Polaris 2011 Annual Report Download - page 54

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$13.5 million, respectively, for the probable payment of pending claims related to product liability litigation
associated with our products. These accruals are included in other accrued expenses in the consolidated balance
sheets. While management believes the product liability reserves are adequate, adverse determination of material
product liability claims made against us could have a material adverse effect on our financial condition.
New Accounting Pronouncements
See Item 8 of Part II, “Financial Statements and Supplementary Data—Note 1—Organization and
Significant Accounting Policies—New Accounting Pronouncements.”
Liquidity and Capital Resources
Our primary sources of funds have been cash provided by operating activities and borrowings under our
credit arrangements. Our primary use of funds has been for repayments under our credit arrangements,
repurchase and retirement of common stock, capital investments, cash dividends to shareholders and new product
development.
The following chart summarizes the cash flows from operating, investing and financing activities for the
years ended December 31, 2011 and 2010:
For the Year Ended December 31
($ in millions): 2011 2010 Change
Total cash provided by (used for):
Operating activities ............................ $302.5 $297.6 $ 4.9
Investment activities ........................... (141.1) (42.1) (99.0)
Financing activities ............................ (227.5) (1.8) (225.7)
Effect of exchange rate changes on cash balances .... (2.5) — (2.5)
Increase (decrease) in cash and cash equivalents ......... $ (68.6) $253.7 $(322.3)
Operating activities:
For the year ended December 31, 2011, we generated net cash from operating activities of $302.5 million
compared to net cash from operating activities of $297.6 million in the same period of 2010, an increase of
2 percent. The $4.9 million increase in net cash provided by operating activities for the year ended 2011
compared to the same period in 2010 is primarily due to a $80.4 million increase in net income largely offset by
$65.0 million higher net investment in working capital. This higher working capital resulted primarily from
higher investment in accounts receivable and income taxes receivable totaling $32.6 million and lower cash
provided from accrued expenses totaling $26.7 million.
Investing activities:
Net cash used for investing activities was $141.1 million for 2011 compared to cash used totaling
$42.1 million for 2010. The primary use of cash in 2011 and 2010 was the investment in property and equipment
of $84.5 million and $55.7 million, respectively. Additionally, during 2011, cash was used to complete a number
of acquisitions totaling $51.9 million.
Financing activities:
Net cash used for financing activities was $227.5 million for 2011 compared to $1.8 million in 2010. In
2011, we used cash for financing activities to pay cash dividends of $61.6 million and repurchase shares of
38