Harley Davidson 2014 Annual Report Download - page 73

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Balance as of 2013
Quoted€Prices€in
Active€Markets€for
Identical Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Assets:
Cash equivalents $836,387 $516,173 $320,214 $—
Marketable securities 129,181 30,172 99,009 —
Derivatives 1,932 — 1,932 —
Total $967,500 $546,345 $421,155 $—
Liabilities:
Derivatives $3,925 $—$3,925 $—
Nonrecurring Fair Value Measurements
Repossessed inventory is recorded at the lower of cost or net realizable value through a nonrecurring fair value
measurement. The nonrecurring fair value measurement represents the loss recognized to adjust the related finance receivable
to the fair value of the repossessed inventory. Repossessed inventory was $13.4 million and $13.8 million at December€31,
2014 and 2013, for which the fair value adjustment was $5.0 million and $6.6 million at December€31, 2014 and 2013,
respectively. Fair value is estimated using level 2 inputs based on the recent market values of repossessed inventory.
73
8. €€€€Fair Value of Financial Instruments
The Company’s financial instruments consist primarily of cash and cash equivalents, marketable securities, trade
receivables, finance receivables, net, trade payables, debt, foreign currency contracts and interest rate swaps (derivative
instruments are discussed further in Note 9). Under U.S. GAAP certain of these items are required to be recorded in the
financial statements at fair value, while others are required to be recorded at historical cost.
The following table summarizes the fair value and carrying value of the Company’s financial instruments at December€31
(in thousands): €
2014 2013
Fair Value Carrying€Value Fair Value Carrying€Value
Assets:
Cash and cash equivalents $906,680 $906,680 $1,066,612 $1,066,612
Marketable securities $91,140 $91,140 $129,181 $129,181
Accounts receivable, net $247,621 $247,621 $261,065 $261,065
Derivatives $32,244 $32,244 $1,932 $1,932
Finance receivables, net $6,519,500 $6,432,881 $6,086,441 $5,999,563
Restricted cash $122,052 $122,052 $144,807 $144,807
Liabilities:
Accounts payable $196,868 $196,868 $239,794 $239,794
Derivatives $2,027 $2,027 $3,925 $3,925
Unsecured commercial paper $731,786 $731,786 $666,317 $666,317
Asset-backed Canadian commercial paper
conduit facility
$166,912 $166,912 $174,241 $174,241
Medium-term notes $3,502,536 $3,334,398 $3,087,852 $2,858,980
Senior unsecured notes $—$—$305,958 $303,000
Term asset-backed securitization debt $1,270,656 $1,271,533 $1,259,314 $1,256,632
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.