26,953 27,905 (952) (3.4) Latin America 2,923 2,922 1 — 162,771 178,451 (15,680) (8.8) % (a) Data source for retail sales figures shown above is new sales warranty and registration information provided by dealers and compiled by the Company.

The Company must rely on information that its dealers supply concerning new retail sales, and the Company does not regularly verify the information that its dealers supply. This information is subject to revision. Worldwide retail sales of new motorcycles decreased 8.8% during 2023 compared to 2022 driven primarily by a decline in North America.

North America retail sales were adversely impacted by macro-economic conditions and changes in product as the Company focused on more profitable models. During 2023, the Company believes high interest rates continued to impact consumer discretionary purchases.

Additionally, retail sales were impacted by the discontinuation of legacy Sportster models at the end of 2022 as the Company shifted to the more profitable Sport models in 2023. The decline in EMEA was primarily driven by challenging economic conditions and a planned unit mix shift towards more profitable core motorcycle models.

In Asia Pacific, retail sales growth was strong in the first half of the year, but slowed in the second half of the year, with modest annual growth in Japan offset by a decline in Australia and South Korea.

Worldwide retail inventory of new motorcycles was up approximately 55% at the end of the fourth quarter of 2023 compared to the end of the fourth quarter of 2022, but remained nearly 15% lower than levels experienced at the end of the fourth quarter of 2019.

Changes in retail inventory of new motorcycles are calculated based on units at the end of each quarter. The Company's Harley-Davidson motorcycle U.S. market share of new 601+cc motorcycles for 2023 was 37.9%, down 3.3 percentage points compared to 2022 (Source: Motorcycle Industry Council).

The Company's Harley-Davidson motorcycle European market share of new 601+cc motorcycles for 2023 was 4.8%, down 1.3 percentage points compared to 2022 (Source: Management Services Helwig Schmitt GmbH).

On-road 601+cc models include dual purpose models, three-wheeled motorcycles and autocycles. (b) United States industry data is derived from information provided by Motorcycle Industry Council. This third-party data is subject to revision and update. (c) Europe data includes Austria, Belgium, Denmark, Finland, France, Germany, Italy, Luxembourg, Netherlands, Norway, Spain, Sweden, Switzerland, and the United Kingdom.

Industry data is derived from information provided by Management Services Helwig Schmitt GmbH.

This third-party data is subject to revision and update. 39 HDMC Segment Harley-Davidson Motorcycle Unit Shipments Wholesale motorcycle unit shipments were as follows: 2023 2022 Unit Unit Units Mix % Units Mix % Increase (Decrease) % Change Motorcycle Units: United States 113,867 63.3 % 118,836 61.4 % (4,969) (4.2) % International 66,117 36.7 % 74,691 38.6 % (8,574) (11.5) 179,984 100.0 % 193,527 100.0 % (13,543) (7.0) % Motorcycle Units: Grand American Touring (a) 92,683 51.6 % 89,849 46.4 % 2,834 3.2 % Cruiser 63,945 35.5 % 59,010 30.5 % 4,935 8.4 Sport and Lightweight 18,228 10.1 % 33,894 17.5 % (15,666) (46.2) Adventure Touring 5,128 2.8 % 10,774 5.6 % (5,646) (52.4) 179,984 100.0 % 193,527 100.0 % (13,543) (7.0) % (a) Includes CVO TM and Trike HDMC shipped 179,984 motorcycles worldwide during 2023, which was 7.0% lower than during 2022 and in line with the decrease in retail sales during 2023.

HDMC's shipments during 2023 were adversely impacted by market conditions and the discontinuation of legacy Sportster models in North America at the end of 2022 as the Company shifted to more profitable Sport models in 2023.

The motorcycles shipped during 2023 compared to 2022 included a higher mix of Grand American Touring and Cruiser motorcycles as a percent of total shipments and a lower mix of Sport and Lightweight and Adventure Touring motorcycles reflecting the Company's focus on more profitable models.

A limited number of select model year 2024 motorcycles, representing approximately 2% of total 2023 shipments, were shipped in late 2023 to better position Harley-Davidson dealers for the launch of the new 2024 model year motorcycles.

Segment Results Condensed statements of operations for the HDMC segment were as follows (in thousands): 2023 2022 Increase (Decrease) % Change Revenue: Motorcycles $ 3,798,977 $ 3,787,484 $ 11,493 0.3 % Parts and accessories 698,095 $ 731,645 (33,550) (4.6) Apparel 244,333 $ 271,107 (26,774) (9.9) Licensing 28,599 $ 39,423 (10,824) (27.5) Other 74,590 $ 58,013 16,577 28.6 4,844,594 $ 4,887,672 (43,078) (0.9) Cost of goods sold 3,278,052 $ 3,359,799 (81,747) (2.4) Gross profit 1,566,542 $ 1,527,873 38,669 2.5 Operating expenses 905,391 $ 850,786 54,605 6.4 % Operating income (loss) $ 661,151 $ 677,087 $ (15,936) (2.4) % Operating margin 13.6 % 13.9 % (0.3) pts. 40 The estimated impacts of the significant factors affecting the change in revenue, cost of goods sold and gross profit from 2022 to 2023 were as follows (in millions): Revenue Cost of Goods Sold Gross Profit 2022 $ 4,887.7 $ 3,359.8 $ 1,527.9 Volume (364.0) (232.8) (131.2) Price 139.0 — 139.0 Foreign currency exchange rates and hedging (26.7) 27.3 (54.0) Shipment mix 208.6 75.6 133.0 Raw material prices — (38.2) 38.2 Manufacturing and other costs — 86.4 (86.4) (43.1) (81.7) 38.6 2023 $ 4,844.6 $ 3,278.1 $ 1,566.5 The following factors affected the change in net revenue, cost of goods sold and gross profit from 2022 to 2023: • The decrease in volume was primarily due to lower wholesale motorcycle shipments. • Revenue benefited from higher prices on new model year 2023 motorcycles partially offset by higher promotional costs in the fourth quarter of 2023.

A portion of these promotional costs involved promotions that will continue into calendar year 2024 to promote the sale of model year 2023 carryover inventory at dealers. • Revenue and gross profit were negatively impacted by weaker foreign currency exchange rates relative to the U.S. dollar as well as less favorable net foreign currency impacts associated with hedging and balance sheet remeasurements recorded in cost of goods sold. • Changes in the shipment mix had a favorable impact on gross profit. • Raw material costs benefited from a decline in prices, primarily related to metals. • Manufacturing and other costs were negatively impacted by continued moderate inflation, higher costs associated with producing fewer units than in 2022 and supply challenges, partially offset by productivity savings, including a reduced reliance on expedited modes of freight.

Operating expenses were higher in 2023 compared to 2022 as the Company continued to execute Hardware strategic priorities and included higher spending related to marketing and advertising and employee-related costs.

LiveWire Segment Segment Results Condensed statements of operations for the LiveWire segment were as follows (in thousands, except unit shipments): 2023 2022 (Decrease) Increase % Change Revenue 38,298 46,833 (8,535) (18.2) Cost of goods sold 44,254 43,929 325 0.7 Gross profit (5,956) 2,904 (8,860) (305.1) Selling, administrative and engineering expense 110,853 88,219 22,634 25.7 Operating loss (116,809) (85,315) $ (31,494) 36.9 % LiveWire motorcycle unit shipments 660 597 63 10.6 % During 2023, revenue decreased by $8.5 million, or 18.2%, compared to 2022.

The decrease was primarily due to lower volumes of electric balance bikes and lower average prices on electric motorcycles, partially offset by higher volumes of electric motorcycles. Cost of sales increased by $0.3 million, or 0.7%, during 2023 compared to 2022 on higher volumes of electric motorcycles.

During 2023, selling, administrative and engineering expense increased $22.6 million, or 25.7%, compared to 2022 driven by higher product development costs as well as higher costs associated with standing up the new organization. 41 HDFS Segment Segment Results Condensed statements of operations for the HDFS segment were as follows (in thousands): 2023 2022 (Decrease) Increase % Change HDFS revenue: Interest income $ 802,078 $ 693,615 $ 108,463 15.6 % Other income 151,508 127,010 24,498 19.3 953,586 820,625 132,961 16.2 HDFS expenses: Interest expense 332,380 217,653 114,727 52.7 Provision for credit losses 227,158 145,133 82,025 56.5 Operating expenses 159,306 140,333 18,973 13.5 718,844 503,119 215,725 42.9 Operating income $ 234,742 $ 317,506 $ (82,764) (26.1) % Interest income was higher in 2023 compared to 2022, primarily due to higher average outstanding finance receivables at a higher average yield.

Other income increased largely driven by higher investment and licensing income, partially offset by unfavorable insurance revenue. Interest expense increased due to higher average outstanding debt at higher average interest rates. The provision for credit losses increased $82.0 million compared to 2022 on higher actual retail credit losses and an increase in the allowance for credit losses.

Item 1A. Risk Factors An investment in Harley-Davidson, Inc. involves risks, including those discussed below. These risk factors should be considered carefully before deciding whether to invest in the Company. Operational Risks • The Company’s ability to remain competitive is dependent upon its capability to develop and successfully introduce new, innovative and compliant products.

The motorcycle market is highly competitive and continues to change in terms of styling preferences and advances in new technologies and, at the same time, is subject to increasing and evolving regulations, including those related to safety and emissions.

Price, reliability, styling, quality and product features are some of the factors that impact competition in the motorcycle market and electric vehicle market. The Company must continue to distinguish its products from its competitors’ products with unique styling and new technologies that consumers desire. Introducing new models may not lead to the desired results, including driving unit sales growth.

As the Company incorporates new and different features and technology into its products, the Company must protect its intellectual property from imitators and ensure its products do not infringe the intellectual property of other companies.

In addition, these new products must comply with applicable regulations in the markets in which they are sold and satisfy the potential demand for products that produce lower emissions and achieve better fuel economy. The Company must make product advancements to respond to changing consumer preferences, market demands, and legal and regulatory requirements.

The Company must also be able to design and manufacture these products and deliver them to a global marketplace in an efficient and timely manner and at prices that are attractive to customers.

As a pioneer in a new industry, the Company’s LiveWire segment inherently has limited experience designing, testing, manufacturing, marketing and selling electric motorcycles and the Company therefore cannot assure that LiveWire will be able to meet customer expectations. The electric vehicle market is relatively new and may not develop as the Company expects.

In addition, electric vehicles are inherently new products and electric vehicle companies may also experience delays in the design, production and commercial release of new products.

To the extent the LiveWire segment delays the launch of future models of electric vehicles or the electric vehicle market fails to develop as the Company expects, its growth prospects could be adversely affected as it may fail to establish or grow its market share.

There can be no assurances that the Company will be successful in these endeavors, or that existing and prospective customers will like or want the Company’s new products. • The Company faces increasing competition and failure to compete effectively may adversely impact its business and operating results.

Many of the Company’s competitors are more diversified than the Company, and they may compete in all segments of the motorcycle market, other powersports markets and/or the automotive market. Also, the Company’s manufacturer’s suggested retail price for its motorcycles is generally higher than its competitors.

If 12 price becomes a more important factor for consumers in the markets in which the Company competes, the Company may be at a competitive disadvantage.

The Company also faces pricing pressure from international competitors who may have the advantage of manufacturing and marketing products in their respective countries, allowing them to sell products at lower prices within or outside their respective countries.

Furthermore, many competitors headquartered outside the U.S. experience a financial benefit when there is a strengthening in the U.S. dollar relative to their home currency that can enable them to reduce prices to U.S. consumers. The Company and LiveWire Group, Inc. are also subject to policies and actions of the U.S.

Securities and Exchange Commission (SEC) and New York Stock Exchange (NYSE). Many major competitors of the Company and LiveWire Group, Inc. are not subject to the requirements of the SEC or the NYSE rules.

As a result, the Company or LiveWire Group, Inc. may be required to disclose certain information that may put the Company or LiveWire Group, Inc. at a competitive disadvantage to their principal competitors.

Additionally, the Company’s LiveWire segment is subject to competition in the electric vehicle sector from companies that are at various levels of maturity, which include several major motorcycle companies that have electric vehicles available today and other current and prospective motorcycle manufacturers that are or may be developing electric vehicles.

Increased competition or failure of the electric vehicle market to develop may lead to lower vehicle unit sales and increased inventory, which may result in downward price pressure and adversely affect the business, prospects, financial condition and operating results of the LiveWire segment.

As a result of new entrants into the electric vehicle market, there may be increased competition for component and other parts of LiveWire’s electric vehicles, which may have limited or single-source supply, or suppliers may be unwilling to provide product at lower volumes.

In addition, the Harley-Davidson Financial Services segment faces competition from various banks, insurance companies and other financial institutions that may have access to additional sources of capital at more competitive rates and terms, particularly for borrowers in higher credit tiers.

The Company's responses to these competitive pressures, or its failure to adequately address and respond to these competitive pressures, may have a material adverse effect on the Company’s business and results of operations. • The Company must prevent and detect issues with its products, components purchased from suppliers and their manufacturing processes to reduce recall campaigns, warranty costs, litigation, product liability claims, delays in new model launches and regulatory investigations.

The Company must complete any recall campaigns within cost expectations.

The Company must continually improve and adhere to product development and manufacturing processes and ensure that its suppliers and their sub-tier suppliers adhere to product development and manufacturing processes, to ensure the Company and its dealers are selling high-quality products that meet customer needs and desires and comply with applicable regulations.

If product designs or manufacturing processes are defective, the Company could experience delays in new model launches, field actions such as product programs and product recalls, inquiries or investigations from regulatory agencies, and warranty claims and product liability claims, which may involve purported class actions or significant jury verdicts.

Any product recall in the future, whether initiated by the Company or a supplier, may result in adverse publicity, damage the Company’s brand image, and adversely affect the Company’s business, prospects, financial condition and operating results.

Such recalls, whether caused by systems or components engineered or manufactured by the Company, LiveWire or the suppliers of either of them, may involve significant expense, the possibility of lawsuits and diversion of management’s attention and other resources, which could adversely affect the Company’s brand image and the Company’s business, prospects, financial condition and operating results.

While the Company uses reasonable methods to estimate the cost of warranty, recall and product liabilities, and appropriately reflects those in its financial statements, there is a risk the actual costs could exceed estimates and result in damages that are not covered by insurance.

Further, selling 13 products with quality issues, the announcement of recalls and the filing of product liability claims (whether or not successful), may also adversely affect the reputation and brand strength of the Company or LiveWire with a resulting adverse impact on sales. • Increased supply of and/or declining prices for used motorcycles and excess supply of new motorcycles may adversely impact retail sales of new motorcycles by the Company’s dealers.

The Company has observed that when the supply of used motorcycles increases or the prices for used Harley-Davidson motorcycles decline, there can be reduced demand among retail purchasers for new Harley-Davidson motorcycles (at or near manufacturer’s suggested retail prices). Further, the Company and its dealers can and do take actions that influence the markets for new and used Harley-Davidson motorcycles.

For example, introduction of new motorcycle models with significantly different styling, design, functionality, technology or other customer satisfiers can result in increased supply of used motorcycles, which could result in declining prices for used motorcycles and prior model-year new motorcycles.

Also, while the Company is operating with a remodeled approach to supply and inventory management , that approach may not be effective, or the Company’s competitors could choose to supply new motorcycles to the market in excess of demand at reduced prices, which could also have the effect of reducing demand for new Harley-Davidson motorcycles (at or near manufacturer’s suggested retail prices).

Ultimately, reduced demand among retail purchasers for new Harley-Davidson motorcycles leads to reduced shipments by the Company. • A significant cybersecurity incident or data privacy breach could disrupt the Company’s information technology environment and data security infrastructure, impacting its business operations, and may adversely affect the Company’s reputation, revenue and earnings.

The Company is dependent on the security, availability, and integrity of its information technology environment and data security infrastructure to operate certain business activities. Additionally, the Company relies on its ability to develop and continually update its information technology environment and related infrastructure in response to its changing business needs.

The Company implements new technologies and necessary upgrades to these technologies while supporting its older technologies, and the implementation of the new technologies and upgrades to technologies may not perform as expected. Third-party service providers and vendors not under the direct control of the Company may provide and/or manage some of these technologies.