Income Taxes (Tables)

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Income Before Income Taxes

Polaris’ income from continuing operations before income taxes was generated from its United States and foreign operations as follows (in thousands):

	For the Years Ended December 31,
	2015		2014		2013
United States	$	640,604	$	666,323	$	535,265
Foreign	45,133		32,994		39,164
Income from continuing operations before income taxes	$	685,737	$	699,317	$	574,429

Components of Provision for Income Taxes

Components of Polaris’ provision for income taxes for continuing operations are as follows (in thousands):

	For the Years Ended December 31,
	2015			2014			2013
Current:
Federal	$	211,017		$	255,299		$	167,690
State	16,609			20,438			12,942
Foreign	20,733			21,584			15,457
Deferred	(17,983		)	(52,033		)	(2,729		)
Total provision for income taxes for continuing operations	$	230,376		$	245,288		$	193,360

Reconciliation of Federal Statutory Income Tax Rate to Effective Tax Rate

Reconciliation of the Federal statutory income tax rate to the effective tax rate is as follows:

	For the Years Ended December 31,
	2015		2014		2013
Federal statutory rate	35.0	%	35.0	%	35.0	%
State income taxes, net of federal benefit	1.5		1.5		1.5
Domestic manufacturing deduction	(0.8	)	(1.1	)	(1.0	)
Research and development tax credit	(3.1	)	(1.1	)	(2.2	)
Valuation allowance for foreign subsidiaries net operating losses	0.2		—		0.3
Other permanent differences	0.8		0.8		0.1
Effective income tax rate for continuing operations	33.6	%	35.1	%	33.7	%

Net Deferred Income Taxes

The net deferred income taxes consist of the following (in thousands):

	December 31,
	2015			2014
Current deferred income taxes:
Inventories	—			$	9,034
Accrued expenses	—			104,279
Derivative instruments	—			864
Total current	—			114,177
Noncurrent deferred income taxes:
Inventories	$	10,047		—
Accrued expenses	107,767			—
Derivative instruments	(1,112		)	—
Cost in excess of net assets of business acquired	(7,956		)	(13,111		)
Property and equipment	(28,853		)	(28,921		)
Compensation payable in common stock	67,222			58,446
Net operating loss carryforwards and impairments	12,374			12,693
Valuation allowance	(6,684		)	(6,097		)
Total noncurrent	152,805			23,010
Total net deferred income tax asset	$	152,805		$	137,187

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in thousands):

	For the Years Ended December 31,
	2015			2014
Balance at January 1,	$	9,836		$	13,199
Gross increases for tax positions of prior years	9,683			55
Gross increases for tax positions of current year	4,961			1,456
Decreases due to settlements and other prior year tax positions	(178		)	(2,346		)
Decreases for lapse of statute of limitations	(1,364		)	(1,586		)
Currency translation effect on foreign balances	(429		)	(942		)
Balance at December 31,	22,509			9,836
Reserves related to potential interest at December 31,	907			732
Unrecognized tax benefits at December 31,	$	23,416		$	10,568