Harley Davidson 2012 Annual Report Download - page 75

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75
The recorded investment of wholesale finance receivables, by internal credit quality indicator, at December 31 was as
follows (in thousands):
2012 2011
Doubtful $ 8,107 $ 13,048
Substandard 2,593 5,052
Special Mention 3,504 14,361
Medium Risk 8,451 3,032
Low Risk 793,749 789,147
Total $ 816,404 $ 824,640
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 our asset-backed financings that were included in
our financial statements at December 31 (in thousands):
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
2011
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 $ 2,916,219 $ (65,735) $ 228,776 $ 6,772 $ 3,086,032 $ 2,087,346
Asset-backed U.S. commercial paper conduit
facility 13,455 (302) 879 449 14,481 —
Unconsolidated VIEs
Asset-backed Canadian commercial paper
conduit facility — — — — — —
$ 2,929,674 $ (66,037) $ 229,655 $ 7,221 $ 3,100,513 $ 2,087,346
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