Polaris 2010 Annual Report Download - page 41

Significant regional trends were as follows:
United States:
Sales in the United States for 2010 increased 31 percent compared to 2009, primarily resulting from higher
shipments in all product lines due to market share gains driven by innovative products. The United States
represented 71 percent, 69 percent and 70 percent of total company sales in 2010, 2009 and 2008, respectively. Sales
in the United States for 2009 decreased 22 percent when compared to 2008 resulting from lower shipments of off-
road and on-road vehicles, snowmobiles and related PG&A items to dealers given the overall weak economic
environment and more dealers transitioning to MVP, which during the initial startup phase inherently requires lower
dealer inventory levels.
Canada:
Canadian sales increased 17 percent in 2010 compared to 2009. Fluctuations in the Canadian currency rate
compared to the United States dollar accounted for a nine percent increase in sales for 2010 compared to 2009.
Increased volume was the primary contributor for the remainder of the increase in 2010 due to strong retail sales
demand in Canada for our products. Canadian sales decreased 12 percent in 2009 compared to 2008. Fluctuations in
the Canadian currency rate compared to the United States dollar accounted for a five percent reduction in sales for
2009 compared to 2008. Decreased volume was the primary contributor for the remainder of the decrease in 2009
due to a slowdown in the Canadian economy.
Other Foreign Countries:
Sales in other foreign countries, primarily in Europe, increased 21 percent for 2010 compared to 2009.
Favorable currency rates accounted for two percent of the increase for the 2010 year compared to 2009. The
remainder of the increase was primarily driven by higher volume largely related to market share gains. Sales
decreased 17 percent for 2009 compared to 2008. Unfavorable currency rates accounted for six percent of the
change for the 2009 year compared to 2008. The remainder of the decrease was primarily driven by lower volume
due to the weak global economic environment.
Cost of Sales:
($ in millions)
Percent of
Total
Cost of Sales 2009
Percent of
Total
Cost of Sales
Change
2010 vs.
2009 2008
Percent of
Total Cost of
Sales
Change
2009 vs. 20082010
For the Year Ended December 31,
Purchased materials
and services ..... $1,208.4 83% $ 968.6 83% 25% $1,278.2 85% ⫺24%
Labor and benefits . . 151.9 10% 108.1 9% 41% 131.0 9% ⫺18%
Depreciation and
amortization ..... 56.9 4% 55.0 5% 3% 53.3 3% 3%
Warranty costs ..... 43.7 3% 41.0 3% 7% 40.0 3% 3%
Total Cost of Sales . . $1,460.9 100% $1,172.7 100% 25% $1,502.5 100% ⫺22%
Percentage of sales . . 73.4% 74.9% ⫺150 basis 77.1% ⫺220 basis
points points
For 2010 cost of sales increased 25 percent to $1,460.9 million compared to $1,172.7 million in 2009. The
increase in cost of sales in 2010 resulted primarily from the effect of a 21 percent sales volume increase and a richer
mix of products on purchased materials and services, and labor and benefits offset somewhat by continued product
cost reduction efforts in 2010. Warranty costs increased only seven percent in spite of the volume increase due to
improved product quality. For the full year 2009, cost of sales decreased 22 percent to $1,172.7 million compared to
$1,502.5 million in 2008. The decrease in cost of sales in 2009 resulted primarily from the effect of a 29 percent
sales volume reduction on purchased materials and services, and labor and benefits. In addition, continued product
cost reduction efforts and lower commodity costs contributed to lower costs for purchased materials and services in
2009.
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