Document and Entity Information
Document and Entity Information - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Feb. 10, 2017 | Jun. 30, 2016 | |
Document and Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2016 | ||
Document Fiscal Year Focus | 2,016 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | PII | ||
Entity Registrant Name | POLARIS INDUSTRIES INC/MN | ||
Entity Central Index Key | 931,015 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 62,936,403 | ||
Entity Public Float | $ 5,240,113 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current Assets: | ||
Cash and cash equivalents | $ 127,325 | $ 155,349 |
Trade receivables, net | 174,832 | 150,778 |
Inventories, net | 746,534 | 710,001 |
Prepaid expenses and other | 91,636 | 90,619 |
Income taxes receivable | 50,662 | 46,175 |
Total current assets | 1,190,989 | 1,152,922 |
Land, buildings and improvements | 386,366 | 301,874 |
Equipment and tooling | 1,080,239 | 995,449 |
Property and equipment, gross | 1,466,605 | 1,297,323 |
Less: accumulated depreciation | (739,009) | (646,645) |
Property and equipment, net | 727,596 | 650,678 |
Investment in finance affiliate | 94,009 | 99,073 |
Deferred tax assets | 188,471 | 166,538 |
Goodwill and other intangible assets, net | 792,979 | 236,117 |
Other long-term assets | 105,553 | 80,331 |
Total assets | 3,099,597 | 2,385,659 |
Current liabilities: | ||
Current portion of debt, capital lease obligations, and notes payable | 3,847 | 5,059 |
Accounts payable | 273,742 | 299,660 |
Accrued expenses: | ||
Compensation | 122,214 | 106,486 |
Warranties | 119,274 | 56,474 |
Sales promotions and incentives | 158,562 | 141,057 |
Dealer holdback | 117,574 | 123,276 |
Other | 162,432 | 88,030 |
Income taxes payable | 2,106 | 6,741 |
Total current liabilities | 959,751 | 826,783 |
Long-term income taxes payable | 26,391 | 23,416 |
Capital lease obligations | 17,538 | 19,660 |
Long-term debt | 1,120,525 | 436,757 |
Deferred tax liabilities | 9,127 | 13,733 |
Other long-term liabilities | 90,497 | 74,188 |
Total liabilities | 2,223,829 | 1,394,537 |
Deferred compensation | 8,728 | 9,645 |
Shareholders’ equity: | ||
Preferred stock $0.01 par value, 20,000 shares authorized, no shares issued and outstanding | 0 | 0 |
Common stock $0.01 par value, 160,000 shares authorized, 63,109 and 65,309 shares issued and outstanding, respectively | 631 | 653 |
Additional paid-in capital | 650,162 | 596,143 |
Retained earnings | 300,084 | 447,173 |
Accumulated other comprehensive loss, net | (83,837) | (62,492) |
Total shareholders’ equity | 867,040 | 981,477 |
Total liabilities and shareholders’ equity | $ 3,099,597 | $ 2,385,659 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 20,000,000 | 20,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 160,000,000 | 160,000,000 |
Common stock, shares issued | 63,109,000 | 65,309,000 |
Common stock, shares outstanding | 63,109,000 | 65,309,000 |
Consolidated Statements Of Inco
Consolidated Statements Of Income - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Statement [Abstract] | |||
Sales | $ 4,516,629 | $ 4,719,290 | $ 4,479,648 |
Cost of sales | 3,411,006 | 3,380,248 | 3,160,470 |
Gross profit | 1,105,623 | 1,339,042 | 1,319,178 |
Operating expenses: | |||
Selling and marketing | 342,235 | 316,669 | 314,449 |
Research and development | 185,126 | 166,460 | 148,458 |
General and administrative | 306,442 | 209,077 | 203,248 |
Total operating expenses | 833,803 | 692,206 | 666,155 |
Income from financial services | 78,458 | 69,303 | 61,667 |
Operating income | 350,278 | 716,139 | 714,690 |
Non-operating expense: | |||
Interest expense | 16,319 | 11,456 | 11,239 |
Equity in loss of other affiliates | 6,873 | 4,124 | |
Other expense, net | 13,835 | 12,144 | 10 |
Income before income taxes | 313,251 | 685,737 | 699,317 |
Provision for income taxes | 100,303 | 230,376 | 245,288 |
Net income | $ 212,948 | $ 455,361 | $ 454,029 |
Net income per share: | |||
Basic (in dollars per share) | $ 3.31 | $ 6.90 | $ 6.86 |
Diluted (in dollars per share) | $ 3.27 | $ 6.75 | $ 6.65 |
Weighted average shares outstanding: | |||
Basic (in shares) | 64,296 | 66,020 | 66,175 |
Diluted (in shares) | 65,158 | 67,484 | 68,229 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 212,948 | $ 455,361 | $ 454,029 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments, net of tax benefit of $195, $643 and $65 | (19,773) | (38,571) | (44,371) |
Unrealized gain (loss) on derivative instruments, net of tax benefit (expense) of $936, ($1,975) and $970 | (1,572) | 3,320 | (1,631) |
Comprehensive income | $ 191,603 | $ 420,110 | $ 408,027 |
Consolidated Statements Of Com6
Consolidated Statements Of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statement of Comprehensive Income [Abstract] | |||
Foreign currency translation adjustments, tax benefit | $ 195 | $ 643 | $ 65 |
Unrealized (loss) gain on derivative instruments, tax (expense) benefit | $ 936 | $ (1,975) | $ 970 |
Consolidated Statements Of Shar
Consolidated Statements Of Shareholders' Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated other Comprehensive Income (Loss) |
Beginning Balance at Dec. 31, 2013 | $ 535,605 | $ 656 | $ 360,616 | $ 155,572 | $ 18,761 |
Beginning Balance (in shares) at Dec. 31, 2013 | 65,623 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Employee stock compensation | 63,183 | $ 3 | 63,180 | ||
Deferred compensation | (5,107) | (3,020) | (2,087) | ||
Employee stock compensation (in shares) | 254 | ||||
Proceeds from stock issuances under employee plans | 31,313 | $ 10 | 31,303 | ||
Proceeds from stock issuances under employee plans (in shares) | 984 | ||||
Tax effect of exercise of stock options | 36,966 | 36,966 | |||
Cash dividends declared ($2.20 per share, $2.12 per share and $1.92 per share in 2016, 2015, and 2014 respectively) | (126,908) | (126,908) | |||
Repurchase and retirement of common shares | $ (81,812) | $ (6) | (3,040) | (78,766) | |
Repurchase and retirement of common shares (in shares) | (554) | (554) | |||
Net income | $ 454,029 | 454,029 | |||
Other comprehensive income | (46,002) | (46,002) | |||
Ending Balance at Dec. 31, 2014 | 861,267 | $ 663 | 486,005 | 401,840 | (27,241) |
Ending Balance (in shares) at Dec. 31, 2014 | 66,307 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Employee stock compensation | 61,929 | $ 2 | 61,927 | ||
Deferred compensation | 3,883 | (2,994) | 6,877 | ||
Employee stock compensation (in shares) | 144 | ||||
Proceeds from stock issuances under employee plans | 32,535 | $ 10 | 32,525 | ||
Proceeds from stock issuances under employee plans (in shares) | 1,037 | ||||
Tax effect of exercise of stock options | 34,654 | 34,654 | |||
Cash dividends declared ($2.20 per share, $2.12 per share and $1.92 per share in 2016, 2015, and 2014 respectively) | (139,285) | (139,285) | |||
Repurchase and retirement of common shares | $ (293,616) | $ (22) | (15,974) | (277,620) | |
Repurchase and retirement of common shares (in shares) | (2,179) | (2,179) | |||
Net income | $ 455,361 | 455,361 | |||
Other comprehensive income | (35,251) | (35,251) | |||
Ending Balance at Dec. 31, 2015 | 981,477 | $ 653 | 596,143 | 447,173 | (62,492) |
Ending Balance (in shares) at Dec. 31, 2015 | 65,309 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Employee stock compensation | 57,927 | $ 3 | 57,924 | ||
Deferred compensation | 917 | 1,379 | (462) | ||
Employee stock compensation (in shares) | 303 | ||||
Proceeds from stock issuances under employee plans | 17,690 | $ 4 | 17,686 | ||
Proceeds from stock issuances under employee plans (in shares) | 405 | ||||
Tax effect of exercise of stock options | 3,578 | 3,578 | |||
Cash dividends declared ($2.20 per share, $2.12 per share and $1.92 per share in 2016, 2015, and 2014 respectively) | (140,336) | (140,336) | |||
Repurchase and retirement of common shares | $ (245,816) | $ (29) | (26,548) | (219,239) | |
Repurchase and retirement of common shares (in shares) | (2,908) | (2,908) | |||
Net income | $ 212,948 | 212,948 | |||
Other comprehensive income | (21,345) | (21,345) | |||
Ending Balance at Dec. 31, 2016 | $ 867,040 | $ 631 | $ 650,162 | $ 300,084 | $ (83,837) |
Ending Balance (in shares) at Dec. 31, 2016 | 63,109 |
Consolidated Statements Of Sha8
Consolidated Statements Of Shareholders' Equity (Parenthetical) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash dividends declared, per share | $ 2.20 | $ 2.12 | $ 1.92 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Operating Activities: | |||
Net income | $ 212,948 | $ 455,361 | $ 454,029 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 167,512 | 152,138 | 127,507 |
Noncash compensation | 57,927 | 61,929 | 63,183 |
Noncash income from financial services | (30,116) | (29,405) | (18,645) |
Deferred income taxes | (26,056) | (16,343) | (50,388) |
Excess tax benefits from share-based compensation | (3,578) | (34,654) | (36,966) |
Other, net | 13,462 | 6,802 | 6,124 |
Changes in operating assets and liabilities: | |||
Trade receivables | 2,030 | 48,798 | (24,174) |
Inventories | 111,999 | (148,725) | (158,476) |
Accounts payable | (62,693) | (46,095) | 105,783 |
Accrued expenses | 145,261 | 9,182 | 30,664 |
Income taxes payable/receivable | (1,997) | (247) | 45,324 |
Prepaid expenses and others, net | (14,916) | (18,510) | (14,695) |
Net cash provided by operating activities | 571,783 | 440,231 | 529,270 |
Investing Activities: | |||
Purchase of property and equipment | (209,137) | (249,485) | (205,079) |
Investment in finance affiliate | (8,641) | (23,087) | (32,582) |
Distributions from finance affiliate | 43,820 | 42,527 | 31,337 |
Investment in other affiliates | (11,595) | (17,848) | (12,445) |
Acquisition of businesses, net of cash acquired | (723,705) | (41,195) | (28,013) |
Net cash used for investing activities | (909,258) | (289,088) | (246,782) |
Financing Activities: | |||
Borrowings under debt arrangements / capital lease obligations | 3,232,137 | 2,631,067 | 2,146,457 |
Repayments under debt arrangements / capital lease obligations | (2,552,760) | (2,385,480) | (2,228,587) |
Repurchase and retirement of common shares | (245,816) | (293,616) | (81,812) |
Cash dividends to shareholders | (140,336) | (139,285) | (126,908) |
Excess tax benefits from share-based compensation | 3,578 | 34,654 | 36,966 |
Proceeds from stock issuances under employee plans | 17,690 | 32,535 | 31,313 |
Net cash provided by (used for) financing activities | 314,493 | (120,125) | (222,571) |
Impact of currency exchange rates on cash balances | (5,042) | (13,269) | (14,565) |
Net increase (decrease) in cash and cash equivalents | (28,024) | 17,749 | 45,352 |
Cash and cash equivalents at beginning of period | 155,349 | 137,600 | 92,248 |
Cash and cash equivalents at end of period | 127,325 | 155,349 | 137,600 |
Noncash Activity: | |||
Property and equipment obtained through capital leases and notes payable | 0 | 14,500 | 24,908 |
Supplemental Cash Flow Information: | |||
Interest paid on debt borrowings | 15,833 | 11,451 | 11,259 |
Income taxes paid | $ 126,799 | $ 244,328 | $ 261,550 |
Organization and Significant Ac
Organization and Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Organization and Significant Accounting Policies Polaris Industries Inc. (“Polaris” or the “Company”), a Minnesota corporation, and its subsidiaries are engaged in the design, engineering, manufacturing and marketing of innovative, high-quality, high-performance Off-Road Vehicles (ORV), Snowmobiles, Motorcycles and Global Adjacent Markets vehicles. Polaris products, together with related parts, garments and accessories, as well as aftermarket accessories and apparel, are sold worldwide through a network of independent dealers and distributors and its subsidiaries. The primary markets for our products are the United States, Canada, Western Europe, Australia and Mexico. 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. The Company evaluates consolidation of entities under Accounting Standards Codification (ASC) Topic 810. This Topic requires management to evaluate whether an entity or interest is a variable interest entity and whether the company is the primary beneficiary. Polaris used the guidelines to analyze the Company’s relationships, including its relationship with Polaris Acceptance, and concluded that there were no variable interest entities requiring consolidation by the Company in 2016 , 2015 and 2014 . Use of estimates. The preparation of financial statements in conformity 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 statements and the reported amounts of revenues and expenses during the reporting period. Ultimate results could differ from those estimates. 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 the foreign currency contracts and commodity 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 interest rate volatility, foreign currency and commodity transactions. Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands): Fair Value Measurements as of December 31, 2016 Asset (Liability) Total Level 1 Level 2 Level 3 Non-qualified deferred compensation assets $ 49,330 $ 49,330 — — Foreign exchange contracts, net 298 — $ 298 — Total assets at fair value $ 49,628 $ 49,330 $ 298 — Non-qualified deferred compensation liabilities $ (49,330 ) $ (49,330 ) — — Total liabilities at fair value $ (49,330 ) $ (49,330 ) $ — — Fair Value Measurements as of December 31, 2015 Asset (Liability) Total Level 1 Level 2 Level 3 Non-qualified deferred compensation assets $ 48,238 $ 48,238 — — Foreign exchange contracts, net 2,767 — $ 2,767 — Interest rate swap contracts 186 — 186 — Total assets at fair value $ 51,191 $ 48,238 $ 2,953 — Commodity contracts, net $ (354 ) — $ (354 ) — Non-qualified deferred compensation liabilities (48,238 ) $ (48,238 ) — — Total liabilities at fair value $ (48,592 ) $ (48,238 ) $ (354 ) — 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, capital lease obligations and notes payable, approximate their fair values. At December 31, 2016 and December 31, 2015 , the fair value of the Company’s long-term debt was approximately $1,156,181,000 and $477,936,000 , respectively, and was determined 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, including current maturities, was $1,141,910,000 and $461,476,000 as of December 31, 2016 and December 31, 2015 , respectively. Polaris measures certain assets and liabilities at fair value on a nonrecurring basis. Assets acquired and liabilities assumed as part of acquisitions are measured at fair value. Refer to Notes 2 and 6 for additional information. Polaris will impair or write off an investment and recognize a loss when events or circumstances indicate there is impairment in the investment that is other-than-temporary. The amount of loss is determined by measuring the investment at fair value. Refer to Note 10 for additional information. 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 approximates fair value. Such investments consist principally of money market mutual funds. Restricted Cash and Cash Equivalents. The Company classifies amounts of cash and cash equivalents that are restricted in terms of their use and withdrawal separately within Other long-term assets on the Consolidated Balance Sheets. Allowance 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 accounts becomes available. 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 market. The major components of inventories are as follows (in thousands): December 31, 2016 December 31, 2015 Raw materials and purchased components $ 141,566 $ 167,569 Service parts, garments and accessories 316,383 189,731 Finished goods 333,760 388,970 Less: reserves (45,175 ) (36,269 ) Inventories $ 746,534 $ 710,001 Investment in finance affiliate. The caption investment in finance affiliate in the consolidated balance sheets represents Polaris’ fifty percent equity interest in Polaris Acceptance, a partnership agreement between Wells Fargo Commercial Distribution Finance Corporation 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 investment in finance affiliate in the consolidated balance sheets. Polaris’ allocable share of the income of Polaris Acceptance has been included as a component of income from financial services in the consolidated statements of income. Refer to Note 9 for additional information regarding Polaris’ investment in Polaris Acceptance. Investment in other affiliates. Polaris’ investment in other affiliates is included within other long-term assets in the consolidated balance sheets, and represents the Company’s investment in nonmarketable securities of strategic companies. For each investment, Polaris assesses the level of influence in determining whether to account for the investment under the cost method or equity method. For equity method investments, Polaris’ proportionate share of income or losses is recorded in the consolidated statements of income. Polaris will write down or write off an investment and recognize a loss if and when events or circumstances indicate there is impairment in the investment that is other-than-temporary. Refer to Note 10 for additional information regarding Polaris’ investment in other affiliates. Property and equipment. 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. Depreciation of assets recorded under capital leases is included with depreciation expense. Fully depreciated tooling is eliminated from the accounting records annually. 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. Refer to Note 6 for additional information regarding goodwill and other intangible assets. Revenue recognition. Revenues are recognized at the time of shipment to the dealer or distributor or other customers, or at the time of delivery for our retail aftermarket locations. Service revenues are recognized upon completion of the service. Product returns, whether in the normal course of business or resulting from repossession under the Company’s customer financing program (see Note 9), have not been material. Polaris sponsors certain sales incentive programs and accrues liabilities for estimated sales promotion expenses and estimated holdback amounts that are recognized as reductions to sales when products are sold to the dealer or distributor customer. 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 distributor. Examples of sales promotion and incentive programs include dealer and consumer rebates, volume incentives, retail financing programs and sales associate incentives. Sales promotion and incentive expenses are estimated based on current programs and historical rates for each product line. Actual results may differ from these estimates if market conditions dictate the need to enhance or reduce sales promotion and incentive programs or if the customer usage rate varies from historical trends. Historically, sales promotion and incentive expenses have been within the Company’s expectations and differences have not been material. Dealer holdback programs. Dealer holdback represents a portion of the invoiced sales price that is expected to be subsequently returned to the dealer or distributor as a sales incentive upon the ultimate retail sale of the product. Holdback amounts reduce the ultimate net price of the products purchased by Polaris’ dealers or distributors and, therefore, reduce the amount of sales Polaris recognizes at the time of shipment. The portion of the invoiced sales price estimated as the holdback is recognized as “dealer holdback” liability on the Company’s balance sheet until paid or forfeited. The minimal holdback adjustments in the estimated holdback liability due to forfeitures are recognized in net sales. Payments are made to dealers or distributors at various times during the year subject to previously established criteria. Shipping and handling costs. Polaris records shipping and handling costs as a component of cost of sales at the time the product is shipped. Research and development expenses. Polaris records research and development expenses in the period in which they are incurred as a component of operating expenses. 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, 2016 , 2015 and 2014 , Polaris incurred $85,199,000 , $80,090,000 and $82,600,000 , respectively. Product warranties - Limited warranties. Polaris provides a limited warranty for its ORVs for a period of six months, for a period of one year for its snowmobiles, for a period of one or two years for its motorcycles depending on brand and model year, for a period of one year for its Taylor-Dunn vehicles, and for a two year period for GEM, Goupil and Aixam vehicles. Polaris provides longer warranties in certain geographical markets as determined by local regulations and market conditions and may also provide longer warranties related to certain promotional programs. Polaris’ limited 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 become known 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 accrual in any given period 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 limited warranty reserve during the periods presented was as follows (in thousands): For the Years Ended December 31, 2016 2015 2014 Balance at beginning of year $ 56,474 $ 53,104 $ 52,818 Additions to reserve through acquisitions 147 250 160 Additions charged to expense 194,996 73,716 61,888 Less: warranty claims paid (132,343 ) (70,596 ) (61,762 ) Balance at end of year $ 119,274 $ 56,474 $ 53,104 During 2016, the Company has incurred significant additions to the warranty reserve, primarily associated with recall activity for certain RZR vehicles. In April 2016, the Company issued a voluntary recall for certain RZR 900 and 1000 off-road vehicles manufactured since model year 2013 due to reports of thermal-related incidents, including fire, and in September 2016, the Company issued a voluntary recall for certain RZR XP Turbo off-road vehicles due to similar thermal-related incidents. Deferred revenue. In 2016, Polaris began financing its self-insured risks related to extended service contracts (“ESCs”). The premiums for ESCs are primarily recognized in income in proportion to the costs expected to be incurred over the contract period. Additionally, in 2016, the Company acquired Transamerican Auto Parts (“TAP”), which recognizes revenues related to sales of its extended warranty programs for tires and other products over the term of the warranty period which vary from two to five years. Warranty costs are recognized as incurred. Revenues related to sales of its extended warranty program for powertrains and related accrued costs for claims are deferred and amortized over the warranty period, generally five years, while warranty administrative costs are recognized as incurred. The activity in the deferred revenue reserve during the periods presented was as follows (in thousands): For the Years Ended December 31, 2016 2015 2014 Balance at beginning of year — — — Additions to deferred revenue through acquisitions $ 7,944 New contracts sold 20,569 — — Less: reductions for revenue recognized (2,356 ) — — Balance at end of year $ 26,157 — — (1) The unamortized extended service contract premiums (deferred revenue) recorded in other current liabilities, totaled $11,012,000 and $15,145,000 in other long-term liabilities as of December 31, 2016 . Share-based employee compensation. For purposes of determining the estimated fair value of share-based payment awards on the date of grant under ASC Topic 718, Polaris uses the Black-Scholes Model. The Black-Scholes Model requires the input of certain assumptions that require judgment. Because employee stock options and restricted stock awards have characteristics significantly different from those of traded options, and because changes in the input assumptions can materially affect the fair value estimate, the existing models may not provide a reliable single measure of the fair value of the employee stock options or restricted stock awards. Management will continue to assess the assumptions and methodologies used to calculate estimated fair value of share-based compensation. Circumstances may change and additional data may become available over time, which could result in changes to these assumptions and methodologies and thereby materially impact the fair value determination. If factors change and the Company employs different assumptions in the application of Topic 718 in future periods, the compensation expense that was recorded under Topic 718 may differ significantly from what was recorded in the current period. Refer to Note 3 for additional information regarding share-based compensation. The Company estimates the likelihood and the rate of achievement for performance share-based awards. Changes in the estimated rate of achievement and fluctuation in the market based stock price can have a significant effect on reported share-based compensation expenses as the effect of a change in the estimated achievement level and fluctuation in the market based stock price is recognized in the period that the likelihood factor and stock price changes. If adjustments in the estimated rate of achievement and fluctuation in the market based stock price are made, they would be reflected in gross margin and operating expenses. Derivative instruments and hedging activities. Changes in the fair value of a derivative are recognized in earnings unless the derivative qualifies as a hedge. To qualify as a hedge, the Company must formally document, designate and assess the effectiveness of transactions that receive hedge accounting. Polaris enters into foreign exchange contracts to manage currency exposures from certain of its purchase commitments denominated in foreign currencies and transfers of funds from time to time from its foreign subsidiaries. Polaris does not use any financial contracts for trading purposes. These contracts met the criteria for cash flow hedges. Gains and losses on the Canadian dollar and Australian dollar contracts at settlement are recorded in non-operating other expense (income), net in the consolidated income statements, and gains and losses on the Japanese yen and Mexican peso contracts at settlement are recorded in cost of sales in the consolidated income statements. Unrealized gains and losses are recorded as a component of accumulated other comprehensive loss, net. Polaris is subject to market risk from fluctuating market prices of certain purchased commodity raw materials, including steel, aluminum, diesel fuel, and petroleum-based resins. In addition, the Company purchases components and parts containing various commodities, including steel, aluminum, rubber, rare earth metals and others which are integrated into the Company’s end products. While such materials are typically available from numerous suppliers, commodity raw materials are subject to price fluctuations. The Company generally buys these commodities and components based upon market prices that are established with the vendor as part of the purchase process. From time to time, Polaris utilizes derivative contracts to hedge a portion of the exposure to commodity risks. During 2015 , the Company entered into derivative contracts to hedge a portion of the exposure for diesel fuel and aluminum. The Company did not enter into any such derivative contracts during 2016 . The Company’s diesel fuel and aluminum hedging contracts do not meet the criteria for hedge accounting and therefore, the resulting unrealized gains and losses from those contracts are included in the consolidated statements of income in cost of sales. Refer to Note 12 for additional information regarding derivative instruments and hedging activities. The gross unrealized gains and losses of these contracts are recorded in the accompanying balance sheets as other current assets or other current liabilities. 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 translated 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 loss in the shareholders’ 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 including intercompany transactions denominated in a currency other than the functional currency of the entity involved are included in other expense (income), net in our consolidated statements of income. Comprehensive income. Components of comprehensive income include net income, foreign currency translation adjustments, and unrealized gains or losses on derivative instruments. The Company has chosen to disclose comprehensive income in separate consolidated statements of comprehensive income. New accounting pronouncements. Debt issuance costs. In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-03, Interest - Imputation of Interest (Subtopic 835-230) - Simplifying the Presentation of Debt Issuance Costs . The amendment requires that debt issuance costs be presented on the balance sheet as a direct reduction from the carrying amount of the related debt liability rather than as an asset. The amendment is to be applied retrospectively and is effective for fiscal years beginning after December 15, 2015. The Company adopted this amendment during the first quarter of 2016, which caused the Company to reclassify $1,803,000 of debt issuance costs as a reduction from long-term debt rather than as a component of prepaid expenses and other assets, as of December 31, 2015 . Share-based payment accounting. In March 2016, the FASB issued ASU No. 2016-09, which simplifies several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements, and statement of cash flow classification. The ASU is effective for annual reporting periods beginning after December 15, 2016, and is effective for the Company’s fiscal year beginning January 1, 2017. Early adoption is permitted, but the Company will adopt this ASU for the fiscal year beginning January 1, 2017. The impact of this ASU on the Company’s financial statements will be dependent on the volume of stock option exercises and restricted share vestings that occur. When the Company adopts this ASU for the fiscal year beginning January 1, 2017, the excess tax benefits will be classified as cash flows from operating activities rather than cash flows from financing activities on a prospective basis. In addition, the Company will continue to estimate the number of awards expected to vest, rather than electing to account for forfeitures as they occur. Leases. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . This ASU requires most lessees to recognize right of use assets and lease liabilities, but recognize expenses in a manner similar with current accounting standards. The new standard is effective for fiscal years and interim periods beginning after December 15, 2018 and is effective for the Company’s fiscal year beginning January 1, 2019. Entities are required to use a modified retrospective approach, with early adoption permitted. The Company is evaluating the impact of this new standard on the financial statements. Revenue from contracts with customers. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers . This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue from the transfer of goods or services to customers in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017 and is effective for the Company’s fiscal year beginning January 1, 2018. Subsequent to the issuance of ASU 2014-09, the FASB has issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , and ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients . These ASUs do not change the core principle of the guidance stated in ASU 2014-09, instead these amendments are intended to clarify and improve operability of certain topics included within the revenue standard. These ASUs will have the same effective date and transition requirements as ASU 2014-09. The Company has completed a preliminary assessment of the impact of ASU No. 2014-09 and other related ASUs, and does not anticipate the impact will be significant to the Company’s financial statements, accounting policies or processes. The Company expects to adopt ASU No. 2014-09 for the Company’s fiscal year beginning January 1, 2018, and expects to adopt the guidance using the modified retrospective approach. There are no other new accounting pronouncements that are expected to have a significant impact on Polaris’ consolidated financial statements. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Acquisitions | Note 2. Acquisitions 2016 Acquisitions. Taylor-Dunn Manufacturing Company In March 2016, the Company acquired Taylor-Dunn Manufacturing Company (“Taylor-Dunn”), a leading provider of industrial vehicles serving a broad range of commercial, manufacturing, warehouse and ground-support customers. Taylor-Dunn is based in Anaheim, California, and is included in the Global Adjacent Markets reporting segment. Pro forma financial results for the Taylor-Dunn acquisition are not presented as the acquisition is not material to the consolidated financial statements. As of December 31, 2016 , the purchase price allocations for the acquisition remain preliminary. Refer to Note 6 for additional information regarding the acquisition of Taylor-Dunn. Transamerican Auto Parts On October 11, 2016, the Company entered into a definitive agreement with TAP Automotive Holdings, LLC (“Transamerican Auto Parts” or “TAP”), to acquire the outstanding equity interests in Transamerican Auto Parts, a privately held, vertically integrated manufacturer, distributor, retailer and installer of off-road Jeep and truck accessories, for an aggregate consideration of $668,848,000 , net of cash acquired. TAP’s products and services for customers in the off-road four-wheel-drive market correspond closely to our ORV business. The transaction closed on November 10, 2016. The Company funded the purchase price with borrowings under its existing credit facilities. As of December 31, 2016 , the purchase price allocation for the acquisition is preliminary. The following table summarizes the preliminary fair values assigned to the TAP net assets acquired and the determination of final net assets (in thousands): Cash and cash equivalents $ 3,017 Trade receivables 18,212 Inventory 144,912 Property, plant and equipment 32,814 Customer relationships 87,500 Trademarks / trade names 175,500 Goodwill 264,333 Other assets 18,434 Deferred revenue (7,944 ) Other liabilities assumed (64,913 ) Total fair value of net assets acquired 671,865 Less cash acquired (3,017 ) Total consideration for acquisition, less cash acquired $ 668,848 On the acquisition date, amortizable intangible assets had a weighted-average useful life of 8.9 years . The customer relationships were valued based on the Discounted Cash Flow Method and are amortized over 5 - 10 years , depending on the customer class. The trademarks and trade names were valued on the Relief from Royalty Method and have indefinite remaining useful lives. Goodwill is deductible for tax purposes. The following unaudited pro forma information represents the Company’s results of operations as if the fiscal 2016 acquisition of TAP had occurred at the beginning of fiscal 2015 (in thousands, except per share data). These performance results may not be indicative of the actual results that would have occurred under the ownership and management of the Company. For the Years Ended December 31, 2016 2015 Net sales $ 5,161,688 $ 5,389,173 Net income 240,400 431,991 Basic earnings per share $ 3.74 $ 6.54 Diluted earnings per common share $ 3.69 $ 6.40 The unaudited pro forma net income for the year ended December 31, 2015 excludes the impact of approximately $21.0 million (pre-tax) in non-recurring items related to acquisition date fair value adjustments to inventory. The unaudited pro forma net income for the year ended December 31, 2016 excludes the impact of transaction costs incurred by TAP and approximately $13.0 million of non-recurring transaction related costs incurred by the Company. The pro forma condensed consolidated financial information has been prepared for comparative purposes only and includes certain adjustments, as noted above. The adjustments are estimates based on currently available information and actual amounts may differ materially from these estimates. They do not reflect the effect of costs or synergies that would have been expected to result from the integration of the TAP acquisition. The pro forma information does not purport to be indicative of the results of operations that actually would have resulted had the TAP acquisition occurred on January 1, 2015. The Company’s 2016 consolidated statements of income include $108,699,000 of net sales and $19,842,000 of gross profit related to TAP. 2015 acquisitions. In January 2015, the Company acquired the electric motorcycle business of Brammo, Inc. In April 2015, the Company completed the acquisitions of Timbersled Products, Inc. (“Timbersled”) and HH Investment Limited (“Hammerhead”). Timbersled is based in Idaho and is an innovator and market leader in the burgeoning snow bike industry. Hammerhead is based in Shanghai, China and manufactures gasoline powered go-karts, light utility vehicles, and electric utility vehicles. Hammerhead markets its products globally under the Hammerhead Off-Road brand, along with maintaining key private label relationships with other original equipment manufacturers. At the end of December 2015, the Company completed the acquisition of certain assets of 509, Inc. (“509”). 509 is based in Washington and is an aftermarket leader in snowmobile helmets and goggles. The Company has included the financial results of the acquisitions in its consolidated results of operations beginning on the respective acquisition dates; however, the acquisitions did not have a material impact on Polaris’ consolidated financial position or results of operations. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation Share-based plans. The Company grants long-term equity-based incentives and rewards for the benefit of its employees and directors under the shareholder approved Polaris Industries Inc. 2007 Omnibus Incentive Plan (as amended) (the “Omnibus Plan”), which were previously provided under several separate incentive and compensatory plans. Upon approval by the shareholders of the Omnibus Plan in April 2007, the Polaris Industries Inc. 1995 Stock Option Plan (“Option Plan”), the 1999 Broad Based Stock Option Plan, the Restricted Stock Plan and the 2003 Non-Employee Director Stock Option Plan (“Director Stock Option Plan” and collectively the “Prior Plans”) were frozen and no further grants or awards have since been or will be made under such plans. A maximum of 21,000,000 shares of common stock are available for issuance under the Omnibus Plan, together with additional shares canceled or forfeited under the Prior Plans. Stock option awards granted to date under the Omnibus Plan generally vest two to four years from the award date and expire after ten years. In addition, since 2007, the Company has granted a total of 157,000 deferred stock units to its non-employee directors under the Omnibus Plan ( 11,000 , 8,000 and 9,000 in 2016 , 2015 and 2014 , respectively) which will be converted into common stock when the director’s board service ends or upon a change in control. Restricted units and performance-based restricted units (collectively restricted stock) awarded under the Omnibus Plan generally vests after a one to four year period. The final number of shares issued under performance-based awards are dependent on achievement of certain performance measures. The Option Plan, which is frozen, was used to issue incentive and nonqualified stock options to certain employees. Options granted to date generally vest three years from the award date and expire after ten years. Under the Polaris Industries Inc. Deferred Compensation Plan for Directors (“Director Plan”), members of the Board of Directors who are not Polaris officers or employees may annually elect to receive common stock equivalents in lieu of director fees, which will be converted into common stock when board service ends. A maximum of 500,000 shares of common stock has been authorized under this plan of which 73,000 equivalents have been earned and 427,000 shares have been issued to retired directors as of December 31, 2016 . As of December 31, 2016 and 2015 , Polaris’ liability under the plan totaled $6,111,000 and $9,167,000 , respectively. Polaris maintains a long term incentive program under which awards are issued to provide incentives for certain employees to attain and maintain the highest standards of performance and to attract and retain employees of outstanding competence and ability with no cash payments required from the recipient. Long term incentive program awards are granted in restricted stock units and stock options and therefore treated as equity awards. Share-based compensation expense. The amount of compensation cost for share-based awards to be recognized during a period is based on the portion of the awards that are ultimately expected to vest. The Company estimates stock option forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company analyzes historical data to estimate pre-vesting forfeitures and records share compensation expense for those awards expected to vest. Total share-based compensation expenses were as follows (in thousands): For the Years Ended December 31, 2016 2015 2014 Option plan $ 23,876 $ 26,191 $ 24,428 Other share-based awards 23,368 23,275 26,574 Total share-based compensation before tax 47,244 49,466 51,002 Tax benefit 17,546 18,451 19,039 Total share-based compensation expense included in net income $ 29,698 $ 31,015 $ 31,963 These share-based compensation expenses are reflected in cost of sales and operating expenses in the accompanying consolidated statements of income. For purposes of determining the estimated fair value of option awards on the date of grant under ASC Topic 718, Polaris has used the Black-Scholes option-pricing model. Assumptions utilized in the model are evaluated and revised, as necessary, to reflect market conditions and experience. At December 31, 2016 , there was $97,831,000 of total unrecognized share-based compensation expense related to unvested share-based equity awards. Unrecognized share-based compensation expense is expected to be recognized over a weighted-average period of 1.72 years. Included in unrecognized share-based compensation is approximately $32,997,000 related to stock options and $64,834,000 for restricted stock. General stock option and restricted stock information. The following summarizes stock option activity and the weighted average exercise price for the following plans for the each of the three years ended December 31, 2016 , 2015 and 2014 : Omnibus Plan Option Plan Outstanding Weighted Outstanding Weighted Balance as of December 31, 2013 4,466,080 $ 49.29 162,431 $ 23.74 Granted 705,564 130.10 — — Exercised (866,917 ) 30.33 (96,398 ) 23.77 Forfeited (98,215 ) 65.14 (2,800 ) 22.43 Balance as of December 31, 2014 4,206,512 $ 66.38 63,233 $ 23.76 Granted 743,062 150.81 — — Exercised (706,750 ) 40.21 (44,283 ) 23.92 Forfeited (137,285 ) 112.95 — — Balance as of December 31, 2015 4,105,539 $ 84.61 18,950 $ 23.37 Granted 1,326,430 78.72 — — Exercised (348,206 ) 40.51 (18,950 ) 23.37 Forfeited (366,702 ) 108.90 — — Balance as of December 31, 2016 4,717,061 $ 84.32 — — Vested or expected to vest as of December 31, 2016 4,717,061 $ 84.32 — — Options exercisable as of December 31, 2016 2,199,084 $ 62.60 — — The weighted average remaining contractual life of options outstanding and of options outstanding and exercisable as of December 31, 2016 was 6.45 years and 4.47 years, respectively. The following assumptions were used to estimate the weighted average fair value of options of $16.81 , $37.64 and $39.97 granted during the years ended December 31, 2016 , 2015 and 2014 , respectively: For the Years Ended December 31, 2016 2015 2014 Weighted-average volatility 32 % 32 % 40 % Expected dividend yield 2.8 % 1.4 % 1.5 % Expected term (in years) 4.5 4.5 4.5 Weighted average risk free interest rate 1.4 % 1.5 % 1.6 % The total intrinsic value of options exercised during the year ended December 31, 2016 was $17,522,000 . The total intrinsic value of options outstanding and of options outstanding and exercisable at December 31, 2016 , was $68,311,000 and $59,612,000 , respectively. The total intrinsic values are based on the Company’s closing stock price on the last trading day of the applicable year for in-the-money options. The following table summarizes restricted stock activity for the year ended December 31, 2016 : Shares Weighted Balance as of December 31, 2015 1,130,767 $ 122.08 Granted 909,161 77.53 Vested (233,841 ) 89.72 Canceled/Forfeited (284,885 ) 108.08 Balance as of December 31, 2016 1,521,202 $ 103.05 Expected to vest as of December 31, 2016 955,106 $ 101.57 The total intrinsic value of restricted stock expected to vest as of December 31, 2016 was $78,691,000 . The total intrinsic value is based on the Company’s closing stock price on the last trading day of the year. The weighted average fair values at the grant dates of grants awarded under the Omnibus Plan for the years ended December 31, 2016 , 2015 and 2014 were $77.53 , $139.50 and $134.34 , respectively. |
Employee Savings Plans
Employee Savings Plans | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure Employee Savings Plans [Abstract] | |
Employee Savings Plans | Employee Savings Plans Employee Stock Ownership Plan (ESOP). Polaris sponsors a qualified non-leveraged ESOP under which a maximum of 7,200,000 shares of common stock can be awarded. The shares are allocated to eligible participants’ accounts based on total cash compensation earned during the calendar year. An employee’s ESOP account vests equally after two and three years of service and requires no cash payments from the recipient. Participants may instruct Polaris to pay respective dividends directly to the participant in cash or reinvest the dividends into the participants ESOP accounts. Employees who meet eligibility requirements can participate in the ESOP. Total expense related to the ESOP was $7,849,000 , $7,455,000 and $10,789,000 , in 2016 , 2015 and 2014 , respectively. As of December 31, 2016 there were 3,811,000 shares held in the plan. Defined contribution plans. Polaris sponsors a 401(k) defined contribution retirement plan covering substantially all U.S. employees. The Company matches 100 percent of employee contributions up to a maximum of five percent of eligible compensation. All contributions vest immediately. The cost of the defined contribution retirement plan was $15,456,000 , $14,178,000 , and $12,486,000 , in 2016 , 2015 and 2014 , respectively. Supplemental Executive Retirement Plan (SERP). Polaris sponsors a SERP that provides executive officers of the Company an alternative to defer portions of their salary, cash incentive compensation, and Polaris matching contributions. The deferrals and contributions are held in a rabbi trust and are in funds to match the liabilities of the plan. The assets are recorded as trading assets. The assets of the rabbi trust are included in other long-term assets on the consolidated balance sheets and the SERP liability is included in other long-term liabilities on the consolidated balance sheets. The asset and liability balances are both $49,330,000 and $48,238,000 at December 31, 2016 , and 2015 , respectively. Executive officers of the Company have the opportunity to defer certain restricted stock units. After a holding period, the executive officer has the option to diversify the vested award into other funds available under the SERP. The deferrals are held in a rabbi trust and are invested in funds to match the liabilities of the SERP. The awards are redeemable in Polaris stock or in cash based upon the occurrence of events not solely within the control of Polaris; therefore, awards probable of vesting, for which the executive has not yet made an election to defer, or awards that have been deferred but have not yet vested and are probable of vesting or have been diversified into other funds, are reported as deferred compensation in the temporary equity section of the consolidated balance sheets. The awards recorded in temporary equity are recognized at fair value as though the reporting date is also the redemption date, with any difference from stock-based compensation recorded in retained earnings. At December 31, 2016 , 105,931 shares are recorded at a fair value of $8,728,000 in temporary equity, which includes $8,993,000 of compensation cost and $(266,000) of cumulative fair value adjustment recorded through retained earnings. |
Financing Agreement
Financing Agreement | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Financing Agreement | Financing Agreement Debt, capital lease obligations, notes payable and the average related interest rates were as follows (in thousands): Average interest rate at December 31, 2016 Maturity December 31, 2016 December 31, 2015 Revolving loan facility 1.66% May 2021 $ 172,142 $ 225,707 Term loan facility 1.98% May 2021 740,000 — Senior notes—fixed rate 3.81% May 2018 25,000 25,000 Senior notes—fixed rate 4.60% May 2021 75,000 75,000 Senior notes—fixed rate 3.13% December 2020 100,000 100,000 Capital lease obligations 5.06% Various through 2029 19,306 21,874 Notes payable and other 3.40% June 2027 13,618 15,698 Debt issuance costs (3,156 ) (1,803 ) Total debt, capital lease obligations, and notes payable $ 1,141,910 $ 461,476 Less: current maturities 3,847 5,059 Total long-term debt, capital lease obligations, and notes payable $ 1,138,063 $ 456,417 Bank financing. In August 2011, Polaris entered into a $350,000,000 unsecured revolving loan facility. In March 2015, Polaris amended the loan facility to increase the facility to $500,000,000 and to provide more beneficial covenant and interest rate terms. The amended terms also extended the expiration date to March 2020. Interest is charged at rates based on a LIBOR or “prime” base rate. In May 2016, Polaris amended the revolving loan facility to increase the facility to $600,000,000 and extend the expiration date to May 2021 . The amended terms also established a $500,000,000 term loan facility. In November 2016, Polaris amended the revolving loan facility to increase the loan facility to $750,000,000 , of which $740,000,000 is outstanding as of December 31, 2016 . In December 2010, the Company entered into a Master Note Purchase Agreement to issue $25,000,000 of unsecured senior notes due May 2018 and $75,000,000 of unsecured senior notes due May 2021 (collectively, the “Senior Notes”). The Senior Notes were issued in May 2011. In December 2013, the Company entered into a First Supplement to Master Note Purchase Agreement, under which the Company issued $100,000,000 of unsecured senior notes due December 2020 . The unsecured loan facility and the amended Master Note Purchase Agreement contain covenants that require Polaris to maintain certain financial ratios, including minimum interest coverage and maximum leverage ratios. Polaris was in compliance with all such covenants as of December 31, 2016 . A property lease agreement for a manufacturing facility which Polaris began occupying in Opole, Poland commenced in February 2014. The Poland property lease is accounted for as a capital lease. In January 2015, the Company announced plans to build a new production facility in Huntsville, Alabama to provide additional capacity and flexibility. Construction of the 725,000 square-foot facility square-foot facility was completed during the second quarter of 2016, with start-of-production also occurring during the second quarter. A mortgage note payable agreement of $14,500,000 for land, on which Polaris is building the facility, commenced in February 2015. The payment of principal and interest for the note payable is forgivable if the Company satisfies certain job commitments over the term of the note. Forgivable loans related to other Company facilities are also included within notes payable. The following summarizes activity under Polaris’ credit arrangements (dollars in thousands): 2016 2015 2014 Total borrowings at December 31 $ 1,112,142 $ 425,707 $ 200,000 Average outstanding borrowings during year $ 638,614 $ 403,097 $ 361,715 Maximum outstanding borrowings during year $ 1,234,337 $ 523,097 $ 500,000 Interest rate at December 31 2.25 % 2.33 % 3.77 % Letters of credit. At December 31, 2016 , Polaris had open letters of credit totaling $13,368,000 . The amounts are primarily related to inventory purchases and are reduced as the purchases are received. Dealer financing programs. Certain finance companies, including Polaris Acceptance, an affiliate (see Note 9), provide floor plan financing to dealers on the purchase of Polaris products. The amount financed by worldwide dealers under these arrangements at December 31, 2016 , was approximately $1,438,845,000 . Polaris has agreed to repurchase products repossessed by the finance companies up to an annual maximum of no more than 15 percent of the average month-end balances outstanding during the prior calendar year. Polaris’ financial exposure under these arrangements is limited to the difference between the amount paid to the finance companies for repurchases and the amount received on the resale of the repossessed product. No material losses have been incurred under these agreements during the periods presented. As a part of its marketing program, Polaris contributes to the cost of dealer financing up to certain limits and subject to certain conditions. Such expenditures are included as an offset to sales in the accompanying consolidated statements of income. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
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 Company performed the annual impairment test as of December 31, 2016 and 2015 . The results of the impairment test indicated that no goodwill or intangible impairment existed as of the test date. The Company has had no historical impairments of goodwill. In accordance with Topic 350, the Company will continue to complete an impairment analysis on an annual basis or more frequently if an event or circumstance that would more likely than not reduce the fair value of a reporting unit below its carrying amount occurs. Goodwill and other intangible assets, net of accumulated amortization, for the periods ended December 31, 2016 and 2015 are as follows (in thousands): 2016 2015 Goodwill $ 421,563 $ 131,014 Other intangible assets, net 371,416 105,103 Total goodwill and other intangible assets, net $ 792,979 $ 236,117 Additions to goodwill and other intangible assets in 2016 relate primarily to the acquisitions of TAP in November 2016 and Taylor-Dunn in March 2016. For these acquisitions, the respective aggregate purchase price was allocated on a preliminary basis to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. TAP and Taylor-Dunn’s financial results are included in the Company’s consolidated results from the respective dates of acquisition. As of December 31, 2016 , the purchase price allocations for these acquisitions remain preliminary. For TAP, the pro forma financial results and the preliminary purchase price allocation are included in Note 2. The changes in the carrying amount of goodwill for the years ended December 31, 2016 and 2015 are as follows (in thousands): 2016 2015 Balance as of beginning of year $ 131,014 $ 123,031 Goodwill from businesses acquired 293,390 17,010 Currency translation effect on foreign goodwill balances (2,841 ) (9,027 ) Balance as of end of year $ 421,563 $ 131,014 For other intangible assets, the changes in the net carrying amount for the years ended December 31, 2016 and 2015 are as follows (in thousands): 2016 2015 Gross Accumulated Gross Accumulated Other intangible assets, beginning $ 138,831 $ (33,728 ) $ 124,093 $ (23,158 ) Intangible assets acquired during the period 284,000 — 20,779 — Amortization expense — (16,549 ) — (12,136 ) Currency translation effect on foreign balances (2,285 ) 1,147 (6,041 ) 1,566 Other intangible assets, ending $ 420,546 $ (49,130 ) $ 138,831 $ (33,728 ) The components of other intangible assets were as follows (in thousands): December 31, 2016 Estimated Life Gross Carrying Accumulated Net Non-compete agreements 5 $ 540 $ (485 ) $ 55 Dealer/customer related 5-10 164,837 (35,907 ) 128,930 Developed technology 5-7 26,048 (12,738 ) 13,310 Total amortizable 191,425 (49,130 ) 142,295 Non-amortizable—brand/trade names 229,121 — 229,121 Total other intangible assets, net $ 420,546 $ (49,130 ) $ 371,416 December 31, 2015 Estimated Life Gross Carrying Accumulated Net Non-compete agreements 5 $ 540 $ (401 ) $ 139 Dealer/customer related 7 67,079 (24,069 ) 43,010 Developed technology 5-7 19,261 (9,258 ) 10,003 Total amortizable 86,880 (33,728 ) 53,152 Non-amortizable—brand/trade names 51,951 — 51,951 Total other intangible assets, net $ 138,831 $ (33,728 ) $ 105,103 Amortization expense for intangible assets for the year ended December 31, 2016 and 2015 was $16,549,000 and $12,136,000 . Estimated amortization expense for 2017 through 2021 is as follows: 2017 , $27,600,000 ; 2018 , $26,000,000 ; 2019 , $24,100,000 ; 2020 , $19,400,000 ; 2021 , $17,200,000 ; and after 2021 , $28,000,000 . The preceding expected amortization expense is an estimate and actual amounts could differ due to additional intangible asset acquisitions, changes in foreign currency rates or impairment of intangible assets. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 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, 2016 2015 2014 United States $ 262,403 $ 640,604 $ 666,323 Foreign 50,848 45,133 32,994 Income from continuing operations before income taxes $ 313,251 $ 685,737 $ 699,317 Components of Polaris’ provision for income taxes for continuing operations are as follows (in thousands): For the Years Ended December 31, 2016 2015 2014 Current: Federal $ 103,717 $ 211,017 $ 255,299 State 4,780 16,609 20,438 Foreign 17,367 20,733 21,584 Deferred (25,561 ) (17,983 ) (52,033 ) Total provision for income taxes for continuing operations $ 100,303 $ 230,376 $ 245,288 Reconciliation of the Federal statutory income tax rate to the effective tax rate is as follows: For the Years Ended December 31, 2016 2015 2014 Federal statutory rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 1.4 1.5 1.5 Domestic manufacturing deduction (2.1 ) (0.8 ) (1.1 ) Research and development tax credit (4.3 ) (3.1 ) (1.1 ) Valuation allowance for foreign subsidiaries net operating losses — 0.2 — Non-deductible expenses 2.4 0.4 0.3 Other permanent differences (0.4 ) 0.4 0.5 Effective income tax rate for continuing operations 32.0 % 33.6 % 35.1 % The income tax rate for 2016 was 32.0% as compared with 33.6% and 35.1% in 2015 and 2014, respectively. The lower income tax rate for 2016, compared with 2015 was primarily due to the decrease in 2016 pretax income, as the beneficial impact of discrete items increases with lower pretax earnings. In December 2015, the President of the United States signed the Consolidated Appropriations Act, 2016, which retroactively reinstated the research and development tax credit for 2015, and also made the research and development tax credit permanent. In addition to the 2015 research and development credits, the Company filed amended returns in 2015 to claim additional credits related to qualified research expenditures incurred in prior years. Undistributed earnings relating to certain non-U.S. subsidiaries of approximately $155,386,000 and $143,284,000 at December 31, 2016 and 2015 , respectively, are considered to be permanently reinvested; accordingly, no provision for U.S. federal income taxes has been provided thereon. If the Company were to distribute these earnings, it would be subject to both U.S. income taxes (subject to an adjustment for foreign tax credits reflecting the amounts paid to non-U.S. taxing authorities) and withholding taxes payable to the non-U.S. countries. Determination of the unrecognized deferred U.S. income tax liability related to these undistributed earnings is not practicable due to the complexities associated with this hypothetical calculation. Polaris utilizes the liability method of accounting for income taxes whereby deferred taxes are determined based on the estimated future tax effects of differences between the financial statement and tax bases of assets and liabilities given the provisions of enacted tax laws. In November 2015, the FASB issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes . This ASU requires entities to present deferred tax assets and deferred tax liabilities as noncurrent in the consolidated balance sheet. The Company has early adopted the requirements of ASU No. 2015-17, and applied the amended provisions prospectively. The net deferred income taxes consist of the following (in thousands): December 31, 2016 2015 Deferred income taxes: Inventories $ 13,252 $ 10,047 Accrued expenses 152,798 107,767 Derivative instruments (175 ) (1,112 ) Cost in excess of net assets of business acquired (10,257 ) (7,956 ) Property and equipment (56,240 ) (28,853 ) Compensation payable in common stock 73,297 67,222 Net operating loss carryforwards and impairments 13,650 12,374 Valuation allowance (6,981 ) (6,684 ) Total net deferred income tax asset $ 179,344 $ 152,805 At December 31, 2016 , the Company had available unused international and acquired federal net operating loss carryforwards of $42,776,000 . The net operating loss carryforwards will expire at various dates from 2017 to 2034 , with certain jurisdictions having indefinite carryforward terms. Polaris classified liabilities related to unrecognized tax benefits as long-term income taxes payable in the accompanying consolidated balance sheets in accordance with ASC Topic 740. Polaris recognizes potential interest and penalties related to income tax positions as a component of the provision for income taxes on the consolidated statements of income. Reserves related to potential interest are recorded as a component of long-term income taxes payable. The entire balance of unrecognized tax benefits at December 31, 2016 , if recognized, would affect the Company’s effective tax rate. The Company does not anticipate that total unrecognized tax benefits will materially change in the next twelve months. Tax years 2011 through 2016 remain open to examination by certain tax jurisdictions to which the Company is subject. A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in thousands): For the Years Ended December 31, 2016 2015 Balance at January 1, $ 22,509 $ 9,836 Gross increases for tax positions of prior years 3,065 9,683 Gross increases for tax positions of current year 4,672 4,961 Decreases due to settlements and other prior year tax positions (3,424 ) (178 ) Decreases for lapse of statute of limitations (1,782 ) (1,364 ) Currency translation effect on foreign balances (39 ) (429 ) Balance at December 31, 25,001 22,509 Reserves related to potential interest at December 31, 1,389 907 Unrecognized tax benefits at December 31, $ 26,390 $ 23,416 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure Shareholders Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Stock repurchase program. The Polaris Board of Directors has authorized the cumulative repurchase of up to 86,500,000 shares of the Company’s common stock. As of December 31, 2016 , 7,463,000 shares remain available for repurchases under the Board’s authorization. The Company has made the following share repurchases (in thousands): For the Years Ended December 31, 2016 2015 2014 Total number of shares repurchased and retired 2,908 2,179 554 Total investment $ 245,816 $ 293,616 $ 81,812 Shareholder rights plan. During 2000, the Polaris Board of Directors adopted a shareholder rights plan. Under the plan, a dividend of preferred stock purchase rights will become exercisable if a person or group should acquire 15 percent or more of the Company’s stock. The dividend will consist of one purchase right for each outstanding share of the Company’s common stock held by shareholders of record on June 1, 2000 . The shareholder rights plan was amended and restated in April 2010. The amended and restated rights agreement extended the final expiration date of the rights from May 2010 to April 2020, expanded the definition of “Beneficial Owner” to include certain derivative securities relating to the common stock of the Company and increased the purchase price for the rights from $75 to $125 per share. The Board of Directors may redeem the rights earlier for $0.01 per right. Stock purchase plan. Polaris maintains an employee stock purchase plan (“Purchase Plan”). A total of 3,000,000 shares of common stock are reserved for this plan. The Purchase Plan permits eligible employees to purchase common stock monthly at 95 percent of the average of the beginning and end of month stock prices. As of December 31, 2016 , approximately 1,324,000 shares had been purchased under the Purchase Plan. Dividends. Quarterly and total year cash dividends declared per common share for the year ended December 31, 2016 and 2015 were as follows: For the Years Ended December 31, 2016 2015 Quarterly dividend declared and paid per common share $ 0.55 $ 0.53 Total dividends declared and paid per common share $ 2.20 $ 2.12 On January 26, 2017 , the Polaris Board of Directors declared a regular cash dividend of $0.58 per share payable on March 15, 2017 to holders of record of such shares at the close of business on March 1, 2017 . Net income per share. Basic earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during each period, including shares earned under The Deferred Compensation Plan for Directors (“Director Plan”), the ESOP and deferred stock units under the 2007 Omnibus Incentive Plan (“Omnibus Plan”). Diluted earnings per share is computed under the treasury stock method and is calculated to compute the dilutive effect of outstanding stock options issued under the Option Plan and certain shares issued under the Omnibus Plan. A reconciliation of these amounts is as follows (in thousands): For the Years Ended December 31, 2016 2015 2014 Weighted average number of common shares outstanding 64,033 65,719 65,904 Director Plan and deferred stock units 162 210 196 ESOP 101 91 75 Common shares outstanding—basic 64,296 66,020 66,175 Dilutive effect of restricted stock awards 150 255 359 Dilutive effect of stock option awards 712 1,209 1,695 Common and potential common shares outstanding—diluted 65,158 67,484 68,229 During 2016 , 2015 and 2014 , the number of options that could potentially dilute earnings per share on a fully diluted basis that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive were 2,463,000 , 1,001,000 and 581,000 , respectively. Accumulated other comprehensive loss. Changes in the accumulated other comprehensive loss balance is as follows (in thousands): Foreign Cash Flow Accumulated Other Balance as of December 31, 2015 $ (64,360 ) $ 1,868 $ (62,492 ) Reclassification to the income statement — 4,643 4,643 Change in fair value (19,773 ) (6,215 ) (25,988 ) Balance as of December 31, 2016 $ (84,133 ) $ 296 $ (83,837 ) The table below provides data about the amount of gains and losses, net of tax, reclassified from accumulated other comprehensive loss into the income statement for cash flow derivatives designated as hedging instruments for the year ended December 31, 2016 and 2015 (in thousands): Derivatives in Cash Flow Hedging Relationships Location of Gain (Loss) Reclassified from Accumulated OCI into Income For the Years Ended December 31, 2016 2015 Foreign currency contracts Other expense, net $ 1,325 $ (8,399 ) Foreign currency contracts Cost of sales 3,318 4,549 Total $ 4,643 $ (3,850 ) The net amount of the existing gains or losses at December 31, 2016 that is expected to be reclassified into the income statement within the next 12 months is expected to not be material. See Note 12 for further information regarding Polaris’ derivative activities. |
Financial Services Arrangements
Financial Services Arrangements | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure Financial Services Arrangements [Abstract] | |
Financial Services Arrangements | Financial Services Arrangements Polaris Acceptance, a joint venture between Polaris and Wells Fargo Commercial Distribution Finance Corporation, a direct subsidiary of Wells Fargo Bank, N.A. (“Wells Fargo”), which is supported by a partnership agreement between their respective wholly owned subsidiaries, finances substantially all of Polaris’ United States sales whereby Polaris receives payment within a few days of shipment of the product. On March 1, 2016, Wells Fargo announced that it completed the purchase of the North American portion of GE Capital’s Commercial Distribution Finance (GECDF) business, including GECDF’s ownership interests in Polaris Acceptance. Effective March 1, 2016, GECDF adopted the tradename Wells Fargo Commercial Distribution Finance. Polaris’ subsidiary has a 50 percent equity interest in Polaris Acceptance. Polaris Acceptance sells a majority of its receivable portfolio to a securitization facility (the “Securitization Facility”) arranged by Wells Fargo. The sale of receivables from Polaris Acceptance to the Securitization Facility is accounted for in Polaris Acceptance’s financial statements as a “true-sale” under Accounting Standards Codification Topic 860. Polaris’ allocable share of the income of Polaris Acceptance has been included as a component of income from financial services in the accompanying consolidated statements of income. The partnership agreement is effective through February 2022. Polaris’ total investment in Polaris Acceptance of $94,009,000 at December 31, 2016 is accounted for under the equity method, and is recorded in investment in finance affiliate in the accompanying consolidated balance sheets. At December 31, 2016 , the outstanding amount of net receivables financed for dealers under this arrangement was $1,206,641,000 , which included $479,944,000 in the Polaris Acceptance portfolio and $726,697,000 of receivables within the Securitization Facility (“Securitized Receivables”). Polaris has agreed to repurchase products repossessed by Polaris Acceptance up to an annual maximum of 15 percent of the aggregate average month-end outstanding Polaris Acceptance receivables and Securitized Receivables during the prior calendar year. For calendar year 2016 , the potential 15 percent aggregate repurchase obligation was approximately $182,814,000 . Polaris’ financial exposure under this arrangement is limited to the difference between the amounts unpaid by the dealer with respect to the repossessed product plus costs of repossession and the amount received on the resale of the repossessed product. No material losses have been incurred under this agreement during the periods presented. Summarized financial information for Polaris Acceptance reflecting the effects of the Securitization Facility is presented as follows (in thousands): For the Years Ended December 31, 2016 2015 2014 Revenues $ 66,414 $ 63,548 $ 40,968 Interest and operating expenses 6,182 4,738 3,678 Net income $ 60,232 $ 58,810 $ 37,290 As of December 31, 2016 2015 Finance receivables, net $ 479,944 $ 472,029 Other assets 200 124 Total Assets $ 480,144 $ 472,153 Notes payable $ 288,275 $ 269,881 Other liabilities 3,851 4,126 Partners’ capital 188,018 198,146 Total Liabilities and Partners’ Capital $ 480,144 $ 472,153 Polaris has agreements with Performance Finance, Sheffield Financial and Synchrony Bank, under which these financial institutions provide financing to end consumers of Polaris products. Polaris’ income generated from these agreements has been included as a component of income from financial services in the accompanying consolidated statements of income. Polaris also administers and provides extended service contracts to consumers and certain insurance contracts to dealers and consumers through various third-party suppliers. Polaris finances its self-insured risks related to extended service contracts, but does not retain any insurance or financial risk under any of the other arrangements. Polaris’ service fee income generated from these arrangements has been included as a component of income from financial services in the accompanying consolidated statements of income. |
Investment in Other Affiliates
Investment in Other Affiliates | 12 Months Ended |
Dec. 31, 2016 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
Investment in Other Affiliates | Investment in Other Affiliates The Company has certain investments in nonmarketable securities of strategic companies. As of December 31, 2016 and 2015 , these investments are primarily comprised of investments in Eicher-Polaris Private Limited (EPPL) and Brammo, Inc. (“Brammo”), and are recorded as components of other long-term assets in the accompanying consolidated balance sheets. EPPL is a joint venture established in 2012 with Eicher Motors Limited (“Eicher”). Polaris and Eicher each control 50 percent of the joint venture, which is intended to design, develop and manufacture a full range of new vehicles for India and other emerging markets. The investment in EPPL is accounted for under the equity method, with Polaris’ proportionate share of income or loss recorded within the consolidated financial statements on a one month lag due to financial information not being available timely. As of December 31, 2016 and 2015 , the carrying value of the Company’s investment in EPPL was $20,182,000 and $18,884,000 , respectively. Through December 31, 2016 , Polaris has invested $43,321,000 in the joint venture. Polaris’ share of EPPL loss for the years ended December 31, 2016 and 2015 was $7,175,000 and $6,802,000 , respectively, and is included in equity in loss of other affiliates on the consolidated statements of income. Brammo is a privately held designer and developer of electric vehicles, which Polaris has invested in since 2011. The investment in Brammo is accounted for under the cost method. Brammo is in the early stages of designing, developing, and selling electric vehicle powertrains. As such, a risk exists that Brammo may not be able to secure sufficient financing to reach viability through cash flow from operations. In January 2015, Polaris acquired the electric motorcycle business from Brammo. Brammo will continue to be a designer and developer of electric vehicle powertrains. Polaris will impair or write off an investment and recognize a loss if and when events or circumstances indicate there is impairment in the investment that is other-than-temporary. When necessary, Polaris evaluates investments in nonmarketable securities for impairment, utilizing level 3 fair value inputs. During 2014, Polaris recorded an immaterial impairment expense within other expense (income), net in the consolidated statements of income, and reduced the Brammo investment. There were no impairments recorded during 2015 or 2016 related to these investments. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Product liability. Polaris is subject to product liability claims in the normal course of business. In 2012, Polaris purchased excess insurance coverage for catastrophic product liability claims for incidents occurring after the policy date. Polaris self-insures product liability claims before the policy date and up to the purchased catastrophic insurance coverage after the policy date. 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 determinable. The Company utilizes historical trends and actuarial analysis tools, along with an analysis of current claims, to assist in determining the appropriate loss reserve levels. At December 31, 2016 , the Company had an accrual of $45,075,000 for the probable payment of pending claims related to continuing operations product liability litigation associated with Polaris products. This accrual is included as a component of other accrued expenses in the accompanying consolidated balance sheets. Litigation. Polaris is a defendant in lawsuits and subject to other claims arising in the normal course of business. In the opinion of management, it is unlikely that any legal proceedings pending against or involving Polaris will have a material adverse effect on Polaris’ financial position or results of operations. Contingent purchase price. As a component of certain past acquisition agreements, Polaris has committed to make additional payments to certain sellers contingent upon either the passage of time or certain financial performance criteria. Polaris initially records the fair value of each commitment as of the respective opening balance sheet, and each reporting period the fair value is evaluated, using level 3 inputs, with the change in value reflected in the consolidated statements of income. As of December 31, 2016 and 2015 the fair value of contingent purchase price commitments are immaterial. Leases. Polaris leases buildings and equipment under non-cancelable operating leases. Total rent expense under all operating lease agreements was $22,534,000 , $16,823,000 and $13,734,000 for 2016 , 2015 and 2014 , respectively. A property lease agreement signed in 2013 for a manufacturing facility which Polaris began occupying in Opole, Poland commenced in February 2014. The Poland property lease is accounted for as a capital lease. Future minimum annual lease payments under capital and operating leases with noncancelable terms in excess of one year as of December 31, 2016 , are as follows (in thousands): Capital Operating 2017 $ 2,852 $ 30,924 2018 2,250 23,437 2019 2,080 20,147 2020 1,995 14,785 2021 1,925 10,225 Thereafter 14,938 13,111 Total future minimum lease obligation $ 26,040 $ 112,629 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments and Hedging Activities | Derivative Instruments and Hedging Activities The Company is exposed to certain risks relating to its ongoing business operations. From time to time, the primary risks managed by using derivative instruments are foreign currency risk, interest rate risk and commodity price fluctuations. Derivative contracts on various currencies are entered into in order to manage foreign currency exposures associated with certain product sourcing activities and intercompany cash flows. Interest rate swaps are occasionally entered into in order to maintain a balanced risk of fixed and floating interest rates associated with the Company’s long-term debt. Commodity hedging contracts are occasionally entered into in order to manage fluctuating market prices of certain purchased commodities and raw materials that are integrated into the Company’s end products. The Company’s foreign currency management objective is to mitigate the potential impact of currency fluctuations on the value of its U.S. dollar cash flows and to reduce the variability of certain cash flows at the subsidiary level. The Company actively manages certain forecasted foreign currency exposures and uses a centralized currency management operation to take advantage of potential opportunities to naturally offset foreign currency exposures against each other. The decision of whether and when to execute derivative instruments, along with the duration of the instrument, can vary from period to period depending on market conditions, the relative costs of the instruments and capacity to hedge. The duration is linked to the timing of the underlying exposure, with the connection between the two being regularly monitored. Polaris does not use any financial contracts for trading purposes. At December 31, 2016 , Polaris had the following open foreign currency contracts (in thousands): Foreign Currency Notional Amounts (in U.S. dollars) Net Unrealized Gain (Loss) Australian Dollar $ 22,498 $ 771 Canadian Dollar 65,154 1,357 Japanese Yen 1,371 (57 ) Mexican Peso 17,942 (1,773 ) Total $ 106,965 $ 298 These contracts, with maturities through December 31, 2017, met the criteria for cash flow hedges and the unrealized gains or losses, after tax, are recorded as a component of accumulated other comprehensive loss in shareholders’ equity. Polaris occasionally enters into derivative contracts to hedge a portion of the exposure related to diesel fuel and aluminum. As of December 31, 2016 , there were no outstanding commodity derivative contracts in place. As of December 31, 2015, diesel fuel and aluminum derivative contracts did not meet the criteria for hedge accounting. The table below summarizes the carrying values of derivative instruments as of December 31, 2016 and 2015 (in thousands): Carrying Values of Derivative Instruments as of December 31, 2016 Fair Value— Assets Fair Value— (Liabilities) Derivative Net Carrying Value Derivatives designated as hedging instruments Foreign exchange contracts(1) $ 2,128 $ (1,830 ) $ 298 Total derivatives designated as hedging instruments $ 2,128 $ (1,830 ) $ 298 Total derivatives $ 2,128 $ (1,830 ) $ 298 Carrying Values of Derivative Instruments as of December 31, 2015 Fair Value— Assets Fair Value— (Liabilities) Derivative Net Carrying Value Derivatives designated as hedging instruments Foreign exchange contracts(1) $ 5,218 $ (2,451 ) $ 2,767 Interest rate swap contracts(1) 186 — 186 Total derivatives designated as hedging instruments $ 5,404 $ (2,451 ) $ 2,953 Commodity contracts(1) — $ (354 ) $ (354 ) Total derivatives not designated as hedging instruments — $ (354 ) $ (354 ) Total derivatives $ 5,404 $ (2,805 ) $ 2,599 (1) Assets are included in prepaid expenses and other and liabilities are included in other accrued expenses on the accompanying consolidated balance sheets. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive loss and reclassified into the income statement in the same period or periods during which the hedged transaction affects the income statement. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in the current income statement. The amount of gains (losses), net of tax, related to the effective portion of derivative instruments designated as cash flow hedges included in accumulated other comprehensive loss for the years ended December 31, 2016 and 2015 was $(1,572,000) and $3,320,000 , respectively. See Note 8 for information about the amount of gains and losses, net of tax, reclassified from accumulated other comprehensive income loss into the income statement for derivative instruments designated as hedging instruments. The ineffective portion of foreign currency contracts was not material for the years ended December 31, 2016 and 2015 . The Company recognized a loss of $121,000 and $2,994,000 in cost of sales on commodity contracts not designated as hedging instruments in 2016 and 2015 , respectively. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting The Company’s reportable segments are based on the Company’s method of internal reporting, which generally segregates the operating segments by product line, inclusive of wholegoods and PG&A. The internal reporting of these operating segments is defined based, in part, on the reporting and review process used by the Company’s Chief Executive Officer. The Company has five operating segments: 1) ORV, 2) Snowmobiles, 3) Motorcycles, 4) Global Adjacent Markets, and 5) Other, and four reportable segments: 1) ORV/Snowmobiles, 2) Motorcycles, 3) Global Adjacent Markets and 4) Other. The ORV/Snowmobiles segment includes the aggregated results of our ORV and Snowmobiles operating segments. The Motorcycles, Global Adjacent Markets and Other segments include the results for those respective operating segments. Other includes our November 2016 acquisition of TAP. The Corporate amounts include costs that are not allocated to individual segments, which include incentive-based compensation and other unallocated manufacturing costs. Additionally, given the commonality of customers, manufacturing and asset management, the Company does not maintain separate balance sheets for each segment. Accordingly, the segment information presented below is limited to sales and gross profit data. For the Years Ended December 31, ($ in thousands) 2016 2015 2014 Sales ORV/Snowmobiles $ 3,357,496 $ 3,708,933 $ 3,741,154 Motorcycles 708,497 698,257 418,546 Global Adjacent Markets 341,937 312,100 319,948 Other 108,699 — — Total sales 4,516,629 4,719,290 4,479,648 Gross profit ORV/Snowmobiles 930,181 1,190,630 1,206,553 Motorcycles 91,401 97,261 54,427 Global Adjacent Markets 95,149 84,211 88,797 Other 19,842 — — Corporate (30,950 ) (33,060 ) (30,599 ) Total gross profit $ 1,105,623 $ 1,339,042 $ 1,319,178 Sales to external customers based on the location of the customer and property and equipment, net, by geography are presented in the tables below (in thousands): For the Years Ended December 31, 2016 2015 2014 United States $ 3,557,228 $ 3,688,980 $ 3,339,905 Canada 307,094 378,725 454,608 Other foreign countries 652,307 651,585 685,135 Consolidated sales $ 4,516,629 $ 4,719,290 $ 4,479,648 As of December 31, 2016 2015 United States $ 637,632 $ 548,410 Other foreign countries 89,964 102,268 Consolidated property and equipment, net $ 727,596 $ 650,678 |
Subsequent Event
Subsequent Event | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On January 9, 2017, our Board of Directors approved a strategic plan to wind down the Victory Motorcycles brand. The Company expects to commence the wind down activities and explore disposition options for the related assets in the near future. The Company estimates the total costs to wind down the brand could be in a range of $50,000,000 to $70,000,000 in 2017. |
Quarterly Financial Data
Quarterly Financial Data | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data [Abstract] | |
Quarterly Financial Data | Quarterly Financial Data (unaudited) Sales Gross profit Net income Diluted net income per share (In thousands, except per share data) 2016 First Quarter $ 982,996 $ 247,578 $ 46,889 $ 0.71 Second Quarter 1,130,777 284,503 71,166 1.09 Third Quarter 1,185,067 260,770 32,312 0.50 Fourth Quarter 1,217,789 312,772 62,581 0.97 Totals $ 4,516,629 $ 1,105,623 $ 212,948 $ 3.27 2015 First Quarter $ 1,033,345 $ 293,731 $ 88,563 $ 1.30 Second Quarter 1,124,327 319,414 100,943 1.49 Third Quarter 1,456,000 415,623 155,173 2.30 Fourth Quarter 1,105,618 310,274 110,682 1.66 Totals $ 4,719,290 $ 1,339,042 $ 455,361 $ 6.75 |
Valuation and Qualifying Accoun
Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2016 | |
Valuation and Qualifying Accounts [Abstract] | |
Valuation and Qualifying Accounts | POLARIS INDUSTRIES INC. SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS Allowance for Doubtful Accounts Balance at Additions Additions Other Changes Balance at (In thousands) 2014: Deducted from asset accounts—Allowance for doubtful accounts receivable $ 5,895 $ 2,347 $ 265 $ (1,083 ) $ 7,424 2015: Deducted from asset accounts—Allowance for doubtful accounts receivable $ 7,424 $ 2,169 $ 59 $ (1,008 ) $ 8,644 2016: Deducted from asset accounts—Allowance for doubtful accounts receivable $ 8,644 $ 7,085 $ 4,644 $ (934 ) $ 19,439 (1) Uncollectible accounts receivable written off, net of recoveries. Inventory Reserve Balance at Additions Additions Other Changes Balance at (In thousands) 2014: Deducted from asset accounts—Allowance for obsolete inventory $ 21,603 $ 12,868 $ 600 $ (8,900 ) $ 26,171 2015: Deducted from asset accounts—Allowance for obsolete inventory $ 26,171 $ 21,648 $ 1,942 $ (13,492 ) $ 36,269 2016: Deducted from asset accounts—Allowance for obsolete inventory $ 36,269 $ 19,770 $ 5,165 $ (16,029 ) $ 45,175 (2) Inventory disposals, net of recoveries. |
Organization and Significant 26
Organization and Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation | 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. The Company evaluates consolidation of entities under Accounting Standards Codification (ASC) Topic 810. This Topic requires management to evaluate whether an entity or interest is a variable interest entity and whether the company is the primary beneficiary. Polaris used the guidelines to analyze the Company’s relationships, including its relationship with Polaris Acceptance, and concluded that there were no variable interest entities requiring consolidation by the Company in 2016 , 2015 and 2014 . |
Use of Estimates | Use of estimates. The preparation of financial statements in conformity 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 statements and the reported amounts of revenues and expenses during the reporting period. Ultimate results could differ from those estimates. |
Fair Value Measurements | 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 the foreign currency contracts and commodity 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 interest rate volatility, foreign currency and commodity transactions. Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands): Fair Value Measurements as of December 31, 2016 Asset (Liability) Total Level 1 Level 2 Level 3 Non-qualified deferred compensation assets $ 49,330 $ 49,330 — — Foreign exchange contracts, net 298 — $ 298 — Total assets at fair value $ 49,628 $ 49,330 $ 298 — Non-qualified deferred compensation liabilities $ (49,330 ) $ (49,330 ) — — Total liabilities at fair value $ (49,330 ) $ (49,330 ) $ — — Fair Value Measurements as of December 31, 2015 Asset (Liability) Total Level 1 Level 2 Level 3 Non-qualified deferred compensation assets $ 48,238 $ 48,238 — — Foreign exchange contracts, net 2,767 — $ 2,767 — Interest rate swap contracts 186 — 186 — Total assets at fair value $ 51,191 $ 48,238 $ 2,953 — Commodity contracts, net $ (354 ) — $ (354 ) — Non-qualified deferred compensation liabilities (48,238 ) $ (48,238 ) — — Total liabilities at fair value $ (48,592 ) $ (48,238 ) $ (354 ) — 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, capital lease obligations and notes payable, approximate their fair values. At December 31, 2016 and December 31, 2015 , the fair value of the Company’s long-term debt was approximately $1,156,181,000 and $477,936,000 , respectively, and was determined 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, including current maturities, was $1,141,910,000 and $461,476,000 as of December 31, 2016 and December 31, 2015 , respectively. Polaris measures certain assets and liabilities at fair value on a nonrecurring basis. Assets acquired and liabilities assumed as part of acquisitions are measured at fair value. Refer to Notes 2 and 6 for additional information. Polaris will impair or write off an investment and recognize a loss when events or circumstances indicate there is impairment in the investment that is other-than-temporary. The amount of loss is determined by measuring the investment at fair value. Refer to Note 10 for additional information. |
Cash Equivalents | 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 approximates fair value. Such investments consist principally of money market mutual funds. |
Allowance for Doubtful Accounts | Allowance 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 accounts becomes available. |
Inventories | 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 market. |
Investment in Affiliate | Investment in other affiliates. Polaris’ investment in other affiliates is included within other long-term assets in the consolidated balance sheets, and represents the Company’s investment in nonmarketable securities of strategic companies. For each investment, Polaris assesses the level of influence in determining whether to account for the investment under the cost method or equity method. For equity method investments, Polaris’ proportionate share of income or losses is recorded in the consolidated statements of income. Polaris will write down or write off an investment and recognize a loss if and when events or circumstances indicate there is impairment in the investment that is other-than-temporary. Refer to Note 10 for additional information regarding Polaris’ investment in other affiliates. Investment in finance affiliate. The caption investment in finance affiliate in the consolidated balance sheets represents Polaris’ fifty percent equity interest in Polaris Acceptance, a partnership agreement between Wells Fargo Commercial Distribution Finance Corporation 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 investment in finance affiliate in the consolidated balance sheets. Polaris’ allocable share of the income of Polaris Acceptance has been included as a component of income from financial services in the consolidated statements of income. Refer to Note 9 for additional information regarding Polaris’ investment in Polaris Acceptance. |
Property and Equipment | Property and equipment. 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. Depreciation of assets recorded under capital leases is included with depreciation expense. Fully depreciated tooling is eliminated from the accounting records annually. |
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. Refer to Note 6 for additional information regarding goodwill and other intangible assets. |
Revenue Recognition | Revenue recognition. Revenues are recognized at the time of shipment to the dealer or distributor or other customers, or at the time of delivery for our retail aftermarket locations. Service revenues are recognized upon completion of the service. Product returns, whether in the normal course of business or resulting from repossession under the Company’s customer financing program (see Note 9), have not been material. Polaris sponsors certain sales incentive programs and accrues liabilities for estimated sales promotion expenses and estimated holdback amounts that are recognized as reductions to sales when products are sold to the dealer or distributor customer. |
Sales Promotions and Incentives | 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 distributor. Examples of sales promotion and incentive programs include dealer and consumer rebates, volume incentives, retail financing programs and sales associate incentives. Sales promotion and incentive expenses are estimated based on current programs and historical rates for each product line. Actual results may differ from these estimates if market conditions dictate the need to enhance or reduce sales promotion and incentive programs or if the customer usage rate varies from historical trends. Historically, sales promotion and incentive expenses have been within the Company’s expectations and differences have not been material. |
Dealer Holdback Programs | Dealer holdback programs. Dealer holdback represents a portion of the invoiced sales price that is expected to be subsequently returned to the dealer or distributor as a sales incentive upon the ultimate retail sale of the product. Holdback amounts reduce the ultimate net price of the products purchased by Polaris’ dealers or distributors and, therefore, reduce the amount of sales Polaris recognizes at the time of shipment. The portion of the invoiced sales price estimated as the holdback is recognized as “dealer holdback” liability on the Company’s balance sheet until paid or forfeited. The minimal holdback adjustments in the estimated holdback liability due to forfeitures are recognized in net sales. Payments are made to dealers or distributors at various times during the year subject to previously established criteria. |
Shipping and Handling Costs | Shipping and handling costs. Polaris records shipping and handling costs as a component of cost of sales at the time the product is shipped. |
Research and Development Expenses | Research and development expenses. Polaris records research and development expenses in the period in which they are incurred as a component of operating expenses. |
Advertising Expenses | Advertising expenses. Polaris records advertising expenses as a component of selling and marketing expenses in the period in which they are incurred. |
Product Warranties | Product warranties - Limited warranties. Polaris provides a limited warranty for its ORVs for a period of six months, for a period of one year for its snowmobiles, for a period of one or two years for its motorcycles depending on brand and model year, for a period of one year for its Taylor-Dunn vehicles, and for a two year period for GEM, Goupil and Aixam vehicles. Polaris provides longer warranties in certain geographical markets as determined by local regulations and market conditions and may also provide longer warranties related to certain promotional programs. Polaris’ limited 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 become known 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 accrual in any given period 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. |
Share-Based Employee Compensation | Share-based employee compensation. For purposes of determining the estimated fair value of share-based payment awards on the date of grant under ASC Topic 718, Polaris uses the Black-Scholes Model. The Black-Scholes Model requires the input of certain assumptions that require judgment. Because employee stock options and restricted stock awards have characteristics significantly different from those of traded options, and because changes in the input assumptions can materially affect the fair value estimate, the existing models may not provide a reliable single measure of the fair value of the employee stock options or restricted stock awards. Management will continue to assess the assumptions and methodologies used to calculate estimated fair value of share-based compensation. Circumstances may change and additional data may become available over time, which could result in changes to these assumptions and methodologies and thereby materially impact the fair value determination. If factors change and the Company employs different assumptions in the application of Topic 718 in future periods, the compensation expense that was recorded under Topic 718 may differ significantly from what was recorded in the current period. Refer to Note 3 for additional information regarding share-based compensation. The Company estimates the likelihood and the rate of achievement for performance share-based awards. Changes in the estimated rate of achievement and fluctuation in the market based stock price can have a significant effect on reported share-based compensation expenses as the effect of a change in the estimated achievement level and fluctuation in the market based stock price is recognized in the period that the likelihood factor and stock price changes. If adjustments in the estimated rate of achievement and fluctuation in the market based stock price are made, they would be reflected in gross margin and operating expenses. |
Derivative Instruments and Hedging Activities | Derivative instruments and hedging activities. Changes in the fair value of a derivative are recognized in earnings unless the derivative qualifies as a hedge. To qualify as a hedge, the Company must formally document, designate and assess the effectiveness of transactions that receive hedge accounting. Polaris enters into foreign exchange contracts to manage currency exposures from certain of its purchase commitments denominated in foreign currencies and transfers of funds from time to time from its foreign subsidiaries. Polaris does not use any financial contracts for trading purposes. These contracts met the criteria for cash flow hedges. Gains and losses on the Canadian dollar and Australian dollar contracts at settlement are recorded in non-operating other expense (income), net in the consolidated income statements, and gains and losses on the Japanese yen and Mexican peso contracts at settlement are recorded in cost of sales in the consolidated income statements. Unrealized gains and losses are recorded as a component of accumulated other comprehensive loss, net. Polaris is subject to market risk from fluctuating market prices of certain purchased commodity raw materials, including steel, aluminum, diesel fuel, and petroleum-based resins. In addition, the Company purchases components and parts containing various commodities, including steel, aluminum, rubber, rare earth metals and others which are integrated into the Company’s end products. While such materials are typically available from numerous suppliers, commodity raw materials are subject to price fluctuations. The Company generally buys these commodities and components based upon market prices that are established with the vendor as part of the purchase process. From time to time, Polaris utilizes derivative contracts to hedge a portion of the exposure to commodity risks. During 2015 , the Company entered into derivative contracts to hedge a portion of the exposure for diesel fuel and aluminum. The Company did not enter into any such derivative contracts during 2016 . The Company’s diesel fuel and aluminum hedging contracts do not meet the criteria for hedge accounting and therefore, the resulting unrealized gains and losses from those contracts are included in the consolidated statements of income in cost of sales. Refer to Note 12 for additional information regarding derivative instruments and hedging activities. The gross unrealized gains and losses of these contracts are recorded in the accompanying balance sheets as other current assets or other current liabilities. |
Foreign Currency Translation | 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 translated 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 loss in the shareholders’ 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 including intercompany transactions denominated in a currency other than the functional currency of the entity involved are included in other expense (income), net in our consolidated statements of income. |
Comprehensive Income | Comprehensive income. Components of comprehensive income include net income, foreign currency translation adjustments, and unrealized gains or losses on derivative instruments. The Company has chosen to disclose comprehensive income in separate consolidated statements of comprehensive income. |
New Accounting Pronouncements | New accounting pronouncements. Debt issuance costs. In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-03, Interest - Imputation of Interest (Subtopic 835-230) - Simplifying the Presentation of Debt Issuance Costs . The amendment requires that debt issuance costs be presented on the balance sheet as a direct reduction from the carrying amount of the related debt liability rather than as an asset. The amendment is to be applied retrospectively and is effective for fiscal years beginning after December 15, 2015. The Company adopted this amendment during the first quarter of 2016, which caused the Company to reclassify $1,803,000 of debt issuance costs as a reduction from long-term debt rather than as a component of prepaid expenses and other assets, as of December 31, 2015 . Share-based payment accounting. In March 2016, the FASB issued ASU No. 2016-09, which simplifies several aspects of the accounting for share-based payment transactions, including the accounting for income taxes, forfeitures, statutory tax withholding requirements, and statement of cash flow classification. The ASU is effective for annual reporting periods beginning after December 15, 2016, and is effective for the Company’s fiscal year beginning January 1, 2017. Early adoption is permitted, but the Company will adopt this ASU for the fiscal year beginning January 1, 2017. The impact of this ASU on the Company’s financial statements will be dependent on the volume of stock option exercises and restricted share vestings that occur. When the Company adopts this ASU for the fiscal year beginning January 1, 2017, the excess tax benefits will be classified as cash flows from operating activities rather than cash flows from financing activities on a prospective basis. In addition, the Company will continue to estimate the number of awards expected to vest, rather than electing to account for forfeitures as they occur. Leases. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) . This ASU requires most lessees to recognize right of use assets and lease liabilities, but recognize expenses in a manner similar with current accounting standards. The new standard is effective for fiscal years and interim periods beginning after December 15, 2018 and is effective for the Company’s fiscal year beginning January 1, 2019. Entities are required to use a modified retrospective approach, with early adoption permitted. The Company is evaluating the impact of this new standard on the financial statements. Revenue from contracts with customers. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers . This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue from the transfer of goods or services to customers in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. The new standard is effective for fiscal years and interim periods beginning after December 15, 2017 and is effective for the Company’s fiscal year beginning January 1, 2018. Subsequent to the issuance of ASU 2014-09, the FASB has issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net) , and ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients . These ASUs do not change the core principle of the guidance stated in ASU 2014-09, instead these amendments are intended to clarify and improve operability of certain topics included within the revenue standard. These ASUs will have the same effective date and transition requirements as ASU 2014-09. The Company has completed a preliminary assessment of the impact of ASU No. 2014-09 and other related ASUs, and does not anticipate the impact will be significant to the Company’s financial statements, accounting policies or processes. The Company expects to adopt ASU No. 2014-09 for the Company’s fiscal year beginning January 1, 2018, and expects to adopt the guidance using the modified retrospective approach. There are no other new accounting pronouncements that are expected to have a significant impact on Polaris’ consolidated financial statements. |
Organization and Significant 27
Organization and Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Accounting Policies [Abstract] | |
Activity in the limited warranty reserve | The activity in the limited warranty reserve during the periods presented was as follows (in thousands): For the Years Ended December 31, 2016 2015 2014 Balance at beginning of year $ 56,474 $ 53,104 $ 52,818 Additions to reserve through acquisitions 147 250 160 Additions charged to expense 194,996 73,716 61,888 Less: warranty claims paid (132,343 ) (70,596 ) (61,762 ) Balance at end of year $ 119,274 $ 56,474 $ 53,104 |
Schedule of assets and liabilities measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands): Fair Value Measurements as of December 31, 2016 Asset (Liability) Total Level 1 Level 2 Level 3 Non-qualified deferred compensation assets $ 49,330 $ 49,330 — — Foreign exchange contracts, net 298 — $ 298 — Total assets at fair value $ 49,628 $ 49,330 $ 298 — Non-qualified deferred compensation liabilities $ (49,330 ) $ (49,330 ) — — Total liabilities at fair value $ (49,330 ) $ (49,330 ) $ — — Fair Value Measurements as of December 31, 2015 Asset (Liability) Total Level 1 Level 2 Level 3 Non-qualified deferred compensation assets $ 48,238 $ 48,238 — — Foreign exchange contracts, net 2,767 — $ 2,767 — Interest rate swap contracts 186 — 186 — Total assets at fair value $ 51,191 $ 48,238 $ 2,953 — Commodity contracts, net $ (354 ) — $ (354 ) — Non-qualified deferred compensation liabilities (48,238 ) $ (48,238 ) — — Total liabilities at fair value $ (48,592 ) $ (48,238 ) $ (354 ) — |
Schedule of major components of 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): December 31, 2016 December 31, 2015 Raw materials and purchased components $ 141,566 $ 167,569 Service parts, garments and accessories 316,383 189,731 Finished goods 333,760 388,970 Less: reserves (45,175 ) (36,269 ) Inventories $ 746,534 $ 710,001 |
Schedule of activity in the warranty reserve | The activity in the deferred revenue reserve during the periods presented was as follows (in thousands): For the Years Ended December 31, 2016 2015 2014 Balance at beginning of year — — — Additions to deferred revenue through acquisitions $ 7,944 New contracts sold 20,569 — — Less: reductions for revenue recognized (2,356 ) — — Balance at end of year $ 26,157 — — (1) The unamortized extended service contract premiums (deferred revenue) recorded in other current liabilities, totaled $11,012,000 and $15,145,000 in other long-term liabilities as of December 31, 2016 . |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Business Combinations [Abstract] | |
Summary of preliminary fair values of net assets acquired and determination of final net assets | The following table summarizes the preliminary fair values assigned to the TAP net assets acquired and the determination of final net assets (in thousands): Cash and cash equivalents $ 3,017 Trade receivables 18,212 Inventory 144,912 Property, plant and equipment 32,814 Customer relationships 87,500 Trademarks / trade names 175,500 Goodwill 264,333 Other assets 18,434 Deferred revenue (7,944 ) Other liabilities assumed (64,913 ) Total fair value of net assets acquired 671,865 Less cash acquired (3,017 ) Total consideration for acquisition, less cash acquired $ 668,848 |
Unaudited pro forma information | The following unaudited pro forma information represents the Company’s results of operations as if the fiscal 2016 acquisition of TAP had occurred at the beginning of fiscal 2015 (in thousands, except per share data). These performance results may not be indicative of the actual results that would have occurred under the ownership and management of the Company. For the Years Ended December 31, 2016 2015 Net sales $ 5,161,688 $ 5,389,173 Net income 240,400 431,991 Basic earnings per share $ 3.74 $ 6.54 Diluted earnings per common share $ 3.69 $ 6.40 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of share-based compensation expenses | Total share-based compensation expenses were as follows (in thousands): For the Years Ended December 31, 2016 2015 2014 Option plan $ 23,876 $ 26,191 $ 24,428 Other share-based awards 23,368 23,275 26,574 Total share-based compensation before tax 47,244 49,466 51,002 Tax benefit 17,546 18,451 19,039 Total share-based compensation expense included in net income $ 29,698 $ 31,015 $ 31,963 |
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | The following summarizes stock option activity and the weighted average exercise price for the following plans for the each of the three years ended December 31, 2016 , 2015 and 2014 : Omnibus Plan Option Plan Outstanding Weighted Outstanding Weighted Balance as of December 31, 2013 4,466,080 $ 49.29 162,431 $ 23.74 Granted 705,564 130.10 — — Exercised (866,917 ) 30.33 (96,398 ) 23.77 Forfeited (98,215 ) 65.14 (2,800 ) 22.43 Balance as of December 31, 2014 4,206,512 $ 66.38 63,233 $ 23.76 Granted 743,062 150.81 — — Exercised (706,750 ) 40.21 (44,283 ) 23.92 Forfeited (137,285 ) 112.95 — — Balance as of December 31, 2015 4,105,539 $ 84.61 18,950 $ 23.37 Granted 1,326,430 78.72 — — Exercised (348,206 ) 40.51 (18,950 ) 23.37 Forfeited (366,702 ) 108.90 — — Balance as of December 31, 2016 4,717,061 $ 84.32 — — Vested or expected to vest as of December 31, 2016 4,717,061 $ 84.32 — — Options exercisable as of December 31, 2016 2,199,084 $ 62.60 — — |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The following assumptions were used to estimate the weighted average fair value of options of $16.81 , $37.64 and $39.97 granted during the years ended December 31, 2016 , 2015 and 2014 , respectively: For the Years Ended December 31, 2016 2015 2014 Weighted-average volatility 32 % 32 % 40 % Expected dividend yield 2.8 % 1.4 % 1.5 % Expected term (in years) 4.5 4.5 4.5 Weighted average risk free interest rate 1.4 % 1.5 % 1.6 % |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity [Table Text Block] | The following table summarizes restricted stock activity for the year ended December 31, 2016 : Shares Weighted Balance as of December 31, 2015 1,130,767 $ 122.08 Granted 909,161 77.53 Vested (233,841 ) 89.72 Canceled/Forfeited (284,885 ) 108.08 Balance as of December 31, 2016 1,521,202 $ 103.05 Expected to vest as of December 31, 2016 955,106 $ 101.57 |
Financing (Tables)
Financing (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | Debt, capital lease obligations, notes payable and the average related interest rates were as follows (in thousands): Average interest rate at December 31, 2016 Maturity December 31, 2016 December 31, 2015 Revolving loan facility 1.66% May 2021 $ 172,142 $ 225,707 Term loan facility 1.98% May 2021 740,000 — Senior notes—fixed rate 3.81% May 2018 25,000 25,000 Senior notes—fixed rate 4.60% May 2021 75,000 75,000 Senior notes—fixed rate 3.13% December 2020 100,000 100,000 Capital lease obligations 5.06% Various through 2029 19,306 21,874 Notes payable and other 3.40% June 2027 13,618 15,698 Debt issuance costs (3,156 ) (1,803 ) Total debt, capital lease obligations, and notes payable $ 1,141,910 $ 461,476 Less: current maturities 3,847 5,059 Total long-term debt, capital lease obligations, and notes payable $ 1,138,063 $ 456,417 |
Summary of Activity Under Credit Arrangements, Excluding Acquired Borrowings | The following summarizes activity under Polaris’ credit arrangements (dollars in thousands): 2016 2015 2014 Total borrowings at December 31 $ 1,112,142 $ 425,707 $ 200,000 Average outstanding borrowings during year $ 638,614 $ 403,097 $ 361,715 Maximum outstanding borrowings during year $ 1,234,337 $ 523,097 $ 500,000 Interest rate at December 31 2.25 % 2.33 % 3.77 % |
Goodwill and Other Intangible31
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill and other intangible assets | Goodwill and other intangible assets, net of accumulated amortization, for the periods ended December 31, 2016 and 2015 are as follows (in thousands): 2016 2015 Goodwill $ 421,563 $ 131,014 Other intangible assets, net 371,416 105,103 Total goodwill and other intangible assets, net $ 792,979 $ 236,117 |
Schedule of changes in carrying amount of goodwill | The changes in the carrying amount of goodwill for the years ended December 31, 2016 and 2015 are as follows (in thousands): 2016 2015 Balance as of beginning of year $ 131,014 $ 123,031 Goodwill from businesses acquired 293,390 17,010 Currency translation effect on foreign goodwill balances (2,841 ) (9,027 ) Balance as of end of year $ 421,563 $ 131,014 |
Schedule of other intangible assets, changes in net carrying amount | For other intangible assets, the changes in the net carrying amount for the years ended December 31, 2016 and 2015 are as follows (in thousands): 2016 2015 Gross Accumulated Gross Accumulated Other intangible assets, beginning $ 138,831 $ (33,728 ) $ 124,093 $ (23,158 ) Intangible assets acquired during the period 284,000 — 20,779 — Amortization expense — (16,549 ) — (12,136 ) Currency translation effect on foreign balances (2,285 ) 1,147 (6,041 ) 1,566 Other intangible assets, ending $ 420,546 $ (49,130 ) $ 138,831 $ (33,728 ) |
Schedule of components of other intangible assets | The components of other intangible assets were as follows (in thousands): December 31, 2016 Estimated Life Gross Carrying Accumulated Net Non-compete agreements 5 $ 540 $ (485 ) $ 55 Dealer/customer related 5-10 164,837 (35,907 ) 128,930 Developed technology 5-7 26,048 (12,738 ) 13,310 Total amortizable 191,425 (49,130 ) 142,295 Non-amortizable—brand/trade names 229,121 — 229,121 Total other intangible assets, net $ 420,546 $ (49,130 ) $ 371,416 December 31, 2015 Estimated Life Gross Carrying Accumulated Net Non-compete agreements 5 $ 540 $ (401 ) $ 139 Dealer/customer related 7 67,079 (24,069 ) 43,010 Developed technology 5-7 19,261 (9,258 ) 10,003 Total amortizable 86,880 (33,728 ) 53,152 Non-amortizable—brand/trade names 51,951 — 51,951 Total other intangible assets, net $ 138,831 $ (33,728 ) $ 105,103 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
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, 2016 2015 2014 United States $ 262,403 $ 640,604 $ 666,323 Foreign 50,848 45,133 32,994 Income from continuing operations before income taxes $ 313,251 $ 685,737 $ 699,317 |
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, 2016 2015 2014 Current: Federal $ 103,717 $ 211,017 $ 255,299 State 4,780 16,609 20,438 Foreign 17,367 20,733 21,584 Deferred (25,561 ) (17,983 ) (52,033 ) Total provision for income taxes for continuing operations $ 100,303 $ 230,376 $ 245,288 |
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, 2016 2015 2014 Federal statutory rate 35.0 % 35.0 % 35.0 % State income taxes, net of federal benefit 1.4 1.5 1.5 Domestic manufacturing deduction (2.1 ) (0.8 ) (1.1 ) Research and development tax credit (4.3 ) (3.1 ) (1.1 ) Valuation allowance for foreign subsidiaries net operating losses — 0.2 — Non-deductible expenses 2.4 0.4 0.3 Other permanent differences (0.4 ) 0.4 0.5 Effective income tax rate for continuing operations 32.0 % 33.6 % 35.1 % |
Net Deferred Income Taxes | The net deferred income taxes consist of the following (in thousands): December 31, 2016 2015 Deferred income taxes: Inventories $ 13,252 $ 10,047 Accrued expenses 152,798 107,767 Derivative instruments (175 ) (1,112 ) Cost in excess of net assets of business acquired (10,257 ) (7,956 ) Property and equipment (56,240 ) (28,853 ) Compensation payable in common stock 73,297 67,222 Net operating loss carryforwards and impairments 13,650 12,374 Valuation allowance (6,981 ) (6,684 ) Total net deferred income tax asset $ 179,344 $ 152,805 |
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, 2016 2015 Balance at January 1, $ 22,509 $ 9,836 Gross increases for tax positions of prior years 3,065 9,683 Gross increases for tax positions of current year 4,672 4,961 Decreases due to settlements and other prior year tax positions (3,424 ) (178 ) Decreases for lapse of statute of limitations (1,782 ) (1,364 ) Currency translation effect on foreign balances (39 ) (429 ) Balance at December 31, 25,001 22,509 Reserves related to potential interest at December 31, 1,389 907 Unrecognized tax benefits at December 31, $ 26,390 $ 23,416 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure Shareholders Equity [Abstract] | |
Schedule of share repurchases | The Company has made the following share repurchases (in thousands): For the Years Ended December 31, 2016 2015 2014 Total number of shares repurchased and retired 2,908 2,179 554 Total investment $ 245,816 $ 293,616 $ 81,812 |
Schedule of cash dividends declared per common share | Dividends. Quarterly and total year cash dividends declared per common share for the year ended December 31, 2016 and 2015 were as follows: For the Years Ended December 31, 2016 2015 Quarterly dividend declared and paid per common share $ 0.55 $ 0.53 Total dividends declared and paid per common share $ 2.20 $ 2.12 |
Schedule of reconciliation of weighted average number of shares | A reconciliation of these amounts is as follows (in thousands): For the Years Ended December 31, 2016 2015 2014 Weighted average number of common shares outstanding 64,033 65,719 65,904 Director Plan and deferred stock units 162 210 196 ESOP 101 91 75 Common shares outstanding—basic 64,296 66,020 66,175 Dilutive effect of restricted stock awards 150 255 359 Dilutive effect of stock option awards 712 1,209 1,695 Common and potential common shares outstanding—diluted 65,158 67,484 68,229 |
Schedule of changes in accumulated other comprehensive income (loss) balances | Changes in the accumulated other comprehensive loss balance is as follows (in thousands): Foreign Cash Flow Accumulated Other Balance as of December 31, 2015 $ (64,360 ) $ 1,868 $ (62,492 ) Reclassification to the income statement — 4,643 4,643 Change in fair value (19,773 ) (6,215 ) (25,988 ) Balance as of December 31, 2016 $ (84,133 ) $ 296 $ (83,837 ) |
Schedule of gains and losses, net of tax, reclassified from accumulated other comprehensive income into the income statement for cash flow derivatives designated as hedging instruments | The table below provides data about the amount of gains and losses, net of tax, reclassified from accumulated other comprehensive loss into the income statement for cash flow derivatives designated as hedging instruments for the year ended December 31, 2016 and 2015 (in thousands): Derivatives in Cash Flow Hedging Relationships Location of Gain (Loss) Reclassified from Accumulated OCI into Income For the Years Ended December 31, 2016 2015 Foreign currency contracts Other expense, net $ 1,325 $ (8,399 ) Foreign currency contracts Cost of sales 3,318 4,549 Total $ 4,643 $ (3,850 ) |
Financial Services Arrangemen34
Financial Services Arrangements (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Disclosure Financial Services Arrangements [Abstract] | |
Financial Information for Polaris Acceptance Reflecting the Effects of Securitization Facility | Summarized financial information for Polaris Acceptance reflecting the effects of the Securitization Facility is presented as follows (in thousands): For the Years Ended December 31, 2016 2015 2014 Revenues $ 66,414 $ 63,548 $ 40,968 Interest and operating expenses 6,182 4,738 3,678 Net income $ 60,232 $ 58,810 $ 37,290 As of December 31, 2016 2015 Finance receivables, net $ 479,944 $ 472,029 Other assets 200 124 Total Assets $ 480,144 $ 472,153 Notes payable $ 288,275 $ 269,881 Other liabilities 3,851 4,126 Partners’ capital 188,018 198,146 Total Liabilities and Partners’ Capital $ 480,144 $ 472,153 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Annual Lease Payments under Capital and Operating Leases with Non-cancelable Terms in Excess of One Year | Future minimum annual lease payments under capital and operating leases with noncancelable terms in excess of one year as of December 31, 2016 , are as follows (in thousands): Capital Operating 2017 $ 2,852 $ 30,924 2018 2,250 23,437 2019 2,080 20,147 2020 1,995 14,785 2021 1,925 10,225 Thereafter 14,938 13,111 Total future minimum lease obligation $ 26,040 $ 112,629 |
Derivative Instruments and He36
Derivative Instruments and Hedging Activities (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of open foreign currency contracts | At December 31, 2016 , Polaris had the following open foreign currency contracts (in thousands): Foreign Currency Notional Amounts (in U.S. dollars) Net Unrealized Gain (Loss) Australian Dollar $ 22,498 $ 771 Canadian Dollar 65,154 1,357 Japanese Yen 1,371 (57 ) Mexican Peso 17,942 (1,773 ) Total $ 106,965 $ 298 |
Schedule of carrying values of derivative instruments | The table below summarizes the carrying values of derivative instruments as of December 31, 2016 and 2015 (in thousands): Carrying Values of Derivative Instruments as of December 31, 2016 Fair Value— Assets Fair Value— (Liabilities) Derivative Net Carrying Value Derivatives designated as hedging instruments Foreign exchange contracts(1) $ 2,128 $ (1,830 ) $ 298 Total derivatives designated as hedging instruments $ 2,128 $ (1,830 ) $ 298 Total derivatives $ 2,128 $ (1,830 ) $ 298 Carrying Values of Derivative Instruments as of December 31, 2015 Fair Value— Assets Fair Value— (Liabilities) Derivative Net Carrying Value Derivatives designated as hedging instruments Foreign exchange contracts(1) $ 5,218 $ (2,451 ) $ 2,767 Interest rate swap contracts(1) 186 — 186 Total derivatives designated as hedging instruments $ 5,404 $ (2,451 ) $ 2,953 Commodity contracts(1) — $ (354 ) $ (354 ) Total derivatives not designated as hedging instruments — $ (354 ) $ (354 ) Total derivatives $ 5,404 $ (2,805 ) $ 2,599 (1) Assets are included in prepaid expenses and other and liabilities are included in other accrued expenses on the accompanying consolidated balance sheets. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information, by Segment [Table Text Block] | Accordingly, the segment information presented below is limited to sales and gross profit data. For the Years Ended December 31, ($ in thousands) 2016 2015 2014 Sales ORV/Snowmobiles $ 3,357,496 $ 3,708,933 $ 3,741,154 Motorcycles 708,497 698,257 418,546 Global Adjacent Markets 341,937 312,100 319,948 Other 108,699 — — Total sales 4,516,629 4,719,290 4,479,648 Gross profit ORV/Snowmobiles 930,181 1,190,630 1,206,553 Motorcycles 91,401 97,261 54,427 Global Adjacent Markets 95,149 84,211 88,797 Other 19,842 — — Corporate (30,950 ) (33,060 ) (30,599 ) Total gross profit $ 1,105,623 $ 1,339,042 $ 1,319,178 |
Polaris' Foreign Operations | Sales to external customers based on the location of the customer and property and equipment, net, by geography are presented in the tables below (in thousands): For the Years Ended December 31, 2016 2015 2014 United States $ 3,557,228 $ 3,688,980 $ 3,339,905 Canada 307,094 378,725 454,608 Other foreign countries 652,307 651,585 685,135 Consolidated sales $ 4,516,629 $ 4,719,290 $ 4,479,648 As of December 31, 2016 2015 United States $ 637,632 $ 548,410 Other foreign countries 89,964 102,268 Consolidated property and equipment, net $ 727,596 $ 650,678 |
Quarterly Financial Data (Table
Quarterly Financial Data (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Quarterly Financial Data [Abstract] | |
Quarterly Financial Data | Sales Gross profit Net income Diluted net income per share (In thousands, except per share data) 2016 First Quarter $ 982,996 $ 247,578 $ 46,889 $ 0.71 Second Quarter 1,130,777 284,503 71,166 1.09 Third Quarter 1,185,067 260,770 32,312 0.50 Fourth Quarter 1,217,789 312,772 62,581 0.97 Totals $ 4,516,629 $ 1,105,623 $ 212,948 $ 3.27 2015 First Quarter $ 1,033,345 $ 293,731 $ 88,563 $ 1.30 Second Quarter 1,124,327 319,414 100,943 1.49 Third Quarter 1,456,000 415,623 155,173 2.30 Fourth Quarter 1,105,618 310,274 110,682 1.66 Totals $ 4,719,290 $ 1,339,042 $ 455,361 $ 6.75 |
- Fair Value Measurements (Deta
- Fair Value Measurements (Detail) - Fair value, measurements, recurring - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-qualified deferred compensation assets | $ 49,330 | $ 48,238 |
Foreign exchange contracts, net | 298 | 2,767 |
Interest rate swap contracts | 186 | |
Total assets at fair value | 49,628 | 51,191 |
Commodity contracts, net | (354) | |
Non-qualified deferred compensation liabilities | (49,330) | (48,238) |
Total liabilities at fair value | (49,330) | (48,592) |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-qualified deferred compensation assets | 49,330 | 48,238 |
Foreign exchange contracts, net | 0 | 0 |
Interest rate swap contracts | 0 | |
Total assets at fair value | 49,330 | 48,238 |
Commodity contracts, net | 0 | |
Non-qualified deferred compensation liabilities | (49,330) | (48,238) |
Total liabilities at fair value | (49,330) | (48,238) |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-qualified deferred compensation assets | 0 | 0 |
Foreign exchange contracts, net | 298 | 2,767 |
Interest rate swap contracts | 186 | |
Total assets at fair value | 298 | 2,953 |
Commodity contracts, net | (354) | |
Non-qualified deferred compensation liabilities | 0 | 0 |
Total liabilities at fair value | 0 | (354) |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Non-qualified deferred compensation assets | 0 | 0 |
Foreign exchange contracts, net | 0 | 0 |
Interest rate swap contracts | 0 | |
Total assets at fair value | 0 | 0 |
Commodity contracts, net | 0 | |
Non-qualified deferred compensation liabilities | 0 | 0 |
Total liabilities at fair value | $ 0 | $ 0 |
- Major Components of Inventori
- Major Components of Inventories (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accounting Policies [Abstract] | ||
Raw materials and purchased components | $ 141,566 | $ 167,569 |
Service parts, garments and accessories | 316,383 | 189,731 |
Finished goods | 333,760 | 388,970 |
Less: reserves | (45,175) | (36,269) |
Inventories | $ 746,534 | $ 710,001 |
Organization and Significant 41
Organization and Significant Accounting Policies - Activity in Polaris Accrued Warranty Reserve (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Activity in Product Warranty Reserve [Roll Forward] | |||
Balance at beginning of year | $ 56,474 | $ 53,104 | $ 52,818 |
Additions to reserve through acquisitions | 147 | 250 | 160 |
Additions charged to expense | 194,996 | 73,716 | 61,888 |
Less: warranty claims paid | (132,343) | (70,596) | (61,762) |
Balance at end of year | $ 119,274 | $ 56,474 | $ 53,104 |
Organization and Significant 42
Organization and Significant Accounting Policies - Activity in Deferred Revenue Reserve (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Movement in Deferred Revenue [Roll Forward] | |
Balance at beginning of year | $ 0 |
Additions to deferred revenue through acquisitions | 7,944 |
New contracts sold | 20,569 |
Less: reductions for revenue recognized | (2,356) |
Balance at end of year | 26,157 |
Deferred revenue, current | 11,012 |
Deferred revenue, noncurrent | $ 15,145 |
Organization and Significant 43
Organization and Significant Accounting Policies - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounting Policies [Abstract] | |||
Long-term debt, fair value | $ 1,156,181,000 | $ 477,936,000 | |
Long-term debt, carrying value | 1,141,910,000 | 461,476,000 | |
Property, Plant and Equipment [Line Items] | |||
Advertising expenses | $ 85,199,000 | 80,090,000 | $ 82,600,000 |
Long-term Debt [Member] | Adjustments for New Accounting Pronouncement [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Debt issuance costs | $ 1,803,000 | ||
ORVs | |||
Property, Plant and Equipment [Line Items] | |||
Period of warranties provided by Polaris | 6 years | ||
Snowmobiles | |||
Property, Plant and Equipment [Line Items] | |||
Period of warranties provided by Polaris | 1 year | ||
SVs | |||
Property, Plant and Equipment [Line Items] | |||
Period of warranties provided by Polaris | 2 years | ||
Minimum | Motorcycles | |||
Property, Plant and Equipment [Line Items] | |||
Period of warranties provided by Polaris | 1 year | ||
Minimum | Building and Building Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful life | 10 years | ||
Minimum | Machinery Equipment And Production Tooling | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful life | 1 year | ||
Maximum | Motorcycles | |||
Property, Plant and Equipment [Line Items] | |||
Period of warranties provided by Polaris | 2 years | ||
Maximum | Building and Building Improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful life | 40 years | ||
Maximum | Machinery Equipment And Production Tooling | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, estimated useful life | 7 years | ||
Polaris Acceptance | |||
Property, Plant and Equipment [Line Items] | |||
Equity method investment ownership percentage | 50.00% |
Acquisitions - Additional Infor
Acquisitions - Additional Informaton (Detail) - USD ($) $ in Thousands | Nov. 10, 2016 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||
Total consideration for acquisition, less cash acquired | $ 723,705 | $ 41,195 | $ 28,013 | ||
TAP | |||||
Business Acquisition [Line Items] | |||||
Total consideration for acquisition, less cash acquired | $ 668,848 | $ 668,848 | |||
Weighted average useful life | 8 years 10 months 12 days | ||||
Net sales included in the consolidated income statement | 108,699 | ||||
Gross profit included in the consolidated income statement | 19,842 | ||||
TAP | Fair Value Adjustment to Inventory | |||||
Business Acquisition [Line Items] | |||||
Pro forma net income | $ 21,000 | ||||
TAP | Acquisition-related Costs | |||||
Business Acquisition [Line Items] | |||||
Pro forma net income | $ 13,000 | ||||
TAP | Customer Relationships | Minimum | |||||
Business Acquisition [Line Items] | |||||
Weighted average useful life | 5 years | ||||
TAP | Customer Relationships | Maximum | |||||
Business Acquisition [Line Items] | |||||
Weighted average useful life | 10 years |
Acquisitions - Summary of Asset
Acquisitions - Summary of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Nov. 10, 2016 | Dec. 31, 2016 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Business Acquisition [Line Items] | |||||
Goodwill | $ 421,563 | $ 421,563 | $ 131,014 | $ 123,031 | |
Total consideration for acquisition, less cash acquired | 723,705 | $ 41,195 | $ 28,013 | ||
TAP | |||||
Business Acquisition [Line Items] | |||||
Cash and cash equivalents | 3,017 | 3,017 | |||
Trade receivables | 18,212 | 18,212 | |||
Inventory | 144,912 | 144,912 | |||
Property, plant and equipment | 32,814 | 32,814 | |||
Customer relationships | 87,500 | 87,500 | |||
Trademarks / trade names | 175,500 | 175,500 | |||
Goodwill | 264,333 | 264,333 | |||
Other assets | 18,434 | 18,434 | |||
Deferred revenue | (7,944) | (7,944) | |||
Other liabilities assumed | (64,913) | (64,913) | |||
Total fair value of net assets acquired | 671,865 | $ 671,865 | |||
Less cash acquired | (3,017) | ||||
Total consideration for acquisition, less cash acquired | $ 668,848 | $ 668,848 |
Acquisitions - Unaudited Profor
Acquisitions - Unaudited Proforma Information (Details) - TAP - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | ||
Net sales | $ 5,161,688 | $ 5,389,173 |
Net income | $ 240,400 | $ 431,991 |
Basic earnings per share (in dollars per share) | $ 3,740 | $ 6.54 |
Diluted earnings per common share (in dollars per share) | $ 3,690 | $ 6.40 |
Share-Based Compensation Expens
Share-Based Compensation Expenses (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Option plan | $ 23,876 | $ 26,191 | $ 24,428 |
Other share-based awards | 23,368 | 23,275 | 26,574 |
Total share-based compensation before tax | 47,244 | 49,466 | 51,002 |
Tax benefit | 17,546 | 18,451 | 19,039 |
Total share-based compensation expense included in net income | $ 29,698 | $ 31,015 | $ 31,963 |
Share-Based Compensation - Addi
Share-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost related to unvested share-based equity awards | $ 97,831 | ||
Weighted average period of recognition of unvested share-based equity awards (in years) | 1 year 8 months 19 days | ||
Unrecognized compensation cost related to unvested share-based equity awards, Stock Options | $ 32,997 | ||
Unrecognized compensation cost related to unvested share-based equity awards, Restricted Stock | $ 64,834 | ||
Weighted average remaining contractual life of option outstanding | 6 years 5 months 13 days | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercisable, Weighted Average Remaining Contractual Term | 4 years 5 months 18 days | ||
Estimated weighted average fair value of options granted | $ 16.81 | $ 37.64 | $ 39.97 |
Total intrinsic value of options exercised | $ 17,522 | ||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | 68,311 | ||
Total intrinsic value of options outstanding and exercisable | $ 59,612 | ||
Omnibus Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum number of shares of common stock available for issuance | 21,000,000 | ||
Omnibus Incentive Plan | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock option awards granted, vesting period | 2 years | ||
Omnibus Incentive Plan | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock option awards granted, vesting period | 4 years | ||
Omnibus Incentive Plan | Deferred Stock Units | Non-employee directors | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock shares granted | 11,000 | 8,000 | 9,000 |
Omnibus Incentive Plan | Deferred Stock Units | Non-employee directors | Since 2007 | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock shares granted | 157,000 | ||
Stock Option Plans | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Common stock shares granted | 1,326,430 | 743,062 | 705,564 |
Stock Option Plans | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock option awards granted, vesting period | 3 years | ||
Stock Option Plans | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock option awards granted, expiration period | 10 years | ||
Directors Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum shares authorized for issuance | 500,000 | ||
Shares of common stock earned | 73,000 | ||
Additional shares issued to retired directors | 427,000 | ||
Liabilities under share plan | $ 6,111 | $ 9,167 | |
Restricted Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total intrinsic value of restricted stock expected to vest | $ 78,691 | ||
Weighted average fair values at the grant dates of grants awarded | $ 77.53 | $ 139.50 | $ 134.34 |
- Stock Option Activity and Wei
- Stock Option Activity and Weighted Average Exercise Price (Detail) - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Outstanding Shares | |||
Forfeited | 0 | ||
Stock Option Plans | |||
Outstanding Shares | |||
Beginning Balance | 4,105,539 | 4,206,512 | 4,466,080 |
Granted | 1,326,430 | 743,062 | 705,564 |
Exercised | (348,206) | (706,750) | (866,917) |
Forfeited | (366,702) | (137,285) | (98,215) |
Ending Balance | 4,717,061 | 4,105,539 | 4,206,512 |
Vested or expected to vest at end of period | 4,717,061 | ||
Options exercisable at end of period | 2,199,084 | ||
Weighted-Average Exercise Price | |||
Beginning Balance | $ 84.61 | $ 66.38 | $ 49.29 |
Granted | 78.72 | 150.81 | 130.10 |
Exercised | 40.51 | 40.21 | 30.33 |
Forfeited | 108.90 | 112.95 | 65.14 |
Ending Balance | 84.32 | $ 84.61 | $ 66.38 |
Vested or expected to vest at end of period | 84.32 | ||
Options exercisable at end of period | $ 62.60 | ||
Omnibus Incentive Plan | |||
Outstanding Shares | |||
Beginning Balance | 18,950 | 63,233 | 162,431 |
Exercised | (18,950) | (44,283) | (96,398) |
Forfeited | 0 | (2,800) | |
Ending Balance | 0 | 18,950 | 63,233 |
Vested or expected to vest at end of period | 0 | ||
Options exercisable at end of period | 0 | ||
Weighted-Average Exercise Price | |||
Beginning Balance | $ 23.37 | $ 23.76 | $ 23.74 |
Exercised | 23.37 | 23.92 | 23.77 |
Forfeited | 0 | 0 | 22.43 |
Ending Balance | 0 | $ 23.37 | $ 23.76 |
Vested or expected to vest at end of period | 0 | ||
Options exercisable at end of period | $ 0 |
- Assumptions Used to Estimate
- Assumptions Used to Estimate Weighted Average Fair Value of Options (Detail) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Weighted-average volatility | 32.00% | 32.00% | 40.00% |
Expected dividend yield | 2.80% | 1.40% | 1.50% |
Expected term (in years) | 4 years 6 months | 4 years 6 months | 4 years 6 months |
Weighted average risk free interest rate | 1.40% | 1.50% | 1.60% |
- Summary of Restricted Stock A
- Summary of Restricted Stock Activity (Detail) - Restricted Stock - $ / shares | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Shares Outstanding | |||
Beginning Balance | 1,130,767 | ||
Granted | 909,161 | ||
Vested | (233,841) | ||
Canceled/Forfeited | (284,885) | ||
Ending Balance | 1,521,202 | 1,130,767 | |
Expected to vest as of end of period | 955,106 | ||
Weighted Average Grant Price | |||
Beginning Balance | $ 122.08 | ||
Granted | 77.53 | $ 139.50 | $ 134.34 |
Vested | 89.72 | ||
Canceled/Forfeited | 108.08 | ||
Ending Balance | 103.05 | $ 122.08 | |
Expected to vest as of end of period | $ 101.57 |
Employee Savings Plans - Additi
Employee Savings Plans - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Expenses related ESOP | $ 7,849 | $ 7,455 | $ 10,789 |
Shares vested under ESOP | 3,811,000 | ||
Matching percentage of employer to employee contributions | 100.00% | ||
Matching contributions to 401(k) retirement savings plan | $ 15,456 | 14,178 | $ 12,486 |
Temporary Equity, Shares Issued | 105,931 | ||
Deferred compensation | $ 8,728 | 9,645 | |
Temporary Equity, Other Changes | 8,993 | ||
Temporary Equity, Accretion to Redemption Value, Adjustment | $ (266) | ||
Employee Stock Ownership Plan E S O P Plan | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Maximum number of shares of common stock available for issuance | 7,200,000 | ||
Fair value, measurements, recurring | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets, fair value disclosure | $ 49,628 | 51,191 | |
Level 1 | Fair value, measurements, recurring | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets, fair value disclosure | 49,330 | 48,238 | |
Level 1 | Fair value, measurements, recurring | Non-qualified deferred compensation assets | |||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | |||
Assets, fair value disclosure | $ 49,330 | $ 48,238 |
Financing Agreement - Debt Inst
Financing Agreement - Debt Instruments (Details) - USD ($) | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Debt Instrument [Line Items] | |||
Long-term debt | $ 1,112,142,000 | $ 425,707,000 | $ 200,000,000 |
Unamortized Debt Issuance Expense | (3,156,000) | (1,803,000) | |
Total debt, capital lease obligations, and notes payable | 1,141,910,000 | 461,476,000 | |
Less: current maturities | 3,847,000 | 5,059,000 | |
Total long-term debt, capital lease obligations, and notes payable | $ 1,138,063,000 | 456,417,000 | |
Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Average interest rate | 1.66% | ||
Long-term debt | $ 172,142,000 | 225,707,000 | |
Senior Notes | Senior Unsecured Notes, 3.81 Percent, Due May 2018 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 25,000,000 | 25,000,000 | |
Senior Notes | Senior Unsecured Notes, 4.60 Percent, Due May 2021 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 75,000,000 | 75,000,000 | |
Senior Notes | Senior Unsecured Notes 3.13 Percent Due December 2020 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 100,000,000 | 100,000,000 | |
Capital lease obligations | |||
Debt Instrument [Line Items] | |||
Capital lease obligations | 19,306,000 | 21,874,000 | |
Notes payable | Notes Payable 3.50 Percent Due June 2027 | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 13,618,000 | 15,698,000 | |
Long-term Debt [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Interest Rate at Period End | 1.98% | ||
Long-term Line of Credit | $ 740,000,000 | $ 0 |
- Summary of Activity Under Cre
- Summary of Activity Under Credit Arrangements, Excluding Acquired Borrowings (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Debt Disclosure [Abstract] | |||
Total borrowings at December 31 | $ 1,112,142 | $ 425,707 | $ 200,000 |
Average outstanding borrowings during year | 638,614 | 403,097 | 361,715 |
Maximum outstanding borrowings during year | $ 1,234,337 | $ 523,097 | $ 500,000 |
Interest rate at December 31 | 2.25% | 2.33% | 3.77% |
Financing - Additional Informat
Financing - Additional Information (Detail) ft² in Thousands | 1 Months Ended | |||||||||
Dec. 31, 2013USD ($) | Dec. 31, 2010USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Feb. 28, 2015USD ($) | Jan. 09, 2015ft² | Dec. 31, 2014USD ($) | Aug. 31, 2011USD ($) | |
Line of Credit Facility [Line Items] | ||||||||||
Revolving loan facility, maximum capacity | $ 350,000,000 | |||||||||
Letter of credit outstanding | $ 13,368,000 | |||||||||
Debt outstanding from dealers | 1,438,845,000 | |||||||||
Area of Real Estate Property | ft² | 725 | |||||||||
Long-term debt | $ 1,112,142,000 | $ 425,707,000 | $ 200,000,000 | |||||||
Maximum | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Aggregate repurchase obligation | 15.00% | |||||||||
Master Notes | Senior Unsecured Notes, 3.81 Percent, Due May 2018 | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Issuance of senior notes | $ 25,000,000 | |||||||||
Maturity date | May 31, 2018 | |||||||||
Master Notes | Senior Unsecured Notes, 4.60 Percent, Due May 2021 | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Issuance of senior notes | $ 75,000,000 | |||||||||
Maturity date | May 31, 2021 | |||||||||
Master Notes | Senior Unsecured Notes 3.13 Percent Due December 2020 | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Issuance of senior notes | $ 100,000,000 | |||||||||
Maturity date | Dec. 31, 2020 | |||||||||
Notes Payable to Banks [Member] | Mortgages [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Long-term debt | $ 14,500,000 | |||||||||
Long-term Debt [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Revolving loan facility, maximum capacity | $ 750,000,000 | |||||||||
Debt Instrument, Face Amount | $ 500,000,000 | |||||||||
Long-term Line of Credit | $ 740,000,000 | $ 0 | ||||||||
Revolving Credit Facility [Member] | ||||||||||
Line of Credit Facility [Line Items] | ||||||||||
Revolving loan facility, maximum capacity | $ 600,000,000 | $ 500,000,000 |
Goodwill and Other Intangible56
Goodwill and Other Intangible Assets - Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 421,563 | $ 131,014 | $ 123,031 |
Other intangible assets, net | 371,416 | 105,103 | |
Intangible Assets, Net (Including Goodwill) | $ 792,979 | $ 236,117 |
Goodwill and Other Intangible57
Goodwill and Other Intangible Assets - Changes in Carrying Amount of Goodwill (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill [Roll Forward] | ||
Balance as of beginning of year | $ 131,014 | $ 123,031 |
Goodwill from businesses acquired | 293,390 | 17,010 |
Currency translation effect on foreign goodwill balances | (2,841) | (9,027) |
Balance as of end of year | $ 421,563 | $ 131,014 |
Goodwill and Other Intangible58
Goodwill and Other Intangible Assets - Other Intangible Assets, Changes in Net Carrying Amount (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Other Intangible Assets, Gross Amount [Roll Forward] | ||
Other intangible assets, beginning | $ 138,831 | $ 124,093 |
Intangible assets acquired during the period | 284,000 | 20,779 |
Currency translation effect on foreign balances | (2,285) | (6,041) |
Other intangible assets, ending | 420,546 | 138,831 |
Other Intangible Assets, Accumulated Amortization [Roll Forward] | ||
Other intangible assets, beginning | (33,728) | (23,158) |
Amortization expense | (16,549) | (12,136) |
Currency translation effect on foreign balances | 1,147 | 1,566 |
Other intangible assets, ending | $ (49,130) | $ (33,728) |
- Components of Other Intangibl
- Components of Other Intangible Assets (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Intangible Assets by Major Class [Line Items] | |||
Amortizable, Gross Carrying Amount | $ 191,425 | $ 86,880 | |
Accumulated Amortization | (49,130) | (33,728) | $ (23,158) |
Amortizable, Net | 142,295 | 53,152 | |
Total other intangible assets, Gross Carrying Amount | 420,546 | 138,831 | $ 124,093 |
Total other intangible assets, net | $ 371,416 | $ 105,103 | |
Non-compete agreements | |||
Intangible Assets by Major Class [Line Items] | |||
Total Estimated Life (years) | 5 years | 5 years | |
Amortizable, Gross Carrying Amount | $ 540 | $ 540 | |
Accumulated Amortization | (485) | (401) | |
Amortizable, Net | 55 | $ 139 | |
Dealer/customer related | |||
Intangible Assets by Major Class [Line Items] | |||
Total Estimated Life (years) | 7 years | ||
Amortizable, Gross Carrying Amount | 164,837 | $ 67,079 | |
Accumulated Amortization | (35,907) | (24,069) | |
Amortizable, Net | $ 128,930 | 43,010 | |
Dealer/customer related | Minimum | |||
Intangible Assets by Major Class [Line Items] | |||
Total Estimated Life (years) | 5 years | ||
Dealer/customer related | Maximum | |||
Intangible Assets by Major Class [Line Items] | |||
Total Estimated Life (years) | 10 years | ||
Developed technology | |||
Intangible Assets by Major Class [Line Items] | |||
Amortizable, Gross Carrying Amount | $ 26,048 | 19,261 | |
Accumulated Amortization | (12,738) | (9,258) | |
Amortizable, Net | $ 13,310 | $ 10,003 | |
Developed technology | Minimum | |||
Intangible Assets by Major Class [Line Items] | |||
Total Estimated Life (years) | 5 years | 5 years | |
Developed technology | Maximum | |||
Intangible Assets by Major Class [Line Items] | |||
Total Estimated Life (years) | 7 years | 7 years | |
Non-amortizable—brand/trade names | |||
Intangible Assets by Major Class [Line Items] | |||
Non-amortizable, Gross Carrying Amount | $ 229,121 | $ 51,951 | |
Non-amortizable, Net | $ 229,121 | $ 51,951 |
Goodwill and Other Intangible60
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense of intangible assets | $ 16,549 | $ 12,136 |
Estimated Future Amortization Expense by Fiscal Year [Abstract] | ||
2,017 | 27,600 | |
2,018 | 26,000 | |
2,019 | 24,100 | |
2,020 | 19,400 | |
2,021 | 17,200 | |
After 2,021 | $ 28,000 |
Income Before Income Taxes (Det
Income Before Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
United States | $ 262,403 | $ 640,604 | $ 666,323 |
Foreign | 50,848 | 45,133 | 32,994 |
Income before income taxes | $ 313,251 | $ 685,737 | $ 699,317 |
- Components of Provision for I
- Components of Provision for Income Taxes (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Current: | |||
Federal | $ 103,717 | $ 211,017 | $ 255,299 |
State | 4,780 | 16,609 | 20,438 |
Foreign | 17,367 | 20,733 | 21,584 |
Deferred | (25,561) | (17,983) | (52,033) |
Total provision for income taxes for continuing operations | $ 100,303 | $ 230,376 | $ 245,288 |
- Reconciliation of Federal Sta
- Reconciliation of Federal Statutory Income Tax Rate to Effective Tax Rate (Detail) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory rate | 35.00% | 35.00% | 35.00% |
State income taxes, net of federal benefit | 1.40% | 1.50% | 1.50% |
Domestic manufacturing deduction | (2.10%) | (0.80%) | (1.10%) |
Research and development tax credit | (4.30%) | (3.10%) | (1.10%) |
Valuation allowance for foreign subsidiaries net operating losses | 0.00% | 0.20% | 0.00% |
Non-deductible expenses | 2.40% | 0.40% | 0.30% |
Other permanent differences | (0.40%) | 0.40% | 0.50% |
Effective income tax rate for continuing operations | 32.00% | 33.60% | 35.10% |
- Net Deferred Income Taxes (De
- Net Deferred Income Taxes (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Deferred income taxes: | ||
Inventories | $ 13,252 | $ 10,047 |
Accrued expenses | 152,798 | 107,767 |
Derivative instruments | (175) | (1,112) |
Cost in excess of net assets of business acquired | (10,257) | (7,956) |
Property and equipment | (56,240) | (28,853) |
Compensation payable in common stock | 73,297 | 67,222 |
Net operating loss carryforwards and impairments | 13,650 | 12,374 |
Valuation allowance | (6,981) | (6,684) |
Total net deferred income tax asset | $ 179,344 | $ 152,805 |
- Reconciliation of Beginning a
- Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | ||
Balance at January 1, | $ 22,509 | $ 9,836 |
Gross increases for tax positions of prior years | 3,065 | 9,683 |
Gross increases for tax positions of current year | 4,672 | 4,961 |
Decreases due to settlements and other prior year tax positions | (3,424) | (178) |
Decreases for lapse of statute of limitations | (1,782) | (1,364) |
Currency translation effect on foreign balances | (39) | (429) |
Balance at December 31, | 25,001 | 22,509 |
Reserves related to potential interest at December 31, | 1,389 | 907 |
Unrecognized tax benefits at December 31, | $ 26,390 | $ 23,416 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Income Tax Disclosure [Abstract] | ||
Undistributed earnings relating to certain non-U.S. subsidiaries | $ 155,386 | $ 143,284 |
Net operating loss carryforwards | $ 42,776 |
Shareholders' Equity - Share Re
Shareholders' Equity - Share Repurchases (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Disclosure Shareholders Equity [Abstract] | |||
Total number of shares repurchased and retired | 2,908 | 2,179 | 554 |
Total investment | $ 245,816 | $ 293,616 | $ 81,812 |
Shareholders' Equity - Cash Div
Shareholders' Equity - Cash Dividends Declared Per Common Share (Details) - $ / shares | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2012 | Dec. 31, 2016 | Dec. 31, 2015 | |
Disclosure Shareholders Equity [Abstract] | ||||
Quarterly dividend declared and paid per common share | $ 0.55 | $ 0.53 | $ 2.2 | $ 2.12 |
Shareholders' Equity - Reconcil
Shareholders' Equity - Reconciliation of Weighted Average Number of Shares (Detail) - shares shares in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Weighted Average Number of Shares Outstanding [Line Items] | |||
Weighted average number of common shares outstanding | 64,033 | 65,719 | 65,904 |
Director Plan and deferred stock units | 162 | 210 | 196 |
ESOP | 101 | 91 | 75 |
Common shares outstanding—basic | 64,296 | 66,020 | 66,175 |
Common and potential common shares outstanding—diluted | 65,158 | 67,484 | 68,229 |
Restricted Stock | |||
Weighted Average Number of Shares Outstanding [Line Items] | |||
Dilutive effect of stock awards | 150 | 255 | 359 |
Stock Options [Member] | |||
Weighted Average Number of Shares Outstanding [Line Items] | |||
Dilutive effect of stock awards | 712 | 1,209 | 1,695 |
Shareholders' Equity - Changes
Shareholders' Equity - Changes in Accumulated Other Comprehensive Income (Loss) Balances (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2016USD ($) | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |
Balance as of December 31, 2015 | $ (62,492) |
Reclassification to the income statement | 4,643 |
Change in fair value | (25,988) |
Balance as of December 31, 2016 | (83,837) |
Foreign currency contracts | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |
Balance as of December 31, 2015 | (64,360) |
Change in fair value | (19,773) |
Balance as of December 31, 2016 | (84,133) |
Cash Flow Hedging | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | |
Balance as of December 31, 2015 | 1,868 |
Reclassification to the income statement | 4,643 |
Change in fair value | (6,215) |
Balance as of December 31, 2016 | $ 296 |
Shareholders' Equity - Gains an
Shareholders' Equity - Gains and Losses, Net of Tax Reclassified from Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Location of Gain (Loss) Reclassified from Accumulated OCI into Income | $ 4,643 | $ (3,850) |
Foreign currency contracts | Other expense, net | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Location of Gain (Loss) Reclassified from Accumulated OCI into Income | 1,325 | (8,399) |
Foreign currency contracts | Cost of sales | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Location of Gain (Loss) Reclassified from Accumulated OCI into Income | $ 3,318 | $ 4,549 |
Shareholders' Equity - Addition
Shareholders' Equity - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | Jan. 26, 2017 | Apr. 30, 2010 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2000 |
Stockholders Equity Note [Line Items] | ||||||
Number of shares authorized to be repurchased | 86,500,000 | |||||
Remaining authorized repurchase amount | 7,463,000 | |||||
Cash dividends declared, per share | $ 2.20 | $ 2.12 | $ 1.92 | |||
Total number of shares repurchased and retired | 2,908,000 | 2,179,000 | 554,000 | |||
Total investment | $ 245,816 | $ 293,616 | $ 81,812 | |||
Employee Stock Purchase Plan Number Of Shares Available For Issuance | 3,000,000 | |||||
Share Based Compensation Arrangements By Share Based Payment Award Percentage Of Market Price At Eligible Employees Granted Options To Purchase Shares | 95.00% | |||||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 1,324,000 | |||||
Common stock excluded from calculation of diluted earnings per share | 2,463,000 | 1,001,000 | 581,000 | |||
Stockholder Rights Plan [Member] | ||||||
Stockholders Equity Note [Line Items] | ||||||
Minimum Percentage Of Ownership Acquired Or To Be Acquired Upon Which Purchase Rights Become Exercisable | 15.00% | |||||
Common Stock Dividends Right Per Share Declared | 1 | |||||
Dividends Payable, Date of Record | Jun. 1, 2000 | |||||
Incentive Stock Purchase Rights Redemption Price Per Right | $ 0.01 | |||||
Stockholder Rights Plan [Member] | Maximum | ||||||
Stockholders Equity Note [Line Items] | ||||||
Common Stock Price Per Share Under Rights Plan | 125 | |||||
Stockholder Rights Plan [Member] | Minimum | ||||||
Stockholders Equity Note [Line Items] | ||||||
Common Stock Price Per Share Under Rights Plan | $ 75 | |||||
Subsequent Event | ||||||
Stockholders Equity Note [Line Items] | ||||||
Cash dividends declared, per share | $ 0.58 |
- Financial Information for Pol
- Financial Information for Polaris Acceptance Reflecting Effects of Securitization Facility (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Polaris Acceptance | |||
Schedule of Investments [Line Items] | |||
Revenues | $ 66,414 | $ 63,548 | $ 40,968 |
Interest and operating expenses | 6,182 | 4,738 | 3,678 |
Net income | 60,232 | 58,810 | $ 37,290 |
Finance receivables, net | 479,944 | 472,029 | |
Other assets | 200 | 124 | |
Total Assets | 480,144 | 472,153 | |
Notes payable/(receivable) | (288,275) | (269,881) | |
Other liabilities | 3,851 | 4,126 | |
Partners' capital | 188,018 | 198,146 | |
Total Liabilities and Partners' Capital | $ 480,144 | $ 472,153 | |
Maximum | |||
Schedule of Investments [Line Items] | |||
Aggregate repurchase obligation | 15.00% |
Financial Services Arrangemen74
Financial Services Arrangements - Additional Information (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Investments in and Advances to Affiliates [Line Items] | ||
Investment in finance affiliate | $ 94,009 | $ 99,073 |
Net amount financed for dealers | 1,206,641 | |
Trade receivables, net | 174,832 | $ 150,778 |
Aggregate repurchase obligation, amount | $ 182,814 | |
Maximum | ||
Investments in and Advances to Affiliates [Line Items] | ||
Aggregate repurchase obligation | 15.00% | |
Polaris Acceptance | ||
Investments in and Advances to Affiliates [Line Items] | ||
Equity method investment ownership percentage | 50.00% | |
Trade receivables, net | $ 479,944 | |
Securitization Facility | ||
Investments in and Advances to Affiliates [Line Items] | ||
Outstanding balance of receivables | $ 726,697 |
Investment in Other Affiliates
Investment in Other Affiliates (Detail) - USD ($) $ in Thousands | 12 Months Ended | 36 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2014 | |
Investments in and Advances to Affiliates [Line Items] | ||||
Investment in finance affiliate | $ 94,009 | $ 99,073 | ||
Payments for (Proceeds from) Investments | $ 43,321 | |||
Equity in loss of other affiliates | $ (6,873) | $ (4,124) | ||
Eicher -Polaris Private Limited | ||||
Investments in and Advances to Affiliates [Line Items] | ||||
Equity method investment ownership percentage | 50.00% | |||
Eicher -Polaris Private Limited | ||||
Investments in and Advances to Affiliates [Line Items] | ||||
Investment in finance affiliate | $ 20,182 | 18,884 | ||
Equity in loss of other affiliates | $ (7,175) | $ (6,802) |
Commitments and Contingencies -
Commitments and Contingencies - Future Minimum Annual Lease Payments under Capital and Operating Leases with Non-cancelable Terms in Excess of One Year (Detail) $ in Thousands | Dec. 31, 2016USD ($) |
Capital Leases, Lease Obligations | |
2,017 | $ 2,852 |
2,018 | 2,250 |
2,019 | 2,080 |
2,020 | 1,995 |
2,021 | 1,925 |
Thereafter | 14,938 |
Total future minimum lease obligation | 26,040 |
Operating Leases, Lease Obligations | |
2,017 | 30,924 |
2,018 | 23,437 |
2,019 | 20,147 |
2,020 | 14,785 |
2,021 | 10,225 |
Thereafter | 13,111 |
Total future minimum lease obligation | $ 112,629 |
Commitments and Contingencies77
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | |||
Accrual for the probable payment of pending claims | $ 45,075 | ||
Rent expense | $ 22,534 | $ 16,823 | $ 13,734 |
Derivative Instruments and He78
Derivative Instruments and Hedging Activities - Open Foreign Currency Contracts (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Derivative [Line Items] | ||
Derivative, Fair Value, Net | $ 298 | $ 2,599 |
Cash Flow Hedging | Foreign currency contracts | ||
Derivative [Line Items] | ||
Notional Amounts (in U.S. dollars) | 106,965 | |
Derivative, Fair Value, Net | 298 | |
Australian Dollar | Cash Flow Hedging | Foreign currency contracts | ||
Derivative [Line Items] | ||
Notional Amounts (in U.S. dollars) | 22,498 | |
Derivative, Fair Value, Net | 771 | |
Canadian Dollar | Cash Flow Hedging | Foreign currency contracts | ||
Derivative [Line Items] | ||
Notional Amounts (in U.S. dollars) | 65,154 | |
Derivative, Fair Value, Net | 1,357 | |
Japanese Yen | Cash Flow Hedging | Foreign currency contracts | ||
Derivative [Line Items] | ||
Notional Amounts (in U.S. dollars) | 1,371 | |
Derivative, Fair Value, Net | (57) | |
Mexican Peso | Cash Flow Hedging | Foreign currency contracts | ||
Derivative [Line Items] | ||
Notional Amounts (in U.S. dollars) | 17,942 | |
Derivative, Fair Value, Net | $ (1,773) |
Derivative Instruments and He79
Derivative Instruments and Hedging Activities - Carrying Values of Derivative Instruments (Detail) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 | |
Derivative [Line Items] | |||
Derivative Net Carrying Value | $ 298 | $ 2,599 | |
Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Derivative Net Carrying Value | 298 | 2,953 | |
Designated as Hedging Instrument | Foreign currency contracts | |||
Derivative [Line Items] | |||
Derivative Net Carrying Value | [1] | 298 | 2,767 |
Designated as Hedging Instrument | Interest rate swap contracts | |||
Derivative [Line Items] | |||
Derivative Net Carrying Value | [1] | 186 | |
Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Derivative Net Carrying Value | (354) | ||
Not Designated as Hedging Instrument | Commodity contracts | |||
Derivative [Line Items] | |||
Derivative Net Carrying Value | [1] | (354) | |
Prepaid Expenses And Other Current Assets | |||
Derivative [Line Items] | |||
Fair Value— Assets | 2,128 | 5,404 | |
Prepaid Expenses And Other Current Assets | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Fair Value— Assets | 2,128 | 5,404 | |
Prepaid Expenses And Other Current Assets | Designated as Hedging Instrument | Foreign currency contracts | |||
Derivative [Line Items] | |||
Fair Value— Assets | [1] | 2,128 | 5,218 |
Prepaid Expenses And Other Current Assets | Designated as Hedging Instrument | Interest rate swap contracts | |||
Derivative [Line Items] | |||
Fair Value— Assets | [1] | 186 | |
Prepaid Expenses And Other Current Assets | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Fair Value— Assets | 0 | ||
Prepaid Expenses And Other Current Assets | Not Designated as Hedging Instrument | Commodity contracts | |||
Derivative [Line Items] | |||
Fair Value— Assets | [1] | 0 | |
Other Current Liabilities | |||
Derivative [Line Items] | |||
Fair Value— (Liabilities) | (1,830) | (2,805) | |
Other Current Liabilities | Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Fair Value— (Liabilities) | (1,830) | (2,451) | |
Other Current Liabilities | Designated as Hedging Instrument | Foreign currency contracts | |||
Derivative [Line Items] | |||
Fair Value— (Liabilities) | [1] | $ (1,830) | (2,451) |
Other Current Liabilities | Designated as Hedging Instrument | Interest rate swap contracts | |||
Derivative [Line Items] | |||
Fair Value— (Liabilities) | [1] | 0 | |
Other Current Liabilities | Not Designated as Hedging Instrument | |||
Derivative [Line Items] | |||
Fair Value— (Liabilities) | (354) | ||
Other Current Liabilities | Not Designated as Hedging Instrument | Commodity contracts | |||
Derivative [Line Items] | |||
Fair Value— (Liabilities) | [1] | $ (354) | |
[1] | Assets are included in prepaid expenses and other and liabilities are included in other accrued expenses on the accompanying consolidated balance sheets. |
Derivative Instruments and He80
Derivative Instruments and Hedging Activities - Gains and Losses, Net of Tax, Related to Derivative Instruments Designated as Cash Flow Hedges Included in Accumulated Other Comprehensive Income, Net (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cash Flow Hedging | ||
Derivative Instruments, Gain (Loss) [Line Items] | ||
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net | $ (1,572) | $ 3,320 |
Derivative Instruments and He81
Derivative Instruments and Hedging Activities - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Cost of sales | Commodity contracts | ||
Derivatives, Fair Value [Line Items] | ||
Recognized gain (loss) in cost of sales on commodity contracts not designated as hedging instruments | $ (121) | $ (2,994) |
Segment Reporting (Detail)
Segment Reporting (Detail) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Sep. 30, 2015USD ($) | Jun. 30, 2015USD ($) | Mar. 31, 2015USD ($) | Dec. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Segment Reporting [Abstract] | |||||||||||
Number of operating segments | segment | 5 | ||||||||||
Number of reportable segments | segment | 4 | ||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | $ 1,217,789 | $ 1,185,067 | $ 1,130,777 | $ 982,996 | $ 1,105,618 | $ 1,456,000 | $ 1,124,327 | $ 1,033,345 | $ 4,516,629 | $ 4,719,290 | $ 4,479,648 |
Gross profit | $ 312,772 | $ 260,770 | $ 284,503 | $ 247,578 | $ 310,274 | $ 415,623 | $ 319,414 | $ 293,731 | 1,105,623 | 1,339,042 | 1,319,178 |
Operating Segments [Member] | Off Road Vehicles / Snowmobiles Segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 3,357,496 | 3,708,933 | 3,741,154 | ||||||||
Gross profit | 930,181 | 1,190,630 | 1,206,553 | ||||||||
Operating Segments [Member] | Motorcycles Segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 708,497 | 698,257 | 418,546 | ||||||||
Gross profit | 91,401 | 97,261 | 54,427 | ||||||||
Operating Segments [Member] | Global Adjacent Markets Segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 341,937 | 312,100 | 319,948 | ||||||||
Gross profit | 95,149 | 84,211 | 88,797 | ||||||||
Operating Segments [Member] | Other Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 108,699 | 0 | 0 | ||||||||
Gross profit | 19,842 | 0 | 0 | ||||||||
Corporate, Non-Segment [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Gross profit | $ (30,950) | $ (33,060) | $ (30,599) |
- Polaris' Foreign Operations (
- Polaris' Foreign Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Segment Reporting Information [Line Items] | |||||||||||
Sales | $ 1,217,789 | $ 1,185,067 | $ 1,130,777 | $ 982,996 | $ 1,105,618 | $ 1,456,000 | $ 1,124,327 | $ 1,033,345 | $ 4,516,629 | $ 4,719,290 | $ 4,479,648 |
Identifiable assets | 727,596 | 650,678 | 727,596 | 650,678 | |||||||
United States | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 3,557,228 | 3,688,980 | 3,339,905 | ||||||||
Identifiable assets | 637,632 | 548,410 | 637,632 | 548,410 | |||||||
Canada | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 307,094 | 378,725 | 454,608 | ||||||||
Other foreign countries | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Sales | 652,307 | 651,585 | $ 685,135 | ||||||||
Identifiable assets | $ 89,964 | $ 102,268 | $ 89,964 | $ 102,268 |
Subsequent Event (Detail)
Subsequent Event (Detail) - Subsequent Event - Victory Motorcycles $ in Millions | Jan. 09, 2017USD ($) |
Minimum | |
Subsequent Event [Line Items] | |
Total estimated wind down costs | $ 50 |
Maximum | |
Subsequent Event [Line Items] | |
Total estimated wind down costs | $ 70 |
Quarterly Financial Data (Detai
Quarterly Financial Data (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2015 | Sep. 30, 2015 | Jun. 30, 2015 | Mar. 31, 2015 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Quarterly Financial Data [Abstract] | |||||||||||
Sales | $ 1,217,789 | $ 1,185,067 | $ 1,130,777 | $ 982,996 | $ 1,105,618 | $ 1,456,000 | $ 1,124,327 | $ 1,033,345 | $ 4,516,629 | $ 4,719,290 | $ 4,479,648 |
Gross profit | 312,772 | 260,770 | 284,503 | 247,578 | 310,274 | 415,623 | 319,414 | 293,731 | 1,105,623 | 1,339,042 | 1,319,178 |
Net income | $ 62,581 | $ 32,312 | $ 71,166 | $ 46,889 | $ 110,682 | $ 155,173 | $ 100,943 | $ 88,563 | $ 212,948 | $ 455,361 | $ 454,029 |
Diluted net income per share (in dollars per share) | $ 0.97 | $ 0.50 | $ 1.09 | $ 0.71 | $ 1.66 | $ 2.30 | $ 1.49 | $ 1.30 | $ 3.27 | $ 6.75 | $ 6.65 |
Valuation and Qualifying Acco86
Valuation and Qualifying Accounts (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Allowance for obsolete inventory | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | $ 36,269 | $ 26,171 | $ 21,603 |
Additions Charged to Costs and Expenses | 19,770 | 21,648 | 12,868 |
Additions Through Acquisition | 5,165 | 1,942 | 600 |
Other Changes Add (Deduct) | (16,029) | (13,492) | (8,900) |
Balance at End of Period | 45,175 | 36,269 | 26,171 |
Allowance for doubtful accounts receivable | |||
Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at Beginning of Period | 8,644 | 7,424 | 5,895 |
Additions Charged to Costs and Expenses | 7,085 | 2,169 | 2,347 |
Additions Through Acquisition | 4,644 | 59 | 265 |
Other Changes Add (Deduct) | (934) | (1,008) | (1,083) |
Balance at End of Period | $ 19,439 | $ 8,644 | $ 7,424 |