Harley Davidson 2015 Annual Report Download - page 64

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64
Cash Flow Information:
The reconciliation of net income to net cash provided by operating activities of continuing operations is as follows (in
thousands):
2015 2014 2013
Cash flows from operating activities:
Net income $ 752,207 $ 844,611 $ 733,993
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 198,074 179,300 167,072
Amortization of deferred loan origination costs 93,546 94,429 86,181
Amortization of financing origination fees 9,975 8,442 9,376
Provision for long-term employee benefits 60,824 33,709 66,877
Contributions to pension and postretirement plans (28,490)(29,686)(204,796)
Stock compensation expense 29,433 37,929 41,244
Net change in wholesale finance receivables related to sales (113,970)(75,210) 28,865
Provision for credit losses 101,345 80,946 60,008
Loss on debt extinguishment 1,099 3,942 4,947
Deferred income taxes (16,484)(7,621) 52,580
Foreign currency adjustments 20,067 21,964 16,269
Other, net 846 (1,491) 10,123
Changes in current assets and liabilities:
Accounts receivable, net (13,665)(9,809)(36,653)
Finance receivables – accrued interest and other (3,046)(2,515)(346)
Inventories (155,222)(50,886)(46,474)
Accounts payable and accrued liabilities 138,823 21,309 (78,665)
Derivative instruments (5,615) 703 (2,189)
Prepaid and other 30,371 (3,389) 68,681
Total adjustments 347,911 302,066 243,100
Net cash provided by operating activities $ 1,100,118 $ 1,146,677 $ 977,093
Cash paid during the period for interest and income taxes (in thousands):
2015 2014 2013
Interest $ 148,654 $ 154,310 $ 197,161
Income taxes $ 371,547 $ 438,840 $ 236,972
Interest paid represents interest payments of HDFS (included in financial services interest expense) and interest payments
of the Company (included in interest expense).
3. Acquisition
On August 4, 2015, the Company completed its purchase of certain assets and liabilities from Fred Deeley Imports, Ltd
(Deeley Imports) including, among other things, the acquisition of the exclusive right to distribute the Company's motorcycles
and other products in Canada (Transaction) for total consideration of $59.9 million. The majority equity owner of Deeley
Imports is a member of the Board of Directors of the Company. The Company believes that the acquisition of the Canadian
distribution rights will align Harley-Davidson's Canada distribution with the Company's global go-to-market approach.
The financial impact of the acquisition, which is part of the Motorcycles segment, has been included in the Company's
consolidated financial statements from the date of acquisition. Proforma information reflecting this acquisition has not been
disclosed as the proforma impact on consolidated net income would not be material.