0001628280-19-008890.txt : 20190723 0001628280-19-008890.hdr.sgml : 20190723 20190723160754 ACCESSION NUMBER: 0001628280-19-008890 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 86 CONFORMED PERIOD OF REPORT: 20190630 FILED AS OF DATE: 20190723 DATE AS OF CHANGE: 20190723 FILER: COMPANY DATA: COMPANY CONFORMED NAME: POLARIS INDUSTRIES INC/MN CENTRAL INDEX KEY: 0000931015 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS TRANSPORTATION EQUIPMENT [3790] IRS NUMBER: 411790959 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11411 FILM NUMBER: 19967910 BUSINESS ADDRESS: STREET 1: 2100 HIGHWAY 55 CITY: MEDINA STATE: MN ZIP: 55340 BUSINESS PHONE: (763) 542-0500 MAIL ADDRESS: STREET 1: 2100 HIGHWAY 55 STREET 2: NONE CITY: MEDINA STATE: MN ZIP: 55340 10-Q 1 pii-06302019x10xq.htm 10-Q Document
false--12-31Q220190000931015POLARIS INDUSTRIES INC/MNP1YP10YP6M0.010.0116000000016000000060890000611190006089000061119000P20YP7YP5YP5Y0.010.0120000000200000000000 0000931015 2019-01-01 2019-06-30 0000931015 2019-07-16 0000931015 exch:XNYS 2019-01-01 2019-06-30 0000931015 2019-06-30 0000931015 2018-12-31 0000931015 2019-04-01 2019-06-30 0000931015 2018-04-01 2018-06-30 0000931015 2018-01-01 2018-06-30 0000931015 us-gaap:FinancialServiceMember 2019-04-01 2019-06-30 0000931015 us-gaap:FinancialServiceMember 2018-01-01 2018-06-30 0000931015 us-gaap:FinancialServiceMember 2018-04-01 2018-06-30 0000931015 us-gaap:FinancialServiceMember 2019-01-01 2019-06-30 0000931015 us-gaap:RetainedEarningsMember 2019-04-01 2019-06-30 0000931015 2019-01-01 2019-03-31 0000931015 us-gaap:AdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0000931015 us-gaap:CommonStockMember 2019-03-31 0000931015 us-gaap:AdditionalPaidInCapitalMember 2019-04-01 2019-06-30 0000931015 us-gaap:CommonStockMember 2019-06-30 0000931015 us-gaap:AdditionalPaidInCapitalMember 2019-06-30 0000931015 2019-03-31 0000931015 us-gaap:CommonStockMember 2019-01-01 2019-03-31 0000931015 us-gaap:NoncontrollingInterestMember 2019-04-01 2019-06-30 0000931015 us-gaap:NoncontrollingInterestMember 2018-12-31 0000931015 us-gaap:RetainedEarningsMember 2019-06-30 0000931015 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0000931015 us-gaap:CommonStockMember 2018-12-31 0000931015 us-gaap:AdditionalPaidInCapitalMember 2018-12-31 0000931015 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-03-31 0000931015 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-12-31 0000931015 us-gaap:CommonStockMember 2019-04-01 2019-06-30 0000931015 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-04-01 2019-06-30 0000931015 us-gaap:NoncontrollingInterestMember 2019-06-30 0000931015 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-03-31 0000931015 us-gaap:RetainedEarningsMember 2019-03-31 0000931015 us-gaap:NoncontrollingInterestMember 2019-03-31 0000931015 us-gaap:AdditionalPaidInCapitalMember 2019-03-31 0000931015 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-06-30 0000931015 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-03-31 0000931015 us-gaap:RetainedEarningsMember 2018-12-31 0000931015 2018-01-01 2018-03-31 0000931015 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-04-01 2018-06-30 0000931015 us-gaap:NoncontrollingInterestMember 2018-03-31 0000931015 us-gaap:RetainedEarningsMember 2018-04-01 2018-06-30 0000931015 us-gaap:CommonStockMember 2018-04-01 2018-06-30 0000931015 us-gaap:AdditionalPaidInCapitalMember 2017-12-31 0000931015 us-gaap:AdditionalPaidInCapitalMember 2018-01-01 2018-03-31 0000931015 us-gaap:AdditionalPaidInCapitalMember 2018-04-01 2018-06-30 0000931015 us-gaap:NoncontrollingInterestMember 2017-12-31 0000931015 us-gaap:RetainedEarningsMember 2018-01-01 2018-03-31 0000931015 us-gaap:AdditionalPaidInCapitalMember 2018-03-31 0000931015 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-06-30 0000931015 us-gaap:CommonStockMember 2018-03-31 0000931015 us-gaap:CommonStockMember 2018-06-30 0000931015 us-gaap:NoncontrollingInterestMember 2018-06-30 0000931015 us-gaap:RetainedEarningsMember 2018-06-30 0000931015 2018-06-30 0000931015 2017-12-31 0000931015 us-gaap:CommonStockMember 2018-01-01 2018-03-31 0000931015 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2017-12-31 0000931015 us-gaap:CommonStockMember 2017-12-31 0000931015 us-gaap:RetainedEarningsMember 2017-12-31 0000931015 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-01-01 2018-03-31 0000931015 us-gaap:RetainedEarningsMember 2018-03-31 0000931015 2018-03-31 0000931015 us-gaap:AdditionalPaidInCapitalMember 2018-06-30 0000931015 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2018-03-31 0000931015 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-06-30 0000931015 srt:MinimumMember us-gaap:AccountingStandardsUpdate201602Member 2019-01-01 2019-01-01 0000931015 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2018-12-31 0000931015 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2018-12-31 0000931015 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2019-06-30 0000931015 us-gaap:ForeignExchangeContractMember us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0000931015 us-gaap:InterestRateSwapMember us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0000931015 us-gaap:InterestRateSwapMember us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0000931015 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:InterestRateSwapMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0000931015 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember 2018-12-31 0000931015 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0000931015 us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0000931015 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0000931015 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember 2019-06-30 0000931015 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:ForeignExchangeContractMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-06-30 0000931015 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0000931015 us-gaap:FairValueMeasurementsRecurringMember us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember 2018-12-31 0000931015 us-gaap:ForeignExchangeContractMember us-gaap:FairValueMeasurementsRecurringMember 2018-12-31 0000931015 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0000931015 us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0000931015 us-gaap:FairValueMeasurementsRecurringMember us-gaap:SupplementalEmployeeRetirementPlanDefinedBenefitMember 2019-06-30 0000931015 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:InterestRateSwapMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-06-30 0000931015 us-gaap:ForeignExchangeContractMember us-gaap:FairValueMeasurementsRecurringMember 2019-06-30 0000931015 pii:VehiclesAndBoatsMember srt:MaximumMember pii:TransamericanAutoPartsMember 2019-01-01 2019-06-30 0000931015 pii:VehiclesAndBoatsMember srt:MinimumMember pii:TransamericanAutoPartsMember 2019-01-01 2019-06-30 0000931015 us-gaap:EMEAMember pii:AftermarketSegmentMember 2019-04-01 2019-06-30 0000931015 pii:APLAMember pii:MotorcyclesSegmentMember 2019-04-01 2019-06-30 0000931015 pii:APLAMember 2019-04-01 2019-06-30 0000931015 pii:MotorcyclesSegmentMember 2019-04-01 2019-06-30 0000931015 pii:PGAMember pii:GlobalAdjacentMarketsSegmentMember 2019-04-01 2019-06-30 0000931015 pii:WholegoodsMember pii:MotorcyclesSegmentMember 2019-04-01 2019-06-30 0000931015 pii:WholegoodsMember 2018-04-01 2018-06-30 0000931015 country:US pii:GlobalAdjacentMarketsSegmentMember 2019-04-01 2019-06-30 0000931015 pii:BoatsSegmentMember 2018-04-01 2018-06-30 0000931015 pii:PGAMember 2019-04-01 2019-06-30 0000931015 pii:APLAMember pii:MotorcyclesSegmentMember 2018-04-01 2018-06-30 0000931015 country:CA 2019-04-01 2019-06-30 0000931015 pii:GlobalAdjacentMarketsSegmentMember 2018-04-01 2018-06-30 0000931015 country:US pii:BoatsSegmentMember 2018-04-01 2018-06-30 0000931015 country:CA pii:AftermarketSegmentMember 2019-04-01 2019-06-30 0000931015 pii:PGAMember pii:OffRoadVehiclesSnowmobilesSegmentMember 2018-04-01 2018-06-30 0000931015 country:CA pii:MotorcyclesSegmentMember 2019-04-01 2019-06-30 0000931015 country:CA pii:BoatsSegmentMember 2018-04-01 2018-06-30 0000931015 pii:PGAMember pii:AftermarketSegmentMember 2019-04-01 2019-06-30 0000931015 pii:PGAMember pii:AftermarketSegmentMember 2018-04-01 2018-06-30 0000931015 country:US 2018-04-01 2018-06-30 0000931015 us-gaap:EMEAMember pii:OffRoadVehiclesSnowmobilesSegmentMember 2018-04-01 2018-06-30 0000931015 pii:WholegoodsMember pii:BoatsSegmentMember 2018-04-01 2018-06-30 0000931015 pii:AftermarketSegmentMember 2019-04-01 2019-06-30 0000931015 us-gaap:EMEAMember pii:GlobalAdjacentMarketsSegmentMember 2018-04-01 2018-06-30 0000931015 country:US pii:MotorcyclesSegmentMember 2019-04-01 2019-06-30 0000931015 country:CA pii:OffRoadVehiclesSnowmobilesSegmentMember 2019-04-01 2019-06-30 0000931015 pii:WholegoodsMember pii:OffRoadVehiclesSnowmobilesSegmentMember 2018-04-01 2018-06-30 0000931015 pii:WholegoodsMember pii:GlobalAdjacentMarketsSegmentMember 2019-04-01 2019-06-30 0000931015 pii:PGAMember pii:MotorcyclesSegmentMember 2018-04-01 2018-06-30 0000931015 country:US 2019-04-01 2019-06-30 0000931015 pii:APLAMember pii:OffRoadVehiclesSnowmobilesSegmentMember 2018-04-01 2018-06-30 0000931015 us-gaap:EMEAMember pii:OffRoadVehiclesSnowmobilesSegmentMember 2019-04-01 2019-06-30 0000931015 pii:MotorcyclesSegmentMember 2018-04-01 2018-06-30 0000931015 pii:APLAMember pii:BoatsSegmentMember 2019-04-01 2019-06-30 0000931015 pii:APLAMember pii:AftermarketSegmentMember 2018-04-01 2018-06-30 0000931015 country:US pii:MotorcyclesSegmentMember 2018-04-01 2018-06-30 0000931015 country:US pii:GlobalAdjacentMarketsSegmentMember 2018-04-01 2018-06-30 0000931015 country:US pii:AftermarketSegmentMember 2019-04-01 2019-06-30 0000931015 country:CA pii:OffRoadVehiclesSnowmobilesSegmentMember 2018-04-01 2018-06-30 0000931015 us-gaap:EMEAMember pii:BoatsSegmentMember 2018-04-01 2018-06-30 0000931015 country:CA 2018-04-01 2018-06-30 0000931015 pii:PGAMember 2018-04-01 2018-06-30 0000931015 pii:WholegoodsMember pii:MotorcyclesSegmentMember 2018-04-01 2018-06-30 0000931015 pii:WholegoodsMember 2019-04-01 2019-06-30 0000931015 pii:PGAMember pii:GlobalAdjacentMarketsSegmentMember 2018-04-01 2018-06-30 0000931015 pii:PGAMember pii:OffRoadVehiclesSnowmobilesSegmentMember 2019-04-01 2019-06-30 0000931015 country:CA pii:MotorcyclesSegmentMember 2018-04-01 2018-06-30 0000931015 pii:AftermarketSegmentMember 2018-04-01 2018-06-30 0000931015 country:US pii:AftermarketSegmentMember 2018-04-01 2018-06-30 0000931015 pii:WholegoodsMember pii:AftermarketSegmentMember 2019-04-01 2019-06-30 0000931015 us-gaap:EMEAMember pii:GlobalAdjacentMarketsSegmentMember 2019-04-01 2019-06-30 0000931015 us-gaap:EMEAMember pii:MotorcyclesSegmentMember 2019-04-01 2019-06-30 0000931015 pii:PGAMember pii:BoatsSegmentMember 2019-04-01 2019-06-30 0000931015 us-gaap:EMEAMember 2019-04-01 2019-06-30 0000931015 us-gaap:EMEAMember 2018-04-01 2018-06-30 0000931015 pii:PGAMember pii:MotorcyclesSegmentMember 2019-04-01 2019-06-30 0000931015 pii:APLAMember pii:AftermarketSegmentMember 2019-04-01 2019-06-30 0000931015 pii:OffRoadVehiclesSnowmobilesSegmentMember 2018-04-01 2018-06-30 0000931015 country:CA pii:GlobalAdjacentMarketsSegmentMember 2019-04-01 2019-06-30 0000931015 pii:WholegoodsMember pii:GlobalAdjacentMarketsSegmentMember 2018-04-01 2018-06-30 0000931015 pii:GlobalAdjacentMarketsSegmentMember 2019-04-01 2019-06-30 0000931015 country:US pii:OffRoadVehiclesSnowmobilesSegmentMember 2019-04-01 2019-06-30 0000931015 pii:PGAMember pii:BoatsSegmentMember 2018-04-01 2018-06-30 0000931015 country:US pii:OffRoadVehiclesSnowmobilesSegmentMember 2018-04-01 2018-06-30 0000931015 pii:APLAMember pii:GlobalAdjacentMarketsSegmentMember 2019-04-01 2019-06-30 0000931015 pii:APLAMember 2018-04-01 2018-06-30 0000931015 country:US pii:BoatsSegmentMember 2019-04-01 2019-06-30 0000931015 country:CA pii:GlobalAdjacentMarketsSegmentMember 2018-04-01 2018-06-30 0000931015 pii:WholegoodsMember pii:AftermarketSegmentMember 2018-04-01 2018-06-30 0000931015 pii:BoatsSegmentMember 2019-04-01 2019-06-30 0000931015 pii:APLAMember pii:BoatsSegmentMember 2018-04-01 2018-06-30 0000931015 us-gaap:EMEAMember pii:BoatsSegmentMember 2019-04-01 2019-06-30 0000931015 pii:OffRoadVehiclesSnowmobilesSegmentMember 2019-04-01 2019-06-30 0000931015 pii:APLAMember pii:OffRoadVehiclesSnowmobilesSegmentMember 2019-04-01 2019-06-30 0000931015 country:CA pii:BoatsSegmentMember 2019-04-01 2019-06-30 0000931015 pii:WholegoodsMember pii:OffRoadVehiclesSnowmobilesSegmentMember 2019-04-01 2019-06-30 0000931015 country:CA pii:AftermarketSegmentMember 2018-04-01 2018-06-30 0000931015 us-gaap:EMEAMember pii:MotorcyclesSegmentMember 2018-04-01 2018-06-30 0000931015 pii:WholegoodsMember pii:BoatsSegmentMember 2019-04-01 2019-06-30 0000931015 pii:APLAMember pii:GlobalAdjacentMarketsSegmentMember 2018-04-01 2018-06-30 0000931015 us-gaap:EMEAMember pii:AftermarketSegmentMember 2018-04-01 2018-06-30 0000931015 pii:GlobalAdjacentMarketsSegmentMember 2019-01-01 2019-06-30 0000931015 country:US pii:BoatsSegmentMember 2018-01-01 2018-06-30 0000931015 pii:PGAMember pii:BoatsSegmentMember 2019-01-01 2019-06-30 0000931015 pii:PGAMember 2018-01-01 2018-06-30 0000931015 us-gaap:EMEAMember 2018-01-01 2018-06-30 0000931015 pii:MotorcyclesSegmentMember 2018-01-01 2018-06-30 0000931015 pii:WholegoodsMember pii:BoatsSegmentMember 2019-01-01 2019-06-30 0000931015 pii:MotorcyclesSegmentMember 2019-01-01 2019-06-30 0000931015 pii:APLAMember pii:MotorcyclesSegmentMember 2019-01-01 2019-06-30 0000931015 pii:AftermarketSegmentMember 2019-01-01 2019-06-30 0000931015 country:CA pii:BoatsSegmentMember 2018-01-01 2018-06-30 0000931015 pii:BoatsSegmentMember 2018-01-01 2018-06-30 0000931015 pii:BoatsSegmentMember 2019-01-01 2019-06-30 0000931015 us-gaap:EMEAMember pii:BoatsSegmentMember 2019-01-01 2019-06-30 0000931015 pii:WholegoodsMember pii:GlobalAdjacentMarketsSegmentMember 2018-01-01 2018-06-30 0000931015 pii:OffRoadVehiclesSnowmobilesSegmentMember 2018-01-01 2018-06-30 0000931015 us-gaap:EMEAMember pii:MotorcyclesSegmentMember 2018-01-01 2018-06-30 0000931015 pii:WholegoodsMember pii:MotorcyclesSegmentMember 2018-01-01 2018-06-30 0000931015 pii:PGAMember pii:AftermarketSegmentMember 2019-01-01 2019-06-30 0000931015 country:US pii:OffRoadVehiclesSnowmobilesSegmentMember 2018-01-01 2018-06-30 0000931015 country:CA pii:GlobalAdjacentMarketsSegmentMember 2018-01-01 2018-06-30 0000931015 country:US 2018-01-01 2018-06-30 0000931015 pii:APLAMember pii:AftermarketSegmentMember 2018-01-01 2018-06-30 0000931015 us-gaap:EMEAMember pii:AftermarketSegmentMember 2019-01-01 2019-06-30 0000931015 us-gaap:EMEAMember pii:GlobalAdjacentMarketsSegmentMember 2018-01-01 2018-06-30 0000931015 pii:OffRoadVehiclesSnowmobilesSegmentMember 2019-01-01 2019-06-30 0000931015 country:US pii:MotorcyclesSegmentMember 2019-01-01 2019-06-30 0000931015 country:US pii:AftermarketSegmentMember 2019-01-01 2019-06-30 0000931015 pii:AftermarketSegmentMember 2018-01-01 2018-06-30 0000931015 country:CA pii:MotorcyclesSegmentMember 2019-01-01 2019-06-30 0000931015 country:CA pii:OffRoadVehiclesSnowmobilesSegmentMember 2019-01-01 2019-06-30 0000931015 pii:WholegoodsMember 2018-01-01 2018-06-30 0000931015 country:CA pii:BoatsSegmentMember 2019-01-01 2019-06-30 0000931015 pii:GlobalAdjacentMarketsSegmentMember 2018-01-01 2018-06-30 0000931015 country:CA pii:MotorcyclesSegmentMember 2018-01-01 2018-06-30 0000931015 us-gaap:EMEAMember pii:GlobalAdjacentMarketsSegmentMember 2019-01-01 2019-06-30 0000931015 pii:PGAMember 2019-01-01 2019-06-30 0000931015 pii:APLAMember 2019-01-01 2019-06-30 0000931015 pii:APLAMember pii:BoatsSegmentMember 2018-01-01 2018-06-30 0000931015 pii:PGAMember pii:BoatsSegmentMember 2018-01-01 2018-06-30 0000931015 country:US pii:AftermarketSegmentMember 2018-01-01 2018-06-30 0000931015 pii:APLAMember pii:GlobalAdjacentMarketsSegmentMember 2019-01-01 2019-06-30 0000931015 pii:PGAMember pii:OffRoadVehiclesSnowmobilesSegmentMember 2019-01-01 2019-06-30 0000931015 pii:PGAMember pii:MotorcyclesSegmentMember 2018-01-01 2018-06-30 0000931015 pii:APLAMember pii:OffRoadVehiclesSnowmobilesSegmentMember 2018-01-01 2018-06-30 0000931015 pii:WholegoodsMember 2019-01-01 2019-06-30 0000931015 pii:WholegoodsMember pii:OffRoadVehiclesSnowmobilesSegmentMember 2019-01-01 2019-06-30 0000931015 us-gaap:EMEAMember pii:AftermarketSegmentMember 2018-01-01 2018-06-30 0000931015 us-gaap:EMEAMember pii:MotorcyclesSegmentMember 2019-01-01 2019-06-30 0000931015 pii:PGAMember pii:AftermarketSegmentMember 2018-01-01 2018-06-30 0000931015 country:CA pii:GlobalAdjacentMarketsSegmentMember 2019-01-01 2019-06-30 0000931015 pii:APLAMember pii:BoatsSegmentMember 2019-01-01 2019-06-30 0000931015 country:US pii:MotorcyclesSegmentMember 2018-01-01 2018-06-30 0000931015 pii:APLAMember pii:OffRoadVehiclesSnowmobilesSegmentMember 2019-01-01 2019-06-30 0000931015 country:CA 2018-01-01 2018-06-30 0000931015 pii:APLAMember pii:AftermarketSegmentMember 2019-01-01 2019-06-30 0000931015 us-gaap:EMEAMember pii:BoatsSegmentMember 2018-01-01 2018-06-30 0000931015 country:CA pii:AftermarketSegmentMember 2018-01-01 2018-06-30 0000931015 pii:WholegoodsMember pii:AftermarketSegmentMember 2019-01-01 2019-06-30 0000931015 pii:WholegoodsMember pii:MotorcyclesSegmentMember 2019-01-01 2019-06-30 0000931015 country:US pii:BoatsSegmentMember 2019-01-01 2019-06-30 0000931015 us-gaap:EMEAMember pii:OffRoadVehiclesSnowmobilesSegmentMember 2019-01-01 2019-06-30 0000931015 pii:WholegoodsMember pii:OffRoadVehiclesSnowmobilesSegmentMember 2018-01-01 2018-06-30 0000931015 pii:WholegoodsMember pii:GlobalAdjacentMarketsSegmentMember 2019-01-01 2019-06-30 0000931015 pii:APLAMember 2018-01-01 2018-06-30 0000931015 country:US pii:GlobalAdjacentMarketsSegmentMember 2018-01-01 2018-06-30 0000931015 pii:PGAMember pii:OffRoadVehiclesSnowmobilesSegmentMember 2018-01-01 2018-06-30 0000931015 pii:WholegoodsMember pii:BoatsSegmentMember 2018-01-01 2018-06-30 0000931015 country:CA pii:AftermarketSegmentMember 2019-01-01 2019-06-30 0000931015 pii:PGAMember pii:MotorcyclesSegmentMember 2019-01-01 2019-06-30 0000931015 pii:PGAMember pii:GlobalAdjacentMarketsSegmentMember 2018-01-01 2018-06-30 0000931015 country:CA 2019-01-01 2019-06-30 0000931015 country:US 2019-01-01 2019-06-30 0000931015 pii:APLAMember pii:MotorcyclesSegmentMember 2018-01-01 2018-06-30 0000931015 country:US pii:OffRoadVehiclesSnowmobilesSegmentMember 2019-01-01 2019-06-30 0000931015 pii:WholegoodsMember pii:AftermarketSegmentMember 2018-01-01 2018-06-30 0000931015 us-gaap:EMEAMember pii:OffRoadVehiclesSnowmobilesSegmentMember 2018-01-01 2018-06-30 0000931015 country:US pii:GlobalAdjacentMarketsSegmentMember 2019-01-01 2019-06-30 0000931015 pii:APLAMember pii:GlobalAdjacentMarketsSegmentMember 2018-01-01 2018-06-30 0000931015 pii:PGAMember pii:GlobalAdjacentMarketsSegmentMember 2019-01-01 2019-06-30 0000931015 us-gaap:EMEAMember 2019-01-01 2019-06-30 0000931015 country:CA pii:OffRoadVehiclesSnowmobilesSegmentMember 2018-01-01 2018-06-30 0000931015 pii:BoatHoldingsLLCMember 2019-01-01 2019-06-30 0000931015 pii:BoatHoldingsLLCMember 2018-01-01 2018-06-30 0000931015 pii:BoatHoldingsLLCMember 2018-04-01 2018-06-30 0000931015 pii:BoatHoldingsLLCMember 2019-04-01 2019-06-30 0000931015 pii:BoatHoldingsLLCMember 2018-07-02 2018-07-02 0000931015 srt:MinimumMember pii:BoatHoldingsLLCMember us-gaap:CustomerRelationshipsMember 2018-07-02 2018-07-02 0000931015 srt:MaximumMember pii:BoatHoldingsLLCMember us-gaap:CustomerRelationshipsMember 2018-07-02 2018-07-02 0000931015 pii:BoatHoldingsLLCMember 2018-07-02 0000931015 pii:SeniorUnsecuredNotesFourPointTwoThreePercentDueJulyTwentyTwentyEightMember us-gaap:SeniorNotesMember 2018-07-02 0000931015 pii:BoatHoldingsLLCMember us-gaap:NoncompeteAgreementsMember 2018-07-02 0000931015 pii:BoatHoldingsLLCMember us-gaap:CustomerRelationshipsMember 2018-07-02 0000931015 pii:BoatHoldingsLLCMember us-gaap:TrademarksAndTradeNamesMember 2018-07-02 0000931015 pii:SeniorUnsecuredNotesThreePointOneThreePercentDueDecemberTwentyTwentyMember us-gaap:SeniorNotesMember 2013-12-01 2013-12-31 0000931015 pii:SeniorUnsecuredNotesFourPointSixZeroPercentDueMayTwentyTwentyOneMember us-gaap:SeniorNotesMember 2010-12-01 2010-12-31 0000931015 us-gaap:MortgagesMember us-gaap:NotesPayableToBanksMember 2019-06-30 0000931015 us-gaap:LongTermDebtMember 2019-06-30 0000931015 pii:BoatHoldingsLLCMember us-gaap:NotesPayableOtherPayablesMember 2019-06-30 0000931015 pii:SeniorUnsecuredNotesFourPointTwoThreePercentDueJulyTwentyTwentyEightMember us-gaap:SeniorNotesMember 2018-07-01 2018-07-31 0000931015 pii:SeniorUnsecuredNotesThreePointEightOnePercentDueMayTwentyEighteenMember us-gaap:SeniorNotesMember 2010-12-01 2010-12-31 0000931015 us-gaap:MortgagesMember us-gaap:NotesPayableToBanksMember 2015-09-30 0000931015 us-gaap:LongTermDebtMember 2018-07-31 0000931015 us-gaap:RevolvingCreditFacilityMember 2018-07-31 0000931015 us-gaap:LongTermDebtMember 2018-12-31 0000931015 pii:SeniorUnsecuredNotesFourPointSixZeroPercentDueMayTwentyTwentyOneMember us-gaap:SeniorNotesMember 2019-06-30 0000931015 pii:SeniorUnsecuredNotesThreePointOneThreePercentDueDecemberTwentyTwentyMember us-gaap:SeniorNotesMember 2018-12-31 0000931015 us-gaap:RevolvingCreditFacilityMember 2019-06-30 0000931015 pii:SeniorUnsecuredNotesFourPointTwoThreePercentDueJulyTwentyTwentyEightMember us-gaap:SeniorNotesMember 2019-06-30 0000931015 pii:SeniorUnsecuredNotesFourPointTwoThreePercentDueJulyTwentyTwentyEightMember us-gaap:SeniorNotesMember 2018-12-31 0000931015 us-gaap:NotesPayableToBanksMember 2019-06-30 0000931015 pii:SeniorUnsecuredNotesFourPointSixZeroPercentDueMayTwentyTwentyOneMember us-gaap:SeniorNotesMember 2018-12-31 0000931015 pii:SeniorUnsecuredNotesThreePointOneThreePercentDueDecemberTwentyTwentyMember us-gaap:SeniorNotesMember 2019-06-30 0000931015 us-gaap:NotesPayableToBanksMember 2018-12-31 0000931015 us-gaap:RevolvingCreditFacilityMember 2019-06-30 0000931015 us-gaap:RevolvingCreditFacilityMember 2018-12-31 0000931015 us-gaap:DevelopedTechnologyRightsMember 2019-06-30 0000931015 us-gaap:CustomerRelationshipsMember 2019-06-30 0000931015 us-gaap:NoncompeteAgreementsMember 2018-12-31 0000931015 us-gaap:CustomerRelationshipsMember 2018-12-31 0000931015 us-gaap:TradeNamesMember 2019-06-30 0000931015 us-gaap:TradeNamesMember 2018-12-31 0000931015 us-gaap:NoncompeteAgreementsMember 2019-01-01 2019-06-30 0000931015 us-gaap:DevelopedTechnologyRightsMember 2018-12-31 0000931015 us-gaap:NoncompeteAgreementsMember 2019-06-30 0000931015 srt:MaximumMember us-gaap:DevelopedTechnologyRightsMember 2019-01-01 2019-06-30 0000931015 srt:MinimumMember us-gaap:CustomerRelationshipsMember 2019-01-01 2019-06-30 0000931015 srt:MaximumMember us-gaap:CustomerRelationshipsMember 2019-01-01 2019-06-30 0000931015 srt:MinimumMember us-gaap:DevelopedTechnologyRightsMember 2019-01-01 2019-06-30 0000931015 us-gaap:ForeignExchangeContractMember us-gaap:CashFlowHedgingMember 2019-01-01 2019-06-30 0000931015 us-gaap:ForeignCurrencyGainLossMember 2019-06-30 0000931015 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2018-12-31 0000931015 us-gaap:ForeignCurrencyGainLossMember 2018-12-31 0000931015 us-gaap:ForeignExchangeContractMember us-gaap:CashFlowHedgingMember 2019-06-30 0000931015 us-gaap:AccumulatedOtherComprehensiveIncomeMember 2019-01-01 2019-06-30 0000931015 us-gaap:ForeignExchangeContractMember us-gaap:CashFlowHedgingMember 2018-12-31 0000931015 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-06-30 0000931015 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentIncludingPortionAttributableToNoncontrollingInterestMember 2019-06-30 0000931015 us-gaap:InterestRateContractMember us-gaap:InterestExpenseMember 2019-01-01 2019-06-30 0000931015 us-gaap:ForeignExchangeContractMember pii:OtherIncomeAndExpenseMember 2018-04-01 2018-06-30 0000931015 us-gaap:CostOfSalesMember us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-04-01 2019-06-30 0000931015 us-gaap:DefinedBenefitPlanDerivativeMember us-gaap:OperatingExpenseMember 2019-01-01 2019-06-30 0000931015 us-gaap:InterestRateContractMember us-gaap:InterestExpenseMember 2019-04-01 2019-06-30 0000931015 us-gaap:ForeignExchangeContractMember pii:OtherIncomeAndExpenseMember 2018-01-01 2018-06-30 0000931015 us-gaap:ForeignExchangeContractMember us-gaap:CostOfSalesMember 2019-04-01 2019-06-30 0000931015 us-gaap:ForeignExchangeContractMember us-gaap:CostOfSalesMember 2018-04-01 2018-06-30 0000931015 us-gaap:DefinedBenefitPlanDerivativeMember us-gaap:OperatingExpenseMember 2018-01-01 2018-06-30 0000931015 us-gaap:ForeignExchangeContractMember us-gaap:CostOfSalesMember 2019-01-01 2019-06-30 0000931015 us-gaap:InterestRateContractMember us-gaap:InterestExpenseMember 2018-04-01 2018-06-30 0000931015 us-gaap:CostOfSalesMember us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2018-04-01 2018-06-30 0000931015 us-gaap:InterestRateContractMember us-gaap:InterestExpenseMember 2018-01-01 2018-06-30 0000931015 us-gaap:ForeignExchangeContractMember pii:OtherIncomeAndExpenseMember 2019-01-01 2019-06-30 0000931015 us-gaap:ForeignExchangeContractMember us-gaap:CostOfSalesMember 2018-01-01 2018-06-30 0000931015 us-gaap:ForeignExchangeContractMember pii:OtherIncomeAndExpenseMember 2019-04-01 2019-06-30 0000931015 pii:PolarisAcceptanceMember 2019-06-30 0000931015 srt:MaximumMember 2019-06-30 0000931015 pii:SecuritizationFacilityMember 2019-06-30 0000931015 pii:EicherMotorsLimitedMember 2018-01-01 2018-06-30 0000931015 pii:EicherMotorsLimitedMember 2018-04-01 2018-06-30 0000931015 srt:MaximumMember 2019-01-01 2019-06-30 0000931015 srt:MinimumMember 2019-01-01 2019-06-30 0000931015 pii:CurrencyCanadianDollarMember us-gaap:ForeignExchangeContractMember us-gaap:CashFlowHedgingMember 2018-12-31 0000931015 pii:CurrencyCanadianDollarMember us-gaap:ForeignExchangeContractMember us-gaap:CashFlowHedgingMember 2019-06-30 0000931015 pii:CurrencyAustralianDollarMember us-gaap:ForeignExchangeContractMember us-gaap:CashFlowHedgingMember 2019-06-30 0000931015 pii:CurrencyMexicanPesoMember us-gaap:ForeignExchangeContractMember us-gaap:CashFlowHedgingMember 2019-06-30 0000931015 pii:CurrencyAustralianDollarMember us-gaap:ForeignExchangeContractMember us-gaap:CashFlowHedgingMember 2018-12-31 0000931015 pii:CurrencyMexicanPesoMember us-gaap:ForeignExchangeContractMember us-gaap:CashFlowHedgingMember 2018-12-31 0000931015 us-gaap:OtherCurrentLiabilitiesMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-06-30 0000931015 us-gaap:InterestRateSwapMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-06-30 0000931015 us-gaap:ForeignExchangeContractMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-06-30 0000931015 us-gaap:DesignatedAsHedgingInstrumentMember 2019-06-30 0000931015 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-06-30 0000931015 pii:InterestRateSwapMay2018ToMay2021Member us-gaap:CashFlowHedgingMember 2019-06-30 0000931015 pii:InterestRateSwapSeptember2018ToSeptember2019Member us-gaap:CashFlowHedgingMember 2018-12-31 0000931015 pii:InterestRateSwapMay2018ToMay2021Member us-gaap:CashFlowHedgingMember 2018-12-31 0000931015 pii:InterestRateSwapSeptember2018ToSeptember2019Member us-gaap:CashFlowHedgingMember 2019-06-30 0000931015 pii:InterestRateSwapSeptember2019ToSeptember2023Member us-gaap:CashFlowHedgingMember 2018-12-31 0000931015 us-gaap:InterestRateSwapMember us-gaap:CashFlowHedgingMember 2019-06-30 0000931015 us-gaap:InterestRateSwapMember us-gaap:CashFlowHedgingMember 2018-12-31 0000931015 pii:InterestRateSwapMay2019ToMay2020MemberMember us-gaap:CashFlowHedgingMember 2018-12-31 0000931015 pii:InterestRateSwapSeptember2019ToSeptember2023Member us-gaap:CashFlowHedgingMember 2019-06-30 0000931015 pii:InterestRateSwapMay2019ToMay2020MemberMember us-gaap:CashFlowHedgingMember 2019-06-30 0000931015 us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-01-01 2019-06-30 0000931015 us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2019-04-01 2019-06-30 0000931015 us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-01-01 2018-06-30 0000931015 us-gaap:CashFlowHedgingMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-04-01 2018-06-30 0000931015 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0000931015 us-gaap:ForeignExchangeContractMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0000931015 us-gaap:PrepaidExpensesAndOtherCurrentAssetsMember us-gaap:ForeignExchangeContractMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0000931015 us-gaap:OtherCurrentLiabilitiesMember us-gaap:ForeignExchangeContractMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0000931015 us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0000931015 us-gaap:OtherCurrentLiabilitiesMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0000931015 us-gaap:InterestRateSwapMember us-gaap:DesignatedAsHedgingInstrumentMember 2018-12-31 0000931015 us-gaap:OperatingSegmentsMember pii:OffRoadVehiclesSnowmobilesSegmentMember 2018-01-01 2018-06-30 0000931015 us-gaap:OperatingSegmentsMember pii:AftermarketSegmentMember 2018-04-01 2018-06-30 0000931015 us-gaap:OperatingSegmentsMember pii:OffRoadVehiclesSnowmobilesSegmentMember 2019-04-01 2019-06-30 0000931015 us-gaap:OperatingSegmentsMember pii:OffRoadVehiclesSnowmobilesSegmentMember 2018-04-01 2018-06-30 0000931015 us-gaap:OperatingSegmentsMember pii:GlobalAdjacentMarketsSegmentMember 2018-04-01 2018-06-30 0000931015 us-gaap:OperatingSegmentsMember pii:GlobalAdjacentMarketsSegmentMember 2019-04-01 2019-06-30 0000931015 us-gaap:OperatingSegmentsMember pii:BoatsSegmentMember 2018-04-01 2018-06-30 0000931015 us-gaap:OperatingSegmentsMember pii:MotorcyclesSegmentMember 2019-04-01 2019-06-30 0000931015 us-gaap:OperatingSegmentsMember pii:BoatsSegmentMember 2019-04-01 2019-06-30 0000931015 us-gaap:OperatingSegmentsMember pii:OffRoadVehiclesSnowmobilesSegmentMember 2019-01-01 2019-06-30 0000931015 us-gaap:OperatingSegmentsMember pii:MotorcyclesSegmentMember 2018-01-01 2018-06-30 0000931015 us-gaap:CorporateNonSegmentMember 2018-01-01 2018-06-30 0000931015 us-gaap:OperatingSegmentsMember pii:GlobalAdjacentMarketsSegmentMember 2018-01-01 2018-06-30 0000931015 us-gaap:OperatingSegmentsMember pii:BoatsSegmentMember 2019-01-01 2019-06-30 0000931015 us-gaap:OperatingSegmentsMember pii:AftermarketSegmentMember 2019-01-01 2019-06-30 0000931015 us-gaap:OperatingSegmentsMember pii:AftermarketSegmentMember 2019-04-01 2019-06-30 0000931015 us-gaap:CorporateNonSegmentMember 2019-04-01 2019-06-30 0000931015 us-gaap:OperatingSegmentsMember pii:MotorcyclesSegmentMember 2019-01-01 2019-06-30 0000931015 us-gaap:OperatingSegmentsMember pii:BoatsSegmentMember 2018-01-01 2018-06-30 0000931015 us-gaap:OperatingSegmentsMember pii:GlobalAdjacentMarketsSegmentMember 2019-01-01 2019-06-30 0000931015 us-gaap:OperatingSegmentsMember pii:MotorcyclesSegmentMember 2018-04-01 2018-06-30 0000931015 us-gaap:CorporateNonSegmentMember 2018-04-01 2018-06-30 0000931015 us-gaap:OperatingSegmentsMember pii:AftermarketSegmentMember 2018-01-01 2018-06-30 0000931015 us-gaap:CorporateNonSegmentMember 2019-01-01 2019-06-30 xbrli:pure iso4217:USD iso4217:USD xbrli:shares xbrli:shares pii:segment

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
(Mark one)
 
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-11411
 
POLARIS INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
Minnesota
 
 
41-1790959
(State or other jurisdiction of
incorporation or organization)
 
 
(I.R.S. Employer
Identification No.)
 
 
 
 
 
 
2100 Highway 55,
Medina
MN
 
 
55340
(Address of principal executive offices)
 
 
(Zip Code)
 
 
 
763
542-0500
 
 
 
 
(Registrant’s telephone number, including area code)
 
 
 
 
Not applicable
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
 
 
Securities registered pursuant to Section 12(b) of the Act:
 
Title of each class
Trading Symbol(s)
Name of each exchange on which registered 
Common Stock, $.01 par value
PII
New York Stock Exchange
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer
x
Accelerated filer
Non-accelerated filer
Smaller reporting company
 
 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes      No   x
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of July 16, 2019, 61,122,877 shares of Common Stock, $.01 par value, of the registrant were outstanding. 
 

1


 
  POLARIS INDUSTRIES INC.
FORM 10-Q
For Quarterly Period Ended June 30, 2019
 
 
 
Page
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

2


Part I FINANCIAL INFORMATION
Item 1 – FINANCIAL STATEMENTS
POLARIS INDUSTRIES INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
 
June 30, 2019
 
December 31, 2018
 
(Unaudited)
 
 
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
96,081

 
$
161,164

Trade receivables, net
224,501

 
197,082

Inventories, net
1,130,264

 
969,511

Prepaid expenses and other
112,921

 
121,472

Income taxes receivable
7,037

 
36,474

Total current assets
1,570,804

 
1,485,703

Property and equipment, net
889,825

 
843,122

Investment in finance affiliate
97,303

 
92,059

Deferred tax assets
92,641

 
87,474

Goodwill and other intangible assets, net
1,508,722

 
1,517,594

Operating lease assets
108,013

 

Other long-term assets
96,904

 
98,963

Total assets
$
4,364,212

 
$
4,124,915

Liabilities and Shareholders’ Equity
 
 
 
Current liabilities:
 
 
 
Current portion of debt, finance lease obligations and notes payable
$
66,505

 
$
66,543

Accounts payable
418,850

 
346,294

Accrued expenses:
 
 
 
Compensation
140,205

 
167,857

Warranties
132,758

 
121,824

Sales promotions and incentives
182,089

 
167,621

Dealer holdback
138,726

 
125,003

Other
212,067

 
197,687

Current operating lease liabilities
35,084

 

Income taxes payable
6,094

 
4,545

Total current liabilities
1,332,378

 
1,197,374

Long-term income taxes payable
28,380

 
28,602

Finance lease obligations
15,780

 
16,140

Long-term debt
1,815,783

 
1,879,887

Deferred tax liabilities
5,357

 
6,490

Long-term operating lease liabilities
75,479

 

Other long-term liabilities
128,360

 
122,570

Total liabilities
$
3,401,517

 
$
3,251,063

Deferred compensation
$
10,607

 
$
6,837

Shareholders’ equity:
 
 
 
Preferred stock $0.01 par value per share, 20,000 shares authorized, no shares issued and outstanding

 

Common stock $0.01 par value per share, 160,000 shares authorized, 61,119 and 60,890 shares issued and outstanding, respectively
$
611

 
$
609

Additional paid-in capital
844,578

 
807,986

Retained earnings
177,540

 
121,114

Accumulated other comprehensive loss, net
(70,820
)
 
(62,973
)
Total shareholders’ equity
951,909

 
866,736

Noncontrolling interest
179

 
279

Total equity
952,088

 
867,015

Total liabilities and equity
$
4,364,212

 
$
4,124,915

The accompanying footnotes are an integral part of these consolidated statements.

3


POLARIS INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
 
Three months ended June 30,
 
Six months ended June 30,
 
2019
 
2018
 
2019
 
2018
Sales
$
1,779,315

 
$
1,502,532

 
$
3,275,005

 
$
2,800,005

Cost of sales
1,342,867

 
1,117,356

 
2,486,109

 
2,091,348

Gross profit
436,448

 
385,176

 
788,896

 
708,657

Operating expenses:
 
 
 
 
 
 
 
Selling and marketing
140,603

 
122,859

 
269,862

 
240,566

Research and development
76,379

 
68,330

 
143,499

 
133,560

General and administrative
104,090

 
92,874

 
197,028

 
171,567

Total operating expenses
321,072

 
284,063

 
610,389

 
545,693

Income from financial services
19,746

 
21,344

 
38,551

 
42,769

Operating income
135,122

 
122,457

 
217,058

 
205,733

Non-operating expense:
 
 
 
 
 
 
 
Interest expense
20,620

 
9,216

 
41,039

 
17,264

Equity in loss of other affiliates
455

 
3,954

 
1,061

 
25,465

Other income, net
(271
)
 
(3,561
)
 
(3,772
)
 
(23,536
)
Income before income taxes
114,318

 
112,848

 
178,730

 
186,540

Provision for income taxes
26,173

 
20,308

 
42,189

 
38,286

Net income
88,145

 
92,540

 
136,541

 
148,254

Net loss attributable to noncontrolling interest
118

 

 
100

 

Net income attributable to Polaris Industries Inc.
$
88,263

 
$
92,540

 
$
136,641

 
$
148,254

Net income per share attributable to Polaris Industries Inc. common shareholders:
 
 
 
 
 
 
 
Basic
$
1.44

 
$
1.46

 
$
2.23

 
$
2.34

Diluted
$
1.42

 
$
1.43

 
$
2.20

 
$
2.28

Weighted average shares outstanding:
 
 
 
 
 
 
 
Basic
61,419

 
63,172

 
61,352

 
63,238

Diluted
62,164

 
64,886

 
62,096

 
65,052


The accompanying footnotes are an integral part of these consolidated statements.

4


POLARIS INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands)
(Unaudited)
 
 
Three months ended June 30,
 
Six months ended June 30,
 
2019
 
2018
 
2019
 
2018
Net income
$
88,145

 
$
92,540

 
$
136,541

 
$
148,254

Other comprehensive income, net of tax:
 
 
 
 
 
 
 
Foreign currency translation adjustments
2,858

 
(24,881
)
 
(804
)
 
(13,903
)
Unrealized gain (loss) on derivative instruments
(4,030
)
 
580

 
(6,499
)
 
5,109

Retirement plan and other activity
62

 
45

 
(544
)
 
130

Comprehensive income
87,035

 
68,284

 
128,694

 
139,590

Comprehensive loss attributable to noncontrolling interest
118

 

 
100

 

Comprehensive income attributable to Polaris Industries Inc.
$
87,153

 
$
68,284

 
$
128,794

 
$
139,590

The accompanying footnotes are an integral part of these consolidated statements.

5


POLARIS INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF EQUITY
(In thousands)
(Unaudited)
 
 
Number
of Shares
 
Common
Stock
 
Additional
Paid-
In Capital
 
Retained
Earnings
 
Accumulated Other
Comprehensive
Income (loss)
 
Non Controlling Interest
 
Total Equity
Balance, December 31, 2018
60,890

 
$
609

 
$
807,986

 
$
121,114

 
$
(62,973
)
 
$
279

 
$
867,015

Employee stock compensation
214

 
2

 
12,089

 

 

 

 
12,091

Deferred compensation

 

 
(1,541
)
 
(346
)
 

 

 
(1,887
)
Proceeds from stock issuances under employee plans
18

 

 
3,207

 

 

 

 
3,207

Cash dividends declared

 

 

 
(37,144
)
 

 

 
(37,144
)
Repurchase and retirement of common shares
(71
)
 

 
(953
)
 
(5,157
)
 

 

 
(6,110
)
Cumulative effect of adoption of accounting standards (ASU 2018-02)

 

 

 
668

 
(668
)
 

 

Net income

 

 

 
48,378

 

 
18

 
48,396

Other comprehensive loss

 

 

 

 
(6,069
)
 

 
(6,069
)
Balance, March 31, 2019
61,051

 
611

 
820,788

 
127,513

 
(69,710
)
 
297

 
879,499

Employee stock compensation
14

 

 
22,142

 

 

 

 
22,142

Deferred compensation

 

 
(1,303
)
 
(578
)
 

 

 
(1,881
)
Proceeds from stock issuances under employee plans
59

 

 
3,006

 

 

 

 
3,006

Cash dividends declared

 

 

 
(37,286
)
 

 

 
(37,286
)
Repurchase and retirement of common shares
(5
)
 

 
(55
)
 
(372
)
 

 

 
(427
)
Net income (loss)

 

 

 
88,263

 

 
(118
)
 
88,145

Other comprehensive loss

 

 

 

 
(1,110
)
 

 
(1,110
)
Balance, June 30, 2019
61,119

 
$
611

 
$
844,578

 
$
177,540

 
$
(70,820
)
 
$
179

 
$
952,088


6


 
 
Number
of Shares
 
Common
Stock
 
Additional
Paid-
In Capital
 
Retained
Earnings
 
Accumulated Other
Comprehensive
Income (loss)
 
Non Controlling Interest
 
Total Equity
Balance, December 31, 2017
63,075

 
$
631

 
$
733,894

 
$
242,763

 
$
(45,629
)
 
$

 
$
931,659

Employee stock compensation
(5
)
 

 
12,032

 

 

 

 
12,032

Deferred compensation

 

 
(392
)
 
812

 

 

 
420

Proceeds from stock issuances under employee plans
161

 
2

 
11,903

 

 

 

 
11,905

Cash dividends declared

 

 

 
(37,796
)
 

 

 
(37,796
)
Repurchase and retirement of common shares
(133
)
 
(2
)
 
(1,549
)
 
(13,436
)
 

 

 
(14,987
)
Cumulative effect of adoption of accounting standards (ASU 2016-16)

 

 

 
(1,077
)
 

 

 
(1,077
)
Net income

 

 

 
55,714

 

 

 
55,714

Other comprehensive loss

 

 

 

 
15,592

 

 
15,592

Balance, March 31, 2018
63,098

 
631

 
755,888

 
246,980

 
(30,037
)
 

 
973,462

Employee stock compensation
12

 

 
20,969

 

 

 

 
20,969

Deferred compensation

 

 
(617
)
 
(853
)
 

 

 
(1,470
)
Proceeds from stock issuances under employee plans
533

 
5

 
31,538

 

 

 

 
31,543

Cash dividends declared

 

 

 
(37,898
)
 

 

 
(37,898
)
Repurchase and retirement of common shares
(1,429
)
 
(14
)
 
(16,630
)
 
(160,736
)
 

 

 
(177,380
)
Net income

 

 

 
92,540

 

 

 
92,540

Other comprehensive loss

 

 

 

 
(24,256
)
 

 
(24,256
)
Balance June 30, 2018
62,214

 
$
622

 
$
791,148

 
$
140,033

 
$
(54,293
)
 
$

 
$
877,510


The accompanying footnotes are an integral part of these consolidated statements.


7


POLARIS INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
Six months ended June 30,
 
2019
 
2018
Operating Activities:
 
 
 
Net income
$
136,541


$
148,254

Adjustments to reconcile net income to net cash used for operating activities:



Depreciation and amortization
111,946


98,584

Noncash compensation
34,233


33,001

Noncash income from financial services
(15,465
)

(14,626
)
Deferred income taxes
(5,903
)

(1,704
)
Impairment charges


20,249

Other, net
1,061


(8,262
)
Changes in operating assets and liabilities:



Trade receivables
(26,941
)

5,326

Inventories
(159,090
)

(146,661
)
Accounts payable
72,049


45,835

Accrued expenses
18,950


(35,693
)
Income taxes payable/receivable
30,773


19,828

Prepaid expenses and others, net
4,698


1,018

Net cash provided by operating activities
202,852


165,149

Investing Activities:



Purchase of property and equipment
(137,203
)

(104,569
)
Investment in finance affiliate, net
10,221


10,436

Investment in other affiliates, net


7,366

Acquisition of businesses, net of cash acquired
(1,800
)


Net cash used for investing activities
(128,782
)

(86,767
)
Financing Activities:



Borrowings under debt arrangements / finance lease obligations
1,788,696


1,511,810

Repayments under debt arrangements / finance lease obligations
(1,853,507
)

(1,310,863
)
Repurchase and retirement of common shares
(6,537
)

(192,367
)
Cash dividends to shareholders
(74,430
)

(75,694
)
Proceeds from stock issuances under employee plans
6,213


43,448

Net cash used for financing activities
(139,565
)

(23,666
)
Impact of currency exchange rates on cash balances
(112
)

(6,370
)
Net increase (decrease) in cash, cash equivalents and restricted cash
(65,607
)

48,346

Cash, cash equivalents and restricted cash at beginning of period
193,126


161,618

Cash, cash equivalents and restricted cash at end of period
$
127,519


$
209,964

 
 
 
 
Supplemental Cash Flow Information:
 
 
 
Interest paid on debt borrowings
$
41,548


$
17,013

Income taxes paid
$
14,873


$
20,614

 



The following presents the classification of cash, cash equivalents and restricted cash within the consolidated balance sheets:



Cash and cash equivalents
$
96,081


$
181,753

Other long-term assets
31,438


28,211

Total
$
127,519


$
209,964

The accompanying footnotes are an integral part of these consolidated statements.

8


POLARIS INDUSTRIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Significant Accounting Policies
Basis of presentation. The accompanying unaudited consolidated financial statements of Polaris Industries Inc. (“Polaris” or the “Company”) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial statements and, therefore, do not include all information and disclosures of results of operations, financial position and changes in cash flow in conformity with accounting principles generally accepted in the United States for complete financial statements. Accordingly, such statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 previously filed with the Securities and Exchange Commission (“SEC”). In the opinion of management, such statements reflect all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the financial position, results of operations, equity, and cash flows for the periods presented. Due to the seasonality trends for certain products and to certain changes in production and shipping cycles, results of such periods are not necessarily indicative of the results to be expected for the complete year.
Reclassifications. Certain reclassifications of previously reported balance sheet amounts have been made to conform to the current year presentation. The reclassifications had no impact on the consolidated statements of income, cash flows, or total assets, total liabilities, or total equity in the consolidated balance sheets, as previously reported.
Fair value measurements. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date:
Level  1 — Quoted prices in active markets for identical assets or liabilities.
Level  2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
In making fair value measurements, observable market data must be used when available. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. The Company utilizes the market approach to measure fair value for its non-qualified deferred compensation assets and liabilities, and the income approach for foreign currency contracts, and interest rate contracts. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities, and for the income approach, the Company uses significant other observable inputs to value its derivative instruments used to hedge foreign currency, interest rate, and commodity transactions.

9


Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):
 
Fair Value Measurements as of June 30, 2019
Asset (Liability)
Total
 
Level 1
 
Level 2
 
Level 3
Non-qualified deferred compensation assets
$
48,548

 
$
48,548

 
$

 
$

Foreign exchange contracts, net
602

 

 
602

 

Total assets at fair value
$
49,150

 
$
48,548

 
$
602

 
$

Non-qualified deferred compensation liabilities
$
(48,548
)
 
$
(48,548
)
 
$

 
$

Interest rate contracts, net
(8,648
)
 

 
(8,648
)
 

Total liabilities at fair value
$
(57,196
)
 
$
(48,548
)
 
$
(8,648
)
 
$

 
 
 
 
 
 
 
 
 
Fair Value Measurements as of December 31, 2018
Asset (Liability)
Total
 
Level 1
 
Level 2
 
Level 3
Non-qualified deferred compensation assets
$
48,545

 
$
48,545

 
$

 
$

Foreign exchange contracts, net
3,128

 

 
3,128

 

Total assets at fair value
$
51,673

 
$
48,545

 
$
3,128

 
$

Non-qualified deferred compensation liabilities
$
(48,545
)
 
$
(48,545
)
 
$

 
$

Interest rate contracts, net
(2,665
)
 

 
(2,665
)
 

Total liabilities at fair value
$
(51,210
)
 
$
(48,545
)
 
$
(2,665
)
 
$

 

 

 

 


Fair value of other financial instruments. The carrying values of the Company’s short-term financial instruments, including cash and cash equivalents, trade receivables and short-term debt, including current maturities of long-term debt, finance lease obligations and notes payable, approximate their fair values. At June 30, 2019 and December 31, 2018, the fair value of the Company’s long-term debt, finance lease obligations and notes payable was approximately $1,972,473,000 and $2,013,684,000, respectively, and was determined primarily using Level 2 inputs, including quoted market prices or discounted cash flows based on quoted market rates for similar types of debt. The carrying value of long-term debt, finance lease obligations and notes payable including current maturities was $1,898,068,000 and $1,962,570,000 as of June 30, 2019 and December 31, 2018, respectively.
Inventories. Inventory costs include material, labor and manufacturing overhead costs, including depreciation expense associated with the manufacture and distribution of the Company’s products. Inventories are stated at the lower of cost (first-in, first-out method) or net realizable value. The major components of inventories are as follows (in thousands):
 
June 30, 2019
 
December 31, 2018
Raw materials and purchased components
$
281,934

 
$
233,258

Service parts, garments and accessories
341,076

 
342,593

Finished goods
562,252

 
442,003

Less: reserves
(54,998
)
 
(48,343
)
Inventories
$
1,130,264

 
$
969,511


Product warranties. Polaris provides a limited warranty for its vehicles and boats for a period of six months to ten years, depending on the product. Polaris provides longer warranties in certain geographical markets as determined by local regulations and customary practice and may also provide longer warranties related to certain promotional programs. 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. The Company records these amounts as a liability in the consolidated balance sheet until they are ultimately paid. Adjustments to the warranty reserve are made based on actual claims experience in order to properly estimate the amounts necessary to settle future and existing claims on products sold as of the balance sheet date. Factors that could have an impact on the warranty reserve include the following: change in manufacturing quality, shifts in product mix, changes in warranty coverage periods, weather and its impact on product usage, product recalls and changes in sales volume.

10


The activity in the warranty reserve during the periods presented was as follows (in thousands):
 
Three months ended June 30,
 
Six months ended June 30,
 
2019
 
2018
 
2019
 
2018
Balance at beginning of period
$
116,217

 
$
116,286

 
$
121,824

 
$
123,840

Additions to reserve related to acquisitions
8,809

 

 
8,809

 

Additions charged to expense
36,854

 
26,141

 
62,873

 
42,172

Warranty claims paid, net
(29,122
)
 
(36,272
)
 
(60,748
)
 
(59,857
)
Balance at end of period
$
132,758

 
$
106,155

 
$
132,758

 
$
106,155



New accounting pronouncements.
Leases. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) and in July 2018, ASU No. 2018-10, Codification Improvements to Topic 842, Leases, and ASU 2018-11, Leases (Topic 842) - Targeted Improvements (collectively, “the new lease standard” or “ASC 842”). The new standard requires lessees to record assets and liabilities on the balance sheet for all leases with terms longer than 12 months. Leases will be classified as either finance or operating, with the classification affecting the pattern of expense recognition in the income statement. The Company adopted the standard as of January 1, 2019 using the alternative transition method provided under ASC 842, which allowed the Company to initially apply the new lease standard at the adoption date. The Company elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the Company to carry forward the historical lease classification. The Company did not elect the hindsight practical expedient permitted under the transition guidance within the new lease standard.
The Company made an accounting policy election to not record leases with an initial term of 12 months or less on the balance sheet. The Company also elected the practical expedient to not separate non-lease components from the lease components to which they relate, and instead account for each separate lease and non-lease component associated with that lease component as a single lease component for all underlying asset classes. Accordingly, all costs associated with a lease contract are accounted for as lease cost.
The new standard resulted in the recognition of additional net lease assets and lease liabilities of approximately $115,681,000 as of January 1, 2019. The adoption of ASC 842 did not have a material impact on the Company’s consolidated results of operations, equity or cash flows as of the adoption date. Under the alternative method of adoption, comparative information was not restated, but will continue to be reported under the standards in effect for those periods. See Note 10 for further information regarding the Company’s leases.
Derivatives and hedging. Effective January 1, 2019, the Company adopted ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities. The adoption of this ASU did not have a material impact on the Company’s consolidated financial position, results of operations, equity or cash flows.
Non-employee share-based payments. Effective January 1, 2019, the Company adopted ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Non-employee Share-based Payment Accounting. The adoption of this ASU did not have a material impact on the Company’s consolidated financial position, results of operations, equity or cash flows.
Intangibles-Goodwill and Other. Effective January 1, 2019, the Company early adopted ASU 2017-04, Intangibles-Goodwill and Other (Topic 350). The new standard simplifies the subsequent measurement of goodwill by eliminating the second step of the goodwill impairment test.
Stranded Tax Effects. Effective January 1, 2019 the Company adopted ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the reduction of the U.S. federal statutory income tax rate to 21% from 35% due to the enactment of the Tax Cuts and Jobs Act of 2017 (the "Tax Act"). As a result of the adoption of ASU 2018-02, the Company recorded a $668,000 reclassification to decrease Accumulated Other Comprehensive Income and increase Retained Earnings.
Financial instruments. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and in November 2018 issued a subsequent amendment, ASU 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. ASU 2016-13 significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. ASU 2016-13 will replace today’s “incurred loss” approach with an “expected loss” model for

11


instruments measured at amortized cost. ASU 2018-19 will affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope of this amendment that have the contractual right to receive cash. ASU 2016-13 is effective for fiscal years and interim periods beginning after December 15, 2019, and is effective for the Company’s fiscal year beginning January 1, 2020. The adoption of the ASU is not expected to have a material impact on the Company’s consolidated financial position, results of operations, equity or cash flows.
There are no other new accounting pronouncements that are expected to have a significant impact on the Company’s consolidated financial statements.

Note 2. Revenue Recognition
The following tables disaggregate the Company’s revenue by major product type and geography (in thousands):
 
Three months ended June 30, 2019
 
ORV / Snowmobiles
 
Motorcycles
 
Global Adj. Markets
 
Aftermarket
 
Boats
 
Consolidated
Revenue by product type
 
 
 
 
 
 
 
 
 
 
 
Wholegoods
$
864,261

 
$
169,421

 
$
98,652

 

 
$
182,425

 
$
1,314,759

PG&A
185,060

 
27,352

 
23,272

 
$
228,872

 

 
464,556

Total revenue
$
1,049,321

 
$
196,773

 
$
121,924

 
$
228,872

 
$
182,425

 
$
1,779,315

 
 
 
 
 
 
 
 
 
 
 
 
Revenue by geography
 
 
 
 
 
 
 
 
 
 
 
United States
$
871,854

 
$
120,183

 
$
58,146

 
$
219,174

 
$
177,203

 
$
1,446,560

Canada
74,223

 
10,414

 
2,150

 
9,698

 
5,222

 
101,707

EMEA
65,757

 
48,707

 
60,867

 

 

 
175,331

APLA
37,487

 
17,469

 
761