Polaris 2005 Annual Report Download - page 2

POLARIS INDUSTRIES INC. is headquartered in Medina, Minnesota, and
designs, manufactures and markets innovative, high-quality, high-performance motorized
products for recreation and utility use. •Our product lines consist of all-terrain recreational
and utility vehicles (ATVs); snowmobiles; motorcycles; and related parts, garments and
accessories (PG&A). Polaris engineering, manufacturing and distribution facilities are located
in Roseau and Wyoming, Minnesota; Osceola, Wisconsin; Spirit Lake, Iowa; Vermillion, South
Dakota; Passy, France; Ballarat, Victoria, Australia; Winnipeg, Manitoba, Canada; Gloucester,
United Kingdom; Askim, Norway; Östersund, Sweden; and Hudson, Wisconsin (joint venture
with Fuji Heavy Industries, Ltd.). •Our wholesale finance company, Polaris Acceptance, is
a 50/50 joint venture. •We have a 25 percent investment in Austrian motorcycle manufacturer
KTM Power Sports AG •Polaris products are sold through a network of nearly 1,700 dealers
in North America, five subsidiaries and 40 distributors in 126 countries outside North America.
•Polaris common stock trades on the New York Stock Exchange and Pacific Stock Exchange
under the symbol PII, and the Company is included in the S&P SmallCap 600 stock price index.
FINANCIAL HIGHLIGHTS (dollars and shares in thousands, except per share data)
2005 2004 % Change
FOR THE YEAR
Sales from continuing operations $ 1,869,819 $1,773,206 5%
Operating income from continuing operations 214,786 211,637 1
Net income from continuing operations 144,285 136,813 5
Percent of sales 7.7% 7.7%
PER SHARE
Net income from continuing operations (diluted) $ 3.29 $ 3.04 8%
Dividends paid 1.12 0.92 22
Net book value 8.42 8.03 5
FINANCIAL POSITION
Total assets $ 768,956 $ 792,925 – 3%
Stockholders’ equity 369,657 361,732 2
Average shares outstanding (diluted) 43,881 45,035 – 3
OTHER INFORMATION
Property and equipment (net) $ 222,336 $ 200,901 11%
Capital expenditures 89,770 88,836 1
Depreciation and amortization 67,936 59,339 14
Borrowings under credit agreement 18,000 18,000 —
Return on average shareholder equity 39% 40%
Average dividend yield 1.9% 1.6%
Average number of employees 3,645 3,616 1
TABLE OF CONTENTS
IFC Polaris Products at a Glance
1Letter from the CEO and COO
4Letter from the Chairman
5Operations Review
18 11-Year Selected Financial Data
20 Directors, Officers and Managers
21 Form 10-K
IBC Other Investor Information
14%
Snowmobiles
66%
ATVs 15% PG&A 5% Victory
Motorcycles
PERCENTAGE OF SALES BY PRODUCT LINE
$1.870 BILLION
IN 2005 SALES
Polaris sales reflect a
diversified mix of
powersports products
for work and recreation
in all climates and
seasons.
11%
Canada
77%
United States 12% International
PERCENTAGE OF SALES BY GEOGRAPHIC AREA
WORLDWIDE
OPPORTUNITIES
While the United
States is the world’s
largest market for
Polaris products,
international markets
represent a significant
growth opportunity.
NOTE: All periods presented reflect the classification of the marine products division’s financial results, including the loss from discontinued operations and the loss on disposal
of the division, as discontinued operations.