Polaris 2006 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.
Polaris products are sold through a network of 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 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)
2006 2005 % Change
FOR THE YEAR
Sales $1,656,518 $1,869,819 – 11%
Operating income 168,057 205,012 – 18
Net income from continuing operations 112,791 137,721 – 18
Percent of sales 6.8% 7.4%
PER SHARE
Net income from continuing operations (diluted) $2.72 $3.15 – 14%
Dividends paid 1.24 1.12 11
Average shares outstanding (diluted) 41,451 43,787 – 5
FINANCIAL POSITION
Total assets $778,791 $770,633 1%
Stockholders’ equity 167,371 377,019 – 56
OTHER INFORMATION
Property and equipment (net) $204,001 $222,336 – 8%
Capital expenditures 52,636 89,770 – 41
Depreciation and amortization 71,164 67,936 5
Borrowings under credit agreement 250,000 18,000 NM*
Return on average shareholder equity 41% 37%
Average dividend yield 2.6% 1.9%
Average number of employees 3,400 3,600
TABLE OF CONTENTS
IFC Polaris Products at a Glance
1Letter from the CEO and COO
9Directors, Officers and Managers
10 11-Year Selected Financial Data
12 Other Investor Information
13 Form 10-K
10%
Snowmobiles
67%
ATVs 16% PG&A 7% Victory
Motorcycles
PERCENTAGE OF SALES BY PRODUCT LINE
$1.657 BILLION
IN 2006 SALES
Polaris sales reflect
a diversified mix of
powersports products
for work and recreation
in all climates and
seasons.
12%
Canada
74%
United States
14%
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.
* Not meaningful.