Under Armour 2012 Annual Report Download - page 45

Adjustments to net income for non-cash items increased in 2011 as compared to 2010 primarily due to a
decrease in deferred taxes in 2011 as compared to an increase in deferred taxes in 2010.
Investing Activities
Cash used in investing activities decreased $42.5 million to $46.9 million in 2012 from $89.4 million in
2011. This decrease in cash used in investing activities was primarily due to the acquisition of our corporate
headquarters in 2011. In addition, in connection with the assumed loan for the acquisition of our corporate
headquarters, we were required to set aside $5.0 million in restricted cash. This cash became unrestricted upon
repayment of the assumed loan in December 2012.
Cash used in investing activities increased $47.6 million to $89.4 million in 2011 from $41.8 million in
2010. This increase in cash used in investing activities was primarily due to the acquisition of our corporate
headquarters and increased investments in our direct to consumer sales channel, in-store fixture program and
corporate and distribution facilities. In addition, in connection with the assumed loan for the acquisition of our
corporate headquarters, we were required to set aside $5.0 million in restricted cash. Refer to Note 6 of the
consolidated financial statements for a discussion of restricted cash.
Total capital expenditures were $62.8 million, $115.4 million and $33.1 million in 2012, 2011 and 2010,
respectively, which includes the acquisition of our corporate headquarters and other related expenditures in 2011.
Capital expenditures for 2013 are expected to be in the range of $80 million to $85 million.
Financing Activities
Cash provided by financing activities decreased $33.5 million to $12.3 million in 2012 from $45.8 million
in 2011. This decrease was primarily due to the repayment of the loan assumed in connection with the acquisition
of our corporate headquarters in 2011 and the repayment of the term loan under the credit facility, partially offset
by the new $50.0 million loan borrowed in December 2012.
Cash provided by financing activities increased $38.6 million to $45.8 million in 2011 from $7.2 million in
2010. This increase was primarily due to the term loan borrowed under the credit facility to partially fund the
purchase of our corporate headquarters, as well as excess tax benefits and proceeds from stock-based
compensation arrangements.
Credit Facility
In March 2011, we entered into a new $325.0 million credit facility with certain lending institutions and
terminated our prior $200.0 million revolving credit facility in order to increase our available financing and to
expand our lending syndicate. The credit facility has a term of four years and provides for a committed revolving
credit line of up to $300.0 million, in addition to a $25.0 million term loan facility. The commitment amount
under the revolving credit facility may be increased by an additional $50.0 million, subject to certain conditions
and approvals as set forth in the credit agreement. We incurred and capitalized $1.6 million in deferred financing
costs in connection with the credit facility.
The credit facility may be used for working capital and general corporate purposes and is collateralized by
substantially all of our assets and certain of our domestic subsidiaries (other than trademarks and the land and
buildings comprising our corporate headquarters) and by a pledge of 65% of the equity interests of certain of our
foreign subsidiaries. Up to $5.0 million of the facility may be used to support letters of credit, of which none
were outstanding as of December 31, 2012. We are required to maintain a certain leverage ratio and interest
coverage ratio as set forth in the credit agreement. As of December 31, 2012, we were in compliance with these
ratios. The credit agreement also provides the lenders with the ability to reduce the borrowing base, even if we
are in compliance with all conditions of the credit agreement, upon a material adverse change to the business,
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