Harley Davidson 2013 Annual Report Download - page 77

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77
The following table summarizes the fair value and carrying value of the Company’s financial instruments at December 31
(in thousands):
2013 2012
Fair Value Carrying Value Fair Value Carrying Value
Assets:
Cash and cash equivalents $ 1,066,612 $ 1,066,612 $ 1,068,138 $ 1,068,138
Marketable securities $ 129,181 $ 129,181 $ 154,051 $ 154,051
Accounts receivable, net $ 261,065 $ 261,065 $ 230,079 $ 230,079
Derivatives $ 1,932 $ 1,932 $ 317 $ 317
Finance receivables, net $ 6,086,441 $ 5,999,563 $ 5,861,442 $ 5,781,852
Restricted cash $ 144,807 $ 144,807 $ 188,008 $ 188,008
Liabilities:
Accounts payable $ 239,794 $ 239,794 $ 257,386 $ 257,386
Derivatives $ 3,925 $ 3,925 $ 7,920 $ 7,920
Unsecured commercial paper $ 666,317 $ 666,317 $ 294,943 $ 294,943
Asset-backed Canadian commercial paper
conduit facility $ 174,241 $ 174,241 $ 175,658 $ 175,658
Medium-term notes $ 3,087,852 $ 2,858,980 $ 3,199,548 $ 2,881,272
Senior unsecured notes $ 305,958 $ 303,000 $ 338,594 $ 303,000
Term asset-backed securitization debt $ 1,259,314 $ 1,256,632 $ 1,457,807 $ 1,447,776
Cash and Cash Equivalents, Restricted Cash, Accounts Receivable, Net and Accounts Payable – With the exception of
certain cash equivalents, the carrying value of these items in the financial statements is based on historical cost. The historical
cost basis for these amounts is estimated to approximate their respective fair values due to the short maturity of these
instruments. Fair value is based on Level 1 or Level 2 inputs.
Marketable Securities – The carrying value of marketable securities in the financial statements is based on fair value. The
fair value of marketable securities is determined primarily based quoted prices for identical instruments or on quoted market
prices of similar financial assets. Fair value is based on Level 1 or Level 2 inputs.
Finance Receivables, Net – The carrying value of retail and wholesale finance receivables in the financial statements is
amortized cost less an allowance for credit losses. The fair value of retail finance receivables is generally calculated by
discounting future cash flows using an estimated discount rate that reflects current credit, interest rate and prepayment risks
associated with similar types of instruments. Fair value is determined based on Level 3 inputs. The amortized cost basis of
wholesale finance receivables approximates fair value because they either are short-term or have interest rates that adjust with
changes in market interest rates.
Derivatives – Interest rate swaps, foreign currency exchange contracts and commodity contracts are derivative financial
instruments and are carried at fair value on the balance sheet. The fair value of interest rate swaps is determined using pricing
models that incorporate quoted prices for similar assets and observable inputs such as interest rates and yield curves. The fair
value of foreign currency exchange and commodity contracts is determined using publicly quoted prices. Fair value is
calculated using Level 2 inputs.
Debt – The carrying value of debt in the financial statements is generally amortized cost. The carrying value of unsecured
commercial paper approximates fair value due to its short maturity. Fair value is calculated using Level 2 inputs.
The carrying value of debt provided under the Canadian Conduit approximates fair value since the interest rates charged
under the facility are tied directly to market rates and fluctuate as market rates change. Fair value is calculated using Level 2
inputs.
The fair values of the medium-term notes are estimated based upon rates currently available for debt with similar terms
and remaining maturities. Fair value is calculated using Level 2 inputs.
The fair value of the senior unsecured notes is estimated based upon rates currently available for debt with similar terms
and remaining maturities. Fair value is calculated using Level 2 inputs.