Polaris 2014 Annual Report Download - page 59

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Income from Financial Services:
The following table reflects our income from financial services:
For the Years Ended December 31,
Change Change
($ in millions) 2014 2013 2014 vs. 2013 2012 2013 vs. 2012
Income from Polaris Acceptance joint venture . $30.5 $20.2 51% $15.7 29%
Income from retail credit agreements ........ 27.6 22.5 23% 15.3 47%
Income from other financial services activities . . 3.6 3.2 13% 2.9 10%
Total income from financial services ..... $61.7 $45.9 34% $33.9 35%
Percentage of sales .............. 1.4% 1.2% +16 basis points 1.1% +16 basis points
Income from financial services increased 34 percent to $61.7 million in 2014 compared to $45.9 million in
2013. The increase in 2014 is primarily due to a 16 percent increase in retail credit contract volume and
increased profitability generated from the retail credit portfolios with Sheffield, Synchrony Bank, Capital One
and FreedomRoad, and higher income from dealer inventory financing through Polaris Acceptance, due to
increased profitability and a 23 percent increase in financed receivables as of December 31, 2014.
Income from financial services increased 35 percent to $45.9 million in 2013 compared to $33.9 million in
2012. The increase in 2013 is primarily due to a nine percent increase in retail credit contract volume and
increased profitability generated from the retail credit portfolios with Sheffield, GE and Capital One, and
higher income from dealer inventory financing through Polaris Acceptance.
Remainder of the Income Statement:
For the Years Ended December 31,
Change Change
($ in millions except per share data) 2014 2013 2014 vs. 2013 2012 2013 vs. 2012
Interest expense ................... $ 11.2 $ 6.2 81% $ 5.9 5%
Equity in loss of other affiliates ....... $ 4.1 $ 2.4 71% $ 0.2 NM
Other expense (income), net .......... $ 0.0 $ (5.1) NM $ (7.5) (32)%
Income before income taxes .......... $699.3 $574.4 22% $479.8 20%
Provision for income taxes ........... $245.3 $193.4 27% $167.5 15%
Percentage of income before income
taxes ......................... 35.1% 33.7% +141 basis points 34.9% ǁ125 basis points
Net income from continuing operations . . $454.0 $381.1 19% $312.3 22%
Net income ...................... $454.0 $377.3 20% $312.3 21%
Diluted net income per share:
Continuing operations ........... $ 6.65 $ 5.40 23% $ 4.40 23%
Diluted net income ............. $ 6.65 $ 5.35 24% $ 4.40 22%
Weighted average diluted shares
outstanding .................... 68.2 70.5 (3)% 71.0 (1)%
NM = not meaningful
Interest Expense. The increase in 2014 compared to 2013 is primarily due to increased debt levels through
borrowings on our existing revolving credit facility and the additional borrowing of $100.0 million through our
amended Master Note Purchase Agreement in December 2013. The increase in 2013 compared to 2012, is
primarily related to the increased debt levels through borrowings in the 2013 fourth quarter on our existing
revolving credit facility and additional borrowings of $100.0 million through our amended Master Note
33