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Debt Debt | 3 Months Ended
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Mar. 27, 2016
Debt Disclosure [Abstract] |
Debt Disclosure [Text Block] | Asset-Backed Financing The Company participates in asset-backed financing both through term asset-backed securitization transactions and through asset-backed commercial paper conduit facilities. The Company treats these transactions as secured borrowings because either they are transferred to consolidated variable interest entities (VIEs) or the Company maintains effective control over the assets and does not meet the accounting sale requirements under ASC Topic 860, "Transfers and Servicing" (ASC Topic 860). In the Company's asset-backed financing programs, the Company transfers retail motorcycle finance receivables to special purpose entities (SPE), which are considered VIEs under U.S. GAAP. Each SPE then converts those assets into cash, through the issuance of debt. HDFS retains servicing rights and a residual interest in the VIEs in the form of a debt security. The Company is required to consolidate any VIE in which it is deemed to be the primary beneficiary through having power over the significant activities of the entity and having an obligation to absorb losses or the right to receive benefits from the VIE which are potentially significant to the VIE. As the servicer, HDFS is the variable interest holder with the power to direct the activities of the VIE that most significantly impact the VIE’s economic performance. As a residual interest holder, HDFS has the obligation to absorb losses and the right to receive benefits which could potentially be significant to the VIE. Therefore, the Company is the primary beneficiary and consolidates all of these VIEs within its consolidated financial statements. The Company is not the primary beneficiary of the asset-backed Canadian commercial paper conduit facility VIE; therefore, the Company does not consolidate this VIE. However, the Company treats the conduit facility as a secured borrowing as it maintains effective control over the assets transferred to the VIE and therefore does not meet the requirements for sale accounting under ASC Topic 860. As such, the Company retains the transferred assets and the related debt within its Consolidated Balance Sheet. Servicing fees paid by VIEs to the Company are eliminated in consolidation and therefore are not recorded on a consolidated basis. The Company is not required, and does not currently intend, to provide any additional financial support to its VIEs. Investors and creditors only have recourse to the assets held by the VIEs. The Company adopted ASU No. 2015-03 and ASU No. 2015-15 on January 1, 2016. Upon adoption, the Company reclassified debt issuance costs, other than debt issuance costs related to line of credit arrangements (including the asset-backed commercial paper programs), from other assets to debt on the balance sheet. Refer to Note 2 for further discussion of newly adopted ASUs. The following table shows the assets and liabilities related to the asset-backed financings that were included in the financial statements (in thousands):
| March 27, 2016
| Finance receivables |  | Allowance for credit losses |  | Restricted cash |  | Other assets |  | Total assets |  | Asset-backed debt
On-balance sheet assets and liabilities |  |  |  |  |  |  |  |  |  |  |
Consolidated VIEs |  |  |  |  |  |  |  |  |  |  |
Term asset-backed securitizations | $ | 1,421,332 |  |  | $ | (35,161 | ) |  | $ | 102,594 |  |  | $ | 4,169 |  |  | $ | 1,492,934 |  |  | $ | 1,286,729 |
Asset-backed U.S. commercial paper conduit facility | — |  |  | — |  |  | — |  |  | 302 |  |  | 302 |  |  | — |
Unconsolidated VIEs |  |  |  |  |  |  |  |  |  |  |
Asset-backed Canadian commercial paper conduit facility | 168,264 |  |  | (3,155 | ) |  | 12,330 |  |  | 406 |  |  | 177,845 |  |  | 153,311 |
Total on-balance sheet assets and liabilities | $ | 1,589,596 |  |  | $ | (38,316 | ) |  | $ | 114,924 |  |  | $ | 4,877 |  |  | $ | 1,671,081 |  |  | $ | 1,440,040 |
| December 31, 2015
| Finance receivables |  | Allowance for credit losses |  | Restricted cash |  | Other assets |  | Total assets |  | Asset-backed debt
On-balance sheet assets and liabilities |  |  |  |  |  |  |  |  |  |  |
Consolidated VIEs |  |  |  |  |  |  |  |  |  |  |
Term asset-backed securitizations | $ | 1,611,624 |  |  | $ | (37,937 | ) |  | $ | 100,151 |  |  | $ | 4,383 |  |  | $ | 1,678,221 |  |  | $ | 1,459,377 |
Asset-backed U.S. commercial paper conduit facility | — |  |  | — |  |  | — |  |  | 323 |  |  | 323 |  |  | — |
Unconsolidated VIEs |  |  |  |  |  |  |  |  |  |  |
Asset-backed Canadian commercial paper conduit facility | 170,708 |  |  | (3,061 | ) |  | 10,491 |  |  | 393 |  |  | 178,531 |  |  | 153,839 |
Total on-balance sheet assets and liabilities | $ | 1,782,332 |  |  | $ | (40,998 | ) |  | $ | 110,642 |  |  | $ | 5,099 |  |  | $ | 1,857,075 |  |  | $ | 1,613,216 |
| March 29, 2015
| Finance receivables |  | Allowance for credit losses |  | Restricted cash |  | Other assets |  | Total assets |  | Asset-backed debt
On-balance sheet assets and liabilities |  |  |  |  |  |  |  |  |  |  |
Consolidated VIEs |  |  |  |  |  |  |  |  |  |  |
Term asset-backed securitizations | $ | 1,919,723 |  |  | $ | (43,128 | ) |  | $ | 138,574 |  |  | $ | 3,443 |  |  | $ | 2,018,612 |  |  | $ | 1,766,014 |
Asset-backed U.S. commercial paper conduit facility | — |  |  | — |  |  | — |  |  | 311 |  |  | 311 |  |  | — |
Unconsolidated VIEs |  |  |  |  |  |  |  |  |  |  |
Asset-backed Canadian commercial paper conduit facility | 169,278 |  |  | (2,999 | ) |  | 12,057 |  |  | 398 |  |  | 178,734 |  |  | 154,035 |
Total on-balance sheet assets and liabilities | $ | 2,089,001 |  |  | $ | (46,127 | ) |  | $ | 150,631 |  |  | $ | 4,152 |  |  | $ | 2,197,657 |  |  | $ | 1,920,049 |
Term Asset-Backed Securitization VIEs The Company transfers U.S. retail motorcycle finance receivables to SPEs which in turn issue secured notes to investors, with various maturities and interest rates, secured by future collections of the purchased U.S. retail motorcycle finance receivables. Each term asset-backed securitization SPE is a separate legal entity and the U.S. retail motorcycle finance receivables included in the term asset-backed securitizations are only available for payment of the secured debt and other obligations arising from the term asset-backed securitization transaction and are not available to pay other obligations or claims of the Company’s creditors until the associated secured debt and other obligations are satisfied. Restricted cash balances held by the SPEs are used only to support the securitizations. There are no amortization schedules for the secured notes; however, the debt is reduced monthly as available collections on the related U.S. retail motorcycle finance receivables are applied to outstanding principal. The secured notes’ contractual lives have various maturities ranging from 2016 to 2022. There were no term asset-backed securitization transactions during the first quarter of 2016. During the first quarter of 2015, the Company issued $700.0 million ($697.6 million net of discount and issuance costs) of secured notes through a term asset-backed securitization transaction. Asset-Backed U.S. Commercial Paper Conduit Facility VIE On December 14, 2015, the Company entered into a new revolving facility agreement (U.S. Conduit) with a third party bank-sponsored asset-backed U.S. commercial paper conduit, which provides for a total aggregate commitment of up to $600.0 million based on, among other things, the amount of eligible U.S. retail motorcycle finance receivables held by the SPE as collateral. The prior facility agreement expired on December 14, 2015 and had similar terms. Under the facility, the Company may transfer U.S. retail motorcycle finance receivables to a SPE, which in turn may issue debt to third-party bank-sponsored asset-backed commercial paper conduits. The assets of the SPE are restricted as collateral for the payment of the debt or other obligations arising in the transaction and are not available to pay other obligations or claims of the Company’s creditors. The terms for this debt provide for interest on the outstanding principal based on prevailing commercial paper rates or LIBOR to the extent the advance is not funded by a conduit lender through the issuance of commercial paper plus, in each case, a program fee based on outstanding principal. The U.S. Conduit also provides for an unused commitment fee based on the unused portion of the total aggregate commitment of $600.0 million. There is no amortization schedule; however, the debt will be reduced monthly as available collections on the related finance receivables are applied to outstanding principal. Upon expiration of the U.S. Conduit, any outstanding principal will continue to be reduced monthly through available collections. Unless earlier terminated or extended by mutual agreement of the Company and the lenders, the U.S. Conduit expires on December 14, 2016. The SPE had no borrowings outstanding under the U.S. Conduit at March 27, 2016, December 31, 2015 or March 29, 2015; therefore, assets that the U.S. Conduit holds are restricted as collateral for the payment of fees associated with the unused portion of the total aggregate commitment. Asset-Backed Canadian Commercial Paper Conduit Facility In June 2015, the Company amended its facility agreement (Canadian Conduit) with a Canadian bank-sponsored asset-backed commercial paper conduit. Under the agreement, the Canadian Conduit is contractually committed, at the Company's option, to purchase eligible Canadian retail motorcycle finance receivables for proceeds up to C$240.0 million. The transferred assets are restricted as collateral for the payment of the debt. The terms for this debt provide for interest on the outstanding principal based on prevailing market interest rates plus a specified margin. The Canadian Conduit also provides for a program fee and an unused commitment fee based on the unused portion of the total aggregate commitment of C$240.0 million. There is no amortization schedule; however, the debt is reduced monthly as available collections on the related finance receivables are applied to outstanding principal. Upon expiration of the Canadian Conduit, any outstanding principal will continue to be reduced monthly through available collections. Unless earlier terminated or extended by mutual agreement of the Company and the lenders, the Canadian Conduit expires on June 30, 2016. The contractual maturity of the debt is approximately 5 years. As the Company participates in and does not consolidate the Canadian bank-sponsored, multi-seller conduit VIE, the maximum exposure to loss associated with this VIE, which would only be incurred in the unlikely event that all the finance receivables and underlying collateral have no residual value, was $24.5 million at March 27, 2016. The maximum exposure is not an indication of the Company's expected loss exposure. The following table includes quarterly transfers of Canadian retail motorcycle finance receivables to the Canadian Conduit and the respective proceeds (in thousands):
| 2016 |  | 2015
| Transfers |  | Proceeds |  | Transfers |  | Proceeds
First quarter | $ | 6,600 |  |  | $ | 5,800 |  |  | $ | 19,200 |  |  | $ | 16,800 |
Debt Debt with contractual terms less than one year is generally classified as short-term debt and consisted of the following (in thousands):
|  | March 27, 2016 |  | December 31, 2015 |  | March 29, 2015
Unsecured commercial paper |  | $ | 869,972 |  |  | $ | 1,201,380 |  |  | $ | 70,329 |
Bank borrowings - global credit facilities |  | 101 |  |  | — |  |  | — |
Total short-term debt |  | $ | 870,073 |  |  | $ | 1,201,380 |  |  | $ | 70,329 |
Debt with a contractual term greater than one year is generally classified as long-term debt and consisted of the following (in thousands):
|  | March 27, 2016 |  | December 31, 2015 |  | March 29, 2015
Secured debt |  |  |  |  |  |
Asset-backed Canadian commercial paper conduit facility |  | $ | 153,311 |  |  | $ | 153,839 |  |  | $ | 154,035 |
Term asset-backed securitization debt |  | 1,289,792 |  |  | 1,463,154 |  |  | 1,770,777 |
Less: unamortized discount and debt issuance costs |  | (3,063 | ) |  | (3,777 | ) |  | (4,763 | )
Total secured debt |  | 1,440,040 |  |  | 1,613,216 |  |  | 1,920,049 |
Unsecured notes |  |  |  |  |  |
1.15% Medium-term notes due in 2015 par value |  | — |  |  | — |  |  | 600,000 |
3.88% Medium-term notes due in 2016 par value |  | — |  |  | 450,000 |  |  | 450,000 |
2.70% Medium-term notes due in 2017 par value |  | 400,000 |  |  | 400,000 |  |  | 400,000 |
1.55% Medium-term notes due in 2017 par value |  | 400,000 |  |  | 400,000 |  |  | 400,000 |
6.80% Medium-term notes due in 2018 par value |  | 878,708 |  |  | 878,708 |  |  | 887,958 |
2.40% Medium-term notes due in 2019 par value |  | 600,000 |  |  | 600,000 |  |  | 600,000 |
2.25% Medium-term notes due in 2019 par value |  | 600,000 |  |  | — |  |  | — |
2.15% Medium-term notes due in 2020 par value |  | 600,000 |  |  | 600,000 |  |  | 600,000 |
2.85% Medium-term notes due in 2021 par value |  | 600,000 |  |  | — |  |  | — |
3.50% Senior unsecured notes due in 2025 |  | 450,000 |  |  | 450,000 |  |  | — |
4.625% Senior unsecured notes due in 2045 |  | 300,000 |  |  | 300,000 |  |  | — |
Less: unamortized discount and debt issuance costs |  | (26,055 | ) |  | (21,106 | ) |  | (15,822 | )
Gross long-term debt |  | 6,242,693 |  |  | 5,670,818 |  |  | 5,842,185 |
Less: current portion of long-term debt, net of unamortized discount and issuance costs |  | (782,140 | ) |  | (838,349 | ) |  | (1,494,301 | )
Total long-term debt |  | $ | 5,460,553 |  |  | $ | 4,832,469 |  |  | $ | 4,347,884 |
The Company adopted ASU No. 2015-03 and ASU No. 2015-15 on January 1, 2016. Upon adoption, the Company reclassified debt issuance costs, other than debt issuance costs related to line of credit arrangements (which include its asset-backed commercial paper and unsecured commercial paper programs and its credit facilities), from other assets to debt on the balance sheet. Refer to Note 2 for further discussion of newly adopted ASUs. There were no term asset-backed securitization transactions during the first quarter of 2016. During the first quarter of 2015, the Company issued $700.0 million ($697.6 million net of discount and issuance costs) of secured notes through a term asset-backed securitization transaction. The term asset-backed securitization transactions are further discussed in Note 7. During the first quarter of 2016, the Company issued $600.0 million ($597.2 million net of discount and issuance costs) of medium-term notes that mature in January 2019 and have an annual interest rate of 2.25%, and $600.0 million ($596.3 million net of discount and issuance costs) of medium-term notes that mature in January 2021 and have an annual interest rate of 2.85%. During the first quarter of 2015, the Company issued $600.0 million ($595.4 million net of discount and issuance costs) of medium-term notes that mature in February 2020 and have an annual interest rate of 2.15%. During the first quarter of 2016, $450.0 million of 3.88% medium-term notes matured, and the principal and accrued interest were paid in full. There were no medium-term note maturities during the first quarter of 2015. In July 2015, the Company issued $450.0 million ($444.4 million net of discount and issuance costs) of senior unsecured notes that mature in July 2025 and have an interest rate of 3.50% and $300.0 million ($296.0 million net of discount and issuance costs) of senior unsecured notes that mature in July 2045 and have an interest rate of 4.625% in an underwritten offering. The senior unsecured notes provide for semi-annual interest payments and principal due at maturity. The Company used the proceeds from the issuance to repurchase shares of the Company's common stock in 2015.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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