Harley Davidson 2012 Annual Report Download - page 85

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85
Under the financial covenants of the Global Credit Facilities, the consolidated debt to equity ratio of HDFS cannot
exceed 10.0 to 1.0. In addition, the Company must maintain a minimum interest coverage ratio of 2.25 to 1.0 for each fiscal
quarter ended through June 2013 and 2.5 to 1.0 for each fiscal quarter thereafter. No financial covenants are required under the
Notes or the U.S. or Canadian asset-backed commercial paper conduit facilities.
At December 31, 2012 and 2011, HDFS and the Company remained in compliance with all of these covenants.
13. Income Taxes
Provision for income taxes for the years ended December 31 consists of the following (in thousands):
2012 2011 2010
Current:
Federal $ 191,006 $ 135,232 $ 138,221
State 4,221 12,177 6,919
Foreign 13,189 5,776 4,486
208,416 153,185 149,626
Deferred:
Federal 121,934 104,723 (18,428)
State 7,697 (12,201)(1,361)
Foreign (460)(1,121) 963
129,171 91,401 (18,826)
Total $ 337,587 $ 244,586 $ 130,800
The components of income before income taxes for the years ended December 31 were as follows (in thousands):
2012 2011 2010
Domestic $ 946,592 $ 782,896 $ 377,416
Foreign 14,920 9,768 13,053
$ 961,512 $ 792,664 $ 390,469
The provision for income taxes differs from the amount that would be provided by applying the statutory U.S. corporate
income tax rate due to the following items for the years ended December 31:
2012 2011 2010
Provision at statutory rate 35.0% 35.0% 35.0%
State taxes, net of federal benefit 1.6 1.6 1.0
Domestic manufacturing deduction (1.6)(1.8)(3.2)
Research and development credit — (0.6)(1.0)
Unrecognized tax benefits including interest and penalties 0.1 (1.1)(0.2)
Valuation allowance adjustments (0.3)(2.0) 0.7
Medicare Part D — — 3.4
Tax audit settlements (0.1)(1.1)(0.4)
Investments in low-income housing partnerships — — 0.6
Adjustments for previously accrued taxes (0.4) 0.3 (2.8)
Other 0.8 0.6 0.4
Provision for income taxes 35.1% 30.9% 33.5%