Harley Davidson 2013 Annual Report Download - page 73

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73
7. Asset-Backed Financing
HDFS participates in asset-backed financing through both term asset-backed securitization transactions and
through asset-backed commercial paper conduit facilities. HDFS treats these transactions as secured borrowing because
assets are either transferred to consolidated VIEs or HDFS maintains effective control over the assets and does not meet
the accounting sale requirements under ASC Topic 860. See Note 1 for more information on the Company's accounting
for asset-backed financings and VIEs.
The following table shows the assets and liabilities related to the Company's asset-backed financings that were
included in its financial statements at December 31 (in thousands):
2013
Finance
receivables
Allowance
for credit
losses Restricted
cash Other
assets Total
assets Asset-backed
debt
On-balance sheet assets and liabilities
Consolidated VIEs
Term asset-backed securitizations $ 1,569,118 $ (31,778) $ 133,053 $ 3,720 $ 1,674,113 $ 1,256,632
Asset-backed U.S. commercial paper conduit
facility — — — 429 429 —
Unconsolidated VIEs
Asset-backed Canadian commercial paper
conduit facility 204,092 (3,361) 11,754 589 213,074 174,241
$ 1,773,210 $ (35,139) $ 144,807 $ 4,738 $ 1,887,616 $ 1,430,873
2012
Finance
receivables
Allowance
for credit
losses Restricted
cash Other
assets Total
assets Asset-backed
debt
On-balance sheet assets and liabilities
Consolidated VIEs
Term asset-backed securitizations $ 2,143,708 $ (42,139) $ 176,290 $ 4,869 $ 2,282,728 $ 1,447,776
Asset-backed U.S. commercial paper conduit
facility — — — 419 419 —
Unconsolidated VIEs
Asset-backed Canadian commercial paper
conduit facility 194,285 (3,432) 11,718 255 202,826 175,658
$ 2,337,993 $ (45,571) $ 188,008 $ 5,543 $ 2,485,973 $ 1,623,434
Term Asset-Backed Securitization VIEs
The Company transfers U.S. retail motorcycle finance receivables to SPEs which in turn issue secured notes to
investors, with various maturities and interest rates, secured by future collections of the purchased U.S. retail
motorcycle finance receivables. Each term asset-backed securitization SPE is a separate legal entity and the U.S. retail
motorcycle finance receivables included in the term asset-backed securitizations are only available for payment of the
secured debt and other obligations arising from the term asset-backed securitization transactions and are not available to
pay other obligations or claims of the Company’s creditors until the associated secured debt and other obligations are
satisfied. Restricted cash balances held by the SPEs are used only to support the securitizations.