Harley Davidson 2015 Annual Report Download - page 42

Download and view the complete annual report

Please find page 42 of the 2015 Harley Davidson annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 119

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119

42
Financing Activities
The Company’s financing activities consist primarily of dividend payments, share repurchases and debt activity.
The Company paid dividends of $1.24 per share totaling $249.3 million during 2015, $1.10 per share totaling $238.3
million during 2014 and $0.84 per share totaling $187.7 million in 2013.
Cash outflows from share repurchases were $1.54 billion, $615.6 million and $479.2 million for 2015, 2014 and 2013,
respectively. Share repurchases during 2015, 2014 and 2013 included 28.0 million, 9.3 million and 8.2 million shares of
common stock, respectively, related to discretionary share repurchases and shares of common stock that employees surrendered
to satisfy withholding taxes in connection with the vesting of restricted stock awards. In June 2015, the Company announced
that the Company's Board of Directors had authorized the Company to repurchase up to 15 million additional shares of its
common stock. In total at December 31, 2015, the Company had Board-approved authorizations to repurchase 9.0 million
shares of its common stock. In February 2016, the Company's Board of Directors separately authorized the Company to buy
back up to an additional 20 million shares of its common stock with no dollar limit or expiration date.
The Company’s total outstanding debt consisted of the following as of December 31, 2015, 2014 and 2013 (in
thousands):
2015 2014 2013
Unsecured commercial paper $ 1,201,380 $ 731,786 $ 666,317
Asset-backed Canadian commercial paper conduit facility 153,839 166,912 174,241
Medium-term notes 3,325,081 3,334,398 2,858,980
Senior unsecured notes 746,934 — 303,000
Term asset-backed securitization debt 1,463,154 1,271,533 1,256,632
Total debt $ 6,890,388 $ 5,504,629 $ 5,259,170
To access the debt capital markets, the Company relies on credit rating agencies to assign short-term and long-term credit
ratings. Generally, lower credit ratings result in higher borrowing costs and reduced access to debt capital markets. A credit
rating agency may change or withdraw the Company’s ratings based on its assessment of the Company’s current and future
ability to meet interest and principal repayment obligations. The Company’s short-term debt ratings affect its ability to issue
unsecured commercial paper. The Company’s short- and long-term debt ratings as of December 31, 2015 were as follows:
Short-Term Long-Term Outlook
Moody’s P2 A3 Stable
Standard & Poor’s A2 A- Stable
Fitch(a) F1 A Stable
Global Credit Facilities – In April 2014, the Company entered into a new $675.0 million five-year credit facility to
refinance and replace a $675.0 million four-year credit facility that was due to mature in April 2015. The new five-year credit
facility matures in April 2019. The Company also has a $675.0 million five-year credit facility which matures in April 2017.
The new five-year credit facility and the existing five-year credit facility (together, the Global Credit Facilities) bear interest at
various variable interest rates, which may be adjusted upward or downward depending on certain criteria, such as credit ratings.
The Global Credit Facilities also require the Company to pay a fee based upon the average daily unused portion of the
aggregate commitments under the Global Credit Facilities. The Global Credit Facilities are committed facilities and primarily
used to support the Company's unsecured commercial paper program. During July 2015, the Company borrowed C$20 million
under the Global Credit Facilities and repaid the borrowings in August 2015. No borrowings were outstanding at December 31,
2015.
Unsecured Commercial Paper – Subject to limitations, the Company could issue unsecured commercial paper of up to
$1.35 billion as of December 31, 2015 supported by the Global Credit Facilities. Outstanding unsecured commercial paper may
not exceed the unused portion of the Global Credit Facilities. Maturities may range up to 365 days from the issuance date. The
Company intends to repay unsecured commercial paper as it matures with additional unsecured commercial paper or through
other means, such as borrowing under the Global Credit Facilities, borrowing under its asset-backed U.S. commercial paper
conduit facility or through the use of operating cash flow and cash on hand.(1)