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UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
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FORM 10-K
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
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OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2014
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Commission file number 001-11411
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Minnesota
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41-1790959
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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2100 Highway 55, Medina MN
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55340
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(Address of principal executive offices)
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(Zip Code)
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(763) 542-0500
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of Class
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Name of Each Exchange on Which Registered
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Common Stock, $.01 par value
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New York Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
None
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DOCUMENTS INCORPORATED BY REFERENCE:
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POLARIS INDUSTRIES INC.
2014 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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ORVs
|
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Snowmobiles
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Motorcycles
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Small Vehicles
|
|
PG&A
|
2014
|
65%
|
|
7%
|
|
8%
|
|
3%
|
|
17%
|
2013
|
67%
|
|
8%
|
|
6%
|
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3%
|
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16%
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2012
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69%
|
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9%
|
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6%
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2%
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14%
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Name
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Age
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Title
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Scott W. Wine
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47
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Chairman of the Board of Directors and Chief Executive Officer
|
Bennett J. Morgan
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51
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|
President and Chief Operating Officer
|
Kenneth J. Pucel
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48
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Executive Vice President—Global Operations, Engineering and Lean
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Michael W. Malone
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56
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Vice President—Finance and Chief Financial Officer
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Todd-Michael Balan
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45
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Vice President—Corporate Development
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Stacy L. Bogart
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51
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Vice President—General Counsel, Compliance Officer and Secretary
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Michael D. Dougherty
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47
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Vice President—Asia Pacific and Latin America
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Stephen L. Eastman
|
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50
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Vice President—Parts, Garments and Accessories
|
Matthew J. Homan
|
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43
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President—Global Adjacent Markets
|
Michael P. Jonikas
|
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54
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Vice President—Snowmobiles and Slingshot
|
Suresh Krishna
|
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46
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Vice President—Europe, Middle East and Africa
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David C. Longren
|
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56
|
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Vice President—Off-Road Vehicles and Off-Road Vehicles Engineering
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James P. Williams
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|
52
|
|
Vice President—Human Resources
|
•
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diversion of management’s attention;
|
•
|
difficulties in integrating and assimilating the operations and products of an acquired business or in realizing projected efficiencies, cost savings, and synergies;
|
•
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potential loss of key employees or customers of the acquired businesses or adverse effects on existing business relationships with suppliers and customers;
|
•
|
adverse impact on overall profitability if acquired businesses or affiliates do not achieve the financial results projected in our valuation models;
|
•
|
reallocation of amounts of capital from other operating initiatives and/or an increase in our leverage and debt service requirements to pay the acquisition purchase prices, which could in turn restrict our ability to access additional capital when needed or to pursue other important elements of our business strategy;
|
•
|
inaccurate assessment of undisclosed, contingent or other liabilities or problems, unanticipated costs associated with an acquisition, and an inability to recover or manage such liabilities and costs;
|
•
|
incorrect estimates made in the accounting for acquisitions, incurrence of non-recurring charges and impairment of significant amounts of goodwill, investments or other related assets that could adversely affect our operating results;
|
•
|
dilution to existing shareholders if our securities are issued as part of transaction consideration or to fund transaction consideration; and
|
•
|
inability to direct the management and policies of a joint venture, alliance, or partnership, where other participants may be able to take action contrary to our instructions or requests and against our policies and objectives.
|
•
|
increased costs of customizing products for foreign countries;
|
•
|
difficulties in managing and staffing international operations and increases in infrastructure costs including legal, tax, accounting, and information technology;
|
•
|
the imposition of additional United States and foreign governmental controls or regulations;
|
•
|
new or enhanced trade restrictions and restrictions on the activities of foreign agents, representatives, and distributors; and the imposition of increases in costly and lengthy import and export licensing and other compliance requirements, customs duties and tariffs, license obligations, and other non-tariff barriers to trade;
|
•
|
the imposition of United States and/or international sanctions against a country, company, person, or entity with whom we do business that would restrict or prohibit our continued business with the sanctioned country, company, person, or entity;
|
•
|
international pricing pressures;
|
•
|
laws and business practices favoring local companies;
|
•
|
adverse currency exchange rate fluctuations;
|
•
|
longer payment cycles and difficulties in enforcing agreements and collecting receivables through certain foreign legal systems;
|
•
|
difficulties in enforcing or defending intellectual property rights; and
|
•
|
multiple, changing, and often inconsistent enforcement of laws, rules, and regulations, including rules relating to environmental, health, taxes, and safety matters.
|
Location
|
|
Facility Type/Use
|
|
Owned or Leased
|
|
Square
Footage |
Medina, Minnesota
|
|
Headquarters
|
|
Owned
|
|
130,000
|
Plymouth, Minnesota
|
|
Headquarters
|
|
Primarily owned
|
|
175,000
|
Roseau, Minnesota
|
|
Wholegoods manufacturing and R&D
|
|
Owned
|
|
733,200
|
Monterrey, Mexico
|
|
Wholegoods manufacturing
|
|
Owned
|
|
425,000
|
Milford, Iowa
|
|
Wholegoods manufacturing
|
|
Primarily owned
|
|
460,400
|
Opole, Poland
|
|
Wholegoods manufacturing
|
|
Leased
|
|
300,000
|
Spirit Lake, Iowa
|
|
Wholegoods manufacturing
|
|
Owned
|
|
298,400
|
Osceola, Wisconsin
|
|
Component parts & engine manufacturing
|
|
Owned
|
|
285,800
|
Chanas, France
|
|
Wholegoods manufacturing
|
|
Owned
|
|
196,000
|
Bourran, France
|
|
Wholegoods manufacturing and R&D
|
|
Leased
|
|
100,000
|
Aix-les-Bains, France
|
|
Wholegoods manufacturing and R&D
|
|
Owned
|
|
97,800
|
Wyoming, Minnesota
|
|
Research and development facility
|
|
Owned
|
|
272,000
|
Burgdorf, Switzerland
|
|
Research and development facility
|
|
Leased
|
|
13,600
|
Wilmington, Ohio
|
|
Distribution center
|
|
Leased
|
|
429,000
|
Vermillion, South Dakota
|
|
Distribution center
|
|
Primarily owned
|
|
418,000
|
Rigby, Idaho
|
|
Distribution center and office facility
|
|
Owned
|
|
54,600
|
Altona, Australia
|
|
Wholegoods distribution
|
|
Leased
|
|
215,000
|
St. Paul, Minnesota
|
|
Wholegoods distribution
|
|
Leased
|
|
160,000
|
Irving, Texas
|
|
Wholegoods distribution
|
|
Leased
|
|
157,000
|
Milford, Iowa
|
|
Wholegoods distribution
|
|
Leased
|
|
100,000
|
Haviland, Ohio
|
|
Wholegoods distribution
|
|
Leased
|
|
100,000
|
Winnipeg, Canada
|
|
Office facility
|
|
Leased
|
|
15,000
|
Rolle, Switzerland
|
|
Office facility
|
|
Leased
|
|
8,000
|
|
2009
|
|
2010
|
|
2011
|
|
2012
|
|
2013
|
|
2014
|
||||||||||||
Polaris Industries Inc.
|
$
|
100.00
|
|
|
$
|
183.78
|
|
|
$
|
268.42
|
|
|
$
|
411.47
|
|
|
$
|
723.73
|
|
|
$
|
761.88
|
|
S&P Midcap 400 Index
|
100.00
|
|
|
126.64
|
|
|
124.45
|
|
|
146.70
|
|
|
195.84
|
|
|
214.97
|
|
||||||
Recreational Vehicles Industry Group Index—Morningstar Group
|
100.00
|
|
|
136.37
|
|
|
149.24
|
|
|
205.27
|
|
|
318.26
|
|
|
313.83
|
|
Issuer Purchases of Equity Securities
|
|||||||||||
Period
|
Total Number of
Shares Purchased |
|
Average Price Paid
per Share |
|
Total Number of Shares Purchased as Part of Publicly Announced Program
|
|
Maximum Number of Shares That May Yet Be Purchased Under the Program(1)
|
||||
October 1–31, 2014
|
1,000
|
|
|
$
|
148.46
|
|
|
1,000
|
|
|
1,573,000
|
November 1–30, 2014
|
—
|
|
|
—
|
|
|
—
|
|
|
1,573,000
|
|
December 1–31, 2014
|
523,000
|
|
|
148.64
|
|
|
523,000
|
|
|
1,050,000
|
|
Total
|
524,000
|
|
|
$
|
148.64
|
|
|
524,000
|
|
|
1,050,000
|
(1)
|
The Board of Directors previously authorized a share repurchase program to repurchase up to an aggregate of 75.0 million shares of the Company’s common stock (the “Program”). Of that total,
73.9 million
shares have been repurchased cumulatively from 1996 through
December 31, 2014
. This Program does not have an expiration date.
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|
For the Years Ended December 31,
|
||||||||||||||
(Dollars in millions, except per-share data)
|
2014
|
2013
|
2012
|
2011
|
2010
|
||||||||||
Statement of Operations Data
|
|
|
|
|
|
||||||||||
Sales Data:
|
|
|
|
|
|
||||||||||
Total sales
|
$
|
4,479.6
|
|
$
|
3,777.1
|
|
$
|
3,209.8
|
|
$
|
2,656.9
|
|
$
|
1,991.1
|
|
Percent change from prior year
|
19
|
%
|
18
|
%
|
21
|
%
|
33
|
%
|
27
|
%
|
|||||
Sales components:
|
|
|
|
|
|
||||||||||
Off-Road Vehicles
|
65
|
%
|
67
|
%
|
69
|
%
|
69
|
%
|
69
|
%
|
|||||
Snowmobiles
|
7
|
%
|
8
|
%
|
9
|
%
|
11
|
%
|
10
|
%
|
|||||
Motorcycles
|
8
|
%
|
6
|
%
|
6
|
%
|
5
|
%
|
4
|
%
|
|||||
Small Vehicles
|
3
|
%
|
3
|
%
|
2
|
%
|
—
|
%
|
—
|
%
|
|||||
Parts, Garments and Accessories
|
17
|
%
|
16
|
%
|
14
|
%
|
15
|
%
|
17
|
%
|
|||||
Gross Profit Data:
|
|
|
|
|
|
||||||||||
Total gross profit
|
$
|
1,319.2
|
|
$
|
1,120.9
|
|
$
|
925.3
|
|
$
|
740.6
|
|
$
|
530.2
|
|
Percent of sales
|
29.4
|
%
|
29.7
|
%
|
28.8
|
%
|
27.9
|
%
|
26.6
|
%
|
|||||
Operating Expense Data:
|
|
|
|
|
|
||||||||||
Total operating expenses
|
$
|
666.2
|
|
$
|
588.9
|
|
$
|
480.8
|
|
$
|
414.7
|
|
$
|
326.3
|
|
Percent of sales
|
14.9
|
%
|
15.6
|
%
|
15.0
|
%
|
15.6
|
%
|
16.4
|
%
|
|||||
Operating Income Data:
|
|
|
|
|
|
||||||||||
Total operating income
|
$
|
714.7
|
|
$
|
577.9
|
|
$
|
478.4
|
|
$
|
349.9
|
|
$
|
220.7
|
|
Percent of sales
|
16.0
|
%
|
15.3
|
%
|
14.9
|
%
|
13.2
|
%
|
11.1
|
%
|
|||||
Net Income Data:
|
|
|
|
|
|
||||||||||
Net income from continuing operations
|
$
|
454.0
|
|
$
|
381.1
|
|
$
|
312.3
|
|
$
|
227.6
|
|
$
|
147.1
|
|
Percent of sales
|
10.1
|
%
|
10.1
|
%
|
9.7
|
%
|
8.6
|
%
|
7.4
|
%
|
|||||
Diluted net income per share from continuing operations
|
$
|
6.65
|
|
$
|
5.40
|
|
$
|
4.40
|
|
$
|
3.20
|
|
$
|
2.14
|
|
Net income
|
$
|
454.0
|
|
$
|
377.3
|
|
$
|
312.3
|
|
$
|
227.6
|
|
$
|
147.1
|
|
Diluted net income per share
|
$
|
6.65
|
|
$
|
5.35
|
|
$
|
4.40
|
|
$
|
3.20
|
|
$
|
2.14
|
|
Cash Flow Data:
|
|
|
|
|
|
||||||||||
Cash flow provided by continuing operations
|
$
|
529.3
|
|
$
|
499.2
|
|
$
|
416.1
|
|
$
|
302.5
|
|
$
|
297.9
|
|
Purchase of property and equipment
|
205.1
|
|
251.4
|
|
103.1
|
|
84.5
|
|
55.7
|
|
|||||
Repurchase and retirement of common stock
|
81.8
|
|
530.0
|
|
127.5
|
|
132.4
|
|
27.5
|
|
|||||
Cash dividends to shareholders
|
126.9
|
|
113.7
|
|
101.5
|
|
61.6
|
|
53.0
|
|
|||||
Cash dividends per share
|
$
|
1.92
|
|
$
|
1.68
|
|
$
|
1.48
|
|
$
|
0.90
|
|
$
|
0.80
|
|
Balance Sheet Data (at end of year):
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
137.6
|
|
$
|
92.2
|
|
$
|
417.0
|
|
$
|
325.3
|
|
$
|
393.9
|
|
Current assets
|
1,096.6
|
|
865.7
|
|
1,017.8
|
|
875.0
|
|
808.1
|
|
|||||
Total assets
|
2,074.9
|
|
1,685.5
|
|
1,488.5
|
|
1,228.0
|
|
1,061.6
|
|
|||||
Current liabilities
|
850.8
|
|
748.1
|
|
631.0
|
|
586.3
|
|
584.2
|
|
|||||
Long-term debt and capital lease obligations
|
223.6
|
|
284.3
|
|
104.3
|
|
104.6
|
|
100.0
|
|
|||||
Shareholders’ equity
|
861.3
|
|
535.6
|
|
690.5
|
|
500.1
|
|
371.0
|
|
|
Percent change in total Company sales compared to the prior year
|
||||
|
2014
|
|
2013
|
||
Volume
|
14
|
%
|
|
12
|
%
|
Product mix and price
|
6
|
|
|
7
|
|
Currency
|
(1
|
)
|
|
(1
|
)
|
|
19
|
%
|
|
18
|
%
|
|
For the Years Ended December 31,
|
|||||||||||||||||||||||||
($ in millions)
|
2014
|
|
Percent
of Total Sales |
|
2013
|
|
Percent
of Total Sales |
|
Percent
Change 2014 vs. 2013 |
|
2012
|
|
Percent
of Total Sales |
|
Percent
Change 2013 vs. 2012 |
|||||||||||
Off-Road Vehicles
|
$
|
2,909.0
|
|
|
65
|
%
|
|
$
|
2,521.5
|
|
|
67
|
%
|
|
15
|
%
|
|
$
|
2,225.8
|
|
|
69
|
%
|
|
13
|
%
|
Snowmobiles
|
322.4
|
|
|
7
|
%
|
|
301.7
|
|
|
8
|
%
|
|
7
|
%
|
|
283.0
|
|
|
9
|
%
|
|
7
|
%
|
|||
Motorcycles
|
348.7
|
|
|
8
|
%
|
|
219.8
|
|
|
6
|
%
|
|
59
|
%
|
|
195.8
|
|
|
6
|
%
|
|
12
|
%
|
|||
Small Vehicles
|
157.4
|
|
|
3
|
%
|
|
122.8
|
|
|
3
|
%
|
|
28
|
%
|
|
44.4
|
|
|
2
|
%
|
|
177
|
%
|
|||
PG&A
|
742.1
|
|
|
17
|
%
|
|
611.3
|
|
|
16
|
%
|
|
21
|
%
|
|
460.8
|
|
|
14
|
%
|
|
33
|
%
|
|||
Total Sales
|
$
|
4,479.6
|
|
|
100
|
%
|
|
$
|
3,777.1
|
|
|
100
|
%
|
|
19
|
%
|
|
$
|
3,209.8
|
|
|
100
|
%
|
|
18
|
%
|
|
For the Years Ended December 31,
|
|||||||||||||||||||||||||
($ in millions)
|
2014
|
|
Percent of Total Sales
|
|
2013
|
|
Percent of Total Sales
|
|
Percent Change 2014 vs. 2013
|
|
2012
|
|
Percent of Total Sales
|
|
Percent Change 2013 vs. 2012
|
|||||||||||
United States
|
$
|
3,339.9
|
|
|
75
|
%
|
|
$
|
2,721.3
|
|
|
72
|
%
|
|
23
|
%
|
|
$
|
2,311.0
|
|
|
72
|
%
|
|
18
|
%
|
Canada
|
454.6
|
|
|
10
|
%
|
|
463.3
|
|
|
12
|
%
|
|
(2
|
)%
|
|
438.2
|
|
|
14
|
%
|
|
6
|
%
|
|||
Other foreign countries
|
685.1
|
|
|
15
|
%
|
|
592.5
|
|
|
16
|
%
|
|
16
|
%
|
|
460.6
|
|
|
14
|
%
|
|
29
|
%
|
|||
Total sales
|
$
|
4,479.6
|
|
|
100
|
%
|
|
$
|
3,777.1
|
|
|
100
|
%
|
|
19
|
%
|
|
$
|
3,209.8
|
|
|
100
|
%
|
|
18
|
%
|
|
For the Years Ended December 31,
|
|||||||||||||||||||||||||
($ in millions)
|
2014
|
|
Percent of Total Cost of Sales
|
|
2013
|
|
Percent of Total Cost of Sales
|
|
Change 2014 vs. 2013
|
|
2012
|
|
Percent of
Total Cost of Sales |
|
Change 2013 vs. 2012
|
|||||||||||
Purchased materials and services
|
$
|
2,757.6
|
|
|
87
|
%
|
|
$
|
2,336.1
|
|
|
88
|
%
|
|
18
|
%
|
|
$
|
2,008.9
|
|
|
88
|
%
|
|
16
|
%
|
Labor and benefits
|
244.1
|
|
|
8
|
%
|
|
198.7
|
|
|
8
|
%
|
|
23
|
%
|
|
177.7
|
|
|
8
|
%
|
|
12
|
%
|
|||
Depreciation and amortization
|
96.9
|
|
|
3
|
%
|
|
64.5
|
|
|
2
|
%
|
|
50
|
%
|
|
51.8
|
|
|
2
|
%
|
|
25
|
%
|
|||
Warranty costs
|
61.9
|
|
|
2
|
%
|
|
56.9
|
|
|
2
|
%
|
|
9
|
%
|
|
46.1
|
|
|
2
|
%
|
|
23
|
%
|
|||
Total cost of sales
|
$
|
3,160.5
|
|
|
100
|
%
|
|
$
|
2,656.2
|
|
|
100
|
%
|
|
19
|
%
|
|
$
|
2,284.5
|
|
|
100
|
%
|
|
16
|
%
|
Percentage of sales
|
70.6
|
%
|
|
|
|
70.3
|
%
|
|
|
|
+23 basis
|
|
|
71.2
|
%
|
|
|
|
-85 basis
|
|
||||||
|
|
|
|
|
|
|
|
|
points
|
|
|
|
|
|
|
points
|
|
|
For the Years Ended December 31,
|
||||||||||||||||
($ in millions)
|
2014
|
|
2013
|
|
Change
2014 vs. 2013 |
|
2012
|
|
Change
2013 vs. 2012 |
||||||||
Gross profit dollars
|
$
|
1,319.2
|
|
|
$
|
1,120.9
|
|
|
18
|
%
|
|
$
|
925.3
|
|
|
21
|
%
|
Percentage of sales
|
29.4
|
%
|
|
29.7
|
%
|
|
-23 basis points
|
|
|
28.8
|
%
|
|
+85 basis points
|
|
|
For the Years Ended December 31,
|
||||||||||||||||
($ in millions)
|
2014
|
|
2013
|
|
Change
2014 vs. 2013 |
|
2012
|
|
Change
2013 vs. 2012 |
||||||||
Selling and marketing
|
$
|
314.5
|
|
|
$
|
270.3
|
|
|
16
|
%
|
|
$
|
210.4
|
|
|
28
|
%
|
Research and development
|
148.5
|
|
|
139.2
|
|
|
7
|
%
|
|
127.3
|
|
|
9
|
%
|
|||
General and administrative
|
203.2
|
|
|
179.4
|
|
|
13
|
%
|
|
143.1
|
|
|
25
|
%
|
|||
Total operating expenses
|
$
|
666.2
|
|
|
$
|
588.9
|
|
|
13
|
%
|
|
$
|
480.8
|
|
|
22
|
%
|
Percentage of sales
|
14.9
|
%
|
|
15.6
|
%
|
|
-72 basis points
|
|
|
15.0
|
%
|
|
+61 basis points
|
|
|
For the Years Ended December 31,
|
||||||||||||||||
($ in millions)
|
2014
|
|
2013
|
|
Change
2014 vs. 2013 |
|
2012
|
|
Change
2013 vs. 2012 |
||||||||
Income from Polaris Acceptance joint venture
|
$
|
30.5
|
|
|
$
|
20.2
|
|
|
51
|
%
|
|
$
|
15.7
|
|
|
29
|
%
|
Income from retail credit agreements
|
27.6
|
|
|
22.5
|
|
|
23
|
%
|
|
15.3
|
|
|
47
|
%
|
|||
Income from other financial services activities
|
3.6
|
|
|
3.2
|
|
|
13
|
%
|
|
2.9
|
|
|
10
|
%
|
|||
Total income from financial services
|
$
|
61.7
|
|
|
$
|
45.9
|
|
|
34
|
%
|
|
$
|
33.9
|
|
|
35
|
%
|
Percentage of sales
|
1.4
|
%
|
|
1.2
|
%
|
|
+16 basis points
|
|
|
1.1
|
%
|
|
+16 basis points
|
|
|
For the Years Ended December 31,
|
||||||||||||||||
($ in millions except per share data)
|
2014
|
|
2013
|
|
Change
2014 vs. 2013 |
|
2012
|
|
Change
2013 vs. 2012 |
||||||||
Interest expense
|
$
|
11.2
|
|
|
$
|
6.2
|
|
|
81
|
%
|
|
$
|
5.9
|
|
|
5
|
%
|
Equity in loss of other affiliates
|
$
|
4.1
|
|
|
$
|
2.4
|
|
|
71
|
%
|
|
$
|
0.2
|
|
|
NM
|
|
Other expense (income), net
|
$
|
0.0
|
|
|
$
|
(5.1
|
)
|
|
NM
|
|
|
$
|
(7.5
|
)
|
|
(32
|
)%
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income before income taxes
|
$
|
699.3
|
|
|
$
|
574.4
|
|
|
22
|
%
|
|
$
|
479.8
|
|
|
20
|
%
|
Provision for income taxes
|
$
|
245.3
|
|
|
$
|
193.4
|
|
|
27
|
%
|
|
$
|
167.5
|
|
|
15
|
%
|
Percentage of income before income taxes
|
35.1%
|
|
33.7%
|
|
+141 basis points
|
|
|
34.9%
|
|
-125 basis points
|
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||||
Net income from continuing operations
|
$
|
454.0
|
|
|
$
|
381.1
|
|
|
19
|
%
|
|
$
|
312.3
|
|
|
22
|
%
|
Net income
|
$
|
454.0
|
|
|
$
|
377.3
|
|
|
20
|
%
|
|
$
|
312.3
|
|
|
21
|
%
|
Diluted net income per share:
|
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
$
|
6.65
|
|
|
$
|
5.40
|
|
|
23
|
%
|
|
$
|
4.40
|
|
|
23
|
%
|
Diluted net income
|
$
|
6.65
|
|
|
$
|
5.35
|
|
|
24
|
%
|
|
$
|
4.40
|
|
|
22
|
%
|
Weighted average diluted shares outstanding
|
68.2
|
|
|
70.5
|
|
|
(3
|
)%
|
|
71.0
|
|
|
(1
|
)%
|
|||
NM = not meaningful
|
|
|
|
|
|
|
|
|
|
($ in millions)
|
For the Years Ended December 31,
|
||||||||||
2014
|
|
2013
|
|
Change
|
|||||||
Total cash provided by (used for):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
529.3
|
|
|
$
|
492.2
|
|
|
$
|
37.1
|
|
Investing activities
|
(246.8
|
)
|
|
(406.7
|
)
|
|
159.9
|
|
|||
Financing activities
|
(222.6
|
)
|
|
(409.0
|
)
|
|
186.4
|
|
|||
Impact of currency exchange rates on cash balances
|
(14.5
|
)
|
|
(1.3
|
)
|
|
(13.2
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
$
|
45.4
|
|
|
$
|
(324.8
|
)
|
|
$
|
370.2
|
|
(In millions):
|
Total
|
|
<1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
>5 Years
|
||||||||||
Senior notes
|
$
|
200.0
|
|
|
—
|
|
|
—
|
|
|
$
|
25.0
|
|
|
$
|
175.0
|
|
||
Interest expense
|
44.4
|
|
|
$
|
7.6
|
|
|
$
|
15.1
|
|
|
13.6
|
|
|
8.1
|
|
|||
Capital leases
|
38.3
|
|
|
3.9
|
|
|
6.2
|
|
|
4.6
|
|
|
23.6
|
|
|||||
Operating leases
|
22.5
|
|
|
9.6
|
|
|
8.4
|
|
|
3.1
|
|
|
1.4
|
|
|||||
Total
|
$
|
305.2
|
|
|
$
|
21.1
|
|
|
$
|
29.7
|
|
|
$
|
46.3
|
|
|
$
|
208.1
|
|
Foreign Currency
|
|
|
|
Foreign currency hedging contracts
|
|
Currency impact compared to the prior year period
|
||||||
|
Currency Position
|
|
Notional amounts (in thousands of U.S. dollars)
|
|
Average exchange rate of open contracts
|
|
2014
|
|
2015
|
|||
Australian Dollar
|
|
Long
|
|
$
|
3,491
|
|
|
$0.91 to 1 AUD
|
|
Negative
|
|
Negative
|
Canadian Dollar (CAD)
|
|
Long
|
|
40,550
|
|
|
$0.85 to 1 CAD
|
|
Negative
|
|
Negative
|
|
Euro
|
|
Long
|
|
—
|
|
|
—
|
|
Negative
|
|
Negative
|
|
Japanese Yen
|
|
Short
|
|
22,201
|
|
|
109.37 Yen to $1
|
|
Positive
|
|
Positive
|
|
Mexican Peso
|
|
Short
|
|
34,060
|
|
|
14.01 Peso to $1
|
|
Slightly positive
|
|
Positive
|
|
Norwegian Kroner
|
|
Long
|
|
—
|
|
|
—
|
|
Negative
|
|
Negative
|
|
Swedish Krona
|
|
Long
|
|
—
|
|
|
—
|
|
Negative
|
|
Negative
|
|
Swiss Franc
|
|
Short
|
|
—
|
|
|
—
|
|
Negative
|
|
Positive
|
|
Page
|
|
/
S
/ S
COTT
W. W
INE
|
|
Scott W. Wine
|
Chairman and Chief Executive Officer
|
|
/
S
/ M
ICHAEL
W. M
ALONE
|
|
Michael W. Malone
|
Vice President—Finance and
|
Chief Financial Officer
|
POLARIS INDUSTRIES INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
|
|||||||
Assets
|
December 31, 2014
|
|
December 31, 2013
|
||||
Current Assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
137,600
|
|
|
$
|
92,248
|
|
Trade receivables, net
|
204,876
|
|
|
186,213
|
|
||
Inventories, net
|
565,685
|
|
|
417,948
|
|
||
Prepaid expenses and other
|
71,526
|
|
|
63,716
|
|
||
Income taxes receivable
|
2,691
|
|
|
12,217
|
|
||
Deferred tax assets
|
114,177
|
|
|
93,356
|
|
||
Total current assets
|
1,096,555
|
|
|
865,698
|
|
||
Property and equipment:
|
|
|
|
||||
Land, buildings and improvements
|
272,802
|
|
|
228,916
|
|
||
Equipment and tooling
|
826,997
|
|
|
701,101
|
|
||
|
1,099,799
|
|
|
930,017
|
|
||
Less: accumulated depreciation
|
(544,371
|
)
|
|
(474,850
|
)
|
||
Property and equipment, net
|
555,428
|
|
|
455,167
|
|
||
Investment in finance affiliate
|
89,107
|
|
|
69,217
|
|
||
Deferred tax assets
|
41,201
|
|
|
18,616
|
|
||
Goodwill and other intangible assets, net
|
223,966
|
|
|
229,708
|
|
||
Other long-term assets
|
68,678
|
|
|
47,082
|
|
||
Total assets
|
$
|
2,074,935
|
|
|
$
|
1,685,488
|
|
Liabilities and Shareholders' Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Current portion of capital lease obligations
|
$
|
2,528
|
|
|
$
|
3,281
|
|
Accounts payable
|
343,470
|
|
|
238,044
|
|
||
Accrued expenses:
|
|
|
|
||||
Compensation
|
102,379
|
|
|
143,504
|
|
||
Warranties
|
53,104
|
|
|
52,818
|
|
||
Sales promotions and incentives
|
138,630
|
|
|
123,089
|
|
||
Dealer holdback
|
120,093
|
|
|
100,600
|
|
||
Other
|
79,262
|
|
|
77,480
|
|
||
Income taxes payable
|
11,344
|
|
|
9,254
|
|
||
Total current liabilities
|
850,810
|
|
|
748,070
|
|
||
Long-term income taxes payable
|
10,568
|
|
|
14,292
|
|
||
Capital lease obligations
|
23,620
|
|
|
3,842
|
|
||
Long-term debt
|
200,000
|
|
|
280,500
|
|
||
Deferred tax liabilities
|
18,191
|
|
|
25,028
|
|
||
Other long-term liabilities
|
96,951
|
|
|
69,730
|
|
||
Total liabilities
|
$
|
1,200,140
|
|
|
$
|
1,141,462
|
|
Deferred compensation
|
13,528
|
|
|
8,421
|
|
||
Shareholders’ equity:
|
|
|
|
||||
Preferred stock $0.01 par value, 20,000 shares authorized, no shares issued and outstanding
|
—
|
|
|
—
|
|
||
Common stock $0.01 par value, 160,000 shares authorized, 66,307 and 65,623 shares issued and outstanding, respectively
|
$
|
663
|
|
|
$
|
656
|
|
Additional paid-in capital
|
486,005
|
|
|
360,616
|
|
||
Retained earnings
|
401,840
|
|
|
155,572
|
|
||
Accumulated other comprehensive income (loss), net
|
(27,241
|
)
|
|
18,761
|
|
||
Total shareholders’ equity
|
861,267
|
|
|
535,605
|
|
||
Total liabilities and shareholders’ equity
|
$
|
2,074,935
|
|
|
$
|
1,685,488
|
|
POLARIS INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
|
|||||||||||
|
For the Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Sales
|
$
|
4,479,648
|
|
|
$
|
3,777,068
|
|
|
$
|
3,209,782
|
|
Cost of sales
|
3,160,470
|
|
|
2,656,189
|
|
|
2,284,485
|
|
|||
Gross profit
|
1,319,178
|
|
|
1,120,879
|
|
|
925,297
|
|
|||
Operating expenses:
|
|
|
|
|
|
||||||
Selling and marketing
|
314,449
|
|
|
270,266
|
|
|
210,367
|
|
|||
Research and development
|
148,458
|
|
|
139,193
|
|
|
127,361
|
|
|||
General and administrative
|
203,248
|
|
|
179,407
|
|
|
143,064
|
|
|||
Total operating expenses
|
666,155
|
|
|
588,866
|
|
|
480,792
|
|
|||
Income from financial services
|
61,667
|
|
|
45,901
|
|
|
33,920
|
|
|||
Operating income
|
714,690
|
|
|
577,914
|
|
|
478,425
|
|
|||
Non-operating expense (income):
|
|
|
|
|
|
||||||
Interest expense
|
11,239
|
|
|
6,210
|
|
|
5,932
|
|
|||
Equity in loss of other affiliates
|
4,124
|
|
|
2,414
|
|
|
179
|
|
|||
Other expense (income), net
|
10
|
|
|
(5,139
|
)
|
|
(7,529
|
)
|
|||
Income before income taxes
|
699,317
|
|
|
574,429
|
|
|
479,843
|
|
|||
Provision for income taxes
|
245,288
|
|
|
193,360
|
|
|
167,533
|
|
|||
Net income from continuing operations
|
454,029
|
|
|
381,069
|
|
|
312,310
|
|
|||
Loss from discontinued operations, net of tax
|
—
|
|
|
(3,777
|
)
|
|
—
|
|
|||
Net income
|
$
|
454,029
|
|
|
$
|
377,292
|
|
|
$
|
312,310
|
|
Basic net income per share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
6.86
|
|
|
$
|
5.56
|
|
|
$
|
4.54
|
|
Loss from discontinued operations
|
—
|
|
|
(0.05
|
)
|
|
—
|
|
|||
Basic net income per share
|
$
|
6.86
|
|
|
$
|
5.51
|
|
|
$
|
4.54
|
|
Diluted net income per share:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
6.65
|
|
|
$
|
5.40
|
|
|
$
|
4.40
|
|
Loss from discontinued operations
|
—
|
|
|
(0.05
|
)
|
|
—
|
|
|||
Diluted net income per share
|
$
|
6.65
|
|
|
$
|
5.35
|
|
|
$
|
4.40
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
66,175
|
|
|
68,535
|
|
|
68,849
|
|
|||
Diluted
|
68,229
|
|
|
70,546
|
|
|
71,005
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Net income
|
$
|
454,029
|
|
|
$
|
377,292
|
|
|
$
|
312,310
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustments, net of tax benefit (expense) of $65, $1,841, and ($182)
|
(44,371
|
)
|
|
4,913
|
|
|
4,124
|
|
|||
Unrealized gain (loss) on derivative instruments, net of tax benefit (expense) of $970, ($950), and $2,325
|
(1,631
|
)
|
|
1,610
|
|
|
(3,909
|
)
|
|||
Comprehensive income
|
$
|
408,027
|
|
|
$
|
383,815
|
|
|
$
|
312,525
|
|
POLARIS INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(In thousands, except per share data)
|
||||||||||||||||||||||
|
Number
of Shares |
|
Common
Stock |
|
Additional
Paid- In Capital |
|
Retained
Earnings |
|
Accumulated Other
Comprehensive Income (loss) |
|
Total
|
|||||||||||
Balance, December 31, 2011
|
68,430
|
|
|
$
|
684
|
|
|
$
|
165,518
|
|
|
$
|
321,831
|
|
|
$
|
12,023
|
|
|
$
|
500,056
|
|
Employee stock compensation
|
174
|
|
|
2
|
|
|
35,418
|
|
|
—
|
|
|
—
|
|
|
35,420
|
|
|||||
Proceeds from stock issuances under employee plans
|
1,692
|
|
|
17
|
|
|
41,679
|
|
|
—
|
|
|
—
|
|
|
41,696
|
|
|||||
Tax effect of exercise of stock options
|
—
|
|
|
—
|
|
|
29,892
|
|
|
—
|
|
|
—
|
|
|
29,892
|
|
|||||
Cash dividends declared ($1.48 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(101,534
|
)
|
|
—
|
|
|
(101,534
|
)
|
|||||
Repurchase and retirement of common shares
|
(1,649
|
)
|
|
(17
|
)
|
|
(3,992
|
)
|
|
(123,516
|
)
|
|
—
|
|
|
(127,525
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
312,310
|
|
|
—
|
|
|
312,310
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
215
|
|
|
215
|
|
|||||
Balance, December 31, 2012
|
68,647
|
|
|
686
|
|
|
268,515
|
|
|
409,091
|
|
|
12,238
|
|
|
690,530
|
|
|||||
Employee stock compensation
|
264
|
|
|
3
|
|
|
57,890
|
|
|
—
|
|
|
—
|
|
|
57,893
|
|
|||||
Deferred compensation
|
—
|
|
|
—
|
|
|
(4,358
|
)
|
|
(4,063
|
)
|
|
—
|
|
|
(8,421
|
)
|
|||||
Proceeds from stock issuances under employee plans
|
1,049
|
|
|
10
|
|
|
26,912
|
|
|
—
|
|
|
—
|
|
|
26,922
|
|
|||||
Tax effect of exercise of stock options
|
—
|
|
|
—
|
|
|
28,621
|
|
|
—
|
|
|
—
|
|
|
28,621
|
|
|||||
Cash dividends declared ($1.68 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(113,722
|
)
|
|
—
|
|
|
(113,722
|
)
|
|||||
Repurchase and retirement of common shares
|
(4,337
|
)
|
|
(43
|
)
|
|
(16,964
|
)
|
|
(513,026
|
)
|
|
—
|
|
|
(530,033
|
)
|
|||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
377,292
|
|
|
—
|
|
|
377,292
|
|
|||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6,523
|
|
|
6,523
|
|
|||||
Balance, December 31, 2013
|
65,623
|
|
|
656
|
|
|
360,616
|
|
|
155,572
|
|
|
18,761
|
|
|
535,605
|
|
|||||
Employee stock compensation
|
254
|
|
|
3
|
|
|
63,180
|
|
|
—
|
|
|
—
|
|
|
63,183
|
|
|||||
Deferred compensation
|
—
|
|
|
—
|
|
|
(3,020
|
)
|
|
(2,087
|
)
|
|
—
|
|
|
(5,107
|
)
|
|||||
Proceeds from stock issuances under employee plans
|
984
|
|
|
10
|
|
|
31,303
|
|
|
—
|
|
|
—
|
|
|
31,313
|
|
|||||
Tax effect of exercise of stock options
|
—
|
|
|
—
|
|
|
36,966
|
|
|
—
|
|
|
—
|
|
|
36,966
|
|
|||||
Cash dividends declared ($1.92 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(126,908
|
)
|
|
—
|
|
|
(126,908
|
)
|
|||||
Repurchase and retirement of common shares
|
(554
|
)
|
|
(6
|
)
|
|
(3,040
|
)
|
|
(78,766
|
)
|
|
—
|
|
|
(81,812
|
)
|
|||||
Net income
|
|
|
|
|
|
|
454,029
|
|
|
—
|
|
|
454,029
|
|
||||||||
Other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46,002
|
)
|
|
(46,002
|
)
|
|||||
Balance, December 31, 2014
|
66,307
|
|
|
$
|
663
|
|
|
$
|
486,005
|
|
|
$
|
401,840
|
|
|
$
|
(27,241
|
)
|
|
$
|
861,267
|
|
POLARIS INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
|||||||||||
|
For the Year Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Operating Activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
454,029
|
|
|
$
|
377,292
|
|
|
$
|
312,310
|
|
Loss from discontinued operations
|
—
|
|
|
3,777
|
|
|
—
|
|
|||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
127,507
|
|
|
92,100
|
|
|
70,580
|
|
|||
Noncash compensation
|
63,183
|
|
|
57,893
|
|
|
35,420
|
|
|||
Noncash income from financial services
|
(18,645
|
)
|
|
(4,983
|
)
|
|
(3,899
|
)
|
|||
Deferred income taxes
|
(50,388
|
)
|
|
(5,892
|
)
|
|
(28,901
|
)
|
|||
Tax effect of share-based compensation exercises
|
(36,966
|
)
|
|
(28,621
|
)
|
|
(29,892
|
)
|
|||
Other, net
|
6,124
|
|
|
7,414
|
|
|
179
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Trade receivables
|
(24,174
|
)
|
|
(54,055
|
)
|
|
2,413
|
|
|||
Inventories
|
(158,476
|
)
|
|
(52,049
|
)
|
|
(36,029
|
)
|
|||
Accounts payable
|
105,783
|
|
|
51,519
|
|
|
21,371
|
|
|||
Accrued expenses
|
30,664
|
|
|
53,278
|
|
|
39,269
|
|
|||
Income taxes payable/receivable
|
45,324
|
|
|
33,398
|
|
|
51,120
|
|
|||
Prepaid expenses and others, net
|
(14,695
|
)
|
|
(31,919
|
)
|
|
(17,831
|
)
|
|||
Cash provided by continuing operations
|
529,270
|
|
|
499,152
|
|
|
416,110
|
|
|||
Cash used for discontinued operations
|
—
|
|
|
(6,912
|
)
|
|
—
|
|
|||
Net cash provided by operating activities
|
529,270
|
|
|
492,240
|
|
|
416,110
|
|
|||
Investing Activities:
|
|
|
|
|
|
||||||
Purchase of property and equipment
|
(205,079
|
)
|
|
(251,401
|
)
|
|
(103,083
|
)
|
|||
Investment in finance affiliate
|
(32,582
|
)
|
|
(19,251
|
)
|
|
(18,400
|
)
|
|||
Distributions from finance affiliate
|
31,337
|
|
|
12,005
|
|
|
7,562
|
|
|||
Investment in other affiliates
|
(12,445
|
)
|
|
(10,934
|
)
|
|
(7,996
|
)
|
|||
Acquisition of businesses, net of cash acquired
|
(28,013
|
)
|
|
(137,104
|
)
|
|
(41,135
|
)
|
|||
Net cash used for investing activities
|
(246,782
|
)
|
|
(406,685
|
)
|
|
(163,052
|
)
|
|||
Financing Activities:
|
|
|
|
|
|
||||||
Borrowings under debt arrangements / capital lease obligations
|
2,146,457
|
|
|
776,669
|
|
|
2,437
|
|
|||
Repayments under debt arrangements / capital lease obligations
|
(2,228,587
|
)
|
|
(597,492
|
)
|
|
(7,478
|
)
|
|||
Repurchase and retirement of common shares
|
(81,812
|
)
|
|
(530,033
|
)
|
|
(127,525
|
)
|
|||
Cash dividends to shareholders
|
(126,908
|
)
|
|
(113,722
|
)
|
|
(101,534
|
)
|
|||
Proceeds from stock issuances under employee plans
|
31,313
|
|
|
26,922
|
|
|
41,696
|
|
|||
Tax effect of proceeds from share-based compensation exercises
|
36,966
|
|
|
28,621
|
|
|
29,892
|
|
|||
Net cash used for financing activities
|
(222,571
|
)
|
|
(409,035
|
)
|
|
(162,512
|
)
|
|||
Impact of currency exchange rates on cash balances
|
(14,565
|
)
|
|
(1,287
|
)
|
|
1,133
|
|
|||
Net increase (decrease) in cash and cash equivalents
|
45,352
|
|
|
(324,767
|
)
|
|
91,679
|
|
|||
Cash and cash equivalents at beginning of period
|
92,248
|
|
|
417,015
|
|
|
325,336
|
|
|||
Cash and cash equivalents at end of period
|
$
|
137,600
|
|
|
$
|
92,248
|
|
|
$
|
417,015
|
|
|
|
|
|
|
|
||||||
Noncash Activity:
|
|
|
|
|
|
||||||
Property and equipment obtained through capital leases
|
$
|
24,908
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Supplemental Cash Flow Information:
|
|
|
|
|
|
||||||
Interest paid on debt borrowings
|
$
|
11,259
|
|
|
$
|
6,076
|
|
|
$
|
5,932
|
|
Income taxes paid
|
$
|
261,550
|
|
|
$
|
162,647
|
|
|
$
|
143,510
|
|
|
Fair Value Measurements as of December 31, 2014
|
|||||||||||||
Asset (Liability)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||
Non-qualified deferred compensation assets
|
$
|
41,797
|
|
|
$
|
41,797
|
|
|
—
|
|
|
—
|
|
|
Total assets at fair value
|
$
|
41,797
|
|
|
$
|
41,797
|
|
|
—
|
|
|
—
|
|
|
Commodity contracts, net
|
$
|
(4,609
|
)
|
|
—
|
|
|
$
|
(4,609
|
)
|
|
|
||
Foreign exchange contracts, net
|
(2,570
|
)
|
|
—
|
|
|
(2,570
|
)
|
|
—
|
|
|||
Non-qualified deferred compensation liabilities
|
(41,797
|
)
|
|
$
|
(41,797
|
)
|
|
—
|
|
|
—
|
|
||
Total liabilities at fair value
|
$
|
(48,976
|
)
|
|
$
|
(41,797
|
)
|
|
$
|
(7,179
|
)
|
|
—
|
|
|
Fair Value Measurements as of December 31, 2013
|
|||||||||||||
Asset (Liability)
|
Total
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|||||||
Commodity contracts, net
|
$
|
30
|
|
|
—
|
|
|
$
|
30
|
|
|
—
|
|
|
Non-qualified deferred compensation assets
|
24,711
|
|
|
$
|
24,711
|
|
|
—
|
|
|
—
|
|
||
Total assets at fair value
|
$
|
24,741
|
|
|
$
|
24,711
|
|
|
$
|
30
|
|
|
—
|
|
Foreign exchange contracts, net
|
$
|
(9
|
)
|
|
—
|
|
|
$
|
(9
|
)
|
|
—
|
|
|
Non-qualified deferred compensation liabilities
|
(24,711
|
)
|
|
$
|
(24,711
|
)
|
|
—
|
|
|
—
|
|
||
Total liabilities at fair value
|
$
|
(24,720
|
)
|
|
$
|
(24,711
|
)
|
|
$
|
(9
|
)
|
|
—
|
|
|
December 31, 2014
|
|
December 31, 2013
|
||||
Raw materials and purchased components
|
$
|
165,823
|
|
|
$
|
107,496
|
|
Service parts, garments and accessories
|
163,455
|
|
|
125,765
|
|
||
Finished goods
|
262,578
|
|
|
206,290
|
|
||
Less: reserves
|
(26,171
|
)
|
|
(21,603
|
)
|
||
Inventories
|
$
|
565,685
|
|
|
$
|
417,948
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Balance at beginning of year
|
$
|
52,818
|
|
|
$
|
47,723
|
|
|
$
|
44,355
|
|
Additions to warranty reserve through acquisitions
|
160
|
|
|
1,602
|
|
|
900
|
|
|||
Additions charged to expense
|
61,888
|
|
|
56,857
|
|
|
46,088
|
|
|||
Warranty claims paid
|
(61,762
|
)
|
|
(53,364
|
)
|
|
(43,620
|
)
|
|||
Balance at end of year
|
$
|
53,104
|
|
|
$
|
52,818
|
|
|
$
|
47,723
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Option plan
|
$
|
24,428
|
|
|
$
|
22,245
|
|
|
$
|
16,497
|
|
Other share-based awards
|
26,574
|
|
|
57,640
|
|
|
56,770
|
|
|||
Total share-based compensation before tax
|
51,002
|
|
|
79,885
|
|
|
73,267
|
|
|||
Tax benefit
|
19,039
|
|
|
29,835
|
|
|
27,401
|
|
|||
Total share-based compensation expense included in net income
|
$
|
31,963
|
|
|
$
|
50,050
|
|
|
$
|
45,866
|
|
|
Omnibus Plan
(Active) |
|
Option Plan
(Frozen) |
|
Director Stock Option Plan
(Frozen) |
|||||||||||||||
|
Outstanding
Shares |
|
Weighted
Average Exercise Price |
|
Outstanding
Shares |
|
Weighted
Average Exercise Price |
|
Outstanding
Shares |
|
Weighted
Average Exercise Price |
|||||||||
Balance as of December 31, 2011
|
4,682,737
|
|
|
$
|
29.45
|
|
|
1,098,546
|
|
|
$
|
25.08
|
|
|
80,000
|
|
|
$
|
23.52
|
|
Granted
|
570,700
|
|
|
66.19
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Exercised
|
(861,397
|
)
|
|
22.54
|
|
|
(744,974
|
)
|
|
25.84
|
|
|
(64,000
|
)
|
|
22.62
|
|
|||
Forfeited
|
(61,630
|
)
|
|
40.95
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance as of December 31, 2012
|
4,330,410
|
|
|
$
|
35.50
|
|
|
353,572
|
|
|
$
|
23.47
|
|
|
16,000
|
|
|
$
|
27.10
|
|
Granted
|
1,037,729
|
|
|
87.06
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Exercised
|
(821,679
|
)
|
|
24.45
|
|
|
(191,141
|
)
|
|
23.23
|
|
|
(16,000
|
)
|
|
27.10
|
|
|||
Forfeited
|
(80,380
|
)
|
|
47.55
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance as of December 31, 2013
|
4,466,080
|
|
|
$
|
49.29
|
|
|
162,431
|
|
|
$
|
23.74
|
|
|
—
|
|
|
—
|
|
|
Granted
|
705,564
|
|
|
130.10
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Exercised
|
(866,917
|
)
|
|
30.33
|
|
|
(96,398
|
)
|
|
23.77
|
|
|
—
|
|
|
—
|
|
|||
Forfeited
|
(98,215
|
)
|
|
65.14
|
|
|
(2,800
|
)
|
|
22.43
|
|
|
—
|
|
|
—
|
|
|||
Balance as of December 31, 2014
|
4,206,512
|
|
|
$
|
66.38
|
|
|
63,233
|
|
|
$
|
23.76
|
|
|
—
|
|
|
—
|
|
|
Vested or expected to vest as of December 31, 2014
|
4,206,512
|
|
|
$
|
66.38
|
|
|
63,233
|
|
|
$
|
23.76
|
|
|
—
|
|
|
—
|
|
|
Options exercisable as of December 31, 2014
|
1,640,169
|
|
|
$
|
32.52
|
|
|
63,233
|
|
|
$
|
23.76
|
|
|
—
|
|
|
—
|
|
|
For the Years Ended December 31,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Weighted-average volatility
|
40
|
%
|
|
49
|
%
|
|
50
|
%
|
Expected dividend yield
|
1.5
|
%
|
|
1.9
|
%
|
|
2.2
|
%
|
Expected term (in years)
|
4.5
|
|
|
4.4
|
|
|
4.6
|
|
Weighted average risk free interest rate
|
1.6
|
%
|
|
0.9
|
%
|
|
0.7
|
%
|
|
Shares
Outstanding |
|
Weighted
Average Grant Price |
|||
Balance as of December 31, 2013
|
770,967
|
|
|
$
|
74.47
|
|
Granted
|
407,626
|
|
|
134.34
|
|
|
Vested
|
(65,020
|
)
|
|
50.29
|
|
|
Canceled/Forfeited
|
(35,842
|
)
|
|
87.12
|
|
|
Balance as of December 31, 2014
|
1,077,731
|
|
|
$
|
98.15
|
|
Expected to vest as of December 31, 2014
|
895,243
|
|
|
$
|
94.80
|
|
|
Average interest rate at December 31, 2014
|
|
Maturity
|
|
December 31, 2014
|
|
December 31, 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
|
|
|
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
|
%
|
|
2014
|
|
2013
|
||||
Balance as of beginning of year
|
$
|
126,697
|
|
|
$
|
56,324
|
|
Goodwill acquired during the period
|
7,456
|
|
|
66,085
|
|
||
Currency translation effect on foreign goodwill balances
|
(11,122
|
)
|
|
4,288
|
|
||
Balance as of end of year
|
$
|
123,031
|
|
|
$
|
126,697
|
|
|
2014
|
|
2013
|
||||||||||||
|
Gross
Amount |
|
Accumulated
Amortization |
|
Gross
Amount |
|
Accumulated
Amortization |
||||||||
Other intangible assets, beginning
|
$
|
116,279
|
|
|
$
|
(13,268
|
)
|
|
$
|
54,907
|
|
|
$
|
(4,015
|
)
|
Intangible assets acquired during the period
|
16,050
|
|
|
—
|
|
|
57,388
|
|
|
—
|
|
||||
Amortization expense
|
—
|
|
|
(11,599
|
)
|
|
—
|
|
|
(9,178
|
)
|
||||
Currency translation effect on foreign balances
|
(8,236
|
)
|
|
1,709
|
|
|
3,984
|
|
|
(75
|
)
|
||||
Other intangible assets, ending
|
$
|
124,093
|
|
|
$
|
(23,158
|
)
|
|
$
|
116,279
|
|
|
$
|
(13,268
|
)
|
December 31, 2014
|
Estimated Life
(Years) |
|
Gross Carrying
Amount |
|
Accumulated
Amortization |
|
Net
|
||||||
Non-compete agreements
|
5
|
|
$
|
540
|
|
|
$
|
(293
|
)
|
|
$
|
247
|
|
Dealer/customer related
|
7
|
|
62,758
|
|
|
(16,361
|
)
|
|
46,397
|
|
|||
Developed technology
|
5-7
|
|
14,571
|
|
|
(6,504
|
)
|
|
8,067
|
|
|||
Total amortizable
|
|
|
77,869
|
|
|
(23,158
|
)
|
|
54,711
|
|
|||
Non-amortizable—brand/trade names
|
|
|
46,224
|
|
|
—
|
|
|
46,224
|
|
|||
Total other intangible assets, net
|
|
|
$
|
124,093
|
|
|
$
|
(23,158
|
)
|
|
$
|
100,935
|
|
|
|
|
|
|
|
|
|
||||||
December 31, 2013
|
Estimated Life
(Years) |
|
Gross Carrying
Amount |
|
Accumulated
Amortization |
|
Net
|
||||||
Non-compete agreements
|
5
|
|
$
|
540
|
|
|
$
|
(185
|
)
|
|
$
|
355
|
|
Dealer/customer related
|
7
|
|
59,244
|
|
|
(8,608
|
)
|
|
50,636
|
|
|||
Developed technology
|
5-7
|
|
15,307
|
|
|
(4,475
|
)
|
|
10,832
|
|
|||
Total amortizable
|
|
|
75,091
|
|
|
(13,268
|
)
|
|
61,823
|
|
|||
Non-amortizable—brand/trade names
|
|
|
41,188
|
|
|
—
|
|
|
41,188
|
|
|||
Total other intangible assets, net
|
|
|
$
|
116,279
|
|
|
$
|
(13,268
|
)
|
|
$
|
103,011
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
United States
|
$
|
666,323
|
|
|
$
|
535,265
|
|
|
$
|
458,635
|
|
Foreign
|
32,994
|
|
|
39,164
|
|
|
21,208
|
|
|||
Income from continuing operations before income taxes
|
$
|
699,317
|
|
|
$
|
574,429
|
|
|
$
|
479,843
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
255,299
|
|
|
$
|
167,690
|
|
|
$
|
169,833
|
|
State
|
20,438
|
|
|
12,942
|
|
|
15,366
|
|
|||
Foreign
|
21,584
|
|
|
15,457
|
|
|
8,593
|
|
|||
Deferred
|
(52,033
|
)
|
|
(2,729
|
)
|
|
(26,259
|
)
|
|||
Total provision for income taxes for continuing operations
|
$
|
245,288
|
|
|
$
|
193,360
|
|
|
$
|
167,533
|
|
|
For the Years Ended December 31,
|
|||||||
|
2014
|
|
2013
|
|
2012
|
|||
Federal statutory rate
|
35.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
State income taxes, net of federal benefit
|
1.5
|
|
|
1.5
|
|
|
1.8
|
|
Domestic manufacturing deduction
|
(1.1
|
)
|
|
(1.0
|
)
|
|
(1.5
|
)
|
Research and development tax credit
|
(1.1
|
)
|
|
(2.2
|
)
|
|
—
|
|
Valuation allowance for foreign subsidiaries net operating losses
|
—
|
|
|
0.3
|
|
|
—
|
|
Other permanent differences
|
0.8
|
|
|
0.1
|
|
|
(0.4
|
)
|
Effective income tax rate for continuing operations
|
35.1
|
%
|
|
33.7
|
%
|
|
34.9
|
%
|
|
December 31,
|
||||||
|
2014
|
|
2013
|
||||
Current deferred income taxes:
|
|
|
|
||||
Inventories
|
$
|
9,034
|
|
|
$
|
6,306
|
|
Accrued expenses
|
104,279
|
|
|
87,157
|
|
||
Derivative instruments
|
864
|
|
|
(107
|
)
|
||
Total current
|
114,177
|
|
|
93,356
|
|
||
Noncurrent deferred income taxes:
|
|
|
|
||||
Cost in excess of net assets of business acquired
|
(13,111
|
)
|
|
(13,594
|
)
|
||
Property and equipment
|
(28,921
|
)
|
|
(36,069
|
)
|
||
Compensation payable in common stock
|
58,446
|
|
|
42,528
|
|
||
Net operating loss carryforwards and impairments
|
12,693
|
|
|
5,782
|
|
||
Valuation allowance
|
(6,097
|
)
|
|
(5,059
|
)
|
||
Total noncurrent
|
23,010
|
|
|
(6,412
|
)
|
||
Total net deferred income tax asset
|
$
|
137,187
|
|
|
$
|
86,944
|
|
|
For the Years Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||
Balance at January 1,
|
$
|
13,199
|
|
|
$
|
6,704
|
|
Increases due to acquisition opening balance sheet positions
|
—
|
|
|
6,420
|
|
||
Gross increases for tax positions of prior years
|
55
|
|
|
561
|
|
||
Gross increases for tax positions of current year
|
1,456
|
|
|
3,755
|
|
||
Decreases due to settlements and other prior year tax positions
|
(2,346
|
)
|
|
(3,310
|
)
|
||
Decreases for lapse of statute of limitations
|
(1,586
|
)
|
|
(1,344
|
)
|
||
Currency translation effect on foreign balances
|
(942
|
)
|
|
413
|
|
||
Balance at December 31,
|
9,836
|
|
|
13,199
|
|
||
Reserves related to potential interest at December 31,
|
732
|
|
|
1,093
|
|
||
Unrecognized tax benefits at December 31,
|
$
|
10,568
|
|
|
$
|
14,292
|
|
|
|
For the Years Ended December 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Quarterly dividend declared and paid per common share
|
|
$
|
0.48
|
|
|
$
|
0.42
|
|
Total dividends declared and paid per common share
|
|
$
|
1.92
|
|
|
$
|
1.68
|
|
|
For the Years Ended December 31,
|
|||||
|
2014
|
|
2013
|
|
2012
|
|
Weighted average number of common shares outstanding
|
65,904
|
|
68,209
|
|
68,409
|
|
Director Plan and deferred stock units
|
196
|
|
242
|
|
341
|
|
ESOP
|
75
|
|
84
|
|
99
|
|
Common shares outstanding—basic
|
66,175
|
|
68,535
|
|
68,849
|
|
Dilutive effect of restricted stock awards
|
359
|
|
228
|
|
181
|
|
Dilutive effect of stock option awards
|
1,695
|
|
1,783
|
|
1,975
|
|
Common and potential common shares outstanding—diluted
|
68,229
|
|
70,546
|
|
71,005
|
|
|
Foreign
Currency Items |
|
Cash Flow
Hedging Derivatives |
|
Accumulated Other
Comprehensive Income (loss) |
||||||
Balance as of December 31, 2013
|
$
|
18,582
|
|
|
$
|
179
|
|
|
$
|
18,761
|
|
Reclassification to the income statement
|
—
|
|
|
(5,469
|
)
|
|
(5,469
|
)
|
|||
Change in fair value
|
(44,371
|
)
|
|
3,838
|
|
|
(40,533
|
)
|
|||
Balance as of December 31, 2014
|
$
|
(25,789
|
)
|
|
$
|
(1,452
|
)
|
|
$
|
(27,241
|
)
|
Derivatives in Cash
Flow Hedging Relationships
|
Location of Gain (Loss)
Reclassified from
Accumulated OCI
into Income
|
|
For the Years Ended December 31,
|
||||||
|
2014
|
|
2013
|
||||||
Foreign currency contracts
|
Other (income), net
|
|
$
|
(5,641
|
)
|
|
$
|
(1,671
|
)
|
Foreign currency contracts
|
Cost of sales
|
|
172
|
|
|
977
|
|
||
Total
|
|
|
$
|
(5,469
|
)
|
|
$
|
(694
|
)
|
|
For the Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
Revenues
|
$
|
40,968
|
|
|
$
|
13,010
|
|
|
$
|
8,811
|
|
Interest and operating expenses
|
3,678
|
|
|
3,044
|
|
|
1,013
|
|
|||
Net income
|
$
|
37,290
|
|
|
$
|
9,966
|
|
|
$
|
7,798
|
|
|
As of December 31,
|
||||||
|
2014
|
|
2013
|
||||
Finance receivables, net
|
$
|
337,088
|
|
|
$
|
226,742
|
|
Other assets
|
122
|
|
|
172
|
|
||
Total Assets
|
$
|
337,210
|
|
|
$
|
226,914
|
|
Notes payable
|
$
|
155,436
|
|
|
$
|
85,096
|
|
Other liabilities
|
3,560
|
|
|
3,384
|
|
||
Partners’ capital
|
178,214
|
|
|
138,434
|
|
||
Total Liabilities and Partners’ Capital
|
$
|
337,210
|
|
|
$
|
226,914
|
|
|
Capital
Leases |
|
Operating
Leases |
||||
2015
|
$
|
3,915
|
|
|
$
|
9,576
|
|
2016
|
3,281
|
|
|
5,098
|
|
||
2017
|
2,903
|
|
|
3,326
|
|
||
2018
|
2,403
|
|
|
1,945
|
|
||
2019
|
2,203
|
|
|
1,173
|
|
||
Thereafter
|
23,639
|
|
|
1,403
|
|
||
Total future minimum lease obligation
|
$
|
38,344
|
|
|
$
|
22,521
|
|
Foreign Currency
|
|
Notional Amounts
(in U.S. dollars)
|
|
Net Unrealized Gain (Loss)
|
||||
Australian Dollar
|
|
$
|
3,491
|
|
|
$
|
391
|
|
Canadian Dollar
|
|
40,550
|
|
|
38
|
|
||
Japanese Yen
|
|
22,201
|
|
|
(1,008
|
)
|
||
Mexican Peso
|
|
34,060
|
|
|
(1,991
|
)
|
||
Total
|
|
$
|
100,302
|
|
|
$
|
(2,570
|
)
|
|
Carrying Values of Derivative Instruments as of December 31, 2014
|
||||||||||
|
Fair Value—
Assets
|
|
Fair Value—
(Liabilities)
|
|
Derivative Net
Carrying Value
|
||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
||||||
Foreign exchange contracts(1)
|
$
|
534
|
|
|
$
|
(3,104
|
)
|
|
$
|
(2,570
|
)
|
Total derivatives designated as hedging instruments
|
$
|
534
|
|
|
$
|
(3,104
|
)
|
|
$
|
(2,570
|
)
|
Commodity contracts(1)
|
$
|
—
|
|
|
$
|
(4,609
|
)
|
|
$
|
(4,609
|
)
|
Total derivatives not designated as hedging instruments
|
$
|
—
|
|
|
$
|
(4,609
|
)
|
|
$
|
(4,609
|
)
|
Total derivatives
|
$
|
534
|
|
|
$
|
(7,713
|
)
|
|
$
|
(7,179
|
)
|
|
Carrying Values of Derivative Instruments as of December 31, 2013
|
||||||||||
|
Fair Value—
Assets
|
|
Fair Value—
(Liabilities)
|
|
Derivative Net
Carrying Value
|
||||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
||||||
Foreign exchange contracts(1)
|
$
|
1,194
|
|
|
$
|
(1,203
|
)
|
|
$
|
(9
|
)
|
Total derivatives designated as hedging instruments
|
$
|
1,194
|
|
|
$
|
(1,203
|
)
|
|
$
|
(9
|
)
|
Commodity contracts(1)
|
$
|
46
|
|
|
$
|
(16
|
)
|
|
$
|
30
|
|
Total derivatives not designated as hedging instruments
|
$
|
46
|
|
|
$
|
(16
|
)
|
|
$
|
30
|
|
Total derivatives
|
$
|
1,240
|
|
|
$
|
(1,219
|
)
|
|
$
|
21
|
|
(1)
|
Assets are included in prepaid expenses and other and liabilities are included in other accrued expenses on the accompanying consolidated balance sheets.
|
Derivatives in Cash
Flow Hedging Relationships
|
For the Years Ended December 31,
|
||||||
2014
|
|
2013
|
|||||
Interest rate contracts
|
—
|
|
|
$
|
(26
|
)
|
|
Foreign currency contracts
|
$
|
(1,631
|
)
|
|
1,636
|
|
|
Total
|
$
|
(1,631
|
)
|
|
$
|
1,610
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2014
|
|
2013
|
|
2012
|
||||||
United States
|
$
|
3,339,905
|
|
|
$
|
2,721,300
|
|
|
$
|
2,310,943
|
|
Canada
|
454,608
|
|
|
463,316
|
|
|
438,208
|
|
|||
Other foreign countries
|
685,135
|
|
|
592,452
|
|
|
460,631
|
|
|||
Consolidated sales
|
$
|
4,479,648
|
|
|
$
|
3,777,068
|
|
|
$
|
3,209,782
|
|
|
As of December 31,
|
||||||
|
2014
|
|
2013
|
||||
United States
|
$
|
432,614
|
|
|
$
|
349,224
|
|
Mexico
|
49,064
|
|
|
52,450
|
|
||
Other foreign countries
|
73,750
|
|
|
53,493
|
|
||
Consolidated property and equipment, net
|
$
|
555,428
|
|
|
$
|
455,167
|
|
|
Sales
|
|
Gross profit
|
|
Net income from continuing operations
|
|
Net income
|
|
Diluted net income per share from continuing operations
|
|
Diluted net income per share
|
||||||||||||
|
(In thousands, except per share data)
|
||||||||||||||||||||||
2014
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
First Quarter
|
$
|
888,346
|
|
|
$
|
258,417
|
|
|
$
|
80,901
|
|
|
$
|
80,901
|
|
|
$
|
1.19
|
|
|
$
|
1.19
|
|
Second Quarter
|
1,013,959
|
|
|
304,914
|
|
|
96,905
|
|
|
96,905
|
|
|
1.42
|
|
|
1.42
|
|
||||||
Third Quarter
|
1,302,343
|
|
|
388,274
|
|
|
140,826
|
|
|
140,826
|
|
|
2.06
|
|
|
2.06
|
|
||||||
Fourth Quarter
|
1,275,000
|
|
|
367,573
|
|
|
135,397
|
|
|
135,397
|
|
|
1.98
|
|
|
1.98
|
|
||||||
Totals
|
$
|
4,479,648
|
|
|
$
|
1,319,178
|
|
|
$
|
454,029
|
|
|
$
|
454,029
|
|
|
$
|
6.65
|
|
|
$
|
6.65
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
First Quarter
|
$
|
745,909
|
|
|
$
|
216,648
|
|
|
$
|
75,464
|
|
|
$
|
75,464
|
|
|
$
|
1.07
|
|
|
$
|
1.07
|
|
Second Quarter
|
844,800
|
|
|
252,338
|
|
|
80,004
|
|
|
80,004
|
|
|
1.13
|
|
|
1.13
|
|
||||||
Third Quarter
|
1,102,649
|
|
|
334,785
|
|
|
116,921
|
|
|
113,144
|
|
|
1.64
|
|
|
1.59
|
|
||||||
Fourth Quarter
|
1,083,710
|
|
|
317,108
|
|
|
108,680
|
|
|
108,680
|
|
|
1.56
|
|
|
1.56
|
|
||||||
Totals
|
$
|
3,777,068
|
|
|
$
|
1,120,879
|
|
|
$
|
381,069
|
|
|
$
|
377,292
|
|
|
$
|
5.40
|
|
|
$
|
5.35
|
|
POLARIS INDUSTRIES INC.
|
||
By:
|
|
/
S
/ S
COTT
W. W
INE
|
|
|
Scott W. Wine
|
|
|
Chairman and Chief Executive Officer
|
*
|
Scott W. Wine, pursuant to Powers of Attorney executed by each of the officers and directors listed above whose name is marked by an “*” and filed as an exhibit hereto, by signing his name hereto does hereby sign and execute this report of Polaris Industries Inc. on behalf of each of such officers and directors in the capacities in which the names of each appear above.
|
Allowance for Doubtful Accounts
|
Balance at
Beginning of Period |
|
Additions
Charged to Costs and Expenses |
|
Additions
Through Acquisition |
|
Other Changes
Add (Deduct)(1) |
|
Balance at
End of Period |
||||||||||
(In thousands)
|
|
|
|
||||||||||||||||
2012: Deducted from asset accounts—Allowance for doubtful accounts receivable
|
$
|
4,473
|
|
|
$
|
375
|
|
|
365
|
|
|
$
|
(945
|
)
|
|
$
|
4,268
|
|
|
2013: Deducted from asset accounts—Allowance for doubtful accounts receivable
|
$
|
4,268
|
|
|
$
|
75
|
|
|
$
|
2,192
|
|
|
$
|
(640
|
)
|
|
$
|
5,895
|
|
2014: Deducted from asset accounts—Allowance for doubtful accounts receivable
|
$
|
5,895
|
|
|
$
|
2,347
|
|
|
$
|
265
|
|
|
$
|
(1,083
|
)
|
|
$
|
7,424
|
|
(1)
|
Uncollectible accounts receivable written off, net of recoveries.
|
Inventory Reserve
|
Balance at
Beginning of Period |
|
Additions
Charged to Costs and Expenses |
|
Additions
Through Acquisition |
|
Other Changes
Add (Deduct)(2) |
|
Balance at
End of Period |
||||||||||
(In thousands)
|
|
|
|
||||||||||||||||
2012: Deducted from asset accounts—Allowance for obsolete inventory
|
$
|
15,943
|
|
|
$
|
6,258
|
|
|
$
|
15
|
|
|
$
|
(4,859
|
)
|
|
$
|
17,357
|
|
2013: Deducted from asset accounts—Allowance for obsolete inventory
|
$
|
17,357
|
|
|
$
|
9,966
|
|
|
$
|
2,423
|
|
|
$
|
(8,143
|
)
|
|
$
|
21,603
|
|
2014: Deducted from asset accounts—Allowance for obsolete inventory
|
$
|
21,603
|
|
|
$
|
12,868
|
|
|
$
|
600
|
|
|
$
|
(8,900
|
)
|
|
$
|
26,171
|
|
(2)
|
Inventory disposals, net of recoveries.
|
POLARIS INDUSTRIES INC.
EXHIBIT INDEX TO ANNUAL REPORT ON
FORM 10-K
For Fiscal Year Ended December 31, 2014 (cont.)
|
|
.i
|
Polaris Industries Inc. 2007 Omnibus Incentive Plan (As Amended and Restated April 28, 2011), incorporated by reference to Annex A to the Company’s Proxy Statement for the 2011 Annual Meeting of Shareholders filed March 10, 2011.*
|
|
|
.j
|
Form of Performance Based Restricted Share Award Agreement for performance based restricted shares awarded to named executive officers in 2008 under the Polaris Industries Inc. 2007 Omnibus Incentive Plan, as amended and restated, incorporated by reference to Exhibit 10.a to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2009.*
|
|
|
.k
|
Polaris Industries Inc. 2007 Omnibus Incentive Plan (As Amended and Restated April 28, 2011) Performance Based Restricted Share Award Agreement form (Single Trigger), incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on May 3, 2011.*
|
|
|
.l
|
Polaris Industries Inc. 2007 Omnibus Incentive Plan (As Amended and Restated April 28, 2011) Performance Based Restricted Share Award Agreement form (Double Trigger), incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed on May 3, 2011.*
|
|
|
.m
|
Form of Stock Option Agreement and Notice of Exercise Form for options (cliff vesting) granted to executive officers under the Polaris Industries Inc. 2007 Omnibus Incentive Plan, incorporated by reference to Exhibit 10.ff to the Company’s Current Report on Form 8-K filed February 4, 2008.*
|
|
|
.n
|
Form of Stock Option Agreement and Notice of Exercise Form for options (installment vesting) granted to executive officers under the Polaris Industries Inc. 2007 Omnibus Incentive Plan, incorporated by reference to Exhibit 10.t to the Company’s Annual Report on Form 10-K for the year ended December 31, 2008.*
|
|
|
.o
|
Polaris Industries Inc. 2007 Omnibus Incentive Plan (As Amended and Restated April 28, 2011) Nonqualified Stock Option Agreement form (Single Trigger), incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on May 3, 2011.*
|
|
|
.p
|
Polaris Industries Inc. 2007 Omnibus Incentive Plan (As Amended and Restated April 28, 2011) Nonqualified Stock Option Agreement form (Double Trigger), incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on May 3, 2011.*
|
|
|
.q
|
Polaris Industries Inc. 2007 Omnibus Incentive Plan (As Amended and Restated April 28, 2011) Restricted Stock Award Agreement, incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed on May 3, 2011.*
|
|
|
.r
|
Form of Deferred Stock Award Agreement for shares of deferred stock granted to non-employee directors in 2007 under the Polaris Industries Inc. 2007 Omnibus Incentive Plan, incorporated by reference to Exhibit 10.t to the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.*
|
|
|
.s
|
Form of Performance Restricted Stock Unit Award Agreement under the Polaris Industries Inc. 2007 Omnibus Incentive Plan, incorporated by reference to Exhibit 10.y to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.*
|
|
|
.t
|
Employment Offer Letter dated April 4, 2005 by and between the Company and Bennett J. Morgan, incorporated by reference to Exhibit 10.y to the Company’s Current Report on Form 8-K, filed April 18, 2005.*
|
|
|
.u
|
Employment Offer Letter dated July 28, 2008 by and between the Company and Scott W. Wine, incorporated by reference to Exhibit 10.a to the Company’s Current Report on Form 8-K filed August 4, 2008.*
|
|
|
.v
|
Employment Offer Letter dated January 12, 2011 by and between the Company and James P. Williams, incorporated by reference to Exhibit 10.cc to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.*
|
|
|
.w
|
Employment Offer Letter dated September 15, 2014 by and between the Company and Kenneth J. Pucel.*
|
|
|
.x
|
Form of Severance Agreement entered into with executive officers of the Company, incorporated by reference to Exhibit 10.dd to the Company’s Current Report on Form 8-K filed January 17, 2008.*
|
|
|
POLARIS INDUSTRIES INC.
EXHIBIT INDEX TO ANNUAL REPORT ON
FORM 10-K
For Fiscal Year Ended December 31, 2014 (cont.)
|
|
.y
|
Severance, Proprietary Information and Noncompetition Agreement entered into with Scott W. Wine, incorporated by reference to Exhibit 10.b to the Company’s Current Report on Form 8-K filed August 4, 2008.*
|
|
|
.z
|
Form of Severance Agreement entered into with Bennett J. Morgan, incorporated by reference to Exhibit 10.ee to the Company’s Current Report on Form 8-K filed January 17, 2008.*
|
|
|
.aa
|
Amended and Restated Joint Venture Agreement dated as of February 28, 2011, by and between the Company and GE Commercial Distribution Finance Corporation, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 1, 2011.
|
|
|
.bb
|
Credit Agreement, dated as of August 18, 2011, by and among the Company, one or more of its foreign subsidiaries designated thereafter as foreign borrowers, the lenders identified therein, U.S. Bank National Association, as Administrative Agent, Lead Arranger and Lead Book Runner, RBC Capital Markets and Wells Fargo Securities, LLC, as Joint Lead Arrangers and Joint Book Runners, RBC Capital Markets and Wells Fargo Bank National Association, as Syndication Agents, and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Documentation Agent, incorporated by reference to Exhibit 10.1 to the Company’s Report on Form 8-K filed on August 22, 2011.
|
|
|
.cc
|
First Amendment to the Credit Agreement, dated December 20, 2011, by and among the Company, and any designated Foreign Borrower, the lenders from time to time party to the Credit Agreement, and U.S. Bank National Association, as one of the lenders, lead arranger, lead book runner, and administrative agent for the lenders, incorporated by reference to Exhibit 10.nn to the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.
|
|
|
.dd
|
Second Amendment to the Credit Agreement, dated January 31, 2013, by and among the Company, and any designated Foreign Borrower, the lenders from time to time party to the Credit Agreement, and U.S. Bank National Association, as one of the lenders, lead arranger, lead book runner, and administrative agent for the lenders, incorporated by reference to Exhibit 10.nn to the Company’s Annual Report on Form 10-K for the year ended December 31, 2012.
|
|
|
.ee
|
Amended and Restated Manufacturer’s Repurchase Agreement dated as of February 28, 2011, by and among the Company, Polaris Industries Inc., a Delaware Corporation, Polaris Sales Inc., and Polaris Acceptance, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 1, 2011.
|
|
|
.ff
|
Share Repurchase Agreement dated November 12, 2013, by and among the Company and Fuji Heavy Industries Ltd., incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 12, 2013.
|
|
|
.gg
|
Form of Nonqualified Stock Option Agreement entered into with Kenneth J. Pucel.*
|
|
|
.hh
|
Form of Performance Restricted Stock Unit Award Agreement entered into with Kenneth J. Pucel.*
|
|
|
.ii
|
Form of Severance Agreement entered into with Kenneth J. Pucel.*
|
|
|
.jj
|
Form of Incentive Plan Acknowledgement for David C. Longren.*
|
|
|
13
|
Portions of the Annual Report to Security Holders for the Year Ended December 31, 2014 included pursuant to Note 2 to General Instruction G.
|
|
|
21
|
Subsidiaries of Registrant.
|
|
|
23
|
Consent of Ernst & Young LLP.
|
|
|
24
|
Power of Attorney.
|
|
|
31.a
|
Certification of Chief Executive Officer required by Exchange Act Rule 13a-14(a).
|
|
|
31.b
|
Certification of Chief Financial Officer required by Exchange Act Rule 13a-14(a).
|
|
|
32.a
|
Certification furnished pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
POLARIS INDUSTRIES INC.
EXHIBIT INDEX TO ANNUAL REPORT ON
FORM 10-K
For Fiscal Year Ended December 31, 2014 (cont.)
|
|
32.b
|
Certification furnished pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
101
|
The following financial information from Polaris Industries Inc.’s Annual Report on Form 10-K for the year ended December 31, 2014, filed with the SEC on February 20, 2015, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets as of December 31, 2014 and 2013, (ii) the Consolidated Statements of Income for the years ended December 31, 2014, 2013 and 2012 (iii) the Consolidated Statements of Comprehensive Income for the years ended December 31, 2014, 2013 and 2012, (iv) the Consolidated Statements of Shareholders’ Equity for the years ended December 31, 2014, 2013 and 2012, (v) the Consolidated Statements of Cash Flows for the years ended December 31, 2014 and 2013, and (vi) Notes to Consolidated Financial Statements
|
I.
|
Title and reporting relationship
|
II.
|
Date of Employment
|
III.
|
Base Salary
|
IV.
|
Cash Incentive Compensation
|
V.
|
Signing Bonus
|
VI.
|
Long Term Incentive PRSU Plan (LTIP)
|
VII.
|
Stock Options
|
VIII.
|
Restricted Stock
|
IX.
|
Benefits & Perquisites
|
X.
|
Equity Awards and Retirement
|
XI.
|
Severance Agreement
|
XII.
|
Ownership Guidelines and Section 16 Reporting Obligations
|
POLARIS INDUSTRIES INC.
|
|
Michael W. Malone
|
Vice President—Finance and Chief Financial Officer
|
1.
|
Nonqualified Stock Option
. This Option is
not
intended to be an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code and will be interpreted accordingly.
|
2.
|
Vesting and Exercisability of Option
.
|
(a)
|
Scheduled Vesting
. This Option will vest and become exercisable as to the number of shares of Common Stock (“Shares”) and on the dates specified in the Vesting and Exercise Schedule on the cover page to this Agreement, so long as you have continuously provided service to the Company or any of its Affiliates in the capacity of an Employee, Nonemployee Director or Third-Party Service Provider since the Grant Date. For purposes of this Agreement, use of the terms “employment” and “employed” refers to providing service in any of these capacities to the Company and its Affiliates. The Vesting and Exercise Schedule is cumulative, meaning that to the extent the Option has not already been exercised and has not expired or been terminated or cancelled, you or the person otherwise entitled to exercise the Option as provided in this Agreement may at any time purchase all or any portion of the Shares subject to the vested portion of the Option.
|
(b)
|
Accelerated Vesting
. This Option will vest in full and become immediately exercisable upon a Change of Control of the Company that occurs during the term of this Option.
Vesting and exercisability of this Option will also be accelerated during the term of the Option under the circumstances described in Section 9 of this Agreement.
|
3.
|
Expiration
. This Option will expire and will no longer be exercisable on the earliest of:
|
(a)
|
The Expiration Date specified on the cover page of this Agreement;
|
(b)
|
Termination of your employment with the Company and its Affiliates for Cause;
|
(c)
|
The expiration of any applicable period specified in Section 9 of this Agreement or specified pursuant to Article 11 of the Plan during which this Option may be exercised after termination of your employment with the Company and its Affiliates; or
|
(d)
|
The date (if any) fixed for termination or cancellation of this Option pursuant to Article 11 of the Plan.
|
4.
|
Service Requirement
.
Except as otherwise provided in Section 9 of this Agreement and Sections 11.1and 11.2 of the Plan, this Option may be exercised only while you continue to be employed by the Company or any Affiliate, and only if you have continuously been so employed since the Grant Date.
|
5.
|
Exercise of Option
. Subject to Sections 6 and 7 of this Agreement, the vested and exercisable portion of this Option may be exercised in whole or in part by delivering a written or electronic notice of exercise to the Company or the Company’s third-party stock plan administrator (as the Company’s agent), which written or electronic notice must be in a form approved by the Company stating the number of Shares to be purchased, the method of payment of the aggregate Option Price and directions for the delivery of the Shares to be acquired, and must be signed or otherwise authenticated by the person exercising this Option. This Option may also be exercised by such other means as the Committee may approve from time to time, including by providing notice of exercise to the third-party administrator by telephone or by using the third-party administrator’s Internet web site. If you are not the person exercising this Option, the person exercising the Option must also submit appropriate proof of his or her right to exercise this Option. For purposes of this Section 5, “third-party stock option administrator” means E*Trade Financial Corporate Services or, as applicable, any successor designated by the Committee.
|
6.
|
Payment of Option Price
. When you submit your notice of exercise, you must include payment of the aggregate Option Price of the Shares being purchased through one or a combination of the following methods:
|
7.
|
Withholding Taxes
. The Company will notify you of the amount of any federal, state, local or foreign withholding taxes (including social insurance contributions) that must be paid by you in connection with the exercise of the Option. The Company (or any Affiliate employing you) may deduct such amount from your regular salary payments or other compensation otherwise due and owing to you. If the full amount of the withholding taxes cannot be timely recovered in this manner, you must immediately remit the deficiency to the Company upon the receipt of the Company’s notice. If you wish to satisfy some or all of such withholding taxes by delivering Shares you already own or by having the Company retain a portion of the Shares being acquired upon exercise of the Option, you must make such a request in accordance with Section 19.2 of the Plan which shall be subject to approval by the Committee. The Company may withhold the issuance to you of any and all Shares to which you are otherwise entitled under this Agreement until you have satisfied the applicable withholding tax obligations.
|
8.
|
Delivery of Shares
.
As soon as practicable after the Company receives the notice of exercise and payment of the exercise price as provided above, and determines that all other conditions to exercise, including satisfaction of withholding tax obligations and compliance with applicable laws as provided in Section 21.6 of the Plan, have been satisfied, it will arrange for the issuance and delivery of the Shares being purchased. Delivery of the Shares shall be effected by the issuance of a stock certificate, by an appropriate entry in the stock register maintained by the Company’s transfer agent with a notice of issuance provided, or by the electronic delivery of the Shares to a designated brokerage account. The Company will pay any original issue or transfer taxes with respect to the issuance and delivery of the Shares to you, and all fees and expenses incurred by it in connection therewith.
|
9.
|
Termination of Employment or Other Service
.
If your employment by the Company and its Affiliates terminates before the scheduled Expiration Date and before the Option has been exercised in full, the following rules apply:
|
10.
|
Transfer of Option
. During your lifetime, only you (or your guardian or legal representative in the event of legal
|
11.
|
Compensation Recovery
.
Notwithstanding any other provision of this Agreement, this Award and any Shares or cash received in settlement thereof shall be subject to (i) the Company’s Policy Regarding Executive Incentive Compensation Recoupment as in effect from time to time, including any amendments or revisions thereto adopted by the Board or the Committee in response to the requirements of Section 10D of the Exchange Act and the rules promulgated by the Securities and Exchange Commission and the New York Stock Exchange thereunder; and (ii) forfeiture to or reimbursement of the Company under the circumstances and to the extent provided in Section 304 of the Sarbanes-Oxley Act of 2002 if you are one of the individuals expressly subject to such Section 304 or if you knowingly or grossly negligently engaged in the misconduct, or knowingly or grossly negligently failed to prevent the misconduct which resulted in material noncompliance by the Company with any financial reporting requirement under the securities laws and as a result of which the Company was required to prepare an accounting restatement.
|
12.
|
Governing Plan Document
. This Agreement and Option Award are subject to all the provisions of the Plan, and to all interpretations, rules and regulations which may, from time to time, be adopted and promulgated by the Committee pursuant to the Plan. If there is any conflict between the provisions of this Agreement and the Plan, the provisions of the Plan will govern.
|
13.
|
Binding Effect
. This Agreement will be binding in all respects on your heirs, representatives, successors and assigns, and on the successors and assigns of the Company.
|
14.
|
Notices
.
Every notice or other communication relating to this Agreement shall be in writing and shall be mailed to or delivered (including electronically) to the party for whom it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided. Unless and until some other address is so designated, all notices or communications by you to the Company shall be mailed or delivered to the Company
[provide a specific contact or department at the Company, along with email address?]
at its office at 2100 Highway 55, Medina, Minnesota 55340, and all notices or communications by the Company to you may be given to you personally or may be mailed or delivered to you at the address indicated in the Company's records as your most recent address.
|
15.
|
Entire Agreement; Amendment; Severability
.
This Agreement and the Plan embody the entire understanding of the parties with respect to this Option Award, and supersede all other oral or written agreements or understandings between you and the Company regarding the subject matter hereof. Except as otherwise provided in Section 17.4 of the Plan, no change, alteration or modification hereof may adversely affect in any material way your rights under this Agreement without your prior written consent. If any provision of this Agreement or the application of any provision hereof is declared to be illegal, invalid, or otherwise unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall not be affected thereby.
|
16.
|
Choice of Law
. This Agreement will be governed by, and interpreted and enforced in accordance with, the laws of the state of Minnesota (without regard to its conflicts or choice of law principles).
|
17.
|
Certain References
.
References to you in any provision of this Agreement under circumstances where the provision should logically be construed to apply to your executors or administrators, or to the person or persons to whom all or any portion of the Option may be transferred by will or the laws of descent and distribution, shall be deemed to include such person or persons.
|
18.
|
Electronic Delivery and Acceptance
. The Company may deliver any documents related to this Option Award by electronic means and request your acceptance of this Agreement by electronic means. You hereby consent to receive all applicable documentation by electronic delivery and to participate in the Plan through an on-line (and/or voice activated) system established and maintained by the Company or the Company’s third-party stock plan administrator.
|
19.
|
Appendix
. This Option Award and the Shares acquired under the Plan upon exercise of the Option shall be subject to any and all special terms and provisions, if any, as set forth in the Appendix for your country of residence, which Appendix
|
Number of Performance Restricted Stock Units Granted:
|
____________
|
Grant Date:
|
____________, 20__
|
Scheduled Vesting Date:
|
The date described in Section 4(a) of the Agreement
|
Performance Period:
|
____________, 20__ - ___________, 20__
|
Performance Goals:
|
See Exhibit A
|
POLARIS INDUSTRIES INC.
|
|
Michael W. Malone
|
Vice President—Finance and Chief Financial Officer
|
1.
|
Award of Performance Restricted Stock Units
.
The Company hereby confirms the grant to you, as of the Grant Date and subject to the terms and conditions of this Agreement and the Plan, of the number of Performance Restricted Stock Units identified on the cover page of this Agreement (the "Units"). Each Unit represents the right to receive one Share of the Company’s common stock. The Units granted to you will be credited to an account in your name maintained by the Company. This account shall be unfunded and maintained for book-keeping purposes only, with the Units simply representing an unfunded and unsecured obligation of the Company.
|
2.
|
Restrictions Applicable to Units
.
Neither this Award nor the Units subject to this Award may be sold, assigned, transferred, exchanged or encumbered other than by will or the laws of descent and distribution. Any attempted transfer in violation of this Section 2 shall be void and ineffective. The Units and your right to receive Shares in settlement of the Units under this Agreement shall be subject to forfeiture except to extent the Units have vested as provided in Section 4.
|
3.
|
No Shareholder Rights
. The Units subject to this Award do not entitle you to any rights of a shareholder of the Company’s common stock. You will not have any of the rights of a shareholder of the Company in connection with the grant of Units subject to this Agreement unless and until Shares are issued to you upon settlement of the Units as provided in Section 5.
|
4.
|
Vesting and Forfeiture of Units
.
The Units shall vest at the earliest of the following times and to the degree specified. For purposes of this Section 4, use of the terms “employment” and “employed” refers to providing services to the Company and its Affiliates in the capacity of an Employee, Nonemployee Director or Third-Party Service Provider.
|
(a)
|
Scheduled Vesting
. The number of Units that have been earned during the Performance Period shall be eligible to vest on the Scheduled Vesting Date, so long as your employment has been continuous since the Grant Date. The actual number of earned Units that will vest on the Scheduled Vesting Date will be determined by the Committee as provided in
Exhibit A
. For these purposes, the “Scheduled Vesting Date” means the date the Committee certifies (i) the degree to which the applicable performance goals for the Performance Period have been satisfied, (ii) the number of Units that have been earned during the Performance Period as provided in
Exhibit A
, and (iii) the number of Units that will vest as determined in accordance with
Exhibit A
, which certification shall occur no later than March 15 of the calendar year immediately following the calendar year during which the Performance Period ended.
|
(b)
|
Retirement
. If your employment terminates by reason of your Retirement prior to the Scheduled Vesting Date, then you will be entitled to have vest on the Scheduled Vesting Date a pro rata portion of the Units that would otherwise have been determined to vest on the Scheduled Vesting Date in accordance with
Exhibit A
if you had remained continuously employed until the Scheduled Vesting Date. The pro rata portion shall be determined by multiplying the number of Units that would otherwise have been determined to vest by a fraction whose numerator is the number of full calendar months during the Performance Period prior to your employment termination date and whose denominator is thirty-six (36). For these purposes, “Retirement” shall mean any termination of your employment, other than termination for Cause, that occurs (i) at least twelve (12) months after the Grant Date, and (ii) at or after you reach the age of fifty-five (55) and have completed at least ten (10) years of continuous employment, or at or after you reach the age of sixty-five (65).
|
(c)
|
Severance Agreement
. If your employment terminates prior to the Scheduled Vesting Date at a time when you are party to a severance agreement with the Company, and if such termination of employment constitutes a “Non-Change in Control Termination” as defined in the severance agreement, then you will be entitled to have vest on the Scheduled Vesting Date a pro rata portion of the Units that would otherwise have been determined to vest on the Scheduled Vesting Date in accordance with
Exhibit A
if you had remained continuously employed until the Scheduled Vesting Date. The pro rata portion shall be determined in the same manner as provided in Section 4(b).
|
(d)
|
Change of Control
. If a Change of Control occurs after the Grant Date but before the Scheduled Vesting Date and while you continue to be employed, then the Units shall vest as of the Date of the Change of Control to the extent provided below:
|
(1)
|
If the Change of Control occurs on or after the last day of the Performance Period, the number of Units determined to have been earned as of the end of the Performance Period in accordance with
Exhibit A
shall vest.
|
(2)
|
If the Change of Control occurs before the last day of the Performance Period, one-third of the Units shall vest if the Change of Control occurs during the third year of the Performance Period, one-sixth of the Units shall vest if the Change of Control occurs during the second year of the Performance Period, and no Units shall vest if the Change of Control occurs during the first year of the Performance Period.
|
(e)
|
Forfeiture of Unvested Units
. To the extent any of Sections 4(a) through (d) is applicable to this Award, any Units that do not vest on the applicable vesting date as provided therein shall immediately be forfeited. If your employment terminates prior to the Scheduled Vesting Date under circumstances other than as set forth in Sections 4(b) and (c), all unvested Units shall immediately be forfeited.
|
5.
|
Settlement of Units
.
After any Units vest pursuant to Section 4, the Company shall, as soon as practicable (but no later than March 15 of the year following the calendar year in which such Units vest), cause to be issued and delivered to you, or to your designated beneficiary or estate in the event of your death, one Share in payment and settlement of each vested Unit. Delivery of the Shares shall be effected by the issuance of a stock certificate, by an appropriate entry in the stock register maintained by the Company’s transfer agent with a notice of issuance provided, or by the electronic delivery of the Shares to a designated brokerage account, shall be subject to satisfaction of withholding tax obligations as provided in Section 6 and compliance with all applicable legal requirements as provided in Section 21.6 of the Plan, and shall be in complete satisfaction and settlement of such vested Units. The Company will pay any original issue or transfer taxes with respect to the issuance and delivery of the Shares to you, and all fees and expenses incurred by it in connection therewith.
|
6.
|
Withholding Taxes
.
The Company will notify you of the amount of any federal, state, local or foreign withholding taxes (including social insurance contributions) that must be paid in connection with the vesting or settlement of the Units. The Company (or any Affiliate employing you) may deduct such amount from your regular salary payments or other compensation otherwise due and owing to you. If the full amount of the withholding taxes cannot be timely recovered in this manner, you must immediately remit the deficiency to the Company upon the receipt of the Company’s notice. If you wish to satisfy some or all of such withholding taxes by delivering Shares you already own or by having the Company retain a portion of the Shares that would otherwise be issued to you in settlement of vested Units, you must make such a request in accordance with Section 19.2 of the Plan which shall be subject to approval by the Committee. The Company may withhold the issuance to you of any and all Shares to which you are otherwise entitled under this Agreement until you have satisfied the applicable tax withholding obligations.
|
7.
|
Compensation Recovery
.
Notwithstanding any other provision of this Agreement, this Award and any Shares or cash received in settlement thereof shall be subject to (i) the Company’s Policy Regarding Executive Incentive Compensation Recoupment as in effect from time to time, including any amendments or revisions thereto adopted by the Board or the Committee in response to the requirements of Section 10D of the Exchange Act and the rules promulgated by the Securities and Exchange Commission and the New York Stock Exchange thereunder; and (ii) forfeiture to or reimbursement of the Company under the circumstances and to the extent provided in Section 304 of the Sarbanes-Oxley Act of 2002 if you are one of the individuals expressly subject to such Section 304 or if you knowingly or grossly negligently engaged in the misconduct, or knowingly or grossly negligently failed to prevent the misconduct which resulted in material noncompliance by the Company with any financial reporting requirement under the securities laws and as a result of which the Company was required to prepare an accounting restatement.
|
8.
|
Governing Plan Document
. This Agreement and Award are subject to all the provisions of the Plan, and to all interpretations, rules and regulations which may, from time to time, be adopted and promulgated by the Committee pursuant to the Plan. If there is any conflict between the provisions of this Agreement and the Plan, the provisions of the Plan will govern.
|
9.
|
Binding Effect
.
This Agreement will be binding in all respects on your heirs, representatives, successors and assigns, and on the successors and assigns of the Company.
|
10.
|
Entire Agreement; Amendment; Severability
.
This Agreement and the Plan embody the entire understanding of the parties regarding the subject matter hereof and shall supersede all prior agreements and understandings, oral or written, between the parties with respect thereto. Except as otherwise provided in Section 17.4 of the Plan, no change, alteration or modification of this Agreement may adversely affect in any material way your rights under this Agreement without your prior written consent. If any provision of this Agreement or the application of any provision hereof is declared to be illegal, invalid, or otherwise unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall not be affected thereby.
|
11.
|
Certain References
.
References to you in any provision of this Agreement under circumstances where the provision should logically be construed to apply to your executors or administrators, or to the person or persons to whom all or any portion of the Units may be transferred by will or the laws of descent and distribution, shall be deemed to include such person or persons.
|
12.
|
Notices
.
Every notice or other communication relating to this Agreement shall be in writing and shall be mailed to or delivered (including electronically) to the party for whom it is intended at such address as may from time to time be designated by it in a notice mailed or delivered to the other party as herein provided. Unless and until some other address is so designated, all notices or communications by you to the Company shall be mailed or delivered to the Company (Attention: Vice President - Human Resources) at its office at 2100 Highway 55, Medina, Minnesota 55340, and all notices or communications by the Company to you may be given to you personally or may be mailed or delivered to you at the address indicated in the Company's records as your most recent address.
|
13.
|
Choice of Law
. This Agreement will be governed by, and interpreted and enforced in accordance with, the laws of the state of Minnesota (without regard to its conflicts or choice of law principles).
|
14.
|
Electronic Delivery and Acceptance
. The Company may deliver any documents related to this Award by electronic means and request your acceptance of this Agreement by electronic means. You hereby consent to receive all applicable documentation by electronic delivery and to participate in the Plan through an on-line (and/or voice activated) system established and maintained by the Company or the Company’s third-party stock plan administrator.
|
15.
|
Appendix
. This Award and the Shares acquired under the Plan upon settlement of the Units shall be subject to any and all special terms and provisions, if any, as set forth in the Appendix for your country of residence, which Appendix is incorporated into and made a part of this Agreement.
|
|
POLARIS INDUSTRIES INC.
|
|
EMPLOYEE
|
By:
|
|
|
|
|
Stacy Bogart
|
|
Name:
|
|
VP, General Counsel
|
|
|
|
|
|
Employee Name (please print)
|
|
Date Signed
|
|
|
|
Title
|
|
|
|
|
|
Employee Signature
|
|
|
|
|
|
Received by (please print name)
|
|
Date Received
|
1.
|
Incentive bonus of $100,000 if the ORV Division meets or exceeds its Net Operating Profit budget of $___ Million for calendar year 2014
|
2.
|
Incentive bonus of an additional $150,000 if the Net Operating Profit of the ORV division meets or exceeds $___ Million for calendar year 2014
|
3.
|
Incentive bonus of an additional $150,000 if the Net Operating Profit of the ORV division meets or exceeds $___ Million for calendar year 2014
|
1.
|
Participant must be actively employed with Polaris on the bonus payout date and one or more of the performance metrics must have been achieved in order for participant to receive any payout under the Plan.
|
2.
|
If participant’s employment is terminated prior to the bonus payout date, he will not be eligible for a payout.
|
|
2014
|
2013
|
||
Quarter
|
High
|
Low
|
High
|
Low
|
First
|
$146.99
|
$118.80
|
$93.89
|
$80.87
|
Second
|
143.98
|
124.73
|
97.96
|
83.20
|
Third
|
152.88
|
130.00
|
130.40
|
95.23
|
Fourth
|
159.33
|
138.21
|
146.41
|
122.72
|
Quarter
|
2014
|
2013
|
First
|
$0.48
|
$0.42
|
Second
|
0.48
|
0.42
|
Third
|
0.48
|
0.42
|
Fourth
|
0.48
|
0.42
|
Total
|
$1.92
|
$1.68
|
Name of Subsidiary
|
|
State or Other Jurisdiction of Incorporation or Organization
|
A.M. Holding S.A.S.
|
|
France
|
Aixam Immobilier S.A.S.
|
|
France
|
Aixam Lusitana Sociedad De Comercializacae de Automoveis, S.A.
|
|
Portugal
|
Aixam Mega S.A.S.
|
|
France
|
Aixam Production S.A.S.
|
|
France
|
Aixam Mega Engineering S.A.S.
|
|
France
|
AIXAM Mega GmbH
|
|
Austria
|
Aixam Mega Italia S.R.L.
|
|
Italy
|
Aixam Mega Ltd.
|
|
United Kingdom
|
Aixam Mega Nederland BV
|
|
Netherlands
|
Aixam-Mega Iberica, S.L.
|
|
Spain
|
Carmax SAS
|
|
France
|
Carmetal SAS
|
|
France
|
Compagnie Industrielle du Vencors SAS
|
|
France
|
Eicher Polaris Private Ltd. (50%)
|
|
India
|
FAM SAS
|
|
France
|
Goupil Industrie S.A.
|
|
France
|
Indian Motorcycle Company
|
|
Delaware
|
Indian Motorcycle International, LLC
|
|
Delaware
|
Indian Motorcycle USA, LLC
|
|
Delaware
|
KLIM Europe ApS
|
|
Denmark
|
KLIM Europe Sarl
|
|
Switzerland
|
Kolpin Outdoors, Inc.
|
|
Wisconsin
|
Mega Production S.A.
|
|
France
|
North Pole Star, LLC
|
|
Mexico
|
Polaris Acceptance (50%)
|
|
Illinois
|
Polaris Acceptance Inc.
|
|
Minnesota
|
Polaris Britain Limited
|
|
United Kingdom
|
Polaris Canada Holdco LP
|
|
Canada
|
Polaris Direct Inc.
|
|
Minnesota
|
Polaris Finance Co Sarl
|
|
Luxembourg
|
Polaris France S.A.S.
|
|
France
|
Polaris Germany GmbH
|
|
Germany
|
Polaris India Private Ltd.
|
|
India
|
Polaris Industries Holdco LP
|
|
Cayman Islands
|
Polaris Industries Inc.
|
|
Delaware
|
Polaris Industries LLC
|
|
Delaware
|
Polaris Industries Ltd.
|
|
Manitoba, Canada
|
Polaris Industries Manufacturing LLC
|
|
Minnesota
|
Polaris Insurance Services LLC
|
|
Minnesota
|
Polaris Limited China
|
|
China
|
Polaris Luxembourg I Sarl
|
|
Switzerland
|
Polaris Luxembourg II Sarl
|
|
Switzerland
|
Polaris Norway AS
|
|
Norway
|
Polaris of Brazil
|
|
Brazil
|
Polaris Poland Sp. z o.o
|
|
Poland
|
Polaris Sales Australia Pty Ltd.
|
|
Australia
|
Polaris Sales Europe Inc.
|
|
Minnesota
|
Polaris Sales Europe Sarl
|
|
Switzerland
|
Polaris Sales Inc.
|
|
Minnesota
|
Polaris Sales Mexico, S. de R.L. de C.V.
|
|
Mexico
|
Polaris Sales Spain, S.L.
|
|
Spain
|
Polaris Scandinavia AB
|
|
Sweden
|
Primordial, Inc.
|
|
Delaware
|
Resilient Technologies LLC
|
|
Wisconsin
|
SCI GEB
|
|
France
|
swissauto powersport LLC
|
|
Switzerland
|
Teton Outfitters, LLC
|
|
Idaho
|
Victory Motorcycles Australia Pty Ltd
|
|
Australia
|
|
|
|
|
|
|
POLARIS INDUSTRIES INC.
|
|
|
|
By
|
/s/ Scott W. Wine
|
|
Scott W. Wine
Chairman and Chief Executive Officer
|
|
|
|
/s/ Annette K. Clayton
|
|
/s/ Bernd F. Kessler
|
Annette K. Clayton
|
|
Bernd F. Kessler
|
|
|
|
/s/ Brian C. Cornell
|
|
/s/ R.M. Schreck
|
Brian C. Cornell
|
|
R. M. Schreck
|
|
|
|
/s/ Kevin M. Farr
|
|
/s/ John P. Wiehoff
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Kevin M. Farr
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John P. Wiehoff
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/s/ Gary E. Hendrickson
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/s/ Scott W. Wine
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Gary E. Hendrickson
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Scott W. Wine
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1.
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I have reviewed this annual report on Form 10-K of Polaris Industries Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/
S
/ S
COTT
W. W
INE
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Scott W. Wine
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Chairman and Chief Executive Officer
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1.
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I have reviewed this annual report on Form 10-K of Polaris Industries Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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b.
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Any fraud
,
whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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/
S
/ M
ICHAEL
W. M
ALONE
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Michael W. Malone
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Vice President — Finance and
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Chief Financial Officer
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1.
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This statement is provided pursuant to 18 U.S.C. § 1350 in connection with the Company’s Annual Report on Form 10-K for the period ended
December 31, 2014
(the “Periodic Report”);
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2.
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The Periodic Report fully complies with the requirements of Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended; and
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3.
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The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods indicated therein.
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/
S
/ S
COTT
W. W
INE
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Scott W. Wine
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Chairman and Chief Executive Officer
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1.
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This statement is provided pursuant to 18 U.S.C. § 1350 in connection with the Company’s Annual Report on Form 10-K for the period ended
December 31, 2014
(the “Periodic Report”);
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2.
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The Periodic Report fully complies with the requirements of Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended; and
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3.
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The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods indicated therein.
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/
S
/ M
ICHAEL
W. M
ALONE
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Michael W. Malone
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Vice President — Finance and Chief Financial Officer
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