Polaris 2014 Annual Report Download - page 86

Download and view the complete annual report

Please find page 86 of the 2014 Polaris 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 116

  • 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

the reporting date is also the redemption date, with any difference from stock-based compensation recorded in
retained earnings. At December 31, 2014, 89,444 shares are recorded at a fair value of $13,528,000 in
temporary equity, which includes $7,378,000 of compensation cost and $6,150,000 of cumulative fair value
adjustment recorded through retained earnings.
Note 4. Financing Agreement
Debt and capital lease obligations and the average related interest rates were as follows (in thousands):
Average
interest
rate at
December 31, December 31, December 31,
2014 Maturity 2014 2013
Revolving loan facility ........... — January 2018 — $ 80,500
Senior notes—fixed rate ......... 3.81% May 2018 $ 25,000 25,000
Senior notes—fixed rate ......... 4.60% May 2021 75,000 75,000
Senior notes—fixed rate ......... 3.13% December 2020 100,000 100,000
Capital lease obligations ......... 5.02% Various through 2029 26,148 7,123
Total debt and capital lease
obligations ................. $226,148 $287,623
Less: current maturities .......... 2,528 3,281
Total long-term debt and capital
lease obligations ............. $223,620 $284,342
Bank financing. In August 2011, Polaris entered into a $350,000,000 unsecured revolving loan facility. In
January 2013, Polaris amended the loan facility to provide more beneficial covenant and interest rate terms
and extend the expiration date from August 2016 to January 2018. Interest is charged at rates based on
LIBOR or ‘‘prime.’’
In December 2010, the Company entered into a Master Note Purchase Agreement to issue $25,000,000 of
unsecured senior notes due May 2018 and $75,000,000 of 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 $100,000,000
of unsecured senior notes due December 2020.
The unsecured revolving loan facility and the amended Master Note Purchase Agreement contain covenants
that require Polaris to maintain certain financial ratios, including minimum interest coverage and maximum
leverage ratios. Polaris was in compliance with all such covenants as of December 31, 2014.
The following summarizes activity under Polaris’ credit arrangements (dollars in thousands):
2014 2013 2012
Total borrowings at December 31 .................. $200,000 $280,500 $100,000
Average outstanding borrowings during year .......... $361,715 $138,400 $100,000
Maximum outstanding borrowings during year ......... $500,000 $411,000 $100,000
Interest rate at December 31 ...................... 3.77% 2.98% 4.40%
The carrying amount of the Company’s long-term debt approximates its fair value as December 31, 2014 and
2013.
Letters of credit. At December 31, 2014, Polaris had open letters of credit totaling $24,894,000. The amounts
are primarily related to inventory purchases and are reduced as the purchases are received.
60