Accounting Homework_financial statement analysis and interpretation
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financial_information_polaris.pdf
POLARIS INDUSTRIES INC. CONSOLIDATED BALANCE SHEETS
December 31 (In thousands, except per share data) 2011 2010
ASSETS Current Assets
Cash and cash equivalents ........................................................ . $ 325,336 $ 393,927 Trade receivables, nef ........................................................... . 115,302 89,294 Inventories, net ................................................................. . 298,042 235,927 Prepaid expenses and other ....................................................... . 37,608 21,628 Income taxes receivable .......................................................... . 24,723 Deferred tax assets .............................................................. . 77,665 67,369
Total current assets ..................................................... . 878,676 808,145 Property and Equipment
Land, buildings and improvements ...................... : .......................... . 123,771 118,831 Equipment and tooling ........................................................... . 524,382 488,562
648,153 607,393 Less accumulated depreciation ............................................................ . {434,375) (423,382)
Property and equipment, net ........................................................ :--.. 213,778 184,011 Investments in finance affiliate ............................................................ . 42,251 37,169 Investments in other affiliates ............................................................. . 5,000 1,009 Deferred tax assets ...................................................................... . 10,601 Goodwill and other intangible assets, net ........................................ ~ ............ . 77 718 31,313
Total Assets ....................................................................... . $1,228,024 $1,061,647
LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities
Current portion of long-term borrowings under credit agreement ............................. . $ 100,000 Current portion of capital lease obligations ............................................... . $ 2,653 Accounts payable ................................................................... . 146,743 113,248 Accrued expenses
Compensation ................................................................. . 187,671 126,781 Warranties .................................................................... . 44,355 32,651 Sales promotions and incentives ................................................... . 81,228 75,494 Dealer holdback ................................................................ . 76,512 79,688 Other ........................................................................ . 75,730 53,744
Income taxes payable ................................................................ . 639 2,604
Total current liabilities ........................................................... . 615,531 584,210 7,837 5,509
937 Long term income taxes payable ........................................................... . Deferred income taxes ....................... · ............................................ . Capital lease obligations ................................................................. . 4,600 Long-term debt ........................................................................ . 100,000
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 727,968 --=-=--- 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, 68,430 and 68,468 shares issued imd
outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 684 Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165,518 Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321,831 Accumulated other comprehensive income, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,023 ---==---
Total shareholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500,056 -~~.-,. . . Total Liabilities and Shareholders' Equity .............................. <."';. ...... $1,228,024 ~~~~
Shares outstanding, common stock, additional paid-in-capital, retained eamings and per share data have been adjusted to give effect to the two-for-one stock split declared on July 20, 2011, paid on
September 12.2011 to shareholders of record on September 2, 201 I.
POLARIS INDUSTRIES INC. CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended December 31 (In thousands, except per share data) 2011 2010
Sales .................................................... . $2,656,949 $1,991,139 Cost of sales .............................................. . 1,916,366
Gross profit ........................................... . 740,583 Operating expenses
Selling and marketing ................................... . 178,725 Research and development ............................... . 105,631 General and administrative ............................... . 130,395
Total operating expenses ..........................•... 414,751 Income from financial services ................................ . 24,092
Operating income .................................. . 349,924 Non-operating expense (income)
Interest expense ........................................ . 3,987 (Gain) loss on securities available for sale ................... . Other expense (income), net .............................. . (689)
Income before income taxes .......................... . 346,626 Provision for income taxes ................................... . 119,051
Net income : ....................................... . $ 227,575 $
Basic net income per share ........................... . $ 3.31 $
Diluted net income per share .......................... . $ 3.20 $
Weighted average shares outstanding: Basic ............................................ . 68,792 Diluted ........................................... . 71,057
Shares outstanding and per share dala have been adjusted to give effect to the two-for-one stoc)$: split declared on July 20, 2011, paid on September 12,2011 lo shareholders of record on September 2, 201 J.
1,460,926
530,213
142,353 84,940 99,055
326,348 16,856
220,721
2,680 (825) 325
218,541 71,403
147,138
2.20
2.14
66,900 68,765
2009
$1,565,887 1,172,668 .
393,219
111,137 62,999 71,184
245,320 17,071
164,970
4,111 8,952
733
151,174 50,157
$ 101,017
$ 1.56
$ 1.53
64,798 66,148
POLARIS INDUSTRIES INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS'
EQUITY AND COMPREHENSIVE INCOME
Additional Number Common Paid- Retained (In thousands, except per share data) of Shares Stock In Capital Earnings
Balance, December 31, 2008 ••••••••••••••••••••••••• 0 •• 64,984 $650 $ 140,234
Employee stock compensation ........................ 62 1 10,225 Proceeds from stock issuances under employee plans ...... 472 4 4,729 Tax effect of exercise of stock options .................. (410) Cash dividends declared ($0.78 per share) ...............
(50,177) Repurchase and retirement of common shares ............ (222) (2) (4,554) Comprehensive income:
Net Income ................................... 101,017
Foreign currency translation adjustments, net of tax of $69
• 0. 0 •••••• ••• 0 ••••••• ••••••••••••••••••
Reclassification of unrealized loss on available for sale securities to the income statement, net of tax of $2,277 .....................................
Unrealized loss on available for sale securities, net of tax benefit of $230 ••••••••••.•••••••••••••• 0.
Unrealized gain on derivative instruments, net of tax of $165
•••••• 0 ••• •••••••••••••••••••••••• 0 •••
Total comprehensive income ••••••• 0 ••• 0 •••••••••••••
Balance, December 31, 2009 0. 0 •••••••• 0. 0 • ••••••••••••• 65,296 653 9,990 191,074
Employee stock compensation ........................ 308 3 18,049 Proceeds from stock issuances under employee plans ...... 4,066 41 68,064 Tax effect of exercise of stock options .................. 10,610 Cash dividends declared ($0.80 per share) ...............
(53,043) Repurchase and retirement of common shares ............ (1,202) (12) (27,474) Comprehensive income:
Net Income ................................... 147,138
Foreign currency translation adjustments, net of tax of $222
••••••• 0 ••• 0 •••• 0 ••••••••••••••••••• ••
Unrealized gain on available for sale securities, net of tax benefit of $230
•••••••• 0 ••••••• 0 ••••••• •••
Unrealized loss on derivative instruments, net of tax benefit of $256 ..............................
Total comprehensive income •••••••••••• 0 ••••••• 0 ••••
Balance, December 31, 2010 ••••••••••••••••••••••• 0 •••• 68,468 685 79,239 285,169
Employee stock compensation ........................ 290 3 20,545 Proceeds from stock issuances under employee plans ...... 2,280 22 45,632 Tax effect of exercise of stock options .................. 23,120 Cash dividends declared ($0.90 per share) ...............
(61,585) Repurchase and retirement of common shares ............ (2,608) (26) (3,018) (129,328) Comprehensive income:
Net Income ................................... 227,575
Foreign currency translation adjustments, net of tax benefit of $6,782 .............................
Unrealized gainl(loss) on derivative instruments, net of tax of$2,125 ................................
Total comprehensive income •••••• 0 •••••••• 0 •••••• ••• <k
~
Balance, December 31, 2011 ............................ 68,430 $684 $165,518 $ 321,831 -- --
Shares outstanding. conunon stock, additional paid·in-capita1, retained earnings and per share data have been adjusted to give effect to the two-for·one stock split declared on Jul"'20, 2011, paid on
Seoternber 12. 2011 to shareholders of record on Seotember 2. 2011.
Accumulated Other Comprehensive Income (Loss) Total
$(3,857) $ 137,027 10,226 4,733 (410)
(50,177) (4,556)
115
6,675
(382)
273 107,698
2,824 204,541 18,052 68,105 10,610
(53,043) (27,486)
3,131
382
(439) 150,212
5,898 370,991 20,548 45,654 23,120
(61,585) (132,372)
2,554
3,571
$12,023 ---
POLARIS INDUSTRIES INC. CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Year Ended December 31 (In thousands)
Operating Activities Net income .................................................... . Adjustments to reconcile net income to net cash provided by operating
activities: (Gain) loss on securities available for sale ........................ . Depreciation and amortization ................................. . Noncash compensation ....................................... . Noncash income from financial services ......................... . Noncash expense from other affiliates .................... · ....... . Deferred income taxes . . . . . . . . . . . ............................. . Tax effect of share-based compensation exercises .................. . Changes in current operating items:
Trade receivables ....................................... . Inventories ............................................. . Accounts payable ....................................... . Accrued expenses ....................................... . Income taxes payable/receivable ............................ . Prepaid expenses and others, net ............................ .
Net cash.provided by operating activities ................. .
Investing Activities Purchase of property and equipment ............................. . Investments in finance affiliate ................................. . Distributions from finance affiliate .............................. . Investment in other affiliates ................................... . Proceeds from sale of investments .............................. . Acquisition of businesses, net of cash acquired .................... .
Net cash used for investment activities ................... .
·Financing Activities Borrowings under credit agreement I senior notes .................. . Repayments under credit agreement ............................. . Repurchase and retirement of common shares ..................... . Cash dividends to shareholders ................................. . Tax effect of proceeds from share-based compensation exercises ...... . Proceeds from stock issuances under employee plans ............... .
Net cash used for financing activities .................... . Impact of currency exchange rates on cash balances .................... .
Net increase (decrease) in cash and cash equivalents .................... .
Cash and cash equivalents at beginning of period ...................... .
2011
$ 227,575
66,390 20,548 (4,444)
133 (16,946) (23,120)
(23,115) (49,973) 27,232 80,668 (1;343) (1,075)
302,530
(84,484) (12,588) 11,950 (5,000)
876 (51,899)
(141,145)
100,000 (202,333) (132,372)
(61,585) 23,120 45,654
(227,516) (2,460)
(68,591)
393,927
2010
$147,138
(825) 66,519 18,052 (4,574) 1,376
(16,888) (10,610)
1,111 (56,612) 37,580
107,363 7,033
956
297,619
(55,718) (9,173) 17,910
9,061 (4,738)
(42,118)
(27,486) (53,043)
. 10,610 68,105
(1,814)
253,687
140,240
Cash and cash equivalents at end of period ........................... . $ 325,336 $3~3.927
Supplemental Cash Flow Information: Interest paid on debt borrowings .............................. : . . $ 3,350 $ 2,813
2009
$ 101,017
8,952 64,593 10,226 (4,021)
382 13,573
410
8,192 42,997
(40,329) (24,759)
7,325 4,643
193,201
(43,932) (3,007) 17,261
(29,678)
364,000 (364,000)
(4,556) (50,177)
(410) 4,733
(50,410)
113,113
27,127
$ 140,240
$ 3,966
Income taxes paid ........................................... . $ 132,088 $ 81,142 $ 29,039
POLARIS INDUSTRIES INC. SELECTED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Organization and Significant Accounting Policies Polaris Industries Inc. ("Polaris" or the "Company") a Minnesota corporation, and its subsidiaries, are engaged in the design, engi- neering, manufacturing and marketing of innovative, high-quality, high-performance Off-Road Vehicles ("ORV"), Snowmobiles, and On-Road Vehicles, including motorcycles and Small Electric Vehicles. Polaris products, together with related parts, garments and accessories are sold worldwide through a network of deal- ers, distributors and its subsidiaries located in the United States, Canada, France, the United Kingdom, Australia, Norway, Sweden, Germany, Spain, China, India and Brazil.
Basis of presentation: The accompanying consolidated financial statements include the accounts of Polaris and its wholly-owned subsidiaries. All inter-company transactions and balances have been eliminated in consolidation. Income from financial services is reported as a component of operating income to better reflect income from ongoing operations, of which financial services has a significant impact.
During the 2011 third quarter, the Board of Directors declared a two-for-one split of the Company's outstanding shares of Com- mon Stock. On September 12,2011, Polaris shareholders received one additional share of Common Stock for each share they held of record at the close of business on September 2, 2011. All amounts, including shares and per share information, have been adjusted to give effect to the two-for-one stock split.
Investment in finance affiliate: The caption Investment in finance affiliate in the consolidated balance sheets represents Polaris' 50 percent equity interest in Polaris Acceptance, a partnership agree- ment between GE Commercial Distribution Finance Corpora- tion ("GECDF') and one of Polaris' wholly-owned subsidiaries. Polaris Acceptance provides floor plan financing to Polaris dealers in the United States. Polaris' investment in Polaris Acceptance is accounted for under the equity method, and is recorded as invest- ments in finance affiliate in the consolidated balance sheets.
Investment in other affiliates: The caption Investments in other affiliates in the consolidated balance sheets for the period ended December 31, 2011 represents the Company's October 2011 investment in Brammo, Inc., a privately held manufacturer of elec- tric motorcycles. This investment represents a minority interest in Brammo and is accounted for under the cost method.
(Gain) Loss on Securities Available for Sale: The net gain of $825,000 in 2010 on securities available for sale resulted from a $1,594,000 gain on the sale of our remaining investment in KTM during the 2010 third quarter offset by a related non-cash impair- ment charge of $769,000 during the 2010 second quarter. In the first quarter 2009, we recorded a non-cash impairment charge on securities held for sales of $8,952,000 from the decline in the fair value of the KTM shares owned by Polaris as of March 31, 2009, when it was determined that the decline in the fair value of the KTM shares owned by the Company was other than temporary.
Use of estimates: The preparation of financial statements in confor- mity with accounting principles generally accepted in the United
States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial state- ments and the reported amounts of revenues and expenses during the reporting period. Ultimate results could differ from those estimates.
Cash equivalents: Polaris considers all highly liquid investments purchased with an original maturity of 90 days or less to be cash equivalents. Cash equivalents are stated at cost, which approxi- mates fair value. Such investments consist principally of money market mutual funds.
Allow~nce for doubtful accounts: Polaris' financial exposure to collection of accounts receivable is limited due to its agreements with certain finance companies. For receivables not serviced through these finance companies, the Company provides a reserve for doubtful accounts based on historical rates and trends. This reserve is adjusted periodically as information about specific ac- counts becomes available.
Inventories: Inventories are stated at the lower of cost (first-in, first-out method) or market. The major components of inventories are as follows (in thousands):
December31
Raw materials and purchased components ... . Service parts, garments and accessories ..... .
Finished goods ......................... .
Less: reserves .......................... .
Inventories ............................ .
2011
$ 61,296 77,437
175,252 (15,943)
$298,042
2010
$ 35,580 60,813
155,744 (16,210)
$235,927
Property and equipmellt: Property and equipment is stated at cost. Depreciation is provided using the straight-line method over the estimated useful life of the respective assets, ranging from 10-40 years for buildings and improvements and from 1-7 years for equipment and tooling. Fully depreciated tooling is eliminated from the accounting records annually.
Research and Development Expenses: Polaris records research and development expenses in the period in which they are incurred as a component of operating expenses. In the years ended Decem- ber 31, 2011, 2010, and 2009, Polaris incurred $105,631,000, $84,940,000, and $62,999,000, respectively.
Advertising Expenses: Polaris 'records advertising expenses as a component of selling and marketing expenses in the period in which they are incurred. In the years ended December 31, 2011, 2010, and 2009, Polaris incurred $48,877,000, $40,833,000 and $37,433,000, respectively.
Shipping and Handling Costs: Polaris records shipping and han- dling costs as a component of c6§'t.of sales at the time the product is shipped.
Product warranties: Polaris provides a limited warranty for its ORVs for a period of six months and for a period of one year for its snowmobiles and motorcycles and a two year period for SEVs. Polaris provides longer warranties in certain geographical markets as determined by local regulations and market conditions and provide longer warranties related to certain promotional ,...,.,..,.,,m,~:
Polaris' standard warranties require the Company or its dealers to repair or replace defective products during such warranty periods at no cost to the consumer. The warranty reserve is established at the time of sale to the dealer or distributor based on management's best estimate using historical rates and trends. Adjustments to the warranty reserve are made from time to time as actual claims be- come known in order to properly estimate the amounts necessary to
For the Year Ended December 31
settle future and existing claims on products sold as of the balance sheet date. Factors that could have an impact on the warranty accrual in any given year include the following: improved manufacturing quality, shifts in product mix, changes in warranty coverage periods, snowfall and its impact on snowmobile usage, product recalls and any significant changes in sales volume. The activity in the warranty reserve during the years presented is as follows (in thousands):
2011 2010
Balance at beginning of year ..................... . $ 32,651 2,727
46,217
~) $ 44,355
$ 25,520
2009
$ 28,631 Additions to warranty reserve through acquisitions ... . Additions charged to expense .................... . 43,721
(36,590)
$ :2,651
40,977 (44,088)
$ 25,520 Warranty claims paid ........................... . Balance at end of year .......................... .
Sales promotions and incentives: Polaris provides for estimated sales promotion and incentive expenses, which are recognized as a reduction to sales, at the time of sale to the dealer or dis- tributor. Polaris recorded accrued liabilities of $81,228,000 and $75,494,000 related to various sales promotions and incentive pro- grams as of December 31, 2011 and 2010, respectively.
Dealer holdback programs: Dealer holdback represents a portion of the invoiced sales price that is expected to be subsequently re- turned to the dealer or distributor as a sales incentive upon the ulti- mate retail sale of the product. Polaris recorded accrued liabilities of $76,512,000 and $79,688,000, for.tiealer holdback programs in the consolidated balance sheets as of December 31, 2011 and 20 l 0, respectively.
Foreign currency translation: The functional currency for each of the Polaris foreign subsidiaries is their respective local currencies. The assets and liabilities in all Polaris foreign entities are trans- lated at the foreign exchange rate in effect at the balance sheet date. Translation gains and losses are reflected as a component of Accumulated other comprehensive income in the sharehold- ers' equity section of the accompanying consolidated balance sheets. Revenues and expenses in all of Polaris' foreign entities are translated at the average foreign exchange rate in effect for each month of the quarter. Transaction gains and losses includ- ing intercompany transactions denominated in a currency other
than the functional currency of the entity involved are included in "Other income (expense), net" on our Consolidated statements of income. The net Accumulated other comprehensive income related to translation gains and losses was a net gain of $9,545,000 and $6,991 ,000 at December 31, 2011 and 20 I 0, respectively.
Revenue recognition: Revenues are recognized at the time of ship- ment to the dealer or distributor or other customers. Product re- turns, whether in the normal course of business or resulting from repossession under its customer financing program, have not been material. Polaris sponsors certain sales incentive programs and ac- crues liabilities for estimated sales promotion expenses and esti- mated holdback amounts that are recognized as reductions to sales when products are sold to the dealer or distributor customer.
Comprehensive income: Components of comprehensive income include net income, foreign currency translation adjustments, un- realized gains or losses on derivative instruments, and unrealized gains or losses on securities held for sale, net of tax. The Company has chosen to disclose comprehensive income in the accompany- ing consolidated statements of shareholders' equity and compre- hensive income.
Note 3. Financing
The following summarizes activity under Polaris' credit arrange- ments (dollars in thousands):
2011 2009
Total borrowings at December 31, ............. . $100,000 $133,800 $200,000
2010
$200,000 $200,000 $200,000
$200,000 $2fi8,100 $345,000
Average outstanding borrowings during year .... . Maximum outstanding borrowings during year ... . Interest rate at December 31 ................. . 4.40% 0.65% 0.79%
The carrying amounts of the Company's long-term debt approxi- mates its fair vale as December 31, 2011 and 20 I 0.
Note 4. Goodwill and Other Intangible Assets
Goodwill and other intangible assets: ASC Topic 350 prohibits the amortization of goodwill and intangible assets with indefinite useful lives. Topic 350 requires that these assets be reviewed for impairment at least annually. An impairment charge for goodwill is recognized only when the estimated fair value of a reporting unit, including goodwill, is less than its carrying amount. The results of the analyses indicated that no goodwill or intangible impairment existed. In ac- cordance with Topic 350. the Company will continue to complete an
impairment analysis on an annual basis. Goodwill and other intangible assets, net, consist of $44,668,000 and $28,354,000 of goodwill and $33,050,000 and $2,959,000 of intangible assets, 9~t of accumulated amortization, for the periods ended December 31, ':!6 I 1 and Decem- ber 31, 2010, respectively. Amortization expense for intangible assets during 2011 and 2010 was $1,018,000 and $188,000, respectively.
Note 9. Commitments and Contingencies
Product liability: Polaris is subject to product liability claims in the normal course of business. Polaris is currently self-insured for all product liability claims. The estimated costs resulting from any losses are charged to operating expenses when it is probable a loss
has been incurred and the amount of the loss is reasonably determin- able. The Company utilizes historical trends and actuarial analysis tools, along with an analysis of current claims, to assist in determin- ing the appropriate loss reserve levels. At December 31, 2011, the Company had an accrual of $16,861,000 for the probable payment of pending claims related to product liability litigation associated with Polaris products. This accrual is included as a component of Other Accrued expenses in the accompanying consolidated balance sheets.
Leases: Polaris leases buildings and equipment under non-can- celable operating leases. Total rent expense under all operating lease agreements was $9,184,000, $5,553,000 and $4,999,000 for 2011, 2010 and 2009, respectively. Future minimum annual lease payments under capital and operating leases with non-cancelable terms in excess of one year as of December 31, 2011, including payments for the Monterrey, Mexico facility operating lease were as follows (in thousands):
Lease Obligations
2012 .............................. . 2013 .............................. . 2014 .............................. . 2015 .............................. . 2016 ................•.............. Thereafter .......................... . Total future minimum lease obligation ... .
Capital Leases
$2,653 2,190 1,444
701 222
~ $7,253
Operating Leases
$7,184 5,845 4,857 3,899 3,460
11,644 $36,889
Note 12. Segment Reporting
Polaris has reviewed ASC Topic 280 and determined that the Com- pany meets the aggregation criteria outlined since the Company's segments have similar (l) economic characteristics, (2) product
and services, (3) production processes, (4) customers, (5) distri- bution channels, and (6) regulatory environments. Therefore, the Company reports as a single reportable business segment. The fol- lowing data relates to Polaris' foreign operations:
For the Year Ended December 31 (In thousands) 2011 2010 2009
Canadian subsidiary: Sales ............................ ·· ... ······ $368,487 $279,309 $239,240 Identifiable assets ............................. 18,008 42,936 35,462
Other foreign countries: Sales ....................................... $424,363 $305,864 $252,419 Identifiable assets ............................. 252,519 145,528 97,771
POLARIS INDUSTRIES INC. SCHEDULE II-VALUATION AND QUALIFYING ACCOUNTS
Additions
(In thousands) Balance at Charged to
Beginning of Costs and Allowance for Doubtful Accounts Period Expenses
2009: Deducted from asset accounts--Allowance for doubtful accounts receivable ............. $6,098 $5,741
2010: Deducted from asset accounts--Allowance for doubtful accounts receivable ............. $9,593 $1,599
2011: Deducted from asset accounts-Allowance for doubtful accounts receivable ............. $6,369 $ 25
Inventory Reserve
2009: Deducted from asset accounts--Allowance for obsolete inventory ..................... $17,216 $6,400
= 2010: Deducted from asset accounts-Allowance
for obsolete inventory ..................... $15,593 $5,840
2011: Deducted from asset accounts--Allowance for obsolete inventory ..................... $16,210 $4,611
1 Uncollectible accounts receivable wiitten off, net of recoveries.
2 Inventory disposals, net of recoveries
Additions Through Other Changes
Acquisition Add (Deduct)
$(2,246)1 = $(4,823)1
$532 $(2,453)1
$(8,023)2
$(~J~23)2
$125 $(5,603)2
Balance at End of Period
$9,593
$6,369
$4,473
$15,593
$16,210
$15,943
POLARIS INDUSTRIES INC.
Selected Financial Data For the Years Ended December 31
(Dollars in millions, except per-share data) 2011 2010 2009 2008 2007 2006
Statement of Operations Data Sales Data:
Total sales ...................... $2,656.9 $1,991.1 $1,565.9 $1,948.3 $1,780.0 $1,656.5 Percent change from prior
year ..................... 33% 27% -20% 9% 7% -11% Sales mix by product:
Off-Road Vehicles ........... 69% 69% 65% 67% 67% 67% Snowmobiles ••• 0 •••• 0. 0 0 ••• 11% 10% 12% 10% 10% 10% On-Road Vehicles 0 0 •• 0 ••• 0 •• 5% 4% 3% 5% 6% 7% Parts, Garments and
Accessories ............... 15% 17% 20% 18% 17% 16%
Gross Profit Data: Total gross profit 0 •••• 0 •••• 0. 0 0. 0 $ 740.6 $ 530.2 $ 393.2 $ 445.7 $ 393.0 $ 359.4
Percent of sales .............. 27.9% 26.6% 25.1% 22.9% 22.1% 21.7%
Operating Expense Data: Total operating expenses ••••••• 0 0. $ 414.7 $ 326.3 $ 245.3 $ 284.1 $ '262.3 $ 238.4
Percent of sales .............. 15.6% 16.4% 15.7% 14.6% 14.7% 14.4%
Operating Income Data: Total operating income •••• 0 0. 0. 0. $ 349.9 $ 220.7 $ 165.0 $ 182.8 $ 176.0 $ 168.1
Percent of ~ales .............. 13.2% 11.1% 10.5% 9.4% 9.9% 10.1%
Net Income Data: Net income from continuing
operations .................... $ 227.6 $ 147.1 $ 101.0 $ 117.4 $ 112.6 $ 112.8 Percent of sales . . . . . . . . . . . . ...... 8.6% 7.4% 6.5% 6.0% 6.3% 6.8% Diluted net income per share from
continuing operations ........... $ 3.20 $ 2.14 $ 1.53 $ 1.75 $ 1.55 $ 1.36 Net income ..................... $ 227.6 $ 147.1 $ 101.0 $ 117.4 $ 111.7 $ 107.0 Diluted net income per share ....... $ 3.20 $ 2.14 $ 1.53 $ 1.75 $ 1.54 $ 1.29
Cash Flow Data: Cash flow provided by continuing
operations ........................ $ 302.5 $ 297.9 $ 193.2 $ 176.2 $ 213.2 $ 152.8 Purchase of property and equipment for
continuing operations ............... 84.5 55.7 43.9 76.6 63.7 52.6 Repurchase and retirement of common
stock ............................ 132.4 27.5 4.6 107.2 103.1 307.6 Cash dividends to shareholders ......... 61.6 53.0 50.2 49.6 47.7 50.2 Cash dividends per share .............. $ 0.90 $ 0.80 $ 0.78 $ 0.76 $ 0.68 $ 0.62
Balance Sheet Data (at end of year): Cash and cash equivalents ••• 0 0 ••• 0 •••• $ 325.3 $ 393.9 $ 140.2 $ 27.2 $ 63.3 $ 19.6 Current assets ....................... 878.7 808.1 491.5 443.6 447.6 393.0 Total assets ......................... 1,228.0 1,061.6 763.7 751.1 769.9 778.8 Current liabilities •••••• 0 •• 0 •• 0 ••••••• 615.5 584.2 343.1 404.8"<. 388.2 361.4 Long-term debt ...................... 104.6 100.0 200.0 200.0 200.0 250.0 Shareholders' equity .................. 500.1 371.0 204.5 137.0 173.0 167.4
