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, 2026		December 31, 2025		September 30, 2025
Raw materials and work in process	$	282,968	$	338,744	$	294,480
Motorcycle finished goods	221,156		434,044		255,339
Parts and accessories and apparel	102,095		97,674		98,431
Inventory at lower of FIFO cost or net realizable value	606,219		870,462		648,250
Excess of FIFO over LIFO cost	(147,474)		(139,564)		(136,064)
	$	458,745	$	730,898	$	512,186

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 $537.4 million, $536.6 million, and $554.5 million, net of fees, of interest-bearing brokered certificates of deposit outstanding as of September 30, 2026, December 31, 2025, and September 30, 2025, 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.

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


	Nine months ended
	September 30, 2026		September 30, 2025
Cash flows from operating activities:
Net income	$	144,047	$	611,709
Adjustments to reconcile Net income to Net cash provided by operating activities:
Depreciation and amortization	125,480		126,339
Amortization of deferred loan origination costs	8,324		43,871
Amortization of financing origination fees	3,676		9,773
Income related to long-term employee benefits	(32,112)		(41,287)
Employee benefit plan contributions and payments	(5,039)		(5,091)
Stock compensation expense	25,459		25,838
Net change in wholesale finance receivables related to sales	603		(183,006)
Provision for credit losses	51,120		(198,427)
Originations of finance receivables held for sale	(1,727,770)		(414,009)
Collections from finance receivables held for sale	128,186		16,916
Proceeds from sales of loans held for sale	1,307,502		—
Gain on sale of securitization beneficial interests	(856)		(26,958)




Deferred income taxes	(5,770)		92,122
Other, net	44,976		19,360
Changes in current assets and liabilities:
Accounts receivable, net	(55,675)		(46,415)
Finance receivables – accrued interest and other	(7,877)		11,279
Inventories, net	263,392		262,287
Accounts payable and accrued liabilities	3,647		75,039
Other current assets	4,621		37,563
	131,887		(194,806)
Net cash provided by operating activities	$	275,934	$	416,903