Harley Davidson 2012 Annual Report Download - page 72

Download and view the complete annual report

Please find page 72 of the 2012 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 143

  • 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
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143

72
HDFS provides retail financial services to customers of the Company’s independent dealers in the U.S. and Canada. The
origination of retail loans is a separate and distinct transaction between HDFS and the retail customer, unrelated to the
Company’s sale of product to its dealers. Retail finance receivables consist of secured promissory notes and installment loans.
HDFS holds either titles or liens on titles to vehicles financed by promissory notes and installment loans. As of December 31,
2012 and 2011, approximately 12% and 11%, respectively, of gross outstanding finance receivables were originated in Texas.
At December 31, 2012 and 2011, unused lines of credit extended to HDFS’ wholesale finance customers totaled $955.5
million and $909.9 million, respectively. Approved but unfunded retail finance loans totaled $137.7 million and $139.3 million
at December 31, 2012 and 2011, respectively.
Wholesale finance receivables are related primarily to motorcycles and related parts and accessories sales to independent
Harley-Davidson dealers and are generally contractually due within one year. Retail finance receivables are primarily related to
sales of motorcycles to the dealers’ customers. On December 31, 2012, contractual maturities of finance receivables were as
follows (in thousands):
United States Canada Total
2013 $ 1,685,921 $ 81,268 $ 1,767,189
2014 988,995 44,726 1,033,721
2015 1,117,929 50,035 1,167,964
2016 1,146,884 55,975 1,202,859
2017 601,981 30,432 632,413
Thereafter 85,373 — 85,373
Total $ 5,627,083 $ 262,436 $ 5,889,519
As of December 31, 2012, all finance receivables due after one year were at fixed interest rates.
The allowance for credit losses on finance receivables is comprised of individual components relating to wholesale and
retail finance receivables. Changes in the allowance for credit losses on finance receivables by portfolio for the year ended
December 31 were as follows (in thousands):
2012
Retail Wholesale Total
Balance, beginning of period $ 116,112 $ 9,337 $ 125,449
Provision for credit losses 25,252 (3,013) 22,239
Charge-offs (86,963)(99)(87,062)
Recoveries 47,041 — 47,041
Balance, end of period $ 101,442 $ 6,225 $ 107,667
2011
Retail Wholesale Total
Balance, beginning of period $ 157,791 $ 15,798 $ 173,589
Provision for credit losses 23,054 (6,023) 17,031
Charge-offs (118,993)(503)(119,496)
Recoveries 54,260 65 54,325
Balance, end of period $ 116,112 $ 9,337 $ 125,449