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Table of Contents
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 September 30, 2020
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 INC.
(Exact name of registrant as specified in its charter)
Minnesota41-1790959
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
2100 Highway 55,MedinaMN55340
(Address of principal executive offices)(Zip Code)
763542-0500
(Registrant’s telephone number, including area code)
N/A
(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 classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $.01 par valuePIINew 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.
Large accelerated filerxAccelerated filer
Non-accelerated filerSmaller 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 October 20, 2020, 61,700,081 shares of Common Stock, $.01 par value, of the registrant were outstanding. 
1

Table of Contents
 
  POLARIS INC.
FORM 10-Q
For Quarterly Period Ended September 30, 2020
Page
Part I FINANCIAL INFORMATION
2

Table of Contents
Part I FINANCIAL INFORMATION
Item 1 – FINANCIAL STATEMENTS
POLARIS INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
September 30, 2020December 31, 2019
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $820.6 $157.1 
Trade receivables, net 241.3 190.4 
Inventories, net 1,213.5 1,121.1 
Prepaid expenses and other 98.6 125.9 
Income taxes receivable 5.7 32.5 
Total current assets2,379.7 1,627.0 
Property and equipment, net865.3 899.8 
Investment in finance affiliate 44.9 110.6 
Deferred tax assets 186.4 93.3 
Goodwill and other intangible assets, net 1,087.3 1,490.2 
Operating lease assets105.8 110.2 
Other long-term assets 114.2 99.4 
Total assets $4,783.6 $4,430.5 
Liabilities and Equity
Current liabilities:
Current portion of debt, finance lease obligations and notes payable $542.1 $166.7 
Accounts payable 790.7 450.2 
Accrued expenses:
Compensation 194.6 184.5 
Warranties 140.6 136.2 
Sales promotions and incentives 133.1 189.9 
Dealer holdback 109.7 145.8 
Other 256.6 213.9 
Current operating lease liabilities33.6 34.9 
Income taxes payable 38.0 5.9 
Total current liabilities 2,239.0 1,528.0 
Long-term income taxes payable 21.3 28.1 
Finance lease obligations14.4 14.8 
Long-term debt 1,307.9 1,512.0 
Deferred tax liabilities3.5 4.0 
Long-term operating lease liabilities74.2 77.9 
Other long-term liabilities 159.3 143.9 
Total liabilities $3,819.6 $3,308.7 
Deferred compensation$16.2 $13.6 
Shareholders’ equity:
Preferred stock $0.01 par value per share, 20.0 shares authorized, no shares issued and outstanding   
Common stock $0.01 par value per share, 160.0 shares authorized, 61.7 and 61.4 shares issued and outstanding, respectively$0.6 $0.6 
Additional paid-in capital 972.8 892.8 
Retained earnings59.0 287.3 
Accumulated other comprehensive loss, net (84.9)(72.7)
Total shareholders’ equity 947.5 1,108.0 
Noncontrolling interest0.3 0.2 
Total equity 947.8 1,108.2 
Total liabilities and equity $4,783.6 $4,430.5 
The accompanying footnotes are an integral part of these consolidated statements.
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POLARIS INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(In millions, except per share data)
(Unaudited)
Three months ended September 30,Nine months ended September 30,
2020201920202019
Sales $1,954.6 $1,771.6 $4,871.6 $5,046.6 
Cost of sales 1,420.0 1,335.1 3,711.4 3,821.2 
Gross profit 534.6 436.5 1,160.2 1,225.4 
Operating expenses:
Selling and marketing 135.5 149.8 405.3 419.7 
Research and development 77.2 77.3 222.4 220.8 
General and administrative 100.6 100.8 267.0 297.8 
Goodwill and other intangible asset impairments  379.2  
Total operating expenses 313.3 327.9 1,273.9 938.3 
Income from financial services 18.1 21.7 63.2 60.2 
Operating income (loss)239.4 130.3 (50.5)347.3 
Non-operating expense:
Interest expense 17.3 19.8 51.4 60.8 
Equity in loss of other affiliates  4.0  5.1 
Other (income) expense, net 3.2 (1.7)4.9 (5.5)
Income (loss) before income taxes 218.9 108.2 (106.8)286.9 
Provision for income taxes 52.0 19.8 (32.9)62.0 
Net income (loss)166.9 88.4 (73.9)224.9 
Net (income) loss attributable to noncontrolling interest(0.1) (0.1)0.1 
Net income (loss) attributable to Polaris Inc.$166.8 $88.4 $(74.0)$225.0 
Net income (loss) per share attributable to Polaris Inc. common shareholders:
Basic $2.70 $1.44 $(1.20)$3.67 
Diluted $2.66 $1.42 $(1.20)$3.62 
Weighted average shares outstanding:
Basic 61.961.561.861.4
Diluted 62.862.361.862.2
The accompanying footnotes are an integral part of these consolidated statements.
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POLARIS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(In millions)
(Unaudited)
 
Three months ended September 30,Nine months ended September 30,
2020201920202019
Net income (loss)$166.9 $88.4 $(73.9)$224.9 
Other comprehensive income, net of tax:
Foreign currency translation adjustments12.8 (12.4)(1.8)(13.2)
Unrealized gain (loss) on derivative instruments1.8 (0.4)(10.6)(6.9)
Retirement plan and other activity0.1  0.2 (0.5)
Comprehensive income (loss)181.6 75.6 (86.1)204.3 
Comprehensive (income) loss attributable to noncontrolling interest(0.1) (0.1)0.1 
Comprehensive income (loss) attributable to Polaris Inc.$181.5 $75.6 $(86.2)$204.4 
The accompanying footnotes are an integral part of these consolidated statements.
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POLARIS INC.
CONSOLIDATED STATEMENTS OF EQUITY
(In millions)
(Unaudited)
 
Number
of Shares
Common
Stock
Additional
Paid-
In Capital
Retained
Earnings
Accumulated Other
Comprehensive
Income (loss)
Non Controlling InterestTotal Equity
Balance, December 31, 2019
61.4 $0.6 $892.8 $287.3 $(72.7)$0.2 $1,108.2 
Employee stock compensation
0.4  11.9 — — — 11.9 
Deferred compensation
— — (0.5)7.4 — — 6.9 
Proceeds from stock issuances under employee plans
 — 2.3 — — — 2.3 
Cash dividends declared (1)
— — — (38.0)— — (38.0)
Repurchase and retirement of common shares
(0.6) (8.1)(40.7)— — (48.8)
Net loss
— — — (5.4)—  (5.4)
Other comprehensive loss
— — — — (35.3)— (35.3)
Balance, March 31, 2020
61.2 0.6 898.4 210.6 (108.0)0.2 1,001.8 
Employee stock compensation
  19.8 — — — 19.8 
Deferred compensation
— — (1.4)(6.1)— — (7.5)
Proceeds from stock issuances under employee plans
0.1 — 4.6 — — — 4.6 
Cash dividends declared (1)
— — — (38.0)— — (38.0)
Repurchase and retirement of common shares
  (0.1)(0.4)— — (0.5)
Net loss
— — — (235.4)—  (235.4)
Other comprehensive income
— — — — 8.4 — 8.4 
Balance, June 30, 2020
61.3 0.6 921.3 (69.3)(99.6)0.2 753.2 
Employee stock compensation
  27.7 — — — 27.7 
Deferred compensation
— — (1.9)(0.1)— — (2.0)
Proceeds from stock issuances under employee plans
0.4 — 25.7 — — — 25.7 
Cash dividends declared (1)
— — — (38.2)— — (38.2)
Repurchase and retirement of common shares
   (0.2)— — (0.2)
Net income
— — — 166.8 — 0.1 166.9 
Other comprehensive loss
— — — — 14.7 — 14.7 
Balance, September 30, 2020
61.7 0.6 972.8 59.0 (84.9)0.3 947.8 
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Number
of Shares
Common
Stock
Additional
Paid-
In Capital
Retained
Earnings
Accumulated Other
Comprehensive
Income (loss)
Non Controlling InterestTotal Equity
Balance, December 31, 2018
60.9 $0.6 $808.0 $121.1 $(63.0)$0.3 $867.0 
Employee stock compensation
0.2 — 12.1 — — — 12.1 
Deferred compensation
— — (1.5)(0.3)— — (1.8)
Proceeds from stock issuances under employee plans
  3.2 — — — 3.2 
Cash dividends declared (1)
— — — (37.1)— — (37.1)
Repurchase and retirement of common shares
(0.1) (1.0)(5.2)— — (6.2)
Cumulative effect of adoption of accounting standards (ASU 2018-02)
— — — 0.6 (0.6)—  
Net income
— — — 48.4 — — 48.4 
Other comprehensive loss
— — — — (6.1)— (6.1)
Balance, March 31, 2019
61.0 0.6 820.8 127.5 (69.7)0.3 879.5 
Employee stock compensation
 — 22.1 — — — 22.1 
Deferred compensation
— — (1.2)(0.6)— — (1.8)
Proceeds from stock issuances under employee plans
0.1  3.0 — — — 3.0 
Cash dividends declared (1)
— — — (37.3)— — (37.3)
Repurchase and retirement of common shares
  (0.1)(0.3)— — (0.4)
Net income
— — — 88.2 — (0.1)88.1 
Other comprehensive loss
— — — — (1.1)— (1.1)
Balance, June 30, 2019
61.1 0.6 844.6 177.5 (70.8)0.2 952.1 
Employee stock compensation
 — 22.3 — — — 22.3 
Deferred compensation
— — (1.6)0.6 — — (1.0)
Proceeds from stock issuances under employee plans
  2.0 — — — 2.0 
Cash dividends declared (1)— — — (37.3)— — (37.3)
Repurchase and retirement of common shares
  (0.1)(0.4)— — (0.5)
Net income
— — — 88.4 —  88.4 
Other comprehensive loss
— — — — (12.8)— (12.8)
Balance September 30, 2019
61.1 $0.6 $867.2 $228.8 $(83.6)$0.2 $1,013.2 
(1) Polaris Inc. declared a $0.62 dividend per share for the three month periods ended September 30, 2020, June 30, 2020, and March 31, 2020 and a $0.61 dividend per share for the three month periods ended September 30, 2019, June 30, 2019, and March 31, 2019.

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


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POLARIS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
Nine months ended September 30,
20202019
Operating Activities:
Net income (loss)$(73.9)$224.9 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 190.5 173.0 
Noncash compensation 59.4 56.6 
Noncash income from financial services (15.0)(23.7)
Deferred income taxes (94.1)(9.1)
Goodwill and other intangible asset impairments379.2  
Other, net 5.2 
Changes in operating assets and liabilities:
Trade receivables (48.6)(23.6)
Inventories (90.4)(304.3)
Accounts payable 338.5 239.2 
Accrued expenses (19.4)75.3 
Income taxes payable/receivable 51.6 19.7 
Prepaid expenses and others, net (2.1)2.9 
Net cash provided by operating activities 675.7 436.1 
Investing Activities:
Purchase of property and equipment (131.8)(189.3)
Investment in finance affiliate, net 80.6 11.7 
Investment in other affiliates, net(2.5) 
Acquisition of businesses, net of cash acquired (1.8)
Net cash used for investing activities(53.7)(179.4)
Financing Activities:
Borrowings under debt arrangements / finance lease obligations1,299.9 2,654.2 
Repayments under debt arrangements / finance lease obligations(1,131.6)(2,831.7)
Repurchase and retirement of common shares (49.5)(7.0)
Cash dividends to shareholders (114.2)(111.7)
Proceeds from stock issuances under employee plans 32.6 8.2 
Net cash provided by (used for) financing activities37.2 (288.0)
Impact of currency exchange rates on cash balances 1.4 (3.1)
Net increase (decrease) in cash, cash equivalents and restricted cash 660.6 (34.4)
Cash, cash equivalents and restricted cash at beginning of period 196.3 193.1 
Cash, cash equivalents and restricted cash at end of period $856.9 $158.7 
Supplemental Cash Flow Information:
Interest paid on debt borrowings$54.2 $63.7 
Income taxes paid$5.6 $48.9 
Leased assets obtained for operating lease liabilities$21.9 $18.6 
The following presents the classification of cash, cash equivalents and restricted cash within the consolidated balance sheets:
Cash and cash equivalents$820.6 $122.2 
Other long-term assets36.3 36.5 
Total$856.9 $158.7 
The accompanying footnotes are an integral part of these consolidated statements.
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POLARIS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Significant Accounting Policies
Basis of presentation. The accompanying unaudited consolidated financial statements of Polaris 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, 2019 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 segment gross profit amounts have been made to conform to the current year presentation. The reclassifications had no impact on the consolidated balance sheets, statements of income (loss), comprehensive income (loss), equity, or cash flows, as previously reported. See further information in Note 10.
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