Harley Davidson 2014 Annual Report Download - page 40

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The Company’s strategy is to maintain a minimum of twelve months of its projected liquidity needs through a
combination of cash and marketable securities and availability under credit facilities. The following table summarizes the
Company’s cash and marketable securities and availability under credit facilities (in thousands):
€
December 31,
2014
Cash and cash equivalents $906,680
Current marketable securities 57,325
Total cash and cash equivalents and marketable securities 964,005
Global credit facilities 618,214
Asset-backed U.S commercial paper conduit facility (a) 600,000
Asset-backed Canadian commercial paper conduit facility (b) 5,508
Total availability under credit facilities 1,223,722
Total $2,187,727
(a) The U.S. commercial paper conduit facility expires on October 30, 2015. The Company anticipates that it will renew this
facility prior to expiration(1).
(b) The Canadian commercial paper conduit facility expires on June 30, 2015 and is limited to Canadian denominated
borrowings. The Company anticipates that it will renew this facility prior to expiration.(1).
Although the Company believes it has obtained the funding necessary to support Financial Services' operations for 2015
(1), the Company recognizes that it must continue to adjust its business to changes in the lending environment. The Company
intends to continue with a diversified funding profile through a combination of short-term and long-term funding vehicles and
to pursue a variety of sources to obtain cost-effective funding. The Financial Services operations could be negatively affected
by higher costs of funding and the increased difficulty of raising, or potential unsuccessful efforts to raise, funding in the short-
term and long-term capital markets.(1) These negative consequences could in turn adversely affect the Company’s business and
results of operations in various ways, including through higher costs of capital, reduced funds available through its Financial
Services operations to provide loans to independent dealers and their retail customers, and dilution to existing shareholders
through the use of alternative sources of capital.
40
Cash Flow Activity
The following table summarizes the cash flow activity of continuing operations for the years ended December€31, 2014,
2013 and 2012 (in thousands):€
2014 2013 2012
Net cash provided by operating activities $1,146,677 $977,093 $801,458
Net cash used by investing activities (744,650)(568,867)(261,311)
Net cash used by financing activities (536,096)(393,209)(990,073)
Effect of exchange rate changes on cash and cash equivalents (25,863)(16,543)(8,886)
Net decrease in cash and cash equivalents $(159,932) $ (1,526) $ (458,812)
Operating Activities
The increase in operating cash flow in 2014 compared to 2013 was due primarily to increased earnings, favorable
changes in working capital and lower pension contributions, partially offset by higher wholesale finance originations.
During 2014, the Company contributed $29.7 million to its qualified pension, SERPA and postretirement healthcare plans
compared to $204.8 million in 2013, which included a $175.0 million voluntary contribution to its qualified pension plan. The
Company does not expect to make any contributions to its qualified pension plan in 2015.(1) The Company expects it will
continue to make on-going contributions related to current benefit payments for SERPA and postretirement healthcare plans.
The Company’s expected future contributions to these plans are provided in Note 13 of Notes to Consolidated Financial
Statements.
The increase in operating cash flow in 2013 compared to 2012 was due primarily to increased earnings and favorable
changes in working capital. The favorable changes in working capital were in part due to the utilization of a prepaid income tax
balance in 2013 that was established in 2012.