Thank you for standing by, and welcome to the Harley-Davidson 2025 Third Quarter Investor and Analyst Conference Call. Please be advised that today's conference is being recorded. I would now like to hand the conference over to Shawn Collins. Thank you. Please go ahead.

Thank you. Good morning. This is Shawn Collins, the Director of Investor Relations at Harley-Davidson. You can access the slides supporting today's call on the Internet at the Harley-Davidson Investor Relations website. As you might expect, our comments will include forward-looking statements that are subject to risks that could cause actual results to be materially different. Those risks include, among others, matters we have noted in today's earnings release and in our latest filings with the SEC. Joining me for this morning's call are Harley-Davidson Chief Executive Officer, Artie Starrs; and Chief Financial Officer and President of Commercial, Jonathan Root, who is also the Chairman of LiveWire Group, Inc, and will be available to address any questions about LiveWire during the Q&A portion of today's call. With that, let me turn it over to Harley-Davidson CEO, Artie Starrs.

Thank you, Shawn, and good morning, everyone. I'm excited to be with you today and thrilled to be partnering with our Board, Jonathan, and our leadership team, with the broader team here at Harley-Davidson and of course, with the Harley-Davidson dealer network. Over the past month, I've been truly energized by what I've experienced across the Motor Company at HDFS and dealerships and with the broader rider community. I'd like to take a moment to thank all the riders I've had the pleasure of meeting at dealerships and dealer events since joining the company. Your passion and connection to the brand are truly inspiring. On October 1, I started my HD chapter with the dealer network right here in Milwaukee at our Annual Dealer Forum, where over 1,500 of our global dealers came together in celebration of Harley-Davidson. During our time together, we reviewed our product launches and marketing strategies for 2026, celebrated the valuable role our dealers play in our business and most importantly, began our planning and alignment to deliver successfully in the year ahead. Since then, I've been working with our team of employees at Juneau Avenue and have visited company facilities in Wisconsin and Pennsylvania. I've been impressed with the level of talent, craftsmanship and the unwavering commitment to the brand from employees at all levels across the company. That resilience is part of what makes Harley-Davidson so special. On the road, I was pleased to meet with over 260 dealers from corner to corner across the country, listening and learning and beginning to shape our shared future together. It's clear that Harley-Davidson has the opportunity to improve dealer health across the network, and I'm committed to addressing it quickly. A healthy Harley depends on a healthy dealer network. And right now, we have work to do to strengthen that foundation, starting with dealer profitability. I've already made some quick decisions aimed at supporting the network in the immediate term. First, we're accelerating our focus on improving motorcycle inventory management. Jonathan will share more details in a moment, but our focus is on reducing overall inventory levels at dealerships, particularly in the touring and CVO segments to ensure a healthier, more balanced mix across the network. Second, we're introducing market-responsive customer-facing promotions. These are designed to drive traffic to our dealers, help close more sales and support the reduction of touring inventory by moving units through retail. But this is especially important given the challenging macro environment we're operating in. Third, we're assessing alternative approaches to e-commerce, working closely with our U.S. Dealer Advisory Council. The goal here is to better meet the expectations of today's consumer while maintaining the right balance with the needs of the dealer network. And fourth, we're reviewing fuel facility guidelines to provide more flexibility for dealers. While that review is underway, penalties for noncompliance will be suspended for 12 months. These are immediate actions, but they're also an important step towards strengthening our relationship with dealers while setting us up for a stronger, more resilient future together. Jonathan will get into more details on the quarter. And while we are disappointed by the results of the Motor Company, our Q3 results positively reflect the HDFS transaction, demonstrating the strategic value of HDFS as part of the overall business. Aligned to what you've seen in the numbers, I'd like to share some initial observations about the strengths and opportunities that I've seen since joining the company. Starting with the strengths. First, brand and community. As someone new to the sport of riding and to the Harley-Davidson community, having earned my motorcycle license this year, I'm blown away by the incredible camaraderie that surrounds the brand. The support, passion and shared spirit among riders make it feel like more than just a community, it's a family. That passion is one of our greatest assets and a key driver of future growth for both the brand and business. Second, our product. Harley-Davidson is building the best bikes in the world. We'll continue to focus on delivering the best products for our customers and on strengthening our manufacturing capabilities to ensure excellence in every bike that leaves our facilities. Third, our dealer network. It's clear to me that the exclusive HD dealer network is a unique and powerful differentiator. As I said a moment ago, we need to build on that foundation. We'll continue to invest in supporting and strengthening the network as we all navigate the evolving commercial environment. And fourth, HDFS. The HDFS business continues to be a significant strength and asset to the company and to the HD dealer network. Post transaction, this will continue to be the case. Now turning to the opportunities. First, given the continued interest rate environment, affordability will be critical in winning in the market. Our product portfolio must balance aspiration with accessibility, finding the right mix across our future portfolio will ensure we don't over-index on one product family while continuing to appeal to new riders. Second, we must improve our speed to market. We're building the best bikes, but we need to move faster to bring innovation to market and capture new riders. That won't happen overnight, but the competencies and talent exist within Harley-Davidson to accelerate how quickly we bring new products and experiences to customers. Lastly, in the current demand environment, we must sharpen our focus on cost and capital efficiency. Before I hand it over to Jonathan, I want to say a few words on LiveWire. I want to congratulate Karim and the team for the successful launch of the S4 Honcho last month. The product has been met with a lot of positivity, and we look forward to seeing the bikes on the street next year. And with that, Jonathan, over to you.

Thank you, Artie, and good morning to all. I'd like to start with an update on what we refer to as the HDFS transaction. On July 30, Harley-Davidson announced a strategic partnership with KKR and PIMCO to transform Harley-Davidson Financial Services into a capital-light derisked business model. The transaction includes 3 key components: back book sale, sale of approximately $6 billion of existing HDFS loan receivables, forward flow agreement, sale of future HDFS loan originations and sale of equity interest, sale of a 9.8% common equity interest in HDFS to KKR and PIMCO. At the end of October, we signed and completed agreements for each of these 3 components. I will go into each of these in more detail. First of all, the back book sale. In Q3, HDFS sold the majority of its residual interest, resulting in a gain of $27 million and the derecognition of $1.9 billion of net finance receivables and $1.7 billion of related debt among other assets and liabilities. HDFS classified $4.1 billion of finance receivables as held for sale during Q3, resulting in the reversal of the related allowance for credit losses and driving the $301 million benefit in the provision for credit losses. In Q4, the $4.1 billion of finance receivables previously classified as held for sale were sold on October 30 to strategic partners, KKR and PIMCO. After the loan sale, HDFS plans to continue the management of all finance receivables sold to the strategic partners, where HDFS will receive a servicing fee of 1% for prime rated retail finance receivables and 2.5% for subprime rated retail finance receivables. Secondly, the forward flow agreement. Starting in Q4 on a monthly basis, HDFS expects to sell approximately 2/3 of retail loan originations over the course of its 5-year agreement. This did not have an impact on the Q3 financial statements. The continued management of the finance receivables sold to the strategic partners will result in servicing fees for HDFS, where HDFS will receive a servicing fee of 1% for prime rated retail finance receivables and 2.5% for subprime rated retail finance receivables. And finally, the sale of equity interest. HDFS has sold a 9.8% common equity interest in the fourth quarter to investment vehicles managed by KKR and PIMCO, 4.9% to each based on a 1.75x post-transaction book value. We expect KKR and PIMCO to participate in 9.8% of future HDFS equity activity, including earnings and equity raises with strategic partners holding an exchange right into HOG stock after 7 years. Taking a step back, by executing these 3 components, including selling approximately $6 billion of loans in the back book sale at a premium to par and then with a portion of the proceeds paying off the HDFS debt that corresponds with the loans over the balance of Q4 and into Q1 of '26, this will rightsize the debt structure at HDFS. And as a result, the company expects the transaction to unlock $1.2 billion to $1.25 billion in discretionary cash through Q1 of 2026. In addition, as HDFS transforms to a capital-light model, HDFS will have reduced capital requirements as the KKR and PIMCO investment vehicles will be funding these assets. In return, we expect this will result in a higher return on equity for the HDFS business. At the HDI level or parent level, HDI expects to use the proceeds, first of all, to reduce HDI indebtedness; secondly, to buy back Harley-Davidson shares; and thirdly, for other corporate purposes. We expect that Artie will provide more details on these uses by spring of 2026. Stepping away from the numbers. We are excited to unlock some of the significant value of HDFS for our shareholders through the sale of a minority stake while transforming HDFS into a capital-light financing business. In addition, beginning in 2026, the transaction creates a path that we believe will grow HDFS operating income over the coming years through new loan origination fees and loan servicing fees. And with this transaction, we retain full control and majority ownership of HDFS, where there is absolutely no change to how our dealers or customers transact with or are serviced by Harley-Davidson and HDFS. Now I will turn to Q3 results at Harley-Davidson. I plan to start on Page 6 of the presentation, where I will briefly summarize the consolidated financial results for the third quarter of 2025, and subsequently, I'll go into further detail on each business segment. Consolidated revenue in the third quarter was up 17%, largely driven by the increase in revenue of 23% or up $198 million versus prior year at HDMC. HDFS revenue was down 3%, while LiveWire revenue was up 16%. Consolidated operating income in the third quarter was $475 million, primarily driven by HDFS operating income, which was favorably impacted by the HDFS transaction. At HDMC, operating income was down 2% relative to the prior year. The LiveWire segment had an operating loss of $18 million. Consolidated operating income margin in the third quarter came in at 35.4%, up significantly relative to 9.2% in the third quarter a year ago, primarily due to the impacts associated with the HDFS transaction. I plan to go into further detail on each business segment's profit and loss drivers in the next section. Third quarter earnings per share was $3.10. In Q3, global retail was down 6%, with the North American market being down 5% and international markets down 9%, reflecting continued soft demand amidst unfavorable consumer confidence, high relative interest rates and inflation concerns. In North America, our dealers continued to experience lower customer traffic. We experienced this in a more dramatic manner in the first half of 2025, but adjusted our consumer marketing and go-to-market strategies at the end of Q2 and into Q3, which had a positive impact in Q3, evidenced by the sequential improvement in North America retail performance. On a positive note, the Softail family delivered strong growth of 9%, reflecting the strength of the revised product lineup. Non-core motorcycles in North America, including Adventure Touring and Nightster model motorcycles also saw solid gains. Specifically, Adventure Touring bikes were up 4% in Q3 of 2025, driven by the refreshed 2025 Adventure Touring lineup, where the Pan America 1250 ST was newly introduced. In EMEA, retail was down 17% after a comparatively strong first half. Core families, Touring, Trike and Softail were down more than non-core motorcycles, reflecting affordability and inflationary concerns in EMEA. This was partially offset by strong positive growth in non-core segments, including Adventure Touring and Nightster model motorcycles. From a country perspective, within EMEA, the cluster of Spain, Portugal and Italy performed strongest versus the rest of Europe, although it was still down modestly in Q3 of '25 versus prior year. In APAC, retail was down 3%, which is a relative improvement from the first half of 2025. The Softail family was up 6% as consumers responded positively to the updated Softail portfolio. There continues to be intense competition in the lightweight and smaller motorcycle segments. From a country perspective, we welcomed Japan turning in positive growth for the first time since Q4 of 2023. In addition, we saw positive retail performance in Thailand, Malaysia and Taiwan. In Latin America, retail was up 16%, where both Brazil and Mexico were up significantly in the quarter. This is the first quarter of growth for the region since Q3 of 2024 after 3 quarters of declines. Softails were the big positive standout in the region, while on the other hand, touring bikes were down low double-digit percentage points. In Q3, on a global basis, the Softail family delivered positive growth versus prior year. And as I mentioned earlier, Softails were up 9% in North America alone, reflecting the strength of the revised product portfolio and its appeal to core riders. In the U.S., market share for HD in the large cruiser category expanded from 61% in Q3 of 2024 to 68% in Q3 of 2025, underscoring the momentum behind our updated lineup. Moving on to dealer inventory. Global dealer motorcycle inventories were down 13% at the end of Q3 of 2025 compared to the end of Q3 of 2024. We continue to prioritize reducing global dealer inventory, and we are committed to supporting a significant year-over-year dealer inventory reduction by year-end with the continued goal of better matching inventory with demand. Looking at revenue. HDMC revenue increased by 23% in Q3. Focusing on the key drivers for the quarter, 20 points of increase came from increased wholesale volume at HDMC, where motorcycle shipments in the quarter were up 33%, coming in at 36,500 units. Pricing, net of sales incentives was flat in Q3, and 2 points of increase came from mix as we balanced out the delivery of motorcycle models and markets. And finally, foreign exchange impacts resulted in 1 point of growth to Q3 revenue relative to prior year. In Q3, HDMC gross margin was 26.4%, which compares to 30.1% in the prior year. Third quarter gross margin was down 3.7 points versus prior year due to unfavorable operating leverage as higher unit cost is derived from production levels experienced in Q2 of 2025, but sold in Q3 of 2025. The cost of new or increased tariffs implemented this year, which came in at $27 million in Q3 of 2025 and unfavorable foreign currency impacts. These factors were partially offset by the favorable impact of net pricing and mix. Third quarter operating income margin was down 1.3 points due to the factors above, while operating expense was $20 million higher than a year ago due in part to higher marketing spend at the dealer level. Turning to Slide 11. In the year-to-date period, HDMC gross margin was 28.0%, which compares to 31.3% in the prior year-to-date period. The decrease of 320 basis points was driven primarily by the negative impacts of lower operating leverage and the cost of new or increased tariffs implemented in 2025. On their own, the cost of new or increased tariffs in 2025 resulted in $45 million of incremental costs in the year-to-date period, creating a headwind of 140 basis points to the year-to-date gross margin. This excludes operational costs of $7 million to mitigate tariff impacts. The year-to-date results include modest cost inflation of about 1%. The negative impacts I outlined are partially offset by the positive impacts to gross margin of pricing, mix and foreign currency. Operating expense in the year-to-date period came in approximately flat relative to prior year at $665 million, which resulted in a HDMC operating margin of 7.2%, which compares to 13.3% in the prior year-to-date period. Before we turn to the next slide, I would like to provide an update on our ongoing productivity cost program. We achieved $75 million of productivity year-to-date, primarily from logistics and supply chain initiatives and continue to expect to achieve $100 million for all of 2025. As a reminder, for the cumulative 3-year period of 2022 through 2024, we have achieved productivity savings of $257 million with another $100 million expected for the full year 2025. In 2026, we have plans to achieve another $100 million, exceeding our target by over 10%, as mentioned last quarter. Turning to Slide 12. The global tariff environment remains uncertain, but we wanted to provide an update. In Q3 of 2025, the cost of new or increased tariffs was $27 million. As mentioned earlier, the cost of new or increased tariffs in 2025 through the end of Q3 was $45 million. This includes direct tariff exposure to Harley-Davidson importing and exporting product as well as indirect tariff exposure from suppliers. This excludes pricing mitigation actions as well as operational costs related to new or increased tariffs. Harley-Davidson is a business very centered in and around the U.S. Three of four manufacturing plants are U.S.-based and 100% of our U.S. core product is manufactured in the U.S. We also have a U.S.-centric approach to sourcing with approximately 75% of component purchasing coming from the U.S. With that in mind, we estimate our full year 2025 impact from the direct cost of new or increased tariffs to be in the range of $55 million to $75 million. We have a number of actions underway to mitigate the impact, and we expect this situation will remain fluid given the uncertainty that still exists. Turning to Slides 13, 14 and 15 to touch on HDFS and its financial results. At Harley-Davidson Financial Services, Q3 revenue came in at $261 million, a decrease of 3%, where interest income was down $35 million and other income was up $26 million for a net result of down $8 million in Q3 of 2025 relative to Q3 of 2024. Interest income was down due to lower retail loan receivables at a higher average yield and lower wholesale receivables at a lower average yield. Q3 2025 other income includes a $27 million gain on the sale of 95% of HDFS' certificate interest in certain securitization residual interest, which closed in late August. HDFS' operating income increased by $362 million in the third quarter or 472% versus prior year, driven by the impact of the HDFS transaction. The increase was primarily due to a lower provision for credit losses and higher other income, partially offset by lower net interest income and higher operating expenses. The provision for credit loss expense was favorable primarily due to the reversal of the allowance for credit losses on held-for-sale retail finance receivables, which drove a $301 million benefit in Q3 of 2025 compared with an expense of $58 million recorded in the provision for credit losses in Q3 of 2024. In Q3, HDFS' annualized retail credit loss ratio was 3.2%, which compares to 3.1% in the year-ago period. Retail credit losses were $35 million in Q3 of 2025. Total finance receivables at the end of Q3 of 2025 were $6 billion, a decline of 24% versus prior year, primarily due to the HDFS transaction. The $6 billion of quarter-end finance receivables included $4.1 billion of finance receivables classified as held for sale, which resulted in the reversal of the associated allowance for credit losses during Q3 of 2025. The held-for-sale finance receivables were sold in October as part of the HDFS transaction. Total retail loan originations in Q3 of 2025 came in at $757 million, roughly in line with the $754 million of retail loan originations in Q3 of 2024. For the LiveWire segment, which is on Page 16, consolidated revenue increased in Q3 of 2025 compared to the prior year period, driven by an increase in electric balance bike and electric bike revenue for the quarter year-over-year. Selling, administrative and engineering expense was also lower by $9 million for the quarter year-over-year. In Q3, LiveWire delivered a 30% or $8 million improvement in consolidated operating loss and reduced its use of cash and cash equivalents through Q3 of 2025 by 39% or $31 million compared to Q3 of 2024. We now expect LiveWire's full year operating loss to come in between $72 million and $77 million. On a unit basis, LiveWire reported sales of 184 units in Q3 compared to 99 units sold in the prior Q3. This increase in unit sales for the quarter was driven by the Twist & Go promotion, which began on August 28. Wrapping up with consolidated Harley-Davidson, Inc. Q3 financial results, we delivered $417 million of operating cash flow in the Q3 2025 year-to-date period compared to $931 million in the Q3 2024 year-to-date period. The decline was due to new originations of retail finance receivables that were classified as held for sale, which is a change as this is classified as an operating activity under U.S. GAAP. As a result, the originations outflows reduced cash flow from operations as there were no comparative retail finance receivable originations classified as held for sale in the prior year. Total cash and cash equivalents ended at $1.8 billion, which was $469 million lower than at the end of Q3 prior year. This consolidated cash number includes $16 million at LiveWire. Additionally, as part of our capital allocation strategy, we remain committed to returning capital to shareholders. In Q3 of 2025, we bought back 3.4 million shares of our stock at a value of $100 million. For the Q3 2025 year-to-date period, we have bought back 6.8 million shares of our stock at a value of $187 million. Slide 18 outlines our aggregate capital return. Since the start of 2022, we have returned an aggregate of $1.7 billion through discretionary share repurchases and cash dividends. Given that the global tariff situation remains ongoing and uncertain, we continue to withhold our full year 2025 financial outlook for HDMC and HDI. We continue to expect HDFS to come in at approximately $525 million to $550 million of operating income for 2025. As we move into Q4 of 2025 and with the noted closing of the HDFS transaction, I will summarize the intended use of proceeds, which will support Harley-Davidson's capital allocation priorities. Cash is expected to be used for the following: first, approximately $450 million of debt reduction at the HDI level. Second, investment in HDMC and organic growth initiatives; and finally, continued share repurchases, evidenced by today's announcement where Harley-Davidson announced its plans to enter into an accelerated share repurchase agreement with Goldman Sachs to repurchase $200 million of shares of the company's common stock. This announcement is part of the previously announced plan to repurchase $1 billion in shares by the end of 2026. The company expects the transactions under the ASR agreement to complete by no later than the first quarter of 2026. And with that, I'll turn it back to Artie.

Thank you, Jonathan. Before we head to Q&A, I want to share some final observations of where we're at and what you can expect from us. We'll have much more to say about our go-forward strategy by next spring, both in terms of actions we are taking and our expectations about when those actions will deliver results. We're going to work quickly, but I fully expect that a number of the actions we will take will play out throughout '26 as we reset the company's trajectory for the future. In the meantime, there are several key focus areas that you can expect from us. First, dealers as our customer orientation. We succeed when our dealers succeed. Our efforts will prioritize dealer health, engagement, and long-term profitability as the foundation of Harley-Davidson's success. Second, celebrating the joy of ridership and the experience of riding a Harley-Davidson. We need to bring more riders into the community while retaining those we already have. The emotion of being a Harley-Davidson rider is unmatched, and it's our job as a company to make that experience easier, more accessible, and frictionless. Third, more simplified marketing programs, which will support local activations and events, ensuring that marketing investments hit nationally and drive local door swings. And lastly, fourth, analyzing and actioning our cost base for capital-efficient growth. We must ensure that every dollar we invest and every penny we spend drives value growth and sustainability for the long term. Since joining the community, one thing has become abundantly clear to me. There is no other brand that inspires the same level of passion, pride, and pure enthusiasm as Harley-Davidson. I'm truly excited to begin this journey and look forward to what lies ahead. Thank you for your time this morning. And with that, we'll take your questions.

Our first question comes from Craig Kennison from Baird.

Artie, nice to talk to you. Your second priority you mentioned was the joy of ridership and bringing more riders into the Harley-Davidson brand. Just as you've done your listening tour and some of the due diligence you did before taking the job, what were your thoughts around the demographic headwinds that Harley faces and ways that you can overcome what feels like a fundamental issue for the brand?

Sure, Craig. Great to be connected, and thanks for your question. I'm super excited to be here. And getting riders into the brand and onto our bikes is something I have a unique perspective on because I just went through that journey myself. I'll tell you that the inside of this brand, when you get into a dealership and meet our people, and they introduce you to the bikes, is extremely warm and welcoming. Having gone through Rider Academy, it was an amazing experience. I think there's an opportunity for it to be a bit more fun. Young people are looking for something that's fun and maybe has a seriousness to it, but maybe not as serious as we're currently presenting it. Some of the imagery that people have of Harley is reinforcing the fact that some of our riders are a bit more mature. If you look back at the 30, 40, 50 years of advertising that we've put out – and I had Bill Davidson do this for me recently, and he sent me a reel which is just unbelievably inspiring when we were attracting young riders. There is immense joy. There was a tongue-in-cheek attitude. There was a playfulness in the work, and you can expect some of that to come back, and that's sort of on the brand front. Practically speaking, the product line that we have coming and specifically the Sprint bike coming in the second half of next year addresses two things. One is a bike that's lighter and easier to maneuver. The second is a bike that's more affordable. So if you walked into a Harley dealership right now, the price point is pretty high for a young rider to be interested in Harley. I think the combination of brand, product and some augmentation to the experiential elements that make it more fun – I think we have a recipe to do that.

Our next question comes from Stephen Grambling from Morgan Stanley.

In your intro remarks, Artie, you had talked about market responsive customer-facing promotions. I was wondering if you could just elaborate on how you're thinking about that? Is that through specific channels? Or are there any kind of investments that you need to make around technology or otherwise to be more responsive?

Yes, Stephen, thank you so much. I'll say a few words, and then I'll let Jonathan go into some of the specifics that we've actioned. I think the first thing I'd say is our inventory levels at dealers are too high right now. It's something that we need to do and need to mobilize quickly against. I think as Jonathan mentioned in his remarks, specifically on the touring side. We have some promotional activity that is communicated at the local level that's been in place. And then just this past weekend, we put in some more as it relates to touring specifically. And Jonathan, I'll let you go through some of the details.

Okay. Sounds good. And Stephen, thank you for joining us. So I think a couple of details on that. As Artie talked about, as we take a look at sort of a pinpointed view on where we have a concern from an inventory standpoint, one of the primary places that we have concern is just around some pockets of buildup throughout the United States as we look at touring and maybe a couple of select places here or there from a CDO standpoint. We are making sure that we're passing along tools that support dealers in the way that they have the ability to move through those. There are things that we think we can do that really inspire consumers to drive door swings to our dealers. We know that when we get customers inside of our dealers, they do an exceptional job of really engaging with that consumer, converting it through to a sale. So some of the important elements are areas that we think are building the brand and building the experience for customers. Looking at lower APR programs for consumers, making sure that those are programs that are extended out to 60 or 72 months to really allow a customer to get onto the bike and really address the affordability dynamic that you heard Artie talk about. That's probably one of the better near-term examples of some things we are doing to ensure we're driving sales. The last piece I'll quickly touch on is that from a longer-term perspective, in the 2025 calendar year and with the 2025 model year, we have experimented with different price points to understand the impact that had from a consumer standpoint. We know that our customers have a psychological barrier around different price points for what they're willing to pay. That is something that you will see more fully in what we're introducing in the 2026 model year. With that, I'll hand it back to Artie.

Yes. I think the only thing I would add is that what we put into market with the financing support and some of the financial support on these bikes was in response to direct feedback from dealers. We incorporated precisely what dealers thought they needed, and that's what Jonathan referenced.

Our next question comes from Noah Zatzkin from KeyBanc.

I guess, one, just on the impact of the transaction in the quarter. I think previously, you had kind of talked about expecting $275 million to $300 million of operating income benefit in the second half. I guess I suspect most of that, or if not all of that, impacted the third quarter. So just any thoughts around the cadence of P&L impacts related to the transaction? And then just any color on how you're thinking about next year would be great.

Okay. Great. Thank you, Noah. So as we look, I think as we laid out sort of 3 main elements to the HDFS transaction, the back book sale, the forward flow and the equity element, we are super, super excited to partner on this with both KKR and PIMCO investment vehicles. We're excited about getting some of their thoughts and thought leadership into how we run the business. The good news, I think, as we look at this transaction is that we have the structure in place where from a dealer and a consumer perspective, they'll see no day-to-day impact in how that is run. Yet at the same time, we get some solid thinking from a couple of market leaders inside of our business in a thoughtful way that helps us understand credit dynamics across the consumer industry with a little bit more depth than we are today. As you talked about, this transaction really does close over multiple quarters, so there's some Q3 kind of accounting preparation work that occurred in the quarter, and you'll see more details as we get our final releases out over the next few days. And then we have some other elements that close over the coming quarters. So a little bit of carryover from one quarter to the next. But you are right; we do still feel very committed to that $275 million upside figure that we talked about. In addition, as you think through some of the interesting dynamics, there’s a lot that gets freed up from a balance sheet perspective. Although the $275 million is the upside from an operating income standpoint, I just want to reinforce that we expect to have $1.2 billion that gets freed up in cash by the time we get through Q1 of next year. That obviously affords a tremendous amount of flexibility as Harley-Davidson, Inc. thinks about how to place priorities, where our smart capital investments are, and where we can look at driving the business for growth as we move forward. We are really excited about the optionality that the transaction enjoys. I hope that helps.

Our next question comes from Robin Farley from UBS.

Great. Thinking about next year and what shipments could look like for 2026. I know you had a lot of inventory cleared at the dealers this year, but it sounds like you want to do more of that. So if we're thinking about – so first of all, I don't know if you have a thought on where retail – how retail might look going forward. And if you don't, even if you thought that was flat, if we were trying to think about comping some inventory reduction, that could mean shipments up, but it sounds like you want to see further inventory reduction. So if you could help us quantify whether that will be a greater amount year-over-year, just again, kind of thinking about so we can all translate this into shipment expectations for next year.

Okay. All right. Thank you, Robin. So I'll just walk through a little bit of where we are and kind of what we've done on a year-to-date basis and provide a little colored commentary, and then I'll pass it over to Artie for some thoughts. Obviously, as we think about the progress that we've made on inventory throughout the year, in Q1, dealer inventory was down 19% versus the same quarter the prior year, Q2 down 28%, Q3 down 13%. That's after last year where we worked things down a little bit across the full year spectrum. If you recall, we've withdrawn guidance. As we go through and look at some of the original guide, we had a 10% plus target of being down. We would envision being at that level or maybe slightly improved. One really important piece to consider as we take a look at this is Artie talked through the actions we’re taking to support the movement and sell-down of Touring. As we review dealer inventory by family in Q3 of '25 versus Q4, every family is down by 20% to up to 45% except for Touring and CVO, which is pretty flat. There certainly was some uniqueness as we look at 2024 due to the product launch of Touring that came out. So as we think through where we are from an inventory position, we are in a very healthy perspective across virtually all of the families. The one in an era with slightly higher interest rates and a more challenged consumer with affordability dynamics that Artie spoke about is really the touring side of things. I'll turn it over to Artie.

Yes. The only thing I'd add, Robin, is we're optimistic about the pricing ladder that Jonathan referenced earlier, starts with the 9, starts with the 14, starts with the 19, starts with the 24 on Nightster, Street Bob, Softail and Street Glide, coupled with the Sprint bike coming in the second half of next year. The focus in the building right now is the inventory support and getting that down on the model year '25 so that these '26 models have the opportunity to be really successful.

Our next question comes from Joe Altobello from Raymond James.

Just to put a finer point on that, Jonathan, so just so we're all clear. So you're saying this year, you expect global inventories to end at about 43,000 or so units, and that number comes down a little bit further next year? That's my first question. Second question, the HDFS normalized operating income post all of this noise this year, are you still thinking around, call it, $120 million to $130 million going forward?

All right. Joe, nice to hear from you. So relative to dealer inventory, I think your math is probably about right as you look at how that reduction translates through to units. Relative to the next calendar year, we're certainly not guiding on 2026 at this point. I hope that some of the commentary I provided in terms of what we're seeing by family helps understand the uniqueness of the situation that we're in. It certainly feels pretty consistent with the macro environment that we're operating in. As you look across sectors and businesses, you see consumers who are trading down rather than trading up in terms of products at this point from an overall consideration perspective. That really leans back into the elements Artie talked about, the importance of us focusing on affordability dynamics, and how we meet our consumers where they're at. That’s something you'll see us continue with, and we're pretty excited about. Relative to the HDFS transaction, elements that we need to make sure we are working through from a timing standpoint. We'll see if we can get all of that squeezed into 2025 or how much of that carries over into 2026. We'll have more when we're together in the next quarter but are certainly excited about everything that transaction does, and the affordability that it offers up from a strategic standpoint. That's something we’ll be talking about more as we get together next time.

Our next question comes from James Hardiman from Citigroup.

This is Sean Wagner on for James Hardiman. I wonder if you can provide any color on how you're thinking about fourth quarter? What are you assuming for fourth quarter retail? And how did October retail perform?

Sure. So I think as we look – great question around what we’re seeing from a quarter standpoint. Please do pass along our best to James too. So I think from a full-year perspective, we obviously have withdrawn our guidance a couple of quarters ago. We feel that it’s important that we stick with that. The reason for that is obviously an environment that is very dynamic and moving and responsive to what we see from an overall approach to tariffs and the environment in front of consumers. We see that consumer sentiment bounces around from one month to the next. We are really proud of the way that our dealers are out there working with each of the consumers who are walking in. We have seen kind of sequential improvements in traffic that’s flowing into our dealers. One of the biggest things for us is we know that door swings at dealers drive sales. We’re pleased with many of the dynamics and metrics we’re seeing on that front. Something we haven’t talked about is around the marketing development fund. As you may recall, we announced that right at the very beginning of this year. We knew that it would take some time to really gain traction with the dealer body to ensure that collectively we understand where the importance of spend lies in marketing dollars, events, and activations. We’ve really honed in on a mix of those elements that drive performance. We’re excited about what we’re seeing there. But again, probably not in the position to guide on the calendar year in total or in part unless it’s something with a little more certainty, like the HDFS transaction we’ve spoken about.

Our last question will come from Jamie Katz from Morningstar.

I have more of a theoretical question. As we think about shipments rising this quarter, what kind of sales growth do you think would be reasonable? Or what level of shipments do you think we need to really start to see a little bit of Motor Company margin expansion?

Yes, Jamie. A lot to that one as we think through the theoretical possibilities you’ve spoken of. As we think about the margin expansion dynamics and where we would go on that front, you effectively get there through the inverse of what you’ve been seeing in 2025. If you think about the dynamics we’ve called out that have made year-over-year margin changes line up in this way, the flip side of that is how we would get to something where we see margin expansion and growth. One important element is some of the experimentation work we've done with the price points. We are enthused about the early read on that and what some of that has done. That’s a dynamic we think will be really helpful across the business. We are also really excited about the marketing development fund and gaining a detailed understanding of how to balance events, activations, digital spend, and marketing spend to support dealers at their dealerships and drive traffic. Beyond the price points, as we think longer-term about this business, product portfolio dynamics are elements we must consider. There are some pieces that Artie has touched on and more that you will likely hear from Artie as we move through spring of next year with an update and refresh from a planning perspective. Artie, any other thoughts?

No, I think you covered it well, Jonathan. I think you covered it well.

We have no further questions. I would like to turn the call back over to Artie Starrs for any closing remarks.

Great. Well, thanks, everybody, for participating today. I'm super excited to be here and look forward to engaging and meeting so many of you in the coming weeks and months, and we'll see you on the call in February. Thank you.

This concludes today's conference call. Thank you for your participation. You may now disconnect.