Polaris 2013 Annual Report Download - page 61

amortization and $22.5 million increase in noncash compensation, partially offset by a $60.1 million increase in
net investment in working capital.
Investing Activities:
Net cash used for investing activities was $406.7 million in 2013 compared to $163.0 million in 2012. The
primary uses of cash in 2013 were the acquisition of Aixam and capital expenditures for the purchase of
property and equipment. The acquisition of Aixam was funded with cash on hand for $134.8 million, net of
cash acquired. In 2013, we acquired the land and manufacturing facility in Monterrey, Mexico, which we had
previously leased. In addition, we made large capital expenditures related to the expansion of many of our
North America locations, including our Product Development Center near Wyoming, Minnesota, and
manufacturing facilities in Roseau, Minnesota and Monterrey, Mexico. Additionally, we purchased warehouses
in Wilmington, Ohio, which have become a new regional distribution center for our PG&A business, and
purchased a previously leased manufacturing facility in Milford, Iowa to support growing vehicle production
capacity needs. We expect that capital expenditures for 2014 will be between $200 million and $250 million.
Financing Activities:
Net cash used for financing activities was $409.0 million in 2013 compared to $162.5 million in 2012. We paid
cash dividends of $113.7 million and $101.5 million in 2013 and 2012, respectively. In November 2013, Polaris
repurchased the 3.96 million Polaris shares held by Fuji for $497.5 million. Total common stock repurchased in
2013 and 2012 totaled $530.0 million and $127.5 million, respectively. The repurchase of the Polaris shares
held by Fuji was partially funded through additional debt borrowings. In 2013, we had net borrowings under
our capital lease arrangements and debt arrangements of $179.2 million, compared to net repayments of
$5.0 million in 2012. Proceeds from the issuance of stock under employee plans were $26.9 million and
$41.7 million in 2013 and 2012, respectively.
The seasonality of production and shipments cause working capital requirements to fluctuate during the year.
We are party to an unsecured $350 million variable interest rate bank lending agreement that expires in
January 2018. Interest is charged at rates based on LIBOR or ‘‘prime.’’ At December 31, 2013, there were
borrowings of $80.5 million outstanding.
In December 2010, we entered into a Master Note Purchase Agreement to issue $25.0 million of 3.81 percent
unsecured Senior Notes due May 2018 and $75.0 million of 4.60 percent unsecured Senior Notes due May
2021 (collectively, the ‘‘Senior Notes’’). The Senior Notes were issued in May 2011. In December 2013, the
Company entered into a First Supplement to Master Note Purchase Agreement, under which the Company
issued $100.0 million of 3.13 percent unsecured senior notes due December 2020. At December 31, 2013 and
2012, outstanding borrowings under the amended Master Note Purchase Agreement totaled $200.0 million
and $100.0 million, respectively.
At December 31, 2013 and 2012 we were in compliance with all debt covenants. Our debt to total capital ratio
was 35 percent and 13 percent at December 31, 2013 and 2012, respectively.
The following table summarizes our significant future contractual obligations at December 31, 2013:
(In millions): Total <1 Year 1–3 Years 3–5 Years >5 Years
Senior notes .................................... $200.0 — — $ 25.0 $175.0
Borrowings under our credit facility ................... 80.5 — — 80.5 —
Interest expense ................................. 55.3 $ 8.5 $17.0 15.5 14.3
Capital leases ................................... 42.1 4.3 7.3 5.4 25.1
Operating leases ................................. 17.7 6.4 7.2 2.4 1.7
Total ...................................... $395.6 $19.2 $31.5 $128.8 $216.1
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