Polaris 2015 Annual Report Download - page 51

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Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion pertains to the results of operations and financial position of the Company for each
of the three years in the period ended December 31, 2015, and should be read in conjunction with the
Consolidated Financial Statements and the Notes thereto included elsewhere in this report.
Overview
In 2015, we had record sales and net income, with our sixth straight year of growth in both sales and earnings
per share. This growth was fueled by award-winning innovative new products leading to continued market
share leadership in side-by-side vehicles and ATVs. The overall North American powersports industry was
approximately flat in 2015. Our North America retail sales to consumers increased five percent in 2015,
helping to drive total full year Company sales up five percent to a record $4.72 billion. With the global
economy remaining challenged, and the U.S. dollar strengthening, our international sales decreased five
percent due to continued volatility in the currency markets.
Full year net income of $455.4 million was approximately flat with 2014, reflecting the success of continued
product innovation, offset by negative currencies of approximately $70.0 million, or $0.55 per diluted share,
with diluted earnings per share from continuing operations increasing two percent to a record $6.75 per share.
While 2015 results were below expectations, we continued to invest in numerous longer-term diversification
and growth opportunities.
In 2015, product innovation remained our top priority. We introduced over twenty new ORV models in 2015,
including the all-new RZR↧ XP 1000 Turbo and the all-new Polaris GENERAL↩ 1000. We also added to the
iconic Indian Motorcycle↧ line-up with the introduction of the all-new Indian Scout Sixty↩, a 999cc premium
motorcycle. Within snowmobiles, we expanded the award winning AXYS↧ platform into seven new model year
2016 RMK↧ mountain sled models. We also acquired the electric motorcycle business of Brammo,
Hammerhead Off-Road↧ in China, Timbersled↩, and 509. Operationally, we expanded production capacity
and capabilities with the purchase of a paint facility in Spearfish, South Dakota.
In January 2015, we announced plans to build a new production facility in Huntsville, Alabama to provide
additional capacity and flexibility. The 725,000 square-foot facility will focus on ORV and Slingshot
production. We broke ground on the facility in the first quarter of 2015 and expect production to start in the
second quarter of 2016.
On January 28, 2016, we announced that our Board of Directors approved a four percent increase in the
regular quarterly cash dividend to $0.55 per share for the first quarter of 2016, representing the
21st consecutive year of increased dividends to shareholders effective with the 2016 first quarter dividend.
Results of Operations
Sales:
Sales were $4,719.3 million in 2015, a five percent increase from $4,479.6 million in 2014. The following table
is an analysis of the percentage change in total Company sales for 2015 compared to 2014 and 2014 compared
to 2013:
Percent change in total Company sales
compared to the prior year
2015 2014
Volume .............................. 3% 14%
Product mix and price .................... 6 6
Currency ............................. (4) (1)
5% 19%
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