Harley Davidson 2015 Annual Report Download - page 40

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materially different than the Company’s current reserve. At this time, the Company cannot reasonably estimate the impact of
any remedies the EPA might seek beyond the Company's current reserve for this matter, if any.
York Environmental Matters:
The Company is involved with government agencies and groups of potentially responsible parties in various
environmental matters, including a matter involving the cleanup of soil and groundwater contamination at its York,
Pennsylvania facility. The York facility was formerly used by the U.S. Navy and AMF prior to the purchase of the York facility
by the Company from AMF in 1981. Although the Company is not certain as to the full extent of the environmental
contamination at the York facility, it has been working with the Pennsylvania Department of Environmental Protection
(PADEP) since 1986 in undertaking environmental investigation and remediation activities, including an ongoing site-wide
remedial investigation/feasibility study (RI/FS). In January 1995, the Company entered into a settlement agreement (the
Agreement) with the Navy, and the parties amended the Agreement in 2013 to address ordnance and explosive waste. The
Agreement calls for the Navy and the Company to contribute amounts into a trust equal to 53% and 47%, respectively, of future
costs associated with environmental investigation and remediation activities at the York facility (Response Costs). The trust
administers the payment of the Response Costs incurred at the York facility as covered by the Agreement.
The Company has a reserve for its estimate of its share of the future Response Costs at the York facility which is included
in accrued liabilities in the Condensed Consolidated Balance Sheets.(1) As noted above, the RI/FS is still underway and given
the uncertainty that exists concerning the nature and scope of additional environmental investigation and remediation that may
ultimately be required under the RI/FS or otherwise at the York facility, the Company is unable to make a reasonable estimate
of those additional costs, if any, that may result.
The estimate of the Company’s future Response Costs that will be incurred at the York facility is based on reports of
independent environmental consultants retained by the Company, the actual costs incurred to date and the estimated costs to
complete the necessary investigation and remediation activities. Response Costs are expected to be paid primarily through 2017
although certain Response Costs may continue for some time beyond 2017.
Product Liability Matters:
The Company is involved in product liability suits related to the operation of its business. The Company accrues for claim
exposures that are probable of occurrence and can be reasonably estimated. The Company also maintains insurance coverage
for product liability exposures. The Company believes that its accruals and insurance coverage are adequate and that product
liability suits will not have a material adverse effect on the Company’s consolidated financial statements.(1)
Liquidity and Capital Resources as of December 31, 2015
Over the long-term, the Company expects that its business model will continue to generate cash that will allow it to invest
in the business, fund future growth opportunities and return value to shareholders.(1) The Company believes the Motorcycles
operations will continue to be primarily funded through cash flows generated by operations.(1) The Company’s Financial
Services operations have been funded with unsecured debt, unsecured commercial paper, asset-backed commercial paper
conduit facilities, committed unsecured bank facilities, term asset-backed securitizations and intercompany borrowings.
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,
2015
Cash and cash equivalents $ 722,209
Current marketable securities 45,192
Total cash and cash equivalents and marketable securities 767,401
Global credit facilities 148,620
Asset-backed U.S. commercial paper conduit facility (a) 600,000
Asset-backed Canadian commercial paper conduit facility (b) 19,191
Total availability under credit facilities 767,811
Total $ 1,535,212