Harley Davidson 2014 Annual Report Download - page 63

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2014 2013 2012
Interest $154,310 $197,161 $225,228
Income taxes $438,840 $236,972 $317,812
Interest paid represents interest payments of HDFS (included in financial services interest expense) and interest payments
of the Company (included in interest expense).
63
3.€€€€Restructuring Expense and Other Impairments
In 2013, the Company completed the activities related to its 2009, 2010, and 2011 Restructuring Plans.
2011 Restructuring Plans
In December 2011, the Company made a decision to cease operations at New Castalloy, its Australian subsidiary and
producer of cast motorcycle wheels and wheel hubs, and source those components through other existing suppliers by the end
of 2013 (2011 New Castalloy Restructuring Plan). Since 2011, the Company has successfully transitioned a significant amount
of wheel production to other existing suppliers. However, during 2013, the Company made a decision to retain limited
operations at New Castalloy focused on the production of certain complex, high-finish wheels in a cost-effective and
competitive manner. The Company also entered into a new agreement with the unionized labor force at New Castalloy.
In connection with the modified 2011 New Castalloy Restructuring Plan, the New Castalloy workforce was reduced by
approximately 100 employees, leaving approximately 100 remaining employees to support ongoing operations. The original
plan would have resulted in a workforce reduction of approximately 200 employees.
Under the modified 2011 New Castalloy Restructuring Plan, restructuring expenses consisted of employee severance and
termination costs, accelerated depreciation and other related costs. On a cumulative basis, the Company incurred $22.1 million
of restructuring expenses under the modified 2011 New Castalloy Restructuring Plan, of which 35% was non-cash. This
includes a benefit related to restructuring reserves released in the second quarter of 2013 in connection with the decision to
retain a limited operation at the New Castalloy facility, as described above.
In February 2011, the Company’s unionized employees at its facility in Kansas City, Missouri ratified a new seven-year
labor agreement. The new agreement took effect on August€1, 2011. The new contract is similar to the labor agreements ratified
at the Company’s Wisconsin facilities in September 2010 and its York, Pennsylvania production facility in December 2009, and
allows for similar flexibility, increased production efficiency and the addition of a flexible workforce component.
The actions to implement the new ratified labor agreement (2011 Kansas City Restructuring Plan) resulted in
approximately 145 fewer full-time hourly unionized employees in its Kansas City facility than would have been required under
the previous contract.
Under the 2011 Kansas City Restructuring Plan, restructuring expenses consisted of employee severance and termination
costs and other related costs. On a cumulative basis, the Company incurred $6.0 million of restructuring expenses under the
2011 Kansas City Restructuring Plan, of which approximately 10% was non-cash.