Harley Davidson 2014 Annual Report Download - page 80

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In September 2014, the Company issued $600 million of medium-term notes which mature in September 2019 and have
an annual interest rate of 2.40%. In November 2014, the Company issued $400 million of medium-term notes which mature in
November 2017 and have an annual interest rate of 1.55%. There were no medium-term note issuances during 2013. All of the
Company's medium-term notes (collectively, the Notes) provide for semi-annual interest payments and principal due at
maturity. Unamortized discounts on the Notes reduced the balance by $3.6 million and $1.5 million at December€31, 2014 and
2013, respectively.
During 2014, 2013, and 2012, the Company repurchased an aggregate of $22.6 million, $23.0 million, and $16.6 million
respectively, of its 6.80% medium-term notes which mature in June 2018. As a result, the Company recognized in financial
services interest expense $3.9 million, $4.9 million, and $4.3 million of loss on extinguishment of debt, respectively, which
included unamortized discounts and fees. During December 2014, $500.0 million of 5.75% medium-term notes matured, and
the principal and accrued interest were paid in full. During December 2013, $400.0 million of the 5.25% medium-term notes
matured, and the principal and accrued interest were paid in full.
In February 2009, the Company issued $600.0 million of senior unsecured notes in an underwritten offering. The senior
unsecured notes provide for semi-annual interest payments and principal due at maturity. The senior unsecured notes mature in
February 2014 and had an annual interest rate of 15%. During the fourth quarter of 2010, the Company repurchased $297.0
million of the $600.0 million senior unsecured notes and the remaining $303.0 million was repaid at maturity in February 2014.
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 and 2013, HDFS and the Company remained in compliance with all of these covenants.
80
12.€€€€Income Taxes
Provision for income taxes for the years ended December€31 consists of the following (in thousands):€
2014 2013 2012
Current:
Federal $394,904 $281,938 $191,006
State 30,997 23,701 4,221
Foreign 20,429 22,093 13,189
446,330 327,732 208,416
Deferred:
Federal (5,743)51,509 121,934
State (3,155)(1,471)7,697
Foreign 1,277 2,542 (460)
(7,621)52,580 129,171
Total $438,709 $380,312 $337,587