Harley Davidson 2014 Annual Report Download - page 44

$40.0 million. Support may be provided at the Company’s option as capital contributions or loans. Accordingly, certain debt
covenants may restrict the Company’s ability to withdraw funds from HDFS outside the normal course of business. No amount
has ever been provided to HDFS under the support agreement.
Operating and Financial Covenants – HDFS and the Company are subject to various operating and financial covenants
related to the Global Credit Facilities and various operating covenants under the Notes and the U.S. and Canadian asset-backed
commercial paper conduit facilities. The more significant covenants are described below.
The operational covenants limit the Company’s and HDFS’ ability to:
• assume or incur certain liens;
• participate in certain mergers, consolidations, liquidations or dissolutions; and
• purchase or hold margin stock.
Under the current financial covenants of the Global Credit Facilities, the consolidated debt to equity ratio of HDFS
cannot exceed 10.0 to 1.0 as of the end of any fiscal quarter. In addition, the ratio of the Company's consolidated debt to the
Company's consolidated debt and equity, in each case excluding the debt of HDFS and its subsidiaries, cannot exceed 0.65 to
1.0 as of the end of any fiscal quarter. No financial covenants are required under the Notes or the U.S. or Canadian asset-backed
commercial paper conduit facilities.
At December€31, 2014, 2013 and 2012, HDFS and the Company remained in compliance with all of the existing
covenants.
44
Cautionary Statements
The Company’s ability to meet the targets and expectations noted depends upon, among other factors, the Company’s
ability to:
(i) execute its business strategy,
(ii) manage through changes in general economic conditions, including changing capital, credit and retail
markets, and political events,
(iii) adjust to fluctuations in foreign currency exchange rates, interest rates and commodity prices,
(iv) continue to develop the capabilities of its distributors and dealers and manage the risks that our independent
dealers may have difficulty obtaining capital and managing through changing economic conditions and
consumer demand,
(v) manage risks that arise through expanding international manufacturing, operations and sales,
(vi) manage through the effects inconsistent and unpredictable weather patterns may have on retail sales of
motorcycles,
(vii) manage changes and prepare for requirements in legislative and regulatory environments for its products,
services and operations,
(viii) manage supply chain issues, including any unexpected interruptions or price increases caused by raw material
shortages or natural disasters,
(ix) detect any issues with the Company's motorcycles or manufacturing processes to avoid delays in new model
launches, recall campaigns, increased warranty costs or litigation,
(x) develop and implement sales and marketing plans that retain existing retail customers and attract new retail
customers in an increasingly competitive marketplace,
(xi) implement and manage enterprise-wide information technology solutions, including solutions at its
manufacturing facilities, and secure data contained in those systems,
(xii) develop and introduce products, services and experiences that are successful in the marketplace,
(xiii) continue to realize production efficiencies at its production facilities and manage operating costs including
materials, labor and overhead,
(xiv) execute its flexible production strategy,
(xv) balance production volumes for its new motorcycles with consumer demand,
(xvi) continue to manage the relationships and agreements that it has with its labor unions to help drive long-term
competitiveness,