Harley Davidson 2013 Annual Report Download - page 41

Download and view the complete annual report

Please find page 41 of the 2013 Harley Davidson annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 117

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117

41
December 31,
2013
Cash and cash equivalents $ 1,066,612
Current marketable securities 99,009
Total cash and cash equivalents and marketable securities 1,165,621
Global credit facilities 683,683
Asset-backed U.S commercial paper conduit facility (a) 600,000
Asset-backed Canadian commercial paper conduit facility (b) 13,719
Total availability under credit facilities 1,297,402
Total $ 2,463,023
(a) The U.S. commercial paper conduit facility expires on September 12, 2014. The Company anticipates that it will renew this
facility prior to expiration(1).
(b) The Canadian commercial paper conduit facility expires on June 30, 2014 and is limited to Canadian denominated
borrowings. The Company anticipates that it will renew this facility prior to expiration(1).
Although the Company believes it has obtained the funding necessary to support HDFS’ operations for 2014(1), the
Company recognizes that it must continue to adjust its business to changes in the lending environment. The Company intends
to continue with a diversified funding profile through a combination of short-term and long-term funding vehicles and to
pursue a variety of sources to obtain cost-effective funding. The Financial Services operations could be negatively affected by
higher costs of funding and the increased difficulty of raising, or potential unsuccessful efforts to raise, funding in the short-
term and long-term capital markets.(1) These negative consequences could in turn adversely affect the Company’s business and
results of operations in various ways, including through higher costs of capital, reduced funds available through its Financial
Services operations to provide loans to independent dealers and their retail customers, and dilution to existing shareholders
through the use of alternative sources of capital.
Cash Flow Activity
The following table summarizes the cash flow activity of continuing operations for the years ended December 31, 2013,
2012 and 2011 (in thousands):
2013 2012 2011
Net cash provided by operating activities $ 977,093 $ 801,458 $ 885,291
Net cash used by investing activities (568,867)(261,311)(63,542)
Net cash used by financing activities (393,209)(990,073)(308,944)
Effect of exchange rate changes on cash and cash equivalents (16,543)(8,886)(7,788)
Net (decrease) increase in cash and cash equivalents $ (1,526) $ (458,812) $ 505,017
Operating Activities
The increase in operating cash flow in 2013 compared to 2012 was due primarily to increased earnings and favorable
changes in working capital. The favorable changes in working capital were in part due to the utilization of a prepaid income tax
balance in 2013 that was established in 2012.
The Company has long-term obligations related to its qualified pension, SERPA and postretirement healthcare plans at
December 31, 2013. During 2013, the Company contributed $204.8 million to its qualified pension, SERPA and postretirement
healthcare plans, which includes a $175.0 million voluntary contribution to its qualified pension plan. The Company does not
expect to make any contributions to its qualified pension plan in 2014.(1) The Company expects it will continue to make on-
going contributions related to current benefit payments for SERPA and postretirement healthcare plans. The Company’s
expected future contributions to these plans are provided in Note 14 of Notes to Consolidated Financial Statements.
The decrease in operating cash flow in 2012 compared to 2011 was due primarily to working capital changes which
resulted in lower operating cash inflows in 2012 as compared to 2011. This was due in part to the recognition of a prepaid
income tax balance at the end of 2012 driven by accelerated depreciation deductions as well as the timing of quarterly earnings