10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark one)
x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2014

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-11411

POLARIS INDUSTRIES INC.

(Exact name of registrant as specified in its charter)

Minnesota		41-1790959
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
2100 Highway 55, Medina MN		55340
(Address of principal executive offices)		(Zip Code)
	(763) 542-0500 (Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    YesxNo¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YesxNo ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes¨No  x

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

As of October 22, 2014, 66,397,130 shares of Common Stock, $.01 par value, of the registrant were outstanding. 

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POLARIS INDUSTRIES INC. FORM 10-Q For Quarterly Period Ended September 30, 2014
			Page
Part I FINANCIAL INFORMATION
	Item 1 – Financial Statements		3
		Consolidated Balance Sheets	3
		Consolidated Statements of Income	4
		Consolidated Statements of Comprehensive Income	5
		Consolidated Statements of Cash Flows	6
		Notes to Consolidated Financial Statements	7
	Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations		15
		Results of Operations	15
		Liquidity and Capital Resources	19
		Inflation and Foreign Exchange Rates	21
		Critical Accounting Policies	22
		Note Regarding Forward Looking Statements	22
	Item 3 – Quantitative and Qualitative Disclosures About Market Risk		22
	Item 4 – Controls and Procedures		22
Part II OTHER INFORMATION
	Item 1 – Legal Proceedings		23
	Item 1A – Risk Factors		23
	Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds		23
	Item 4 – Mine Safety Disclosures		23
	Item 6 – Exhibits		23
SIGNATURES			25

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Part I FINANCIAL INFORMATION

Item 1 – FINANCIAL STATEMENTS

POLARIS INDUSTRIES INC. CONSOLIDATED BALANCE SHEETS (In thousands, except per share data)
	September 30, 2014			December 31, 2013
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	169,018		$	92,248
Trade receivables, net	153,839			186,213
Inventories, net	582,193			417,948
Prepaid expenses and other	61,780			63,716
Income taxes receivable	20,423			12,217
Deferred tax assets	93,312			93,356
Total current assets	1,080,565			865,698
Property and equipment, net	538,031			455,167
Investment in finance affiliate	71,515			69,217
Investment in other affiliates	21,502			15,956
Deferred tax assets	25,096			18,616
Goodwill and other intangible assets, net	224,443			229,708
Other long-term assets	47,680			31,126
Total assets	$	2,008,832		$	1,685,488
Liabilities and Shareholders' Equity
Current liabilities:
Current portion of capital lease obligations	$	2,809		$	3,281
Accounts payable	340,606			238,044
Accrued expenses:
Compensation	96,055			143,504
Warranties	51,394			52,818
Sales promotions and incentives	142,195			123,089
Dealer holdback	111,259			100,600
Other	77,765			77,480
Income taxes payable	3,219			9,254
Total current liabilities	825,302			748,070
Long-term income taxes payable	12,928			14,292
Capital lease obligations	25,214			3,842
Long-term debt	200,000			280,500
Deferred tax liabilities	21,100			25,028
Other long-term liabilities	85,246			69,730
Total liabilities	$	1,169,790		$	1,141,462
Deferred compensation	$	16,340		$	8,421
Shareholders’ equity:
Preferred stock $0.01 par value, 20,000 shares authorized, no shares issued and outstanding	—			—
Common stock $0.01 par value, 160,000 shares authorized, 66,395 and 65,623 shares issued and outstanding, respectively	$	664		$	656
Additional paid-in capital	452,137			360,616
Retained earnings	372,128			155,572
Accumulated other comprehensive (loss) income, net	(2,227		)	18,761
Total shareholders’ equity	822,702			535,605
Total liabilities and shareholders’ equity	$	2,008,832		$	1,685,488

The accompanying footnotes are an integral part of these consolidated statements.

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POLARIS INDUSTRIES INC. CONSOLIDATED STATEMENTS OF INCOME (In thousands, except per share data) (Unaudited)
	Three months ended September 30,					Nine months ended September 30,
	2014		2013			2014			2013
Sales	$	1,302,343	$	1,102,649		$	3,204,648		$	2,693,358
Cost of sales	914,069		767,864			2,253,043			1,889,587
Gross profit	388,274		334,785			951,605			803,771
Operating expenses:
Selling and marketing	87,567		78,810			227,315			195,541
Research and development	38,586		37,010			111,083			103,064
General and administrative	56,596		49,343			150,830			129,597
Total operating expenses	182,749		165,163			489,228			428,202
Income from financial services	17,048		11,671			42,313			33,247
Operating income	222,573		181,293			504,690			408,816
Non-operating expense (income):
Interest expense	2,835		1,520			8,686			4,364
Equity in loss of other affiliates	1,036		631			2,899			1,629
Other expense (income), net	252		(2,576		)	(3,736		)	(6,274		)
Income before income taxes	218,450		181,718			496,841			409,097
Provision for income taxes	77,624		64,797			178,209			136,708
Net income from continuing operations	140,826		116,921			318,632			272,389
Loss from discontinued operations, net of tax	—		(3,777		)	—			(3,777		)
Net income	$	140,826	$	113,144		$	318,632		$	268,612
Basic net income per share:
Continuing operations	$	2.13	$	1.69		$	4.82		$	3.95
Loss from discontinued operations	—		(0.05		)	—			(0.05		)
Basic net income per share	$	2.13	$	1.64		$	4.82		$	3.90
Diluted net income per share:
Continuing operations	$	2.06	$	1.64		$	4.68		$	3.84
Loss from discontinued operations	—		(0.05		)	—			(0.05		)
Diluted net income per share	$	2.06	$	1.59		$	4.68		$	3.79
Weighted average shares outstanding:
Basic	66,261		69,179			66,051			68,946
Diluted	68,328		71,186			68,125			70,901

The accompanying footnotes are an integral part of these consolidated statements.

4

POLARIS INDUSTRIES INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2014			2013			2014			2013
Net income	$	140,826		$	113,144		$	318,632		$	268,612
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments, net of tax benefit (expense) of $91 and ($48) in 2014 and $60 and $281 in 2013	(22,424		)	8,982			(22,576		)	2,655
Unrealized gain (loss) on derivative instruments, net of tax (expense) benefit of ($1,549) and ($945) in 2014 and $672 and ($1,124) in 2013	2,603			(1,131		)	1,588			1,889
Comprehensive income	$	121,005		$	120,995		$	297,644		$	273,156

The accompanying footnotes are an integral part of these consolidated statements.

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POLARIS INDUSTRIES INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
	Nine months ended September 30,
	2014			2013
Operating Activities:
Net income	$	318,632		$	268,612
Loss from discontinued operations	—			3,777
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	91,041			64,364
Noncash compensation	47,207			46,304
Noncash income from financial services	(10,778		)	(3,440		)
Noncash loss from other affiliates	2,899			1,629
Deferred income taxes	(10,915		)	(10,781		)
Tax effect of share-based compensation exercises	(26,169		)	(22,247		)
Changes in operating assets and liabilities:
Trade receivables	30,479			(24,711		)
Inventories	(168,727		)	(94,110		)
Accounts payable	102,216			94,097
Accrued expenses	139			20,671
Income taxes payable/receivable	11,110			62,332
Prepaid expenses and others, net	(6,699		)	(24,690		)
Cash provided by continuing operations	380,435			381,807
Cash used for discontinued operations	—			(642		)
Net cash provided by operating activities	380,435			381,165
Investing Activities:
Purchase of property and equipment	(146,473		)	(192,350		)
Investment in finance affiliate, net	8,480			2,091
Investment in other affiliates	(8,316		)	(6,063		)
Acquisition of businesses, net of cash acquired	(17,199		)	(134,817		)
Net cash used for investing activities	(163,508		)	(331,139		)
Financing Activities:
Borrowings under debt arrangements	1,921,386			1,682
Repayments under debt arrangements and capital lease obligations	(2,003,422		)	(2,780		)
Repurchase and retirement of common shares	(3,970		)	(31,907		)
Cash dividends to shareholders	(95,004		)	(86,482		)
Proceeds from stock issuances under employee plans	22,970			17,834
Tax effect of proceeds from share-based compensation exercises	26,169			22,247
Net cash used for financing activities	(131,871		)	(79,406		)
Impact of currency exchange rates on cash balances	(8,286		)	169
Net increase (decrease) in cash and cash equivalents	76,770			(29,211		)
Cash and cash equivalents at beginning of period	92,248			417,015
Cash and cash equivalents at end of period	$	169,018		$	387,804
Noncash Activity:
Property and equipment obtained through capital leases	$	24,908		$	—

The accompanying footnotes are an integral part of these consolidated statements.

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POLARIS INDUSTRIES INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Significant Accounting Policies

Basis of presentation. The accompanying unaudited consolidated financial statements of Polaris Industries Inc. ("Polaris" or the "Company") have been prepared in accordance with accounting principles generally accepted in the United States for interim financial statements and, therefore, do not include all information and disclosures of results of operations, financial position and changes in cash flow in conformity with accounting principles generally accepted in the United States for complete financial statements. Accordingly, such statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 previously filed with the Securities and Exchange Commission. In the opinion of management, such statements reflect all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented. Due to the seasonality of snowmobiles; Off-Road Vehicles (ORV), which include all-terrain vehicles (ATV) and side-by-side vehicles; motorcycles; Small Vehicles (SV); and Parts, Garments and Accessories (PG&A) businesses, and to certain changes in production and shipping cycles, results of such periods are not necessarily indicative of the results to be expected for the complete year.

On September 2, 2004, the Company announced its decision to discontinue the manufacture of marine products effective immediately. Material financial results for the marine products division are reported separately as discontinued operations for all periods presented.

Fair value measurements. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date:

Level  1 — Quoted prices in active markets for identical assets or liabilities.

Level  2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

In making fair value measurements, observable market data must be used when available. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. The Company utilizes the market approach to measure fair value for its non-qualified deferred compensation assets and liabilities, and the income approach for foreign currency contracts and commodity contracts. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities, and for the income approach the Company uses significant other observable inputs to value its derivative instruments used to hedge foreign currency and commodity transactions.

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Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):

	Fair Value Measurements as of September 30, 2014
Asset (Liability)	Total			Level 1			Level 2			Level 3
Non-qualified deferred compensation assets	$	40,911		$	40,911		—			—
Foreign exchange contracts, net	2,554			—			$	2,554		—
Total assets at fair value	$	43,465		$	40,911		$	2,554		—
Non-qualified deferred compensation liabilities	$	(40,911	)	$	(40,911	)	—			—
Total liabilities at fair value	$	(40,911	)	$	(40,911	)	—			—
	Fair Value Measurements as of December 31, 2013
Asset (Liability)	Total			Level 1			Level 2			Level 3
Commodity contracts, net	$	30		—			$	30		—
Non-qualified deferred compensation assets	24,711			$	24,711		—			—
Total assets at fair value	$	24,741		$	24,711		$	30		—
Foreign exchange contracts, net	$	(9	)	—			$	(9	)	—
Non-qualified deferred compensation liabilities	(24,711		)	$	(24,711	)	—			—
Total liabilities at fair value	$	(24,720	)	$	(24,711	)	$	(9	)	—

Inventories. Inventory costs include material, labor and manufacturing overhead costs, including depreciation expense associated with the manufacture and distribution of the Company's products. Inventories are stated at the lower of cost (first-in, first-out method) or market. The major components of inventories are as follows (in thousands):

	September 30, 2014			December 31, 2013
Raw materials and purchased components	$	149,555		$	107,496
Service parts, garments and accessories	161,877			125,765
Finished goods	298,314			206,290
Less: reserves	(27,553		)	(21,603		)
Inventories	$	582,193		$	417,948

Product warranties. Polaris provides a limited warranty for its ORVs for a period of six months, for a period of one year for its snowmobiles, for a period of one or two years for its motorcycles depending on brand and model year, and for a two year period for SVs. Polaris provides longer warranties in certain geographical markets as determined by local regulations and market conditions and may also provide longer warranties related to certain promotional programs. Polaris’ standard warranties require the Company or its dealers to repair or replace defective products during such warranty periods at no cost to the consumer. The warranty reserve is established at the time of sale to the dealer or distributor based on management’s best estimate using historical rates and trends. Adjustments to the warranty reserve are made from time to time as actual claims become known in order to properly estimate the amounts necessary to settle future and existing claims on products sold as of the balance sheet date. Factors that could have an impact on the warranty accrual in any given period include the following: improved manufacturing quality, shifts in product mix, changes in warranty coverage periods, snowfall and its impact on snowmobile usage, product recalls and any significant changes in sales volume. The activity in the warranty reserve during the periods presented was as follows (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2014			2013			2014			2013
Balance at beginning of period	$	44,811		$	42,717		$	52,818		$	47,723
Additions to warranty reserve through acquisitions	—			—			110			1,602
Additions charged to expense	21,227			16,860			44,524			38,850
Warranty claims paid	(14,644		)	(11,475		)	(46,058		)	(40,073		)
Balance at end of period	$	51,394		$	48,102		$	51,394		$	48,102

New Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue from the transfer of goods or services to customers in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. Polaris is required to adopt the new pronouncement on January 1, 2017 using one of two retrospective application methods. The Company is evaluating the application method and the impact of this new standard on the financial statements.

8

There are no other new accounting pronouncements that are expected to have a significant impact on Polaris' consolidated financial statements.

Note 2. Share-Based Compensation

The amount of compensation cost for share-based awards to be recognized during a period is based on the portion of the awards that are ultimately expected to vest. The Company estimates stock option forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company analyzes historical data to estimate pre-vesting forfeitures and records share compensation expense for those awards expected to vest.

Total share-based compensation expenses were as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013
Option plan	$	6,310	$	5,866	$	18,263	$	16,843
Other share-based awards	8,103		23,810		19,202		41,915
Total share-based compensation before tax	14,413		29,676		37,465		58,758
Tax benefit	5,376		11,073		13,990		21,939
Total share-based compensation expense included in net income	$	9,037	$	18,603	$	23,475	$	36,819

In addition to the above share-based compensation expenses, Polaris sponsors a qualified non-leveraged employee stock ownership plan (ESOP). Shares allocated to eligible participants’ accounts vest at various percentage rates based on years of service and require no cash payments from the recipient.

At September 30, 2014, there was $80,629,000 of total unrecognized share-based compensation expense related to unvested share-based equity awards. Unrecognized share-based compensation expense is expected to be recognized over a weighted-average period of 1.62 years. Included in unrecognized share-based compensation is approximately $40,819,000 related to stock options and $39,810,000 for restricted stock.

Note 3. Financing Agreements

Debt and capital lease obligations and the average related interest rates were as follows (in thousands):

	Average interest rate at September 30, 2014	Maturity	September 30, 2014		December 31, 2013
Revolving loan facility	—	January 2018	—		$	80,500
Senior notes—fixed rate	3.81%	May 2018	$	25,000	25,000
Senior notes—fixed rate	4.60%	May 2021	75,000		75,000
Senior notes—fixed rate	3.13%	December 2020	100,000		100,000
Capital lease obligations	4.99%	Various through 2029	28,023		7,123
Total debt and capital lease obligations			$	228,023	$	287,623
Less: current maturities			2,809		3,281
Total long-term debt and capital lease obligations			$	225,214	$	284,342

In August 2011, Polaris entered into a $350,000,000 unsecured revolving loan facility. In January 2013, Polaris amended the loan facility to provide more beneficial covenant and interest rate terms and extend the expiration date from August 2016 to January 2018. Interest is charged at rates based on LIBOR or “prime.”

In December 2010, the Company entered into a Master Note Purchase Agreement to issue $25,000,000 of unsecured senior notes due May 2018 and $75,000,000 of unsecured senior notes due May 2021 (collectively, the “Senior Notes”). The Senior Notes were issued in May 2011. In December 2013, the Company entered into a First Supplement to Master Note Purchase Agreement, under which the Company issued $100,000,000 of unsecured senior notes due December 2020.

The unsecured revolving loan facility and the Master Note Purchase Agreement contain covenants that require Polaris to maintain certain financial ratios, including minimum interest coverage and maximum leverage ratios. Polaris was in compliance with all such covenants as of September 30, 2014.

A property lease agreement for a manufacturing facility which Polaris began occupying in Opole, Poland commenced in February 2014. The Poland property lease is accounted for as a capital lease.

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Note 4. Goodwill and Other Intangible Assets

Goodwill and other intangible assets, net, consisted of $123,502,000 of goodwill and $100,941,000 of intangible assets, net of accumulated amortization, as of September 30, 2014.

Additions to goodwill and other intangible assets in the first nine months of 2014 relate to the acquisition of Kolpin Outdoors, Inc. ("Kolpin") on April 1, 2014. Kolpin is a leading aftermarket brand delivering purpose-built and universal-fit ORV accessories and lifestyle products. The aggregate Kolpin purchase price was allocated on a preliminary basis to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition.

The changes in the carrying amount of goodwill for the nine months ended September 30, 2014 were as follows (in thousands):

	Nine months ended September 30, 2014
Goodwill, beginning of period	$	126,697
Goodwill acquired during the period	4,157
Currency translation effect on foreign goodwill balances	(7,352		)
Goodwill, end of period	$	123,502

For other intangible assets, the changes in the net carrying amount for the nine months ended September 30, 2014 were as follows (in thousands):

	Nine months ended September 30, 2014
	Gross Amount			Accumulated Amortization
Other intangible assets, beginning of period	$	116,279		$	(13,268	)
Intangible assets acquired during the period	11,100			—
Amortization expense	—			(8,737		)
Foreign currency translation effect on balances	(5,553		)	1,120
Other intangible assets, end of period	$	121,826		$	(20,885	)

The components of other intangible assets were as follows (in thousands):

	Total estimated life (years)	September 30, 2014			December 31, 2013
Non-amortizable—indefinite lived:
Brand names		$	44,198		$	41,188
Amortized:
Non-compete agreements	5	540			540
Dealer/customer related	7	62,304			59,244
Developed technology	5-7	14,784			15,307
Total amortizable		77,628			75,091
Less: Accumulated amortization		(20,885		)	(13,268		)
Net amortized other intangible assets		56,743			61,823
Total other intangible assets, net		$	100,941		$	103,011

Amortization expense for intangible assets for the three months ended September 30, 2014 and 2013 was $3,029,000 and $2,727,000, respectively. Estimated amortization expense for the remainder of 2014 through 2019 is as follows: 2014 (remainder), $3,000,000; 2015, $11,300,000; 2016, $11,300,000; 2017, $10,900,000; 2018, $9,300,000; 2019, $8,000,000; and after 2019, $2,900,000. The preceding expected amortization expense is an estimate and actual amounts could differ due to additional intangible asset acquisitions, changes in foreign currency rates or impairment of intangible assets.

Note 5. Shareholders’ Equity

During the nine months ended September 30, 2014, Polaris paid $3,970,000 to repurchase and retire approximately 30,000 shares of its common stock. As of September 30, 2014, the Board of Directors has authorized the Company to repurchase up to an additional 1,574,000 shares of Polaris stock. The repurchase of any or all such shares authorized for repurchase will be governed by applicable SEC rules and dependent on management’s assessment of market conditions. Polaris paid a regular

10

cash dividend of $0.48 per share on September 15, 2014 to holders of record at the close of business on September 2, 2014. On October 23, 2014, the Polaris Board of Directors declared a regular cash dividend of $0.48 per share payable on December 15, 2014 to holders of record of such shares at the close of business on December 1, 2014. Cash dividends declared per common share for the three and nine months ended September 30, 2014 and 2013, were as follows:

	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013
Cash dividends declared and paid per common share	$	0.48	$	0.42	$	1.44	$	1.26

Net income per share

Basic earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during each period, including shares earned under The Deferred Compensation Plan for Directors (“Director Plan”), the ESOP and deferred stock units under the 2007 Omnibus Incentive Plan (“Omnibus Plan”). Diluted earnings per share is computed under the treasury stock method and is calculated to compute the dilutive effect of outstanding stock options issued under the 1995 Stock Option Plan and the 2003 Non-Employee Director Stock Option Plan (collectively, the “Option Plans”) and certain shares issued under the Omnibus Plan. A reconciliation of these amounts is as follows (in thousands):

	Three months ended September 30,		Nine months ended September 30,
	2014	2013	2014	2013
Weighted average number of common shares outstanding	65,988	68,910	65,771	68,600
Director Plan and deferred stock units	201	196	204	257
ESOP	72	73	76	89
Common shares outstanding—basic	66,261	69,179	66,051	68,946
Dilutive effect of Option Plans and Omnibus Plan	2,067	2,007	2,074	1,955
Common and potential common shares outstanding—diluted	68,328	71,186	68,125	70,901

During the three and nine months ended September 30, 2014, the number of options that could potentially dilute earnings per share on a fully diluted basis that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive were 647,000 and 562,000, respectively, compared to 67,000 and 870,000 for the same periods in 2013.

Accumulated other comprehensive (loss) income

Changes in the accumulated other comprehensive (loss) income balance is as follows (in thousands):

	Foreign Currency Items			Cash Flow Hedging Derivatives			Accumulated Other Comprehensive (Loss) Income
Balance as of December 31, 2013	$	18,582		$	179		$	18,761
Reclassification to the income statement	—			(2,039		)	(2,039		)
Change in fair value	(22,576		)	3,627			(18,949		)
Balance as of September 30, 2014	$	(3,994	)	$	1,767		$	(2,227	)

The table below provides data about the amount of gains and losses, net of tax, reclassified from accumulated other comprehensive (loss) income into the income statement for cash flow derivatives designated as hedging instruments for the three and nine months ended September 30, 2014 and 2013 (in thousands):

Derivatives in Cash Flow Hedging Relationships	Location of (Gain) Loss Reclassified from Accumulated OCI into Income	Three months ended September 30,						Nine months ended September 30,
		2014			2013			2014			2013
Foreign currency contracts	Other expense (income), net	$	206		$	(2,241	)	$	(1,891	)	$	(3,352	)
Foreign currency contracts	Cost of sales	(208		)	714			(148		)	1,467
Total		$	(2	)	$	(1,527	)	$	(2,039	)	$	(1,885	)

The net amount of the existing gains or losses at September 30, 2014 that is expected to be reclassified into the income statement within the next 12 months is expected to not be material. See Note 9 for further information regarding Polaris' derivative activities.

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Note 6. Financial Services Arrangements

Polaris Acceptance, a joint venture between Polaris and GE Commercial Distribution Finance Corporation, an indirect subsidiary of General Electric Capital Corporation, which is supported by a partnership agreement between their respective wholly owned subsidiaries, finances substantially all of Polaris' United States sales whereby Polaris receives payment within a few days of shipment of the product. Polaris’ subsidiary has a 50 percent equity interest in Polaris Acceptance. Polaris Acceptance sells a majority of its receivable portfolio to a securitization facility (the "Securitization Facility") arranged by General Electric Capital Corporation. The sale of receivables from Polaris Acceptance to the Securitization Facility is accounted for in Polaris Acceptance’s financial statements as a “true-sale” under Accounting Standards Codification Topic 860. Polaris’ allocable share of the income of Polaris Acceptance has been included as a component of income from financial services in the accompanying consolidated statements of income. The partnership agreement is effective through February 2017.

Polaris’ total investment in Polaris Acceptance of $71,515,000 at September 30, 2014 is accounted for under the equity method, and is recorded in investment in finance affiliate in the accompanying consolidated balance sheets. At September 30, 2014, the outstanding amount of net receivables financed for dealers under this arrangement was $1,072,372,000, which included $300,693,000 in the Polaris Acceptance portfolio and $771,679,000 of receivables within the Securitization Facility ("Securitized Receivables").

Polaris has agreed to repurchase products repossessed by Polaris Acceptance up to an annual maximum of 15 percent of the aggregate average month-end outstanding Polaris Acceptance receivables and Securitized Receivables during the prior calendar year. For calendar year 2014, the potential 15 percent aggregate repurchase obligation is approximately $120,815,000. Polaris’ financial exposure under this arrangement is limited to the difference between the amounts unpaid by the dealer with respect to the repossessed product plus costs of repossession and the amount received on the resale of the repossessed product. No material losses have been incurred under this agreement during the periods presented.

Polaris has agreements with Capital One, Sheffield Financial and Synchrony Bank, formerly GE Money Bank, under which these financial institutions provide financing to end consumers of Polaris products. Polaris' income generated from these agreements has been included as a component of income from financial services in the accompanying consolidated statements of income.

Polaris also administers and provides extended service contracts to consumers and certain insurance contracts to dealers and consumers through various third-party suppliers. Polaris does not retain any warranty, insurance or financial risk under any of these arrangements. Polaris’ service fee income generated from these arrangements has been included as a component of income from financial services in the accompanying consolidated statements of income.

Note 7. Investment in Other Affiliates

Investment in other affiliates in the consolidated balance sheets represents the Company’s investment in nonmarketable securities of strategic companies. Investment in other affiliates as of September 30, 2014 and December 31, 2013 is comprised of investments in Brammo, Inc. ("Brammo") and Eicher-Polaris Private Limited (EPPL) with the following balances (in thousands):

	September 30, 2014		December 31, 2013
Investment in Brammo	$	9,500	$	9,500
Investment in EPPL	12,002		6,456
Total investment in other affiliates	$	21,502	$	15,956

Brammo is a privately held designer and developer of electric vehicles. The investment in Brammo is accounted for under the cost method. Brammo is in the early stages of designing and developing electric vehicles. As such, a risk exists that Brammo may not be able to secure sufficient financing to reach viability through cash flow from operations.

EPPL is a joint venture established in 2012 with Eicher Motors Limited ("Eicher"). Polaris and Eicher each control 50 percent of the joint venture, which is intended to design, develop and manufacture a full range of new vehicles for India and other emerging markets. The investment in EPPL is accounted for under the equity method, with Polaris’ proportionate share of income or loss recorded within the consolidated financial statements on a one month lag due to financial information not being available timely. The overall investment is expected to be approximately $50,000,000, shared equally with Eicher over a three year period. Through September 30, 2014, Polaris has invested $17,749,000 in the joint venture. Polaris' share of EPPL loss for the three and nine months ended September 30, 2014 was $1,036,000 and $2,899,000, respectively, compared

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to $631,000 and $1,629,000 for the same respective periods in 2013. The loss is included in equity in loss of other affiliates on the consolidated statements of income.

Polaris will impair or write-off an investment and recognize a loss when events or circumstances indicate there is impairment in the investment that is other-than-temporary. No impairments were recognized on currently held investments in the three or nine months ended September 30, 2014.

Note 8. Commitments and Contingencies

Polaris is subject to product liability claims in the normal course of business. In late 2012, Polaris purchased excess insurance coverage for catastrophic product liability claims for incidents occurring after the policy date. Polaris self-insures product liability claims before the policy date and up to the purchased catastrophic insurance coverage after the policy date. The estimated costs resulting from any losses are charged to operating expenses when it is probable a loss has been incurred and the amount of the loss is reasonably determinable. The Company utilizes historical trends and actuarial analysis tools, along with an analysis of current claims, to assist in determining the appropriate loss reserve levels. At September 30, 2014, the Company had an accrual of $20,020,000 for the probable payment of pending claims related to continuing operations product liability litigation associated with Polaris products. This accrual is included as a component of other accrued expenses in the accompanying consolidated balance sheets.

In the 2013 third quarter, the Company reported a loss from discontinued operations, net of tax, of $3,777,000 for a provision to accrue Polaris' portion of a jury verdict regarding a 2008 accident involving a Polaris model year 2001 personal watercraft. In September 2004, the Company announced that it had decided to cease manufacturing marine products. Since then, any material financial results of that division have been recorded in discontinued operations.

Polaris is a defendant in lawsuits and subject to other claims arising in the normal course of business. In the opinion of management, it is unlikely that any legal proceedings pending against or involving Polaris will have a material adverse effect on Polaris' financial position or results of operations.

As a component of certain past acquisition agreements, Polaris has committed to make additional payments to certain sellers contingent upon either the passage of time or certain financial performance criteria. Polaris initially records the fair value of each commitment as of the respective opening balance sheet, and each reporting period the fair value is evaluated, using level 3 inputs, with the change in value reflected in the consolidated statements of income. As of September 30, 2014 and December 31, 2013, the fair value of contingent purchase price commitments was $19,265,000 and $18,249,000, respectively, recorded in other long-term liabilities in the consolidated balance sheets.

Note 9. Derivative Instruments and Hedging Activities

The Company is exposed to certain risks relating to its ongoing business operations. From time to time, the primary risks managed by using derivative instruments are foreign currency risk, interest rate risk and commodity price fluctuations. Derivative contracts on various currencies are entered into in order to manage foreign currency exposures associated with certain product sourcing activities and intercompany cash flows. Interest rate swaps are entered into in order to manage interest rate risk associated with the Company’s variable-rate borrowings. Commodity hedging contracts are entered into in order to manage fluctuating market prices of certain purchased commodities and raw materials that are integrated into the Company’s end products.

The Company’s foreign currency management objective is to mitigate the potential impact of currency fluctuations on the value of its U.S. dollar cash flows and to reduce the variability of certain cash flows at the subsidiary level. The Company actively manages certain forecasted foreign currency exposures and uses a centralized currency management operation to take advantage of potential opportunities to naturally offset foreign currency exposures against each other. The decision of whether and when to execute derivative instruments, along with the duration of the instrument, can vary from period to period depending on market conditions, the relative costs of the instruments and capacity to hedge. The duration is linked to the timing of the underlying exposure, with the connection between the two being regularly monitored. Polaris does not use any financial contracts for trading purposes.

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At September 30, 2014, Polaris had the following open foreign currency contracts (in thousands):

Foreign Currency	Notional Amounts (in U.S. Dollars)		Net Unrealized Gain (Loss)
Australian Dollar	$	7,991	$	404
Canadian Dollar	91,050		2,826
Japanese Yen	17,200		(599		)
Mexican Peso	14,803		(77		)
Total	$	131,044	$	2,554

These contracts, with maturities through September 30, 2015, met the criteria for cash flow hedges and the unrealized gains or losses, after tax, are recorded as a component of accumulated other comprehensive (loss) income in shareholders’ equity.

Polaris enters into derivative contracts to hedge a portion of the exposure related to diesel fuel and aluminum. These diesel fuel and aluminum derivative contracts have not met the criteria for hedge accounting. The impact to cost of sales in the consolidated statements of income for diesel fuel and aluminum derivative contracts during the three and nine months ended September 30, 2014 and 2013, and the value of outstanding contracts at September 30, 2014, were not material.

The table below summarizes the carrying values of derivative instruments as of September 30, 2014 and December 31, 2013 (in thousands):

	Carrying Values of Derivative Instruments as of September 30, 2014
	Fair Value— Assets		Fair Value— (Liabilities)			Derivative Net Carrying Value
Derivatives designated as hedging instruments
Foreign exchange contracts(1)	$	3,280	$	(726	)	$	2,554
Total derivatives designated as hedging instruments	$	3,280	$	(726	)	$	2,554

	Carrying Values of Derivative Instruments as of December 31, 2013
	Fair Value— Assets		Fair Value— (Liabilities)			Derivative Net Carrying Value
Derivatives designated as hedging instruments
Foreign exchange contracts(1)	$	1,194	$	(1,203	)	$	(9	)
Total derivatives designated as hedging instruments	$	1,194	$	(1,203	)	$	(9	)
Commodity contracts(1)	$	46	$	(16	)	$	30
Total derivatives not designated as hedging instruments	$	46	$	(16	)	$	30
Total derivatives	$	1,240	$	(1,219	)	$	21

(1) Assets are included in prepaid expenses and other and liabilities are included in other accrued expenses on the accompanying consolidated balance sheets.

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive (loss) income and reclassified into the income statement in the same period or periods during which the hedged transaction affects the income statement. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in the current income statement.

The table below provides data about the amount of gains and losses, net of tax, related to derivative instruments designated as cash flow hedges included in accumulated other comprehensive (loss) income for the three and nine ended September 30, 2014 and 2013 (in thousands):

Gains and (Losses) From Derivatives in Cash Flow Hedging Relationships	Three months ended September 30,					Nine months ended September 30,
	2014		2013			2014		2013
Foreign currency contracts	$	2,603	$	(1,131	)	$	1,588	$	1,889

See Note 5 for information about the amount of gains and losses, net of tax, reclassified from accumulated other comprehensive (loss) income into the income statement for derivative instruments designated as hedging instruments. The ineffective portion of foreign currency contracts was not material for the three and nine month periods ended September 30, 2014.

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Item 2 – MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

The following discussion pertains to the results of operations and financial position of Polaris Industries Inc., a Minnesota corporation, for the three and nine month periods ended September 30, 2014 compared to the three and nine month periods ended September 30, 2013. The terms “Polaris,” the “Company,” “we,” “us,” and “our” as used herein refer to the business and operations of Polaris Industries Inc., its subsidiaries and its predecessors, which began doing business in the early 1950s. Due to the seasonality of snowmobiles; Off-Road Vehicles (ORV), which includes all-terrain vehicles (ATV) and side-by-side vehicles; motorcycles; Small Vehicles (SV); and Parts, Garments and Accessories (PG&A) businesses, and to certain changes in production and shipping cycles, results of such periods are not necessarily indicative of the results to be expected for the complete year.

We reported net income from continuing operations of $140.8 million, or $2.06 per diluted share, an earnings per diluted share increase of 26 percent compared to 2013third quarter net income from continuing operations of $116.9 million, or $1.64 per diluted share. Sales totaled $1,302.3 million, an increase of 18 percent from last year’s third quarter sales of $1,102.6 million. The sales increase was driven primarily by increased sales of ORVs, motorcycles, snowmobiles and PG&A, improved pricing and beneficial mix. Our unit retail sales to consumers in North America grew 12 percent in the third quarter of 2014, with the increased demand primarily of ORVs, motorcycles, and snowmobiles. Our sales to customers outside of North America grew nine percent driven by higher sales in ORVs and motorcycles, offset by lower snowmobile sales due to weak snowfall in the prior year. Our gross profit of $388.3 million increased 16 percent from $334.8 million in the comparable prior year period. The increase in gross profit resulted primarily from higher volume, increased selling prices and continued product cost reduction efforts, offset by negative currency impacts. For the third quarter ended September 30, 2014, we reported net income of $140.8 million, compared to $113.1 million for 2013, which included a $3.8 million loss from discontinued operations, net of tax, from charges related to the unfavorable ruling in a personal watercraft product liability case in the third quarter of 2013. Our liquidity remained healthy with $169.0 million of cash on hand and $350 million of availability on our revolving loan facility at September 30, 2014.

Results of Operations

Unless otherwise noted, all "quarter" comparisons are from the third quarter 2014 to the third quarter 2013 and all "year-to-date" comparisons are from the nine month period ended September 30, 2014 to the nine month period ended September 30, 2013.

Sales:

Quarter sales were $1,302.3 million, an 18 percent increase from $1,102.6 million of quarter sales in the prior year. Year-to-date sales were $3,204.6 million, a 19 percent increase from $2,693.4 million of sales in the comparable prior year period. The following table is an analysis of the percentage change in total Company sales:

	Percent change in total Company sales compared to corresponding period of the prior year
	Three months ended		Nine months ended
	September 30, 2014		September 30, 2014
Volume	14	%	15	%
Product mix and price	5		5
Currency	(1	)	(1	)
	18	%	19	%

Quarter and year-to-date volume increased as we shipped more ORVs, snowmobiles, motorcycles and related PG&A items to dealers given increased consumer retail demand for our products in North America. Product mix and price contributed to the growth primarily due to the positive benefit of a greater number of higher priced ORVs and motorcycles sold to dealers relative to our other businesses. The U.S. dollar to Canadian dollar exchange rate negatively impacted our quarter and year-to-date sales when compared to the prior year period exchange rate.

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Our sales by product line were as follows:

	Three months ended September 30,										Nine months ended September 30,
($ in millions)	2014		Percent of Total Sales		2013		Percent of Total Sales		Percent Change 2014 vs. 2013		2014		Percent of Total Sales		2013		Percent of Total Sales		Percent Change 2014 vs. 2013
Off-Road Vehicles	$	823.2	63	%	$	702.0	64	%	17	%	$	2,127.5	66	%	$	1,862.5	69	%	14	%
Snowmobiles	162.7		12	%	143.5		13	%	13	%	184.4		6	%	166.7		6	%	11	%
Motorcycles	63.3		5	%	49.4		4	%	28	%	245.2		7	%	151.1		6	%	62	%
Small Vehicles	34.1		3	%	31.7		3	%	8	%	116.2		4	%	76.5		3	%	52	%
PG&A	219.0		17	%	176.0		16	%	24	%	531.3		17	%	436.6		16	%	22	%
Total Sales	$	1,302.3	100	%	$	1,102.6	100	%	18	%	$	3,204.6	100	%	$	2,693.4	100	%	19	%

ORVs:The quarter and year-to-date sales increase reflects continued market share gains in both ATV and side-by-side vehicles. Our North American ORV quarter unit retail sales to consumers increased high-single digits percent, with side-by-side vehicles unit retail increasing double digits percent, while ATV retail sales were down slightly during the quarter. The Sportsman ACE™ product category continued to receive heightened consumer interest during the quarter. The Company estimates that North American industry ORV retail sales increased mid-single-digits percent from the third quarter of 2013 with side-by-sides up about ten percent and ATVs down low-single digits percent. Polaris' North American dealer unit inventories increased mid-teens percent from the third quarter of 2013, as the Company began shipping most of the 18 new model year 2015 products recently introduced. Quarter sales outside of North America increased 18 percent, primarily due to market share gains. The quarter average per unit sales price increased six percent primarily as a result of the increased sales of higher priced side-by-side vehicle models.

Snowmobiles:The quarter and year-to-date increase in snowmobiles is due to a higher number of snowmobiles shipped in the 2014 third quarter in preparation for the upcoming snowmobile retail selling season, as dealer inventories are low coming off good snowfall and colder weather in most of the North American snowbelt this past snowmobile riding season. Sales of snowmobiles outside of North America decreased 29 percent in the quarter, primarily due to weak snowfall in the previous riding season. The quarter average snowmobile per unit sales price decreased six percent, primarily due to an unfavorable average U.S. dollar to Canadian dollar exchange rate and shifts in product mix.

Motorcycles:The quarter and year-to-date increase in sales is due to shipments of the new Indian motorcycles. North American industry, greater than 1400cc heavyweight cruisers and touring motorcycles, quarter retail sales were up low-single digits percent. Polaris North American quarter unit retail sales increased nearly 30 percent. Victory North American retail sales in the 2014 third quarter were down mid-teens percent impacted by timing of shipments of the 2015 Victory Magnum and due to prior year's tough comparison as Victory retail sales were up over 30 percent in the 2013 third quarter. Increased shipments of Indian motorcycles is the primary driver of (1) North American Polaris dealer inventory increasing approximately ten percent, (2) quarter sales to customers outside of North America increasing more than 80 percent and (3) the quarter average per unit sales price increasing 12 percent.

Small Vehicles: The quarter and year-to-date increase in sales is primarily due to increased shipments of GEM and Aixam Mega vehicles, offset by lower sales of Goupil products due to the soft European economy, particularly in France.

PG&A:The overall quarter and year-to-date sales increase was driven primarily by increases in ORV, motorcycles and snowmobile related PG&A resulting from product innovation and increased integration of accessories. In April 2014, we acquired Kolpin Outdoors, Inc. ("Kolpin"), a leading aftermarket brand delivering purpose-built and universal-fit ORV accessories and lifestyle products, which also benefited quarter and year-to-date sales. Quarter sales to customers outside North America increased eight percent primarily due to an increase in sales in the Asia Pacific and Latin America (APLA) region.

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Sales by geographic region were as follows:

	Three months ended September 30,										Nine months ended September 30,
($ in millions)	2014		Percent of Total Sales		2013		Percent of Total Sales		Percent Change 2014 vs. 2013		2014		Percent of Total Sales		2013		Percent of Total Sales		Percent Change 2014 vs. 2013
United States	$	996.2	76	%	$	800.5	72	%	24	%	$	2,372.7	74	%	$	1,944.3	72	%	22	%
Canada	154.6		12	%	162.7		15	%	(5	)%	344.8		11	%	359.9		13	%	(4	)%
Other foreign countries	151.5		12	%	139.4		13	%	9	%	487.1		15	%	389.2		15	%	25	%
Total sales	$	1,302.3	100	%	$	1,102.6	100	%	18	%	$	3,204.6	100	%	$	2,693.4	100	%	19	%

United States:Quarter and year-to-date sales in the United States increased due to higher shipments of ORVs, snowmobiles, motorcycles and PG&A, improved pricing and more beneficial product mix.

Canada:Quarter and year-to-date sales decreased slightly due to pricing increases being more than offset by an unfavorable five and six percent currency rate movement impact on quarter and year-to-date sales, respectively.

Other foreign countries:Quarter and year-to-date sales in other foreign countries increased primarily due to increased sales of ORVs, particularly side-by-side vehicles, motorcycles, small vehicles and PG&A related sales in both the Europe, Middle East, and Africa (EMEA) and APLA regions. Currency rate movements had a neutral impact for the quarter, and a favorable one percent impact on year-to-date sales.

Cost of Sales:

	Three months ended September 30,												Nine months ended September 30,
($ in millions)	2014			Percent of Total Cost of Sales		2013			Percent of Total Cost of Sales		Change 2014 vs. 2013		2014			Percent of Total Cost of Sales		2013			Percent of Total Cost of Sales		Change 2014 vs. 2013
Purchased materials and services	$	793.8		87	%	$	676.8		88	%	17	%	$	1,962.2		87	%	$	1,660.1		88	%	18	%
Labor and benefits	74.0			8	%	55.9			8	%	32	%	180.1			8	%	145.4			8	%	24	%
Depreciation and amortization	25.1			3	%	18.3			2	%	37	%	66.2			3	%	45.2			2	%	46	%
Warranty costs	21.2			2	%	16.9			2	%	25	%	44.5			2	%	38.9			2	%	14	%
Total cost of sales	$	914.1		100	%	$	767.9		100	%	19	%	$	2,253.0		100	%	$	1,889.6		100	%	19	%
Percentage of sales	70.2		%			69.6		%	+55 basis				70.3		%			70.2		%	+15 basis
											points												points

The increase in quarter and year-to-date cost of sales dollars resulted primarily from the effect of increases in volume on purchased materials and labor and benefits.

Gross Profit:

	Three months ended September 30,								Nine months ended September 30,
($ in millions)	2014			2013			Change 2014 vs. 2013		2014			2013			Change 2014 vs. 2013
Gross profit dollars	$	388.3		$	334.8		16	%	$	951.6		$	803.8		18	%
Percentage of sales	29.8		%	30.4		%	-55 basis points		29.7		%	29.8		%	-15 basis points

Quarter and year-to-date gross profit, as a percentage of sales, decreased due to lower product costs and higher pricing being more than offset by the negative impact from currency rate movements, including negative impacts from intercompany balance sheet positions primarily from the Canadian and European currencies. Likewise, quarter and year-to-date gross profit in absolute dollars increased for similar reasons in addition to the impact from increased sales volume.

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Operating Expenses:

	Three months ended September 30,								Nine months ended September 30,
($ in millions)	2014			2013			Change 2014 vs. 2013		2014			2013			Change 2014 vs. 2013
Selling and marketing	$	87.6		$	78.8		11	%	$	227.3		$	195.5		16	%
Research and development	38.5			37.0			4	%	111.1			103.1			8	%
General and administrative	56.6			49.4			15	%	150.8			129.6			16	%
Total operating expenses	$	182.7		$	165.2		11	%	$	489.2		$	428.2		14	%
Percentage of sales	14.0		%	15.0		%	-95 basis points		15.3		%	15.9		%	-63 basis points

Operating expenses in absolute dollars for the quarter and year-to-date periods increased due to higher selling and marketing expenses primarily related to higher marketing and advertising expenses related to the launch of various new products and the continued roll-out of Indian Motorcycle, infrastructure investments being made to support global growth initiatives and higher product liability provisioning. The increase in operating expenses for the quarter and year-to-date periods was lower than the increase in sales primarily due to a decrease in long-term incentive compensation expense, which resulted from a decrease in unvested stock awards in which the expense is tied to changes in the Company's stock price.

Income from Financial Services:

	Three months ended September 30,								Nine months ended September 30,
($ in millions)	2014			2013			Change 2014 vs. 2013		2014			2013			Change 2014 vs. 2013
Income from financial services	$	17.0		$	11.7		46	%	$	42.3		$	33.2		27	%
Percentage of sales	1.3		%	1.1		%	+25 basis points		1.3		%	1.2		%	+9 basis points

The increase in quarter and year-to-date income from financial services is due to higher income from dealer inventory financing through Polaris Acceptance and increased profitability of the retail credit portfolio. Further discussion can be found in the “Liquidity and Capital Resources” section below.

Remainder of the Income Statement:

	Three months ended September 30,							Nine months ended September 30,
($ in millions except per share data)	2014		2013			Change 2014 vs. 2013		2014			2013			Change 2014 vs. 2013
Interest expense	$	2.8	$	1.5		87	%	$	8.7		$	4.4		99	%
Equity in loss of other affiliates	$	1.0	$	0.6		64	%	$	2.9		$	1.6		78	%
Other expense (income), net	$	0.3	$	(2.6	)	(110	)%	$	(3.7	)	$	(6.3	)	(40	)%
Income before taxes	$	218.5	$	181.7		20	%	$	496.8		$	409.1		21	%
Provision for income taxes	$	77.6	$	64.8		20	%	$	178.2		$	136.7		30	%
Percentage of income before taxes	35.5%		35.7%			-13 basis points		35.9%			33.4%			+245 basis points
Net income from continuing operations	$	140.8	$	116.9		20	%	$	318.6		$	272.4		17	%
Net income	$	140.8	$	113.1		24	%	$	318.6		$	268.6		19	%
Diluted net income per share:
Continuing operations	$	2.06	$	1.64		26	%	$	4.68		$	3.84		22	%
Diluted net income	$	2.06	$	1.59		30	%	$	4.68		$	3.79		23	%
Weighted average diluted shares outstanding	68.3		71.2			(4	)%	68.1			70.9			(4	)%

Interest expense: The quarter and year-to-date increase 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.

Equity in loss of other affiliates: Increased quarter and year-to-date losses at Eicher-Polaris Private Limited (EPPL) were the result of an increase in the joint venture's pre-production activities. We record our proportionate 50 percent share of EPPL gains and losses.

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Other expense (income),net: The quarter and year-to-date change primarily relates to foreign currency exchange rate movements and the corresponding effects on foreign currency transactions and balance sheet positions related to our foreign subsidiaries from period to period.

Provision for income taxes:The quarter and year-to-date income tax rate is negatively impacted by the United States research and development income tax credit not yet being extended to 2014, and as a result no benefit has been recorded year-to-date. This negative impact in the 2014 third quarter is more than offset by net tax benefits recorded as we completed and filed the 2013 United States federal income tax return. The year-to-date income tax rate, when compared to the prior year period, was also negatively impacted as a result of $8.2 million of tax benefits which favorably impacted the 2013 year-to-date income tax rate. The 2013 year-to-date tax benefits resulted from the United States extending the research and development income tax credit retroactively to 2012 and favorable outcomes of income tax audits during the period.

Net income:The 2013 quarter and year-to-date net income includes a loss from discontinued operations as a result of a 2013 third quarter unfavorable jury verdict involving a collision between a 2001 Polaris Virage personal watercraft and a boat. We reported a loss from discontinued operations, net of tax, of $3.8 million in the 2013 third quarter for an additional provision to accrue Polaris' portion of the jury award and legal fees. The Company ceased manufacturing marine products in September 2004 and substantially completed the exit of the business in 2007.

Weighted average shares outstanding: In November 2013, Polaris entered into and executed a Share Repurchase Agreement with Fuji Heavy Industries Ltd. pursuant to which Polaris purchased 3.96 million shares of Polaris stock held by Fuji. This buyback more than offset the issuance of shares under employee compensation plans and resulted in a four percent decrease to the quarter and year-to-date weighted average diluted shares outstanding. As a result of this buyback, the quarter and year-to-date percentage increases in diluted net income from continuing operations per share exceeded the percentage increases in net income.

Cash Dividends:

We paid a regular cash dividend of $0.48 per share on September 15, 2014 to holders of record at the close of business on September 2, 2014. On October 23, 2014, the Polaris Board of Directors declared a regular cash dividend of $0.48 per share payable on December 15, 2014 to holders of record of such shares at the close of business on December 1, 2014.

Liquidity and Capital Resources

Our primary source of funds has been cash provided by operating and financing activities. Our primary uses of funds have been for acquisitions, repurchase and retirement of common stock, capital investment, new product development and cash dividends to shareholders.

The following table summarizes the cash flows from operating, investing and financing activities:

($ in millions)	Nine months ended September 30,
	2014			2013			Change
Total cash provided by (used for):
Operating activities	$	380.4		$	381.2		$	(0.8	)
Investing activities	(163.5		)	(331.2		)	167.7
Financing activities	(131.8		)	(79.4		)	(52.4		)
Impact of currency exchange rates on cash balances	(8.3		)	0.2			(8.5		)
Increase (decrease) in cash and cash equivalents	$	76.8		$	(29.2	)	$	106.0

Operating activities: Net cash provided by operating activities is approximately flat compared to the prior period primarily as a result of higher inventory levels and timing of estimated tax payments, mostly offset by higher net income compared to 2013.

Investing activities: The primary use of cash was for the purchase of property and equipment and the acquisition of Kolpin. We made large capital expenditures related to continued capacity and capability expansion at our manufacturing facilities and the acquisition of an additional headquarters building. We expect that capital expenditures for the full year 2014 will be between $200 million and $250 million.

Financing activities: Cash used for financing activities changed primarily due to net payments under debt arrangements and capital lease obligations of $82.0 million compared to net payments of $1.1 million in the 2013 comparable period, and common stock repurchases of $4.0 million compared to $31.9 million in the 2013 comparable period. Additionally, we paid cash dividends of $95.0 million and $86.5 million for the nine months ended September 30, 2014 and 2013, respectively.

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Proceeds from the issuance of stock under employee plans were $23.0 million and $17.8 million for the nine months ended September 30, 2014 and 2013, respectively.

The seasonality of production and shipments cause working capital requirements to fluctuate during the year.

We are party to a $350 million variable interest rate bank lending agreement and a Master Note Purchase Agreement, as amended and supplemented, under which we have unsecured borrowings. We enter into leasing arrangements to finance the use of certain property and equipment.

Debt and capital lease obligations and the average related interest rates at September 30, 2014 were as follows:

($ in millions)	Average interest rate at September 30, 2014	Maturity	September 30, 2014
Revolving loan facility	—	January 2018	$	—
Senior notes—fixed rate	3.81%	May 2018	25.0
Senior notes—fixed rate	4.60%	May 2021	75.0
Senior notes—fixed rate	3.13%	December 2020	100.0
Capital lease obligations	4.99%	Various through 2029	28.0
Total debt and capital lease obligations			$	228.0
Less: current maturities			2.8
Long-term debt and capital lease obligations			$	225.2

Our debt to total capital ratio was 22 percent and 10 percent at September 30, 2014 and 2013, respectively.

Additionally, at September 30, 2014 we had letters of credit outstanding of $18.3 million primarily related to purchase obligations for raw materials.

Our Board of Directors has authorized the cumulative repurchase of up to 75.0 million shares of our common stock. Of that total, approximately 73.4 million shares have been repurchased cumulatively from 1996 through September 30, 2014. We repurchased a nominal number of shares of our common stock for $4.0 million during the first nine months of 2014, which had a nominal impact on earnings per share. We have authorization from our Board of Directors to repurchase up to an additional 1.6 million shares of our common stock as of September 30, 2014. The repurchase of any or all such shares authorized remaining for repurchase will be governed by applicable SEC rules.

Polaris Acceptance, a joint venture between Polaris and GE Commercial Distribution Finance Corporation ("GECDF"), an indirect subsidiary of General Electric Capital Corporation, which is supported by a partnership agreement between their respective wholly owned subsidiaries, finances substantially all of Polaris' United States sales whereby Polaris receives payment within a few days of shipment of the product. Polaris Acceptance sells a majority of its receivable portfolio (the “Securitized Receivables”) to a securitization facility (“Securitization Facility”) arranged by General Electric Capital Corporation, a GECDF affiliate. Polaris Acceptance is not responsible for any continuing servicing costs or obligations with respect to the Securitized Receivables. At September 30, 2014, the outstanding amount of net receivables financed for dealers under this arrangement, including Securitized Receivables, was $1,072.4 million, a 26 percent increase from $851.8 million at September 30, 2013.

We account for our investment in Polaris Acceptance under the equity method. Polaris Acceptance is funded through equal equity cash investments from the partners and a loan from an affiliate of GECDF. We do not guarantee the outstanding indebtedness of Polaris Acceptance. The partnership agreement provides that all income and losses of Polaris Acceptance are shared 50 percent by our wholly owned subsidiary and 50 percent by GECDF’s subsidiary. Our total investment in Polaris Acceptance at September 30, 2014, was $71.5 million. Our exposure to losses of Polaris Acceptance is limited to our equity in Polaris Acceptance. Credit losses in the Polaris Acceptance portfolio have been modest, averaging less than one percent of the portfolio.

We have agreed to repurchase products repossessed by Polaris Acceptance up to an annual maximum of 15 percent of the aggregate average month-end outstanding Polaris Acceptance receivables and Securitized Receivables during the prior calendar year. For calendar year 2014, the potential 15 percent aggregate repurchase obligation is approximately $120.8 million. Our financial exposure under this arrangement is limited to the difference between the amount paid to the finance company for repurchases and the amount received on the resale of the repossessed product. No material losses have been incurred under this agreement.

See Note 6 in the Notes to Consolidated Financial Statements for further discussion of Polaris Acceptance.

We have agreements with Capital One, Sheffield Financial and Synchrony Bank, formerly GE Money Bank, under which these financial institutions provide financing to end consumers of our products. The agreements expire in October 2015,

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February 2016 and April 2016, respectively. The income generated from these agreements has been included as a component of income from financial services in the accompanying consolidated statements of income.

We believe that existing cash balances and cash flow to be generated from operating activities and available borrowing capacity under the line of credit arrangement will be sufficient to fund operations, new product development, cash dividends, share repurchases and capital requirements for the foreseeable future. At this time, management is not aware of any factors that would have a material adverse impact on cash flow.

Inflation and Foreign Exchange Rates

The changing relationships of the U.S. dollar to the Japanese yen, the Mexican peso, the Canadian dollar, the Australian dollar, the Euro and other foreign currencies have had a material impact from time to time. We actively manage our exposure to fluctuating foreign currency exchange rates by entering into foreign exchange hedging contracts.

Japanese Yen: During 2013, purchases totaling approximately four percent of our cost of sales were from yen-denominated suppliers. Fluctuations in the yen to U.S. dollar exchange rate primarily impact cost of sales and net income.

Mexican Peso: With increased production at our Monterrey, Mexico facility, our costs in the Mexican peso have continued to increase. We also operate in Mexico through a wholly owned subsidiary. Fluctuations in the peso to U.S. dollar exchange rate primarily impact sales, cost of sales, and net income.

Canadian Dollar: We operate in Canada through a wholly owned subsidiary. The relationship of the U.S. dollar in relation to the Canadian dollar impacts both sales and net income.

Other currencies: We operate in various countries, principally in Europe and Australia, through wholly owned subsidiaries and also sell to certain distributors in other countries. We also purchase components from certain suppliers directly for our U.S. operations in transactions denominated in Euros and other foreign currencies. The relationship of the U.S. dollar in relation to these other currencies impacts each of sales, cost of sales and net income.

At September 30, 2014, we had the following open foreign currency hedging contracts for the remainder of 2014 and through September 2015, and expect the following net currency impact on net income, after consideration of the existing foreign currency hedging contracts, when compared to the respective prior year periods:

Foreign Currency		Foreign currency hedging contracts			Currency impact on net income compared to the prior year period
	Currency Position	Notional amounts (in thousands of U.S. Dollars)		Average exchange rate of open contracts	Third quarter 2014	Estimated remainder of 2014
Australian Dollar (AUD)	Long	$	7,991	$0.91 to 1 AUD	Negative	Negative
Canadian Dollar (CAD)	Long	91,050		$0.92 to 1 CAD	Negative	Negative
Euro	Long	—		—	Neutral	Negative
Japanese Yen	Short	17,200		103 Yen to $1	Positive	Positive
Mexican Peso	Short	14,803		13.45 Peso to $1	Slightly positive	Slightly positive
Norwegian Krone	Long	—		—	Slightly negative	Negative
Swedish Krona	Long	—		—	Slightly negative	Negative
Swiss Franc	Short	—		—	Negative	Negative

The assets and liabilities in all our foreign entities are translated at the foreign exchange rate in effect at the balance sheet date. Translation gains and losses are reflected as a component of accumulated other comprehensive income, net in the shareholders’ equity section of the accompanying consolidated balance sheets. Revenues and expenses in all of our foreign entities are translated at the average foreign exchange rate in effect for each month of the quarter. Certain assets and liabilities related to intercompany positions reported on our consolidated balance sheet that are denominated in a currency other than the entity’s functional currency are translated at the foreign exchange rates at the balance sheet date and the associated gains and losses are included in net income.

We are subject to market risk from fluctuating market prices of certain purchased commodities and raw materials including steel, aluminum, petroleum-based resins, certain rare earth metals and diesel fuel. In addition, we are a purchaser of components and parts containing various commodities, including steel, aluminum, rubber and others, which are integrated into the Company’s end products. While such materials are typically available from numerous suppliers, commodity raw materials are subject to price fluctuations. We generally buy these commodities and components based upon market prices that are established with the vendor as part of the purchase process and from time to time will enter into derivative contracts to hedge a portion of the exposure to commodity risk. At September 30, 2014, we had derivative contracts in place to hedge a

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portion of our diesel fuel exposure through June 2015. These contracts are not material. Based on our current outlook for commodity prices, the total impact of commodities is expected to have a slightly positive impact on our gross margins for the remainder of 2014 when compared to the same periods in the prior year.

We are a party to a credit agreement with various lenders consisting of a $350 million revolving loan facility. Interest accrues on the revolving loan at variable rates based on LIBOR or “prime” plus the applicable add-on percentage as defined in the agreement. At September 30, 2014, we did not have an outstanding balance on the revolving loan.

Critical Accounting Policies

See our most recent Annual Report on Form 10-K for the year ended December 31, 2013 for a discussion of our critical accounting policies.

Note Regarding Forward Looking Statements

Certain matters discussed in this report are “forward-looking statements” intended to qualify for the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These “forward-looking statements,” including but not limited to the impact of foreign exchange rate movements on sales and net income, and commodity price changes on gross margins, can generally be identified as such because the context of the statement will include words such as the Company or management “believes,” “anticipates,” “expects,” “estimates” or words of similar import. Similarly, statements that describe the Company’s future plans, objectives or goals are also forward-looking. Forward-looking statements may also be made from time to time in oral presentations, including telephone, conferences and/or webcasts open to the public. Shareholders, potential investors and others are cautioned that all forward-looking statements involve risks and uncertainties that could cause results in future periods to differ materially from those anticipated by some of the statements made in this report, including the risks and uncertainties described under the heading titled “Item 1A-Risk Factors” appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013. In addition to the factors discussed above, among the other factors that could cause actual results to differ materially are the following: product offerings, promotional activities and pricing strategies by competitors; acquisition integration costs; future conduct of litigation processes; warranty expenses; foreign currency exchange rate fluctuations; commodity and transportation costs; environmental and product safety regulatory activity; effects of weather; uninsured product liability claims; uncertainty in the retail and wholesale credit markets and relationships with Capital One, Sheffield Financial and Synchrony Bank; changes in tax policy; and overall economic conditions, including inflation and consumer confidence and spending. The Company does not undertake any duty to any person to provide updates to its forward-looking statements.

Item 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 for a complete discussion on the Company’s market risk. There have been no material changes in market risk from those disclosed in the Company’s Form 10-K for the year ended December 31, 2013.

Item 4 – CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and its Vice President — Finance and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15) as of the end of the period covered by this report. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Securities Exchange Act of 1934 is (1) recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and (2) accumulated and communicated to the Company’s management, including its Chief Executive Officer and Vice President — Finance and Chief Financial Officer, in a manner that allows timely decisions regarding required disclosure.

Changes in Internal Controls

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There have been no changes in the Company’s internal controls over financial reporting during the period covered by this quarterly report on Form 10-Q that have materially affected, or are reasonably likely to materially affect, the Company’s internal controls over financial reporting.

Part II OTHER INFORMATION

Item 1 – LEGAL PROCEEDINGS

We are involved in a number of legal proceedings incidental to our business, none of which is expected to have a material effect on the financial results of our business.

Item 1A – RISK FACTORS

There have been no material changes or additions to our risk factors discussed in our fiscal 2013 Annual Report filed on Form 10-K. Please consider the factors discussed in “Part I, Item 1A. Risk Factors” in such report, which could materially affect the Company’s business, financial condition, or future results.

Item 2 – UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Program	Maximum Number of Shares That May Yet Be Purchased Under the Program (1)
July 1 — 31, 2014	—	$	—	—	1,574,000
August 1 — 31, 2014	—	$	—	—	1,574,000
September 1 — 30, 2014	—	$	—	—	1,574,000
Total	—	$	—	—	1,574,000

(1) The Board of Directors has authorized the cumulative repurchase of up to an aggregate of 75.0 million shares of the Company’s common stock (the “Program”). Of that total, 73.4 million shares have been repurchased cumulatively from 1996 through September 30, 2014. The Program does not have an expiration date.

Item 4 – MINE SAFETY DISCLOSURES

Not applicable.

Item 6 – EXHIBITS

A list of exhibits to this Form 10-Q is set forth on the Exhibit Index and is incorporated herein by reference.

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Exhibit Index

Exhibit Number	Description
3.a	Restated Articles of Incorporation of Polaris Industries Inc. (the “Company”), effective October 24, 2011, incorporated by reference to Exhibit 3.a to the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2011.
3.b	Bylaws of the Company, as amended and restated on April 29, 2010, incorporated by reference to Exhibit 3 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2010.
10.a	Polaris Industries Inc. Supplemental Retirement/Savings Plan, as amended and restated effective July 23, 2014.
31.a	Certification of Chief Executive Officer required by Exchange Act Rule 13a-14(a).
31.b	Certification of Chief Financial Officer required by Exchange Act Rule 13a-14(a).
32.a	Certification furnished pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.b	Certification furnished pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following financial information from Polaris Industries Inc.’s Quarterly Report on Form 10-Q for the period ended September 30, 2014, filed with the SEC on October 29, 2014, formatted in Extensible Business Reporting Language (XBRL): (i) the Consolidated Balance Sheets at September 30, 2014 and December 31, 2013, (ii) the Consolidated Statements of Income for the three and nine month periods ended September 30, 2014 and 2013, (iii) the Consolidated Statements of Comprehensive Income for the three and nine month periods ended September 30, 2014 and 2013, (iv) the Consolidated Statements of Cash Flows for the nine month periods ended September 30, 2014 and 2013, and (v) Notes to Consolidated Financial Statements.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		POLARIS INDUSTRIES INC. (Registrant)
Date:	October 29, 2014	/s/ SCOTT W. WINE
		Scott W. Wine Chairman and Chief Executive Officer (Principal Executive Officer)
Date:	October 29, 2014	/s/ MICHAEL W. MALONE
		Michael W. Malone Vice President — Finance and Chief Financial Officer (Principal Financial and Chief Accounting Officer)

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EX-10.A

Exhibit 10.a

POLARIS INDUSTRIES INC.SUPPLEMENTAL RETIREMENT/SAVINGS PLAN

Effective July 1, 1995

As Amended and Restated Effective July 23, 2014

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POLARIS INDUSTRIESSUPPLEMENTAL RETIREMENT/SAVINGS PLAN

Effective July 1, 1995

As Amended and Restated Effective July 23, 2014

TABLE OF CONTENTS

ARTICLE I DEFINITIONS			1
	1.01	Account	1
	1.02	Additional Credits	1
	1.03	Administrator	1
	1.04	Affiliated Company	1
	1.05	Beneficiary	1
	1.06	Board of Directors	1
	1.07	Bonus Plan	1
	1.08	Change of Control	1
	1.09	Code	2
	1.10	Committee	2
	1.11	Compensation	2
	1.12	Corporation	2
	1.13	Corporation Voting Securities	2
	1.14	Deferrals	3
	1.15	Deferral Agreement	3
	1.16	Distribution Option(s)	3
	1.17	Effective Date	3
	1.18	Eligible Executive	3
	1.19	Exchange Act	3
	1.20	Matching Contribution Credits	3
	1.21	Member	3
	1.22	Omnibus Plan	3
	1.23	Participating Company	3
	1.24	Plan	3
	1.25	Plan Sponsor	3
	1.26	Savings Plan	3
	1.27	Valuation Date	4

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ARTICLE II Membership and Deferral Agreements			4
	2.01	In General	4
	2.02	Modification of Initial Deferral Agreement	4
	2.03	Termination of Membership; Re-employment	5

ARTICLE III Deferrals			5
	3.01	Filing Requirements	5
	3.02	Maximum Deferral Amounts	6
	3.03	Crediting of Deferrals	7
	3.04	Changing Deferrals	7
	3.05	Certain Additional Credits	8
	3.06	Timing of Deferral Elections	8

ARTICLE IV Maintenance of Accounts			8
	4.01	Accounts	9
	4.02	Deemed Investments	9
	4.03	Statement of Accounts	9
	4.04	Vesting of Account	9

ARTICLE V Payment of Benefits			9
	5.01	Commencement of Payment	9
	5.02	Method of Payment	10
	5.03	Unforeseeable Emergency	11
	5.04	Designation of Beneficiary	12
	5.05	Status of Account Pending Distribution	12
	5.06	Change of Control	12
	5.07	Election of Distribution Options for Subsequent Deferrals	12

ARTICLE VI Amendment or Termination			13
	6.01	Right to Terminate	13
	6.02	Right to Amend	13
	6.03	Uniform Action	13

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ARTICLE VII General Provisions			13
	7.01	No Funding	13
	7.02	No Contract of Employment	14
	7.03	Withholding Taxes	14
	7.04	Nonalienation	14
	7.05	Administration	14
	7.06	Construction	15

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Introduction

This Polaris Industries Inc. Supplemental Retirement/Savings Plan originally became effective July 1, 1995. On December 31, 1996, Polaris Industries Inc., a Delaware limited partnership, and the original sponsor of the Plan, was merged with and into Polaris Industries Inc., a Delaware corporation, which then became the new sponsor of the Plan. The Plan was most recently amended and restated in its entirety as of December 31, 2008, and is hereby amended and restated in its entirety effective as of July 23, 2014.

This Plan generally is intended to provide certain executives who participate in the Polaris Industries Inc. 401(k) Retirement/Savings Plan, the Polaris Industries Inc. Senior Executive Annual Compensation Plan, and/or the Polaris Industries Inc. 2007 Omnibus Incentive Plan with an opportunity to defer a portion of their compensation until their retirement or other termination of employment and to have contributions credited as if such contributions had been made under the Savings Plan in order to restore contributions lost because of the application of Section 401(a)(17) of the Internal Revenue Code of 1986, as amended, to the Savings Plan. The Plan is unfunded and is maintained by Polaris Industries Inc. and Affiliated Companies and their respective successors primarily for the purpose of providing deferred compensation for a select group of management or highly-compensated employees.

ARTICLE I
Definitions

1.01 Account.“Account” means the bookkeeping account maintained for each Member to record his Deferrals and Additional Credits, as adjusted pursuant to Article IV. The Administrator will establish such sub-accounts within a Member’s Account as it deems necessary to implement the provisions of the Plan, including, but not limited to, sub-accounts for all Deferrals and Additional Credits that are subject to a common Distribution Option election (i.e., the Deferrals and Additional Credits that will be paid at the same time or upon the same event and in the same form).

1.02 Additional Credits.“Additional Credits” means amounts credited to the Account of a Member pursuant to Section 3.05.

1.03 Administrator.“Administrator” means the Plan Sponsor.

1.04 Affiliated Company.“Affiliated Company” means the Corporation and any corporation, partnership or other entity directly or indirectly controlled by the Corporation.

1.05 Beneficiary."Beneficiary" means the person or persons designated pursuant to Section 5.04 to receive benefits under the Plan in the event of a Participant's death.

1.06 Board of Directors.“Board of Directors” or “Board” means the Board of Directors of the Corporation.

1.07 Bonus Plan.“Bonus Plan” means the Polaris Industries Inc. Senior Executive Annual Compensation Plan.

1.08 Change of Control.“Change of Control” means any of the following:

(a) Any election has occurred of persons to the Board of Directors that causes at least one-half of the Board of Directors to consist of persons other than (i) persons who were members of the Board of Directors on July 1, 1995 and (ii) persons who were nominated for election by the Board of Directors as members of the Board of Directors at a time when more than one-half of the members of the Board of Directors consisted of persons who were members of the Board of Directors on July 1, 1995; provided, however, that any person nominated for election by the Board of Directors at a time when at least one-half of the members of the Board of Directors were persons described in clauses (i) and/or (ii) or by persons who were themselves nominated by such Board of Directors will, for this purpose, be deemed to have been nominated by a Board of Directors composed of persons described in clause (i) (persons described or deemed described in clauses (i) and/or (ii) are referred to herein as “Incumbent Directors”); or

(b) The acquisition in one or more transactions, other than from the corporation, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of a number of Corporation Voting Securities equal to or greater than 35% of Corporation Voting Securities unless such acquisition has been approved by the Incumbent Directors as an acquisition not constituting a Change in Control for purposes hereof; or

(c) A sale or other disposition of all or substantially all of the assets of the Corporation unless, following such sale or disposition, at least one-half of the Board of Directors of the transferee consists of Incumbent Directors.

Notwithstanding the foregoing, no event will constitute a Change of Control unless such event is a change in the ownership or effective control of the corporation, or in the ownership of a substantial portion of the assets of the Corporation within the meaning of Section 409A(2)(A)(v) of the Code and the regulations thereunder.

1.09 Code.“Code” means the Internal Revenue Code of 1986, as amended from time to time.

1.10 Committee.“Committee” means the Compensation Committee of the Board of Directors.

1.11 Compensation. “Compensation” means the compensation of an Eligible Executive as defined for purposes of the Savings Plan, determined prior to any Deferrals under Article III and without application of the limit under Section 401(a)(17) of the Code. “Compensation” also includes (i) Incentive Compensation Awards, as defined in the Bonus Plan, and (ii) Restricted Stock Units, Performance Shares, Performance Units, and Cash-Based Awards, all as defined in the Omnibus Plan, but only to the extent that the Plan Sponsor designates such compensation as eligible for deferral in the Deferral Agreement form provided to the Eligible Executive.

1.12 Corporation. “Corporation” means Polaris Industries Inc., a Minnesota corporation, and any successor thereto by merger, purchase or otherwise.

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1.13 Corporation Voting Securities.“Corporation Voting Securities” means the combined voting power of all outstanding voting securities of the Corporation entitled to vote generally in the election of the Board of Directors.

1.14 Deferrals.“Deferrals” means the amounts credited to a Member’s Account under Section 3.03.

1.15 Deferral Agreement.“Deferral Agreement” means a completed agreement between an Eligible Executive and a Participating Company of which he is an employee under which the Eligible Executive agrees to defer Compensation under the Plan. The Deferral Agreement must be in the form and made in the manner prescribed by the Plan Sponsor or such agreement will not be effective. The Deferral Agreement includes any amendments, attachments or appendices.

1.16 Distribution Option(s).“Distribution Option(s)” means the election by the Member of the event triggering the commencement of distribution and the method of distribution. A Distribution Option election must be made on the Eligible Executive’s initial Deferral Agreement, and in subsequent elections made in accordance with Section 5.07.

1.17 Effective Date.“Effective Date” means July 1, 1995 or with respect to the Eligible Executives of a company which adopts the Plan, the date such company becomes a Participating Company.

1.18 Eligible Executive.“Eligible Executive” means an employee of a Participating Company whose annual Compensation is in excess of the limitation in effect under Section 401(a)(17) of the Code, but only if the employee is also considered to be a part of a select group of management or highly compensated employees.

1.19 Exchange Act.“Exchange Act” means the Securities Exchange Act of 1934, as amended.

1.20 Matching Contribution Credits.“Matching Contribution Credits” means Additional Credits in a Member’s Account based on contributions that would be made to the Savings Plan absent application of the limit under Section 401(a)(17) of the Code.

1.21 Member.“Member” means, except as otherwise provided in Article II, each Eligible Executive who has executed a Deferral Agreement as described in Section 2.01.

1.22 Omnibus Plan.“Omnibus Plan” means the Polaris Industries Inc. 2007 Omnibus Incentive Plan, as amended from time to time.

1.23 Participating Company.“Participating Company” means the Corporation, the Plan Sponsor and any other Affiliated Company which is designated for participation in the Plan in accordance with Section 7.05(b).

1.24 Plan.“Plan” means this Polaris Industries Inc. Supplemental Retirement/Savings Plan, as amended from time to time.

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1.25 Plan Sponsor.“Plan Sponsor” means Polaris Industries Inc., a Delaware corporation and a wholly owned subsidiary of the Corporation, and any successor thereto by merger, purchase or otherwise.

1.26 Savings Plan.“Savings Plan” means the Polaris Industries Inc. 401(k) Retirement/Savings Plan, as amended from time to time.

1.27 Valuation Date.“Valuation Date” means each of the valuation dates under the Savings Plan and the date on which payment of an Incentive Compensation Award (as defined in the Bonus Plan) and/or Award (as defined in the Omnibus Plan) under the Bonus Plan, and/or the Omnibus Plan would otherwise be made under the terms of the Bonus Plan, and/or the Omnibus Plan, but for a Deferral of such Incentive Compensation Award or Award hereunder.

ARTICLE II
Membership and Deferral Agreements

2.01 In General.

(a) Date of Membership. An Eligible Executive becomes a Member as of the date he files his initial Deferral Agreement with the Administrator. However, such Deferral Agreement is effective for purposes of deferring Compensation only as provided in Article III.

(b) Form of Deferral Agreement. A Deferral Agreement must be in writing and properly completed in a form, which may include an agreement that is completed electronically, approved by the Administrator. The Administrator will in its sole discretion determine whether an agreement is properly completed and will be recognized as a Deferral Agreement. A Deferral Agreement must provide for the deferral of Compensation, must specify the Distribution Options, and may include such other provisions as the Administrator deems appropriate. A Member’s Deferral Agreement may provide for separate Deferral elections with respect to the Member’s base pay and with respect to Compensation under the Bonus Plan and/or the Omnibus Plan, but the Administrator may at any time, and in its sole discretion, limit the number of separate Deferral elections that may be made under the Plan in order to facilitate administration. Matching Contribution Credits, as adjusted for Deemed Investment earnings and losses, will be paid in the same form and time as elected with respect to the base pay deferrals on which the Matching Contributions are based. A Deferral Agreement may not be revoked or modified with respect to the amount of prior deferrals. Distribution Options elected may not be modified or revoked except as provided in Section 5.01.

(c) Additional Requirements for Membership. As a condition for membership the Administrator may require such other information as it deems appropriate.

2.02 Modification of Initial Deferral Agreement.A Member may elect to change, modify or revoke a Deferral Agreement as follows:

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(a) Change in Deferral Rate. A Member may change the rate of his Deferrals, as provided in Article III. A Member’s Deferrals will be suspended in the event of a distribution pursuant to an unforeseeable emergency or in the event of a distribution from the Savings Plan, as provided in Article III.

(b) Change in Distribution Event. A Member may change the event entitling him to distribution, as designated on his election of Distribution Options, only as provided in Section 5.01(b).

2.03 Termination of Membership; Re-employment.

(a) Termination. Membership ceases upon a Member’s termination of employment.

(b) Approved Leave of Absence. Membership continues during a leave of absence approved by the Participating Company employing the Eligible Executive.

(c) Re-employment. Upon re-employment as an Eligible Executive, a former Member may become a Member again as follows:

(i) No Account Balance at Re-employment.A former Member who has no Account balance at the time of reemployment may become a Member by executing a Deferral Agreement under Section 2.01 as though for all purposes of the Plan the Affiliated Companies had never employed the former Member.

(ii) Account Balance at Re-employment. A former Member who has an Account balance at the time of re-employment may become a Member by executing a Deferral Agreement under Section 2.01, but only if such former Member was not eligible to participate in the Plan at any time during the 24-month period ending on the date the Member again becomes eligible to participate in the Plan. Otherwise, such former Member may again become a Member by executing a Deferral Agreement under Section 2.01, which will become effective as described in Section 3.01(c) for Eligible Employees filing Deferral Agreements after initial eligibility.

ARTICLE III
Deferrals

3.01 Filing Requirements.

(a) Deferral Agreements prior to Effective Date.

(i) Base Pay and Other Non-Performance Based Pay. An individual who is an Eligible Executive immediately prior to the Effective Date may file a Deferral Agreement with the Administrator with respect to Compensation that is base pay, and, in the Administrator’s discretion, for other Compensation that does not meet the requirements of Section 3.06(a), within the period prior to the Effective Date prescribed by the Administrator. The Agreement will be effective for base pay for payroll periods beginning on or after the later of (i)

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the Effective Date, or (ii) the first day of the month following the date the Deferral Agreement is filed with the Administrator and for other Compensation that does not meet the requirements of Section 3.06(a) only to extent earned after the Effective Date.

(ii) Performance-Based Pay. An individual who is an Eligible Executive immediately prior to the Effective Date may defer Compensation earned under the Bonus Plan and/or the Omnibus Plan that meets the requirements of Section 3.06(a) if the Eligible Executive files a Deferral Agreement with the Administrator no later than the date set forth in Section 3.06(a).

(b) Deferral Agreements upon Initial Eligibility.

(i) Base Pay and Other Non-Performance Based Pay. An individual who becomes an Eligible Executive on or after the Effective Date may file a Deferral Agreement with the Administrator during the 30-day period beginning on the date he first becomes an Eligible Executive with respect to Compensation that is base pay, and, in the Administrator’s discretion, for other Compensation that does not meet the requirements of Section 3.06(a). Such Deferral Agreement will be effective only for Compensation earned after the Deferral Agreement is filed, and, for base pay, the Agreement will be effective only for payroll periods beginning on or after the first day of the month following the date the Deferral Agreement is filed with the Administrator.

(ii) Performance-Based Pay. An individual who becomes an Eligible Executive on or after the Effective Date may defer Compensation earned under the Bonus Plan and/or the Omnibus Plan that meets the requirements of Section 3.06(a) if the Eligible Executive files a Deferral Agreement no later than the date set forth in Section 3.06(a).

(c) Deferral Agreements after Initial Eligibility. To defer Compensation, an Eligible Executive who does not file a Deferral Agreement with the Administrator as provided in Sections 3.01(a) and 3.01(b) must file a Deferral Agreement as follows:

(i) Base Pay. The Eligible Executive must file a Deferral Agreement in any subsequent month of December for the next calendar year with respect to base pay.

(ii) Performance-Based Pay. For Compensation that meets the requirements of Section 3.06(a) and is earned under the Bonus Plan and/or the Omnibus Plan, an Eligible Executive must file a Deferral Agreement no later than the date set forth in Section 3.06(a).

(iii) Other Non-Performance-Based Pay. For Compensation that does not meet the requirements of Section 3.06(a), the Deferral Agreement must be filed no later the last day of the year prior to the first year in which the Participant provides the services with respect to which such Compensation is paid.

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3.02 Maximum Deferral Amounts.An Eligible Executive’s Deferral Agreement must authorize a reduction in his Compensation with respect to his Deferrals under the Plan.

(a) Base Pay. An Eligible Executive may defer up to 100% of his base pay. The elected percentage will be applied to the gross amount of base pay for each payroll period, but will be limited for any payroll period within a calendar year to the gross amount of base pay for that pay period, reduced by the sum of:

(i) the FICA tax withheld from the Eligible Executive’s base pay for the pay period,

(ii) the Eligible Executive’s contributions to a cafeteria plan, as defined in Section 125(d) of the Code, for the pay period, and

(iii) the dollar amount of per pay period deductions (other than the deductions described in (i) and (ii)) in effect as of January 1 of the calendar year.

Notwithstanding the preceding sentence, the Administrator, in its sole discretion, and prior to the first day of a calendar year, may further limit an Eligible Executive’s election to defer base pay for a calendar year in order to facilitate administration of the Plan and to prevent an Eligible Executive’s elected deferrals of base salary from exceeding the net cash payments of base pay that would otherwise be made to the Eligible Executive for a payroll period.

(b) Bonus. An Eligible Executive may defer up to 100% of amounts payable under the Bonus Plan.

(c) Omnibus Plan. An Eligible Executive may defer up to 100% of Compensation payable under the Omnibus Plan.

3.03 Crediting of Deferrals. On each Valuation Date following the effective date of an Eligible Executive’s Deferral Agreement, his Account will be credited with an amount of Deferral elected in his Deferral Agreement, if any, for each payroll period ending within the month in which such Valuation Date occurs.

3.04 Changing Deferrals.

(a) Electing a Change in Deferrals.An Eligible Executive’s election on his Deferral Agreement of the rate at which he authorizes Deferrals under the Plan will remain in effect in subsequent calendar years unless he files with the Administrator an amendment to his Deferral Agreement modifying or revoking such election. With respect to the Deferral of base pay, the amendment must be filed by December 31 and will beeffective for payroll periods beginning on or after the following January 1. With respect to a Deferral of Compensation under the Bonus Plan and/or the Omnibus Plan that meets the requirements of Section 3.06(a), the Deferral Agreement must be filed on or before the date set forth in Section 3.06(a). With respect to a Deferral of Compensation under the Bonus Plan and/or the Omnibus Plan that does

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not meet the requirements of Section 3.06(a), the Deferral must be filed on or before the date set forth in Section 3.06(b).

(b) Automatic Suspension of Deferrals. Notwithstanding Section 3.04(a), if a Member receives a withdrawal pursuant to Section 5.03 due to an unforeseeable emergency or a financial hardship withdrawal from the Savings Plan, the Member’s Deferrals under this Plan will be suspended for the remainder of the calendar year in which such withdrawal or distribution occurs. Deferrals will resume for payroll periods beginning on or after the January 1 following the date of suspension in a time and manner determined by the Administrator, and the Administrator will approve a resumption only if the Administrator determines that the Eligible Executive is no longer subject to the unforeseeable emergency or incurring the financial hardship.

3.05 Certain Additional Credits. On each Valuation Date, the Account of an Eligible Executive will be credited with Additional Credits in an amount equal to the Deferrals described in Sections 3.02(a) and 3.02(b) credited to such Eligible Executive’s Account since the immediately preceding Valuation Date, to the extent such Deferrals do not exceed 5% of the Compensation eligible for deferral under Sections 3.02(a) and 3.02(b). As of December 31 of each calendar year, the Account of an Eligible Executive with be credited with an amount of Matching Contribution Credits equal to the matching contributions that would have been made to the Savings Plan since December 31 of the prior calendar year but for the limitation set forth in Section 401(a)(17) of the Code.

3.06 Timing of Deferral Elections. All elections with respect to Deferral of Compensation awarded under the Bonus Plan or the Omnibus Plan must be filed in accordance with the following requirements:

(a) Performance-Based Compensation. If the Compensation meets the requirements for “performance-based compensation” within the meaning of Treasury Regulation Section 1.409A-1(e), the Deferral Agreement must be filed no later than six months prior to the end of the Incentive Compensation Award Period (as defined in the Bonus Plan) or the Performance Period (as defined in the Omnibus Plan) with respect to which such Compensation is paid, or such earlier date as specified by the Administrator in its sole discretion, but not, in any event, on or after the date on which the amount of such Compensation becomes readily ascertainable.

(b) Non-Performance Based Compensation. If the Compensation does not meet the requirements for “performance-based compensation” within the meaning of Treasury Regulation Section 1.409A-1(e), the Deferral Agreement must be filed no later the last day of the year prior to the first year of the Incentive Compensation Award Period (as defined in the Bonus Plan) or the Performance Period (as defined in the Omnibus Plan) with respect to which such Compensation is paid.

An election under either (a) or (b) above will be irrevocable as of the last date on which a Deferral Agreement may be filed, as specified in (a) and (b), above. To make an election as described in (a), above, the Eligible Executive must be continuously employed from the later of the beginning of the Incentive Compensation Award Period (as defined in the Bonus Plan) or the Performance Period (as defined in the Omnibus Plan) or the date the Business

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Criteria (as defined in the Bonus Plan) or Performance Measures (as defined in the Omnibus Plan) applicable to such Compensation are established, to the date of the election under this Section 3.06.

ARTICLE IV
Maintenance of Accounts

4.01 Accounts. An Account will be established for each Member. As of each Valuation Date, each Member’s Account will be credited with deemed investment earnings and losses pursuant to Section 4.02.

4.02 Deemed Investments. Each Member will have the same rights with respect to the deemed investment of his or her Account under this Plan as such Member has with respect to the investment of his or her Account under the Savings Plan, including available funds (with the exception of the Polaris Stock Fund), the frequency with which the Member may change deemed investments and default deemed investments. As of each Valuation Date, deemed investment earnings and losses will be applied to each Member’s Account based upon the performance of the applicable investment funds. Notwithstanding the foregoing, any credits made to a Member’s Account related to a Deferral of shares of Corporation common stock (“Polaris Stock”) to be received in settlement of Restricted Stock Units, as defined under the Omnibus Plan, will be deemed to be invested only in shares of Polaris Stock for the period ending six (6) months and one (1) day following the date on which the Deferral is first credited to the Member’s Account; thereafter, a Member may change the deemed investment of such Deferral, but once the deemed investment is changed, it may not again be deemed to be invested in shares of Polaris Stock under the Plan. If a dividend is paid on Polaris Stock, a Member’s Account that is deemed invested in Polaris Stock on the record date for such dividend will be credited as of the dividend payment date with an additional amount equal to the dividend that would have been paid on an actual investment in Polaris Stock equal to the number of shares deemed credited to the Member’s Account as of the dividend record date, and such additional credited amount will be deemed to be invested, as of the dividend payment date, in a money market fund or similar fund available under the Savings Plan, as determined by the Administrator, until the Member changes the deemed investment of such amounts.

4.03 Statement of Accounts. A statement will be sent to each Member as to the balance of his Account at least once each calendar year.

4.04 Vesting of Account. Each Member will at all times be fully vested in his Account.

ARTICLE V
Payment of Benefits

5.01 Commencement of Payment.

(a) Distribution Options. The distribution of the Member’s or former Member’s Account will commence, pursuant to Section 5.02, on or after the occurrence of (i), (ii), (iii) or (iv) below, as designated by the Member as part of his Distribution Option election:

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(i) either the date of the Member’s separation from service (within the meaning of Section 409A of the Code and the regulations thereunder) with the Affiliated Companies for any reason, whether with or without cause, or the first anniversary of such date,

(ii) attainment of a designated age not earlier than age 59½ nor later than age 70½,

(iii) the earlier of (i) or (ii) above, or

(iv) the later of (i) or (ii) above.

In the event a Member elects either (ii) or (iii) above, he may not elect an age less than three (3) years subsequent to his current age. If a Member fails to designate a permissible payment event as part of his Distribution Option election, such Member will be deemed to have elected to have payment made upon the date the Member separates from Service. A Member or former Member may not change his Distribution Option election of the designation of the event which entitles him to distribution of his Account, except as provided in Section 5.01(b) below. Notwithstanding the foregoing, if payment of a Member’s Account is to be made or is to commence upon separation from service and if, at the time of such separation from service, such Member is a specified employee (within the meaning of Section 409A(1)(B) of the Code), such payment will be made or will commence on the date that is six (6) months and one day following such Member’s separation from service.

(b) Change in Payment Terms. A Member or former Member may make a request to the Administrator to defer the Member’s designated distribution event under Section 5.01(a), as modified by a prior change pursuant to this Section 5.01(b). The request must be filed in writing with the Administrator at least one year prior to when distribution would commence based on the current designation and must defer distribution for at least five years following the date on which distribution would otherwise have been made. The deferral request must specify a distribution event described in Section 5.01(a), is subject to approval of the Administrator and, if approved, will be effective as of the date that is one year after the request is filed with the Administrator. If the Member’s current distribution event will occur upon his termination of employment and the Member’s employment terminates within one year after the deferral request is made, the deferral request will not be effective.

(c) Death. Notwithstanding anything in this Section 5.01 to the contrary, a Member’s Account will be distributed upon his death.

(d) Delay of Payment in Certain Circumstances. Notwithstanding the foregoing, in their sole and absolute discretion, the Participating Companies may delay payment of a benefit under this Plan to any Member to the extent required to avoid the nondeductibility of such benefit under Section 162(m) of the Code or to avoid a violation of federal securities laws or other applicable law, but if a Member’s payment is delayed, the Member’s Account will continue to be adjusted for earnings and losses associated with the Account’s Deemed Investments, pursuant to Section

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4.02. Payment will be made during the first taxable year in which the Participating Companies reasonably anticipate that Section 162(m) of the Code will not cause the payment to be nondeductible or that the payment will not violate federal securities laws or other applicable law.

5.02 Method of Payment. Distribution of a Member’s or former Member’s Account will commence as soon as administratively practicable following the date provided in the Member’s Distribution Option elected under Section 5.01 or his date of death, as the case may be, based upon the Member’s Account as of the Valuation Date immediately preceding the date of distribution.

(a) Timing Relative to Distribution Event.Payment must be made no later than the later of (i) the last day of the calendar year in which the distribution event occurs or (ii) 2½ monthsfollowing the date of such distribution event.

(b) Method of Payment. Such distribution will be made either (i) in a single lump sum payment or (ii) in substantially equal monthly, quarterly or annual payments over a period not in excess of ten (10) years.

(c) Adjustment of Account prior to Distribution. If the installment method is elected, the Member’s Account, until fully distributed, will continue to be credited with deemed investment earnings and losses in accordance with Section 4.02, and each installment payment will equal a fraction of the Account balance, as of the most recent Valuation Date, equal to one over the number of installment payments left.

(d) Elections and Deemed Election of Payment Method.A Member must elect the form of distribution to him or his Beneficiary at the time of commencement of his participation under this Plan and any such election is irrevocable and not subject to change except prospectively.If a Member fails to make a proper election as to the method of distribution of his Account, he will be deemed to have elected to have his Account distributed to him or his Beneficiary in a single lump sum.

(e) Form of Payment. Payments will be made in cash, except that, in the Company’s sole discretion, payment of the portion of the Member’s Account that is deemed to be invested in shares of Polaris Stock may be made in shares of Polaris Stock, in cash or in a combination thereof, but the portion of a Member’s Account that is required to be deemed invested in shares of Polaris Stock and for which the deemed investment may not be changed, pursuant to Section 4.02 hereof, will be distributed only in shares of Polaris Stock.

5.03 Unforeseeable Emergency. While employed by the Participating Companies, a Member or former Member may, in the event of an unforeseeable emergency, request a withdrawal from his Account in a time and manner determined by the Administrator. Such a request is subject to approval by the Administrator.

(a) Amount of Withdrawal. The request may not be for a greater amount than the amount reasonably necessary to satisfy the emergency need (including any federal,

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state, local or foreign taxes or penalties reasonably anticipated to result from the withdrawal).

(b) Definition of Unforeseeable Emergency. For purposes of this Section 5.03 an unforeseeable emergency is a severe financial hardship to the Member resulting from (i) an illness or accident of the Member, the Member’s spouse, the Member’s Beneficiary, or the Member’s dependent (as defined in Section 152 of the Code, without regard to Sections 152(b)(1), (b)(2) and (d)(1)(B) of the Code), (ii) loss of the Member’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, not as a result of a natural disaster), or (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Member.

(c) Consideration of other Resources to Meet Emergency Need. Notwithstanding the foregoing, a withdrawal on the basis of unforeseeable emergency is not permitted to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the Member’s assets, to the extent the liquidation of such assets would not cause severe financial hardship, or by cessation of deferrals under this Plan.

5.04 Designation of Beneficiary. A Member or former Member may, in a time and manner determined by the Administrator, designate a beneficiary and one or more contingent beneficiaries (which may include the Member’s or former Member’s estate) to receive any benefits which may be payable under this Plan upon his death. If the Member or former Member fails to designate a beneficiary or contingent beneficiary, or if the beneficiary and the contingent beneficiaries fail to survive the Member or former Member, such benefits will be paid to the Member’s or former Member’s estate. A Member or former Member may revoke or change any designation made under this Section 5.04 in a time and manner determined by the Administrator.

5.05 Status of Account PendingDistribution. Pending distribution, a former Member’s Account will continue to be credited with earnings and losses as provided in Section 4.02. The former Member will be entitled to apply for hardship withdrawals under Section 5.03 to the same extent as if he were a Member of the Plan.

5.06 Change of Control. If a Change of Control occurs, each Member or former Member will receive, and the Plan Sponsor will pay within 7 days of such Change of Control, a lump sum payment equal to the value of the Member’s or former Member’s Accounts (determined under Article IV) as of the Valuation Date coinciding with or next following the date of such Change of Control. The amount of each Member’s or former Member’s lump sum payment will be determined by the Plan Sponsor’s accountants after consultation with the entity then maintaining the Plan’s records, and will be projected, if necessary, to such Valuation Date from the last valuation of Member’s or former Member’s Accounts for which information is readily available.

5.07 Election of Distribution Options for Subsequent Deferrals. An Eligible Executive’s election of a Distribution Option will remain in effect with respect to Deferrals of Compensation for subsequent calendar years for base pay, subsequent Incentive

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Compensation Award Periods for Bonus Plan Compensation, and subsequent Performance Periods for Omnibus Plan Compensation until the Eligible Executive files with the Administrator a separate new election of a Distribution Option and method of payment with respect to subsequent Deferrals.  With respect to base pay and Compensation under the Bonus Plan or the Omnibus Plan that does not meet the requirements of Section 3.06(a), the new Distribution Option election must be filed by December 31 and will beeffective for payroll periods beginning on or after the following January 1 for base pay and for Incentive Compensation Award Periods or Performance Periods beginning on or after such January 1. With respect to Compensation under the Bonus Plan or the Omnibus Plan that meets the requirements of Section 3.06(a), the new Distribution Option election must be filed no later than the date set forth in Section 3.06(a) applicable to the Incentive Compensation Award Period or Performance Period. Prior elections of Distribution Options with respect to Deferrals of Compensation from prior periods will remain in effect unless amended in accordance with Section 5.01(b).

ARTICLE VI
Amendment or Termination

6.01 Right to Terminate. The Corporation may, in its sole discretion, terminate this Plan and the related Deferral Agreements at any time (other than at a time proximate to a downturn in the financial health of any Affiliated Company) provided that all deferred compensation plans that must be aggregated with this Plan for purposes of Section 409A of the Code, if any, are also terminated. In the event the Plan and related Deferral Agreements are terminated pursuant to the immediately preceding sentence, each Member, former Member or Beneficiary will receive a single sum payment equal to the balance in his Account no earlier than 12 months nor later than 24 months following such termination. The Corporation may also, in its sole discretion, terminate this Plan at any time within 12 months of a corporate dissolution taxed under Section 331 of the Code, or with the approval of a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1)(A). In the event the Plan and related Deferral Agreements are terminated pursuant to the immediately preceding sentence, each Member, former Member and Beneficiary will receive a single sum payment equal to the balance in his Account as soon as practicable thereafter.

6.02 Right to Amend.Each Participating Company, by proper action of its governing body,or by action of any person or committee to whom that authority has been delegated by such governing body, may, in its sole discretion, amend this Plan and the related Deferral Agreements with respect to the Members employed or formerly employed by such Participating Company.A Participating Company may not amend the Plan in a manner that has the effect of reducing any Member’s, former Member’s, or Beneficiary’s Account without such Member’s, former Member’s, or Beneficiary’s consent.

6.03 Uniform Action. Notwithstanding anything in the Plan to the contrary, any action to amend or terminate the Plan or the Deferral Agreements must be taken in a uniform and nondiscriminatory manner.

ARTICLE VII
General Provisions

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7.01 No Funding. Nothing contained in this Plan or in a Deferral Agreement will cause this Plan to be a funded retirement plan. Neither the Member, former Member, his Beneficiary, contingent beneficiaries, heirs or personal representatives will have any right, title or interest in or to any funds of the Affiliated Companies on account of this Plan or on account of having completed a Deferral Agreement. Each Member or former Member will have the status of a general unsecured creditor of the Affiliated Companies and this Plan constitutes a mere promise by the Affiliated Companies to make benefit payments in the future. The Plan Sponsor, in its sole discretion, may establish a grantor trust, insurance contract or other investment vehicle to assist in its meeting its obligations under this Plan; provided, that no Member or Beneficiary will at any time have any right to any portion of the assets thereof and such assets will at all times be subject to the claims of the creditors of the Plan Sponsor in bankruptcy.

7.02 No Contract of Employment. The existence of this Plan or of a Deferral Agreement does not constitute a contract for continued employment between an Eligible Executive or a Member and an Affiliated Company. The Affiliated Companies reserve the right to modify an Eligible Executive’s or Member’s remuneration and to terminate an Eligible Executive or a Member for any reason and at any time, notwithstanding the existence of this Plan or of a Deferral Agreement.

7.03 Withholding Taxes. All payments under this Plan will be net of an amount sufficient to satisfy any federal, state or local withholding tax requirements.

7.04 Nonalienation. The right to receive any benefit under this Plan may not be transferred, assigned, pledged or encumbered by a Member, former Member, Beneficiary or contingent beneficiary in any manner and any attempt to do so will be void. No such benefit may be subject to garnishment, attachment or other legal or equitable process without the prior written consent of the Affiliated Companies.

7.05 Administration.

(a) This Plan will be administered by the Committee. Certain administrative functions, as set forth in the Plan, will be the responsibility of the Administrator. The Administrator will interpret the Plan, establish regulations to further the purposes of the Plan and take any other action necessary to the proper operation of the Plan in accordance with guidelines established by the Committee or, if there are no such guidelines, consistent with furthering the purpose of the Plan.

(b) The Corporation, by proper action of the Board, in its sole discretion and upon such terms as it may prescribe, may permit any Affiliated Company to participate in the Plan.

(c) Prior to paying any benefit under this Plan, the Administrator may require the Member, former Member, Beneficiary or contingent beneficiary to provide such information or material as the Administrator, in its sole discretion, deems necessary for it to make any determination it may be required to make under this Plan. The Administrator may withhold payment of any benefit under this Plan until it receives

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all such information and material and is reasonably satisfied of its correctness and genuineness.

(d) The Administrator will provide adequate notice in writing to any Member, former Member, Beneficiary or contingent beneficiary whose claim for benefits under this Plan has been denied, setting forth the specific reasons for such denial. The Administrator will provide a reasonable opportunity to any such Member, former Member, Beneficiary or contingent beneficiary for a full and fair review by the Administrator of its decision denying the claim. The Administrator’s decision on any such review will be final and binding on the Member, former Member, Beneficiary or contingent beneficiary and all other interested persons.

(e) All acts and decisions of the Administrator will be final and binding upon all Members, former Members, beneficiaries, contingent beneficiaries and employees of the Affiliated Companies.

7.06 Construction.

(a) The Plan is intended to constitute an unfunded deferred compensation arrangement for a select group of management or highly compensated employees and all rights hereunder will be governed by and construed in accordance with the laws of the State of Minnesota to the extent not preempted by federal law.

(b) The masculine pronoun means the feminine wherever appropriate.

(c) The captions inserted herein are inserted as a matter of convenience and will not affect the construction of the Plan.

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EX-31.A

EXHIBIT 31.a

I, Scott W. Wine, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Polaris Industries Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ SCOTT W. WINE

Scott W. Wine

Chairman and Chief Executive Officer

Date: October 29, 2014

EX-31.B

EXHIBIT 31.b

I, Michael W. Malone, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Polaris Industries Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ MICHAEL W. MALONE

Michael W. Malone

Vice President — Finance and

Chief Financial Officer

Date: October 29, 2014

EX-32.A

Exhibit 32.a

POLARIS INDUSTRIES INC.

STATEMENT PURSUANT TO 18 U.S.C. §1350

I, Scott W. Wine, Chief Executive Officer of Polaris Industries Inc., a Minnesota corporation (the “Company”), hereby certify as follows:

1. This statement is provided pursuant to 18 U.S.C. § 1350 in connection with the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2014 (the “Periodic Report”);

2. The Periodic Report fully complies with the requirements of Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended; and

3. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods indicated therein.

Date: October 29, 2014

/s/ SCOTT W. WINE

Scott W. Wine

Chairman and Chief Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Polaris Industries Inc. and will be retained by Polaris Industries Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.B

Exhibit 32.b

POLARIS INDUSTRIES INC.

STATEMENT PURSUANT TO 18 U.S.C. §1350

I, Michael W. Malone, Vice President — Finance and Chief Financial Officer of Polaris Industries Inc., a Minnesota corporation (the “Company”), hereby certify as follows:

1. This statement is provided pursuant to 18 U.S.C. § 1350 in connection with the Company’s Quarterly Report on Form 10-Q for the period ended September 30, 2014 (the “Periodic Report”);

2. The Periodic Report fully complies with the requirements of Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended; and

3. The information contained in the Periodic Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods indicated therein.

Date: October 29, 2014

/s/ MICHAEL W. MALONE

Michael W. Malone

Vice President — Finance and

Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Polaris Industries Inc. and will be retained by Polaris Industries Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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Shareholders' Equity Changes in Accumulated Other Comprehensive Income (Loss) Balances (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance as of December 31, 2013			$ 18,761
Reclassification from Accumulated Other Comprehensive Income, Current Period, Net of Tax			(2,039)
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax	(22,424)	8,982	(22,576)	2,655
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax			(18,949)
Balance as of September 30, 2014	(2,227)		(2,227)
Foreign Currency Items
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance as of December 31, 2013			18,582
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax			(22,576)
Balance as of September 30, 2014	(3,994)		(3,994)
Cash Flow Hedging [Member] | Foreign Exchange Contract [Member]
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Balance as of December 31, 2013			179
Reclassification to the income statement			(2,039)
Other Comprehensive Income (Loss), before Reclassifications, Net of Tax			3,627
Balance as of September 30, 2014	$ 1,767		$ 1,767

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Derivative Instruments and Hedging Activities Schedule of Derivatives, Effect on OCI (Details) (Foreign Exchange Contract [Member], Cash Flow Hedging [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Foreign Exchange Contract [Member] | Cash Flow Hedging [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Derivative Instruments, Gain (Loss) Recognized in Other Comprehensive Income (Loss), Effective Portion, Net	$ 2,603	$ (1,131)	$ 1,588	$ 1,889

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Derivative Instruments and Hedging Activities Open Foreign Currency Contracts (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Sep. 30, 2014 Cash Flow Hedging [Member] Foreign Exchange Contract [Member]	Sep. 30, 2014 Cash Flow Hedging [Member] Foreign Exchange Contract [Member] Currency, Australian Dollar	Sep. 30, 2014 Cash Flow Hedging [Member] Foreign Exchange Contract [Member] Currency, Canadian Dollar	Sep. 30, 2014 Cash Flow Hedging [Member] Foreign Exchange Contract [Member] Currency, Japanese Yen	Sep. 30, 2014 Cash Flow Hedging [Member] Foreign Exchange Contract [Member] Currency, Mexican Peso
Derivative [Line Items]
Notional Amounts (in US Dollars)		$ 131,044	$ 7,991	$ 91,050	$ 17,200	$ 14,803
Derivative, Fair Value, Net	$ 21	$ 2,554	$ 404	$ 2,826	$ (599)	$ (77)

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Goodwill and Other Intangible Assets Changes in Carrying Amount of Goodwill (Detail) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014
Goodwill [Roll Forward]
Goodwill, beginning of period	$ 126,697
Goodwill, Acquired During Period	4,157
Currency translation effect on foreign goodwill balances	(7,352)
Goodwill, end of period	$ 123,502

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Fair Value Measurements (Details) (Fair value, measurements, recurring, USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
Foreign Currency Contract, Asset, Fair Value Disclosure	$ 2,554
Commodity Contract Asset, Current		30
Assets, fair value disclosure	43,465	24,741
Foreign Currency Contracts, Liability, Fair Value Disclosure		(9)
Liabilities, Fair Value Disclosure, Recurring	(40,911)	(24,720)
Level 1
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
Assets, fair value disclosure	40,911	24,711
Liabilities, Fair Value Disclosure, Recurring	(40,911)	(24,711)
Level 2
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
Foreign Currency Contract, Asset, Fair Value Disclosure	2,554
Commodity Contract Asset, Current		30
Assets, fair value disclosure	2,554	30
Foreign Currency Contracts, Liability, Fair Value Disclosure		(9)
Liabilities, Fair Value Disclosure, Recurring	0	(9)
Supplemental Employee Retirement Plans, Defined Benefit [Member]
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
Deferred Compensation Plan Assets	40,911	24,711
Deferred Compensation Liability, Current and Noncurrent	(40,911)	(24,711)
Supplemental Employee Retirement Plans, Defined Benefit [Member] | Level 1
Fair Value, Assets, Liabilities and Stockholders' Equity Measured on Recurring Basis [Abstract]
Deferred Compensation Plan Assets	40,911	24,711
Deferred Compensation Liability, Current and Noncurrent	$ (40,911)	$ (24,711)

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Financial Services Arrangements - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Investments in and Advances to Affiliates [Line Items]
Net amount financed for dealers	$ 1,072,372
Trade receivables, net	153,839	186,213
Aggregate repurchase obligation, amount	120,815
Maximum [Member]
Investments in and Advances to Affiliates [Line Items]
Aggregate repurchase obligation, percentage	15.00%
Finance affiliate
Investments in and Advances to Affiliates [Line Items]
Investment in affiliates	71,515	69,217
Polaris Acceptance
Investments in and Advances to Affiliates [Line Items]
Equity method investment ownership percentage	50.00%
Trade receivables, net	300,693
Securitization Facility
Investments in and Advances to Affiliates [Line Items]
Outstanding balance of receivables	$ 771,679

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Shareholders' Equity Cash Dividends Declared Per Common Share (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Disclosure of Cash Dividends Declared and Paid Per Common Share [Abstract]
Cash dividends declared and paid per common share	$ 0.48	$ 0.42	$ 1.44	$ 1.26

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Derivative Instruments and Hedging Activities Carrying Values of Derivative Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014		Dec. 31, 2013
Derivative [Line Items]
Derivative Net Carrying Value			$ 21
Designated as Hedging Instrument
Derivative [Line Items]
Derivative Net Carrying Value	2,554		(9)
Designated as Hedging Instrument | Foreign Exchange Contract [Member]
Derivative [Line Items]
Derivative Net Carrying Value	2,554	[1]	(9)	[1]
Not Designated as Hedging Instrument
Derivative [Line Items]
Derivative Net Carrying Value			30
Not Designated as Hedging Instrument | Commodity contracts
Derivative [Line Items]
Derivative Net Carrying Value			30
Prepaid Expenses And Other Current Assets
Derivative [Line Items]
Fair Value— Assets			1,240
Prepaid Expenses And Other Current Assets | Designated as Hedging Instrument
Derivative [Line Items]
Fair Value— Assets	3,280		1,194
Prepaid Expenses And Other Current Assets | Designated as Hedging Instrument | Foreign Exchange Contract [Member]
Derivative [Line Items]
Fair Value— Assets	3,280	[1]	1,194	[1]
Prepaid Expenses And Other Current Assets | Not Designated as Hedging Instrument
Derivative [Line Items]
Fair Value— Assets			46
Prepaid Expenses And Other Current Assets | Not Designated as Hedging Instrument | Commodity contracts
Derivative [Line Items]
Fair Value— Assets			46
Other Current Liabilities
Derivative [Line Items]
Fair Value— (Liabilities)			(1,219)
Other Current Liabilities | Designated as Hedging Instrument
Derivative [Line Items]
Fair Value— (Liabilities)	(726)		(1,203)
Other Current Liabilities | Designated as Hedging Instrument | Foreign Exchange Contract [Member]
Derivative [Line Items]
Fair Value— (Liabilities)	(726)	[1]	(1,203)	[1]
Other Current Liabilities | Not Designated as Hedging Instrument
Derivative [Line Items]
Fair Value— (Liabilities)			(16)
Other Current Liabilities | Not Designated as Hedging Instrument | Commodity contracts
Derivative [Line Items]
Fair Value— (Liabilities)			$ (16)

[1] Assets are included in prepaid expenses and other and liabilities are included in other accrued expenses on the accompanying consolidated balance sheets.

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Share-Based Compensation

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Share-Based Compensation

Note 2. Share-Based Compensation

The amount of compensation cost for share-based awards to be recognized during a period is based on the portion of the awards that are ultimately expected to vest. The Company estimates stock option forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company analyzes historical data to estimate pre-vesting forfeitures and records share compensation expense for those awards expected to vest.

Total share-based compensation expenses were as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013
Option plan	$	6,310	$	5,866	$	18,263	$	16,843
Other share-based awards	8,103		23,810		19,202		41,915
Total share-based compensation before tax	14,413		29,676		37,465		58,758
Tax benefit	5,376		11,073		13,990		21,939
Total share-based compensation expense included in net income	$	9,037	$	18,603	$	23,475	$	36,819

In addition to the above share-based compensation expenses, Polaris sponsors a qualified non-leveraged employee stock ownership plan (ESOP). Shares allocated to eligible participants’ accounts vest at various percentage rates based on years of service and require no cash payments from the recipient.

At September 30, 2014, there was $80,629,000 of total unrecognized share-based compensation expense related to unvested share-based equity awards. Unrecognized share-based compensation expense is expected to be recognized over a weighted-average period of 1.62 years. Included in unrecognized share-based compensation is approximately $40,819,000 related to stock options and $39,810,000 for restricted stock.

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Investment in Other Affiliates (Detail) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Brammo, Inc.
Investments in and Advances to Affiliates [Line Items]
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures	$ 9,500	$ 9,500
Eicher -Polaris Private Limited
Investments in and Advances to Affiliates [Line Items]
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures	12,002	6,456
Other affiliates
Investments in and Advances to Affiliates [Line Items]
Investments in and Advance to Affiliates, Subsidiaries, Associates, and Joint Ventures	$ 21,502	$ 15,956

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Share-Based Compensation Expenses (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Disclosure Share Based Compensation Expenses [Abstract]
Option plan	$ 6,310	$ 5,866	$ 18,263	$ 16,843
Restricted Stock or Unit Expense	8,103	23,810	19,202	41,915
Total share-based compensation before tax	14,413	29,676	37,465	58,758
Tax benefit	5,376	11,073	13,990	21,939
Total share-based compensation expense included in net income	$ 9,037	$ 18,603	$ 23,475	$ 36,819

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Significant Accounting Policies Additional Information (Details)	3 Months Ended
	Sep. 30, 2014
Off Road Vehicle
Product Warranty Liability [Line Items]
Period of warranties provided by Polaris	6 months
Snowmobiles
Product Warranty Liability [Line Items]
Period of warranties provided by Polaris	1 year
Small Electric Vehicles
Product Warranty Liability [Line Items]
Period of warranties provided by Polaris	2 years
Minimum [Member] | Motorcycles [Member]
Product Warranty Liability [Line Items]
Period of warranties provided by Polaris	1 year
Maximum [Member] | Motorcycles [Member]
Product Warranty Liability [Line Items]
Period of warranties provided by Polaris	2 years

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Investment in Other Affiliates Additional Information (Details) (USD $)	3 Months Ended		9 Months Ended		3 Months Ended	23 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014 Eicher -Polaris Private Limited	Sep. 30, 2014 Eicher -Polaris Private Limited
Investments in and Advances to Affiliates [Line Items]
Equity method investment ownership percentage					50.00%	50.00%
Period for proportionate share of income (loss) to be reflected in consolidated financials					1 month
Joint venture investment					$ 50,000,000
Investment maturity period					3 years
Payments to Acquire Businesses and Interest in Affiliates						17,749,000
Income (Loss) from Equity Method Investments	$ (1,036,000)	$ (631,000)	$ (2,899,000)	$ (1,629,000)

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Share-Based Compensation - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 30, 2014
Disclosure Share Based Compensation Additional Information [Abstract]
Unrecognized compensation cost related to unvested share-based equity awards	$ 80,629
Weighted average period of recognition of unvested share-based equity awards	1 year 7 months 15 days
Unrecognized compensation cost related to unvested share-based equity awards, stock options	40,819
Unrecognized compensation cost related to unvested share-based equity awards, restricted stock	$ 39,810

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Financing Agreements Financing Arrangements, Interest Rates and Maturities (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Effective Percentage	4.99%
Capital Lease Obligations	$ 28,023	$ 7,123
Debt and Capital Lease Obligations	228,023	287,623
Capital Lease Obligations, Current	2,809	3,281
Long-term Debt and Capital Lease Obligations	225,214	284,342
Master Notes [Member] | Senior Unsecured Notes Three Point Eight One Percent Due May Twenty Eighteen [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.81%
Debt Instrument, Maturity Date	May 31, 2018
Long-term Debt	25,000	25,000
Master Notes [Member] | Senior Unsecured Notes Four Point Six Zero Percent Due May Twenty Twenty One [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	4.60%
Debt Instrument, Maturity Date	May 31, 2021
Long-term Debt	75,000	75,000
Master Notes [Member] | Senior Unsecured Notes Three Point One Three Percent Due December Twenty Twenty [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	3.13%
Debt Instrument, Maturity Date	Dec. 31, 2020
Long-term Debt	100,000	100,000
Line of Credit [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Interest Rate at Period End	0.00%
Line of Credit Facility, Expiration Date	Jan. 31, 2018
Long-term Line of Credit	$ 0	$ 80,500
Minimum [Member]
Debt Instrument [Line Items]
Lease Expiration Date	Oct. 01, 2014
Maximum [Member]
Debt Instrument [Line Items]
Lease Expiration Date	Jul. 31, 2029

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Significant Accounting Policies

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Significant Accounting Policies

Note 1. Significant Accounting Policies

Basis of presentation. The accompanying unaudited consolidated financial statements of Polaris Industries Inc. ("Polaris" or the "Company") have been prepared in accordance with accounting principles generally accepted in the United States for interim financial statements and, therefore, do not include all information and disclosures of results of operations, financial position and changes in cash flow in conformity with accounting principles generally accepted in the United States for complete financial statements. Accordingly, such statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 previously filed with the Securities and Exchange Commission. In the opinion of management, such statements reflect all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented. Due to the seasonality of snowmobiles; Off-Road Vehicles (ORV), which include all-terrain vehicles (ATV) and side-by-side vehicles; motorcycles; Small Vehicles (SV); and Parts, Garments and Accessories (PG&A) businesses, and to certain changes in production and shipping cycles, results of such periods are not necessarily indicative of the results to be expected for the complete year.

On September 2, 2004, the Company announced its decision to discontinue the manufacture of marine products effective immediately. Material financial results for the marine products division are reported separately as discontinued operations for all periods presented.

Fair value measurements. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date:

Level  1 — Quoted prices in active markets for identical assets or liabilities.

Level  2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

In making fair value measurements, observable market data must be used when available. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. The Company utilizes the market approach to measure fair value for its non-qualified deferred compensation assets and liabilities, and the income approach for foreign currency contracts and commodity contracts. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities, and for the income approach the Company uses significant other observable inputs to value its derivative instruments used to hedge foreign currency and commodity transactions.

Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):

	Fair Value Measurements as of September 30, 2014
Asset (Liability)	Total			Level 1			Level 2			Level 3
Non-qualified deferred compensation assets	$	40,911		$	40,911		—			—
Foreign exchange contracts, net	2,554			—			$	2,554		—
Total assets at fair value	$	43,465		$	40,911		$	2,554		—
Non-qualified deferred compensation liabilities	$	(40,911	)	$	(40,911	)	—			—
Total liabilities at fair value	$	(40,911	)	$	(40,911	)	—			—
	Fair Value Measurements as of December 31, 2013
Asset (Liability)	Total			Level 1			Level 2			Level 3
Commodity contracts, net	$	30		—			$	30		—
Non-qualified deferred compensation assets	24,711			$	24,711		—			—
Total assets at fair value	$	24,741		$	24,711		$	30		—
Foreign exchange contracts, net	$	(9	)	—			$	(9	)	—
Non-qualified deferred compensation liabilities	(24,711		)	$	(24,711	)	—			—
Total liabilities at fair value	$	(24,720	)	$	(24,711	)	$	(9	)	—

Inventories. Inventory costs include material, labor and manufacturing overhead costs, including depreciation expense associated with the manufacture and distribution of the Company's products. Inventories are stated at the lower of cost (first-in, first-out method) or market. The major components of inventories are as follows (in thousands):

	September 30, 2014			December 31, 2013
Raw materials and purchased components	$	149,555		$	107,496
Service parts, garments and accessories	161,877			125,765
Finished goods	298,314			206,290
Less: reserves	(27,553		)	(21,603		)
Inventories	$	582,193		$	417,948

Product warranties. Polaris provides a limited warranty for its ORVs for a period of six months, for a period of one year for its snowmobiles, for a period of one or two years for its motorcycles depending on brand and model year, and for a two year period for SVs. Polaris provides longer warranties in certain geographical markets as determined by local regulations and market conditions and may also provide longer warranties related to certain promotional programs. Polaris’ standard warranties require the Company or its dealers to repair or replace defective products during such warranty periods at no cost to the consumer. The warranty reserve is established at the time of sale to the dealer or distributor based on management’s best estimate using historical rates and trends. Adjustments to the warranty reserve are made from time to time as actual claims become known in order to properly estimate the amounts necessary to settle future and existing claims on products sold as of the balance sheet date. Factors that could have an impact on the warranty accrual in any given period include the following: improved manufacturing quality, shifts in product mix, changes in warranty coverage periods, snowfall and its impact on snowmobile usage, product recalls and any significant changes in sales volume. The activity in the warranty reserve during the periods presented was as follows (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2014			2013			2014			2013
Balance at beginning of period	$	44,811		$	42,717		$	52,818		$	47,723
Additions to warranty reserve through acquisitions	—			—			110			1,602
Additions charged to expense	21,227			16,860			44,524			38,850
Warranty claims paid	(14,644		)	(11,475		)	(46,058		)	(40,073		)
Balance at end of period	$	51,394		$	48,102		$	51,394		$	48,102

New Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue from the transfer of goods or services to customers in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. Polaris is required to adopt the new pronouncement on January 1, 2017 using one of two retrospective application methods. The Company is evaluating the application method and the impact of this new standard on the financial statements.

There are no other new accounting pronouncements that are expected to have a significant impact on Polaris' consolidated financial statements.

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Financing Agreement - Additional Information (Detail) (USD $)		1 Months Ended
	Aug. 31, 2011	Dec. 31, 2010 Master Notes [Member] Senior Unsecured Notes Three Point Eight One Percent Due May Twenty Eighteen [Member]	Dec. 31, 2010 Master Notes [Member] Senior Unsecured Notes Four Point Six Zero Percent Due May Twenty Twenty One [Member]	Dec. 31, 2013 Master Notes [Member] Senior Unsecured Notes Three Point One Three Percent Due December Twenty Twenty [Member]
Debt Instrument [Line Items]
Debt Instruments Maturity Date		5/31/2018	5/31/2021	12/31/2020
Proceeds from Issuance of Debt		$ 25,000,000	$ 75,000,000	$ 100,000,000
Line of Credit Facility, Maximum Borrowing Capacity	$ 350,000,000

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Shareholders' Equity Gains and Losses, Net of Tax Reclassified from Accumulated Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Reclassified from Accumulated OCI Into Income	$ (2)	$ (1,527)	$ (2,039)	$ (1,885)
Foreign Exchange Contract [Member] | Other expense (income), net
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Reclassified from Accumulated OCI Into Income	206	(2,241)	(1,891)	(3,352)
Foreign Exchange Contract [Member] | Cost of sales
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) Reclassified from Accumulated OCI Into Income	$ (208)	$ 714	$ (148)	$ 1,467

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Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Current assets:
Cash and cash equivalents	$ 169,018	$ 92,248
Trade receivables, net	153,839	186,213
Inventories, net	582,193	417,948
Prepaid expenses and other	61,780	63,716
Income taxes receivable	20,423	12,217
Deferred tax assets	93,312	93,356
Total current assets	1,080,565	865,698
Property and equipment, net	538,031	455,167
Deferred tax assets	25,096	18,616
Goodwill and other intangible assets, net	224,443	229,708
Other long-term assets	47,680	31,126
Total assets	2,008,832	1,685,488
Current liabilities:
Current portion of capital lease obligations	2,809	3,281
Accounts payable	340,606	238,044
Accrued expenses:
Compensation	96,055	143,504
Warranties	51,394	52,818
Sales promotions and incentives	142,195	123,089
Dealer holdback	111,259	100,600
Other	77,765	77,480
Income taxes payable	3,219	9,254
Total current liabilities	825,302	748,070
Long-term income taxes payable	12,928	14,292
Capital lease obligations	25,214	3,842
Long-term debt	200,000	280,500
Deferred Tax Liabilities, Net, Noncurrent	21,100	25,028
Other long-term liabilities	85,246	69,730
Total liabilities	1,169,790	1,141,462
Temporary Equity, Redemption Value	16,340	8,421
Shareholders’ equity:
Preferred stock $0.01 par value, 20,000 shares authorized, no shares issued and outstanding	0	0
Common stock $0.01 par value, 160,000 shares authorized, 66,395 and 65,623 shares issued and outstanding, respectively	664	656
Additional paid-in capital	452,137	360,616
Retained earnings	372,128	155,572
Accumulated other comprehensive (loss) income, net	(2,227)	18,761
Total shareholders’ equity	822,702	535,605
Total liabilities and shareholders’ equity	2,008,832	1,685,488
Finance affiliate
Current assets:
Investment in affiliates	71,515	69,217
Other affiliates
Current assets:
Investment in affiliates	$ 21,502	$ 15,956

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Commitments and Contingencies - Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2014 Fair Value, Inputs, Level 3	Dec. 31, 2013 Fair Value, Inputs, Level 3
Loss Contingencies [Line Items]
Accrual for the probable payment of pending claims			$ 20,020
Loss from discontinued operations, net of tax	(3,777)	(3,777)
Fair value of contingent purchase price commitments				$ 19,265	$ 18,249

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Consolidated Statements Of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Statement of Comprehensive Income [Abstract]
Other Comprehensive Income (Loss), Foreign Currency Translation Adjustment, Tax	$ 91	$ 60	$ (48)	$ 281
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Tax	$ (1,549)	$ 672	$ (945)	$ (1,124)

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Goodwill and Other Intangible Assets Components of Other Intangible Assets (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Amortized:
Gross amortized other intangible assets	$ 77,628	$ 75,091
Accumulated Amortization	(20,885)	(13,268)
Net amortized other intangible assets	56,743	61,823
Total other intangible assets, net	100,941	103,011
Non-compete agreements
Amortized:
Total estimated life	5 years
Gross amortized other intangible assets	540	540
Dealer/customer related
Amortized:
Total estimated life	7 years
Gross amortized other intangible assets	62,304	59,244
Developed technology
Amortized:
Gross amortized other intangible assets	14,784	15,307
Developed technology | Minimum [Member]
Amortized:
Total estimated life	5 years
Developed technology | Maximum
Amortized:
Total estimated life	7 years
Brand names
Non-amortizable—indefinite lived:
Non-amortizable, Net	$ 44,198	$ 41,188

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Shareholders' Equity (Tables)

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Schedule of cash dividends declared per common share

Cash dividends declared per common share for the three and nine months ended September 30, 2014 and 2013, were as follows:

	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013
Cash dividends declared and paid per common share	$	0.48	$	0.42	$	1.44	$	1.26

Schedule of reconciliation of weighted average number of shares

A reconciliation of these amounts is as follows (in thousands):

	Three months ended September 30,		Nine months ended September 30,
	2014	2013	2014	2013
Weighted average number of common shares outstanding	65,988	68,910	65,771	68,600
Director Plan and deferred stock units	201	196	204	257
ESOP	72	73	76	89
Common shares outstanding—basic	66,261	69,179	66,051	68,946
Dilutive effect of Option Plans and Omnibus Plan	2,067	2,007	2,074	1,955
Common and potential common shares outstanding—diluted	68,328	71,186	68,125	70,901

Schedule of changes in accumulated other comprehensive income (loss) balances

Changes in the accumulated other comprehensive (loss) income balance is as follows (in thousands):

	Foreign Currency Items			Cash Flow Hedging Derivatives			Accumulated Other Comprehensive (Loss) Income
Balance as of December 31, 2013	$	18,582		$	179		$	18,761
Reclassification to the income statement	—			(2,039		)	(2,039		)
Change in fair value	(22,576		)	3,627			(18,949		)
Balance as of September 30, 2014	$	(3,994	)	$	1,767		$	(2,227	)

Schedule of gains and losses, net of tax, reclassified from accumulated other comprehensive income into the income statement for cash flow derivatives designated as hedging instruments

The table below provides data about the amount of gains and losses, net of tax, reclassified from accumulated other comprehensive (loss) income into the income statement for cash flow derivatives designated as hedging instruments for the three and nine months ended September 30, 2014 and 2013 (in thousands):

Derivatives in Cash Flow Hedging Relationships	Location of (Gain) Loss Reclassified from Accumulated OCI into Income	Three months ended September 30,						Nine months ended September 30,
		2014			2013			2014			2013
Foreign currency contracts	Other expense (income), net	$	206		$	(2,241	)	$	(1,891	)	$	(3,352	)
Foreign currency contracts	Cost of sales	(208		)	714			(148		)	1,467
Total		$	(2	)	$	(1,527	)	$	(2,039	)	$	(1,885	)

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Goodwill and Other Intangible Assets Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Dec. 31, 2013
Disclosure Goodwill And Other Intangible Assets Additional Information [Abstract]
Goodwill	$ 123,502		$ 123,502	$ 126,697
Total other intangible assets, net	100,941		100,941	103,011
Amortization expense of intangible assets	3,029	2,727	8,737
Estimated Future Amortization Expense by Fiscal Year [Abstract]
Remainder of 2014	3,000		3,000
2015	11,300		11,300
2016	11,300		11,300
2017	10,900		10,900
2018	9,300		9,300
2019	8,000		8,000
After 2019	$ 2,900		$ 2,900

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Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Schedule of open foreign currency contracts

At September 30, 2014, Polaris had the following open foreign currency contracts (in thousands):

Foreign Currency	Notional Amounts (in U.S. Dollars)		Net Unrealized Gain (Loss)
Australian Dollar	$	7,991	$	404
Canadian Dollar	91,050		2,826
Japanese Yen	17,200		(599		)
Mexican Peso	14,803		(77		)
Total	$	131,044	$	2,554

Schedule of carrying values of derivative instruments

The table below summarizes the carrying values of derivative instruments as of September 30, 2014 and December 31, 2013 (in thousands):

	Carrying Values of Derivative Instruments as of September 30, 2014
	Fair Value— Assets		Fair Value— (Liabilities)			Derivative Net Carrying Value
Derivatives designated as hedging instruments
Foreign exchange contracts(1)	$	3,280	$	(726	)	$	2,554
Total derivatives designated as hedging instruments	$	3,280	$	(726	)	$	2,554

	Carrying Values of Derivative Instruments as of December 31, 2013
	Fair Value— Assets		Fair Value— (Liabilities)			Derivative Net Carrying Value
Derivatives designated as hedging instruments
Foreign exchange contracts(1)	$	1,194	$	(1,203	)	$	(9	)
Total derivatives designated as hedging instruments	$	1,194	$	(1,203	)	$	(9	)
Commodity contracts(1)	$	46	$	(16	)	$	30
Total derivatives not designated as hedging instruments	$	46	$	(16	)	$	30
Total derivatives	$	1,240	$	(1,219	)	$	21

(1) Assets are included in prepaid expenses and other and liabilities are included in other accrued expenses on the accompanying consolidated balance sheets.

Schedule of Derivative Instruments, Effect on Other Comprehensive Income (Loss) [Table Text Block]

The table below provides data about the amount of gains and losses, net of tax, related to derivative instruments designated as cash flow hedges included in accumulated other comprehensive (loss) income for the three and nine ended September 30, 2014 and 2013 (in thousands):

Gains and (Losses) From Derivatives in Cash Flow Hedging Relationships	Three months ended September 30,					Nine months ended September 30,
	2014		2013			2014		2013
Foreign currency contracts	$	2,603	$	(1,131	)	$	1,588	$	1,889

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Consolidated Statements Of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Statement of Cash Flows [Abstract]
Capital Lease Obligations Incurred	$ 24,908
Operating Activities:
Net income	318,632	268,612
Loss from discontinued operations, net of tax		(3,777)
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	91,041	64,364
Noncash compensation	47,207	46,304
Noncash income from financial services	(10,778)	(3,440)
Noncash loss from other affiliates	2,899	1,629
Deferred income taxes	(10,915)	(10,781)
Tax effect of share-based compensation exercises	(26,169)	(22,247)
Changes in operating assets and liabilities:
Trade receivables	30,479	(24,711)
Inventories	(168,727)	(94,110)
Accounts payable	102,216	94,097
Accrued expenses	139	20,671
Income taxes payable/receivable	11,110	62,332
Prepaid expenses and others, net	(6,699)	(24,690)
Net Cash Provided by (Used in) Operating Activities, Continuing Operations	380,435	381,807
Cash Provided by (Used in) Operating Activities, Discontinued Operations		(642)
Net cash provided by operating activities	380,435	381,165
Investing Activities:
Purchase of property and equipment	(146,473)	(192,350)
Investment in finance affiliate, net	8,480	2,091
Payments to Acquire Interest in Subsidiaries and Affiliates	(8,316)	(6,063)
Payments to Acquire Businesses, Net of Cash Acquired	(17,199)	(134,817)
Net cash used for investing activities	(163,508)	(331,139)
Financing Activities:
Borrowings under debt arrangements	1,921,386	1,682
Repayments under debt arrangements and capital lease obligations	(2,003,422)	(2,780)
Repurchase and retirement of common shares	(3,970)	(31,907)
Cash dividends to shareholders	(95,004)	(86,482)
Proceeds from stock issuances under employee plans	22,970	17,834
Tax effect of proceeds from share-based compensation exercises	26,169	22,247
Net cash used for financing activities	(131,871)	(79,406)
Impact of currency exchange rates on cash balances	(8,286)	169
Net increase (decrease) in cash and cash equivalents	76,770	(29,211)
Cash and cash equivalents at beginning of period	92,248	417,015
Cash and cash equivalents at end of period	$ 169,018	$ 387,804

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Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	20,000,000	20,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	160,000,000	160,000,000
Common stock, shares issued	66,395,000	65,623,000
Common stock, shares outstanding	66,395,000	65,623,000

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Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Basis of presentation

Basis of presentation. The accompanying unaudited consolidated financial statements of Polaris Industries Inc. ("Polaris" or the "Company") have been prepared in accordance with accounting principles generally accepted in the United States for interim financial statements and, therefore, do not include all information and disclosures of results of operations, financial position and changes in cash flow in conformity with accounting principles generally accepted in the United States for complete financial statements. Accordingly, such statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2013 previously filed with the Securities and Exchange Commission. In the opinion of management, such statements reflect all adjustments (which include only normal recurring adjustments) necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented. Due to the seasonality of snowmobiles; Off-Road Vehicles (ORV), which include all-terrain vehicles (ATV) and side-by-side vehicles; motorcycles; Small Vehicles (SV); and Parts, Garments and Accessories (PG&A) businesses, and to certain changes in production and shipping cycles, results of such periods are not necessarily indicative of the results to be expected for the complete year.

On September 2, 2004, the Company announced its decision to discontinue the manufacture of marine products effective immediately. Material financial results for the marine products division are reported separately as discontinued operations for all periods presented.

Fair value measurements

Fair value measurements. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as of the measurement date:

Level  1 — Quoted prices in active markets for identical assets or liabilities.

Level  2 — Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

In making fair value measurements, observable market data must be used when available. When inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement. The Company utilizes the market approach to measure fair value for its non-qualified deferred compensation assets and liabilities, and the income approach for foreign currency contracts and commodity contracts. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities, and for the income approach the Company uses significant other observable inputs to value its derivative instruments used to hedge foreign currency and commodity transactions.

Inventories

Inventories. Inventory costs include material, labor and manufacturing overhead costs, including depreciation expense associated with the manufacture and distribution of the Company's products. Inventories are stated at the lower of cost (first-in, first-out method) or market.

Product warranties

Product warranties. Polaris provides a limited warranty for its ORVs for a period of six months, for a period of one year for its snowmobiles, for a period of one or two years for its motorcycles depending on brand and model year, and for a two year period for SVs. Polaris provides longer warranties in certain geographical markets as determined by local regulations and market conditions and may also provide longer warranties related to certain promotional programs. Polaris’ standard warranties require the Company or its dealers to repair or replace defective products during such warranty periods at no cost to the consumer. The warranty reserve is established at the time of sale to the dealer or distributor based on management’s best estimate using historical rates and trends. Adjustments to the warranty reserve are made from time to time as actual claims become known in order to properly estimate the amounts necessary to settle future and existing claims on products sold as of the balance sheet date. Factors that could have an impact on the warranty accrual in any given period include the following: improved manufacturing quality, shifts in product mix, changes in warranty coverage periods, snowfall and its impact on snowmobile usage, product recalls and any significant changes in sales volume.

New Accounting Pronouncements

New Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. This ASU is a comprehensive new revenue recognition model that requires a company to recognize revenue from the transfer of goods or services to customers in an amount that reflects the consideration that the entity expects to receive in exchange for those goods or services. Polaris is required to adopt the new pronouncement on January 1, 2017 using one of two retrospective application methods. The Company is evaluating the application method and the impact of this new standard on the financial statements.

There are no other new accounting pronouncements that are expected to have a significant impact on Polaris' consolidated financial statements.

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2014	Oct. 22, 2014
Document and Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Trading Symbol	PII
Entity Registrant Name	POLARIS INDUSTRIES INC/MN
Entity Central Index Key	0000931015
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		66,397,130

XML

Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

Assets and liabilities measured at fair value on a recurring basis are summarized below (in thousands):

	Fair Value Measurements as of September 30, 2014
Asset (Liability)	Total			Level 1			Level 2			Level 3
Non-qualified deferred compensation assets	$	40,911		$	40,911		—			—
Foreign exchange contracts, net	2,554			—			$	2,554		—
Total assets at fair value	$	43,465		$	40,911		$	2,554		—
Non-qualified deferred compensation liabilities	$	(40,911	)	$	(40,911	)	—			—
Total liabilities at fair value	$	(40,911	)	$	(40,911	)	—			—
	Fair Value Measurements as of December 31, 2013
Asset (Liability)	Total			Level 1			Level 2			Level 3
Commodity contracts, net	$	30		—			$	30		—
Non-qualified deferred compensation assets	24,711			$	24,711		—			—
Total assets at fair value	$	24,741		$	24,711		$	30		—
Foreign exchange contracts, net	$	(9	)	—			$	(9	)	—
Non-qualified deferred compensation liabilities	(24,711		)	$	(24,711	)	—			—
Total liabilities at fair value	$	(24,720	)	$	(24,711	)	$	(9	)	—

Schedule of major components of inventories

The major components of inventories are as follows (in thousands):

	September 30, 2014			December 31, 2013
Raw materials and purchased components	$	149,555		$	107,496
Service parts, garments and accessories	161,877			125,765
Finished goods	298,314			206,290
Less: reserves	(27,553		)	(21,603		)
Inventories	$	582,193		$	417,948

Schedule of activity in the warranty reserve

The activity in the warranty reserve during the periods presented was as follows (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2014			2013			2014			2013
Balance at beginning of period	$	44,811		$	42,717		$	52,818		$	47,723
Additions to warranty reserve through acquisitions	—			—			110			1,602
Additions charged to expense	21,227			16,860			44,524			38,850
Warranty claims paid	(14,644		)	(11,475		)	(46,058		)	(40,073		)
Balance at end of period	$	51,394		$	48,102		$	51,394		$	48,102

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Consolidated Statements Of Income (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Sales	$ 1,302,343	$ 1,102,649	$ 3,204,648	$ 2,693,358
Cost of sales	914,069	767,864	2,253,043	1,889,587
Gross profit	388,274	334,785	951,605	803,771
Operating expenses:
Selling and marketing	87,567	78,810	227,315	195,541
Research and development	38,586	37,010	111,083	103,064
General and administrative	56,596	49,343	150,830	129,597
Total operating expenses	182,749	165,163	489,228	428,202
Income from financial services	17,048	11,671	42,313	33,247
Operating income	222,573	181,293	504,690	408,816
Non-operating expense (income):
Interest expense	2,835	1,520	8,686	4,364
Equity in loss of other affiliates	1,036	631	2,899	1,629
Other expense (income), net	252	(2,576)	(3,736)	(6,274)
Income before income taxes	218,450	181,718	496,841	409,097
Provision for income taxes	77,624	64,797	178,209	136,708
Net income from continuing operations	140,826	116,921	318,632	272,389
Loss from discontinued operations, net of tax		(3,777)		(3,777)
Net income	$ 140,826	$ 113,144	$ 318,632	$ 268,612
Basic net income per share:
Continuing operations	$ 2.13	$ 1.69	$ 4.82	$ 3.95
Loss from discontinued operations		$ (0.05)		$ (0.05)
Basic net income per share	$ 2.13	$ 1.64	$ 4.82	$ 3.90
Diluted net income per share:
Continuing operations	$ 2.06	$ 1.64	$ 4.68	$ 3.84
Loss from discontinued operations		$ (0.05)		$ (0.05)
Diluted net income per share	$ 2.06	$ 1.59	$ 4.68	$ 3.79
Weighted average shares outstanding:
Basic (in shares)	66,261	69,179	66,051	68,946
Diluted (in shares)	68,328	71,186	68,125	70,901

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Shareholders' Equity

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Shareholders' Equity

Note 5. Shareholders’ Equity

During the nine months ended September 30, 2014, Polaris paid $3,970,000 to repurchase and retire approximately 30,000 shares of its common stock. As of September 30, 2014, the Board of Directors has authorized the Company to repurchase up to an additional 1,574,000 shares of Polaris stock. The repurchase of any or all such shares authorized for repurchase will be governed by applicable SEC rules and dependent on management’s assessment of market conditions. Polaris paid a regular cash dividend of $0.48 per share on September 15, 2014 to holders of record at the close of business on September 2, 2014. On October 23, 2014, the Polaris Board of Directors declared a regular cash dividend of $0.48 per share payable on December 15, 2014 to holders of record of such shares at the close of business on December 1, 2014. Cash dividends declared per common share for the three and nine months ended September 30, 2014 and 2013, were as follows:

	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013
Cash dividends declared and paid per common share	$	0.48	$	0.42	$	1.44	$	1.26

Net income per share

Basic earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during each period, including shares earned under The Deferred Compensation Plan for Directors (“Director Plan”), the ESOP and deferred stock units under the 2007 Omnibus Incentive Plan (“Omnibus Plan”). Diluted earnings per share is computed under the treasury stock method and is calculated to compute the dilutive effect of outstanding stock options issued under the 1995 Stock Option Plan and the 2003 Non-Employee Director Stock Option Plan (collectively, the “Option Plans”) and certain shares issued under the Omnibus Plan. A reconciliation of these amounts is as follows (in thousands):

	Three months ended September 30,		Nine months ended September 30,
	2014	2013	2014	2013
Weighted average number of common shares outstanding	65,988	68,910	65,771	68,600
Director Plan and deferred stock units	201	196	204	257
ESOP	72	73	76	89
Common shares outstanding—basic	66,261	69,179	66,051	68,946
Dilutive effect of Option Plans and Omnibus Plan	2,067	2,007	2,074	1,955
Common and potential common shares outstanding—diluted	68,328	71,186	68,125	70,901

During the three and nine months ended September 30, 2014, the number of options that could potentially dilute earnings per share on a fully diluted basis that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive were 647,000 and 562,000, respectively, compared to 67,000 and 870,000 for the same periods in 2013.

Accumulated other comprehensive (loss) income

Changes in the accumulated other comprehensive (loss) income balance is as follows (in thousands):

	Foreign Currency Items			Cash Flow Hedging Derivatives			Accumulated Other Comprehensive (Loss) Income
Balance as of December 31, 2013	$	18,582		$	179		$	18,761
Reclassification to the income statement	—			(2,039		)	(2,039		)
Change in fair value	(22,576		)	3,627			(18,949		)
Balance as of September 30, 2014	$	(3,994	)	$	1,767		$	(2,227	)

The table below provides data about the amount of gains and losses, net of tax, reclassified from accumulated other comprehensive (loss) income into the income statement for cash flow derivatives designated as hedging instruments for the three and nine months ended September 30, 2014 and 2013 (in thousands):

Derivatives in Cash Flow Hedging Relationships	Location of (Gain) Loss Reclassified from Accumulated OCI into Income	Three months ended September 30,						Nine months ended September 30,
		2014			2013			2014			2013
Foreign currency contracts	Other expense (income), net	$	206		$	(2,241	)	$	(1,891	)	$	(3,352	)
Foreign currency contracts	Cost of sales	(208		)	714			(148		)	1,467
Total		$	(2	)	$	(1,527	)	$	(2,039	)	$	(1,885	)

The net amount of the existing gains or losses at September 30, 2014 that is expected to be reclassified into the income statement within the next 12 months is expected to not be material. See Note 9 for further information regarding Polaris' derivative activities.

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Goodwill and Other Intangible Assets

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Goodwill and Other Intangible Assets

Note 4. Goodwill and Other Intangible Assets

Goodwill and other intangible assets, net, consisted of $123,502,000 of goodwill and $100,941,000 of intangible assets, net of accumulated amortization, as of September 30, 2014.

Additions to goodwill and other intangible assets in the first nine months of 2014 relate to the acquisition of Kolpin Outdoors, Inc. ("Kolpin") on April 1, 2014. Kolpin is a leading aftermarket brand delivering purpose-built and universal-fit ORV accessories and lifestyle products. The aggregate Kolpin purchase price was allocated on a preliminary basis to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition.

The changes in the carrying amount of goodwill for the nine months ended September 30, 2014 were as follows (in thousands):

	Nine months ended September 30, 2014
Goodwill, beginning of period	$	126,697
Goodwill acquired during the period	4,157
Currency translation effect on foreign goodwill balances	(7,352		)
Goodwill, end of period	$	123,502

For other intangible assets, the changes in the net carrying amount for the nine months ended September 30, 2014 were as follows (in thousands):

	Nine months ended September 30, 2014
	Gross Amount			Accumulated Amortization
Other intangible assets, beginning of period	$	116,279		$	(13,268	)
Intangible assets acquired during the period	11,100			—
Amortization expense	—			(8,737		)
Foreign currency translation effect on balances	(5,553		)	1,120
Other intangible assets, end of period	$	121,826		$	(20,885	)

The components of other intangible assets were as follows (in thousands):

	Total estimated life (years)	September 30, 2014			December 31, 2013
Non-amortizable—indefinite lived:
Brand names		$	44,198		$	41,188
Amortized:
Non-compete agreements	5	540			540
Dealer/customer related	7	62,304			59,244
Developed technology	5-7	14,784			15,307
Total amortizable		77,628			75,091
Less: Accumulated amortization		(20,885		)	(13,268		)
Net amortized other intangible assets		56,743			61,823
Total other intangible assets, net		$	100,941		$	103,011

Amortization expense for intangible assets for the three months ended September 30, 2014 and 2013 was $3,029,000 and $2,727,000, respectively. Estimated amortization expense for the remainder of 2014 through 2019 is as follows: 2014 (remainder), $3,000,000; 2015, $11,300,000; 2016, $11,300,000; 2017, $10,900,000; 2018, $9,300,000; 2019, $8,000,000; and after 2019, $2,900,000. The preceding expected amortization expense is an estimate and actual amounts could differ due to additional intangible asset acquisitions, changes in foreign currency rates or impairment of intangible assets.

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Investment in Other Affiliates (Tables)

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Schedule of investment in other affiliates

Investment in other affiliates as of September 30, 2014 and December 31, 2013 is comprised of investments in Brammo, Inc. ("Brammo") and Eicher-Polaris Private Limited (EPPL) with the following balances (in thousands):

	September 30, 2014		December 31, 2013
Investment in Brammo	$	9,500	$	9,500
Investment in EPPL	12,002		6,456
Total investment in other affiliates	$	21,502	$	15,956

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Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Schedule of share-based compensation expenses

Total share-based compensation expenses were as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013
Option plan	$	6,310	$	5,866	$	18,263	$	16,843
Other share-based awards	8,103		23,810		19,202		41,915
Total share-based compensation before tax	14,413		29,676		37,465		58,758
Tax benefit	5,376		11,073		13,990		21,939
Total share-based compensation expense included in net income	$	9,037	$	18,603	$	23,475	$	36,819

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Commitments and Contingencies

Note 8. Commitments and Contingencies

Polaris is subject to product liability claims in the normal course of business. In late 2012, Polaris purchased excess insurance coverage for catastrophic product liability claims for incidents occurring after the policy date. Polaris self-insures product liability claims before the policy date and up to the purchased catastrophic insurance coverage after the policy date. The estimated costs resulting from any losses are charged to operating expenses when it is probable a loss has been incurred and the amount of the loss is reasonably determinable. The Company utilizes historical trends and actuarial analysis tools, along with an analysis of current claims, to assist in determining the appropriate loss reserve levels. At September 30, 2014, the Company had an accrual of $20,020,000 for the probable payment of pending claims related to continuing operations product liability litigation associated with Polaris products. This accrual is included as a component of other accrued expenses in the accompanying consolidated balance sheets.

In the 2013 third quarter, the Company reported a loss from discontinued operations, net of tax, of $3,777,000 for a provision to accrue Polaris' portion of a jury verdict regarding a 2008 accident involving a Polaris model year 2001 personal watercraft. In September 2004, the Company announced that it had decided to cease manufacturing marine products. Since then, any material financial results of that division have been recorded in discontinued operations.

Polaris is a defendant in lawsuits and subject to other claims arising in the normal course of business. In the opinion of management, it is unlikely that any legal proceedings pending against or involving Polaris will have a material adverse effect on Polaris' financial position or results of operations.

As a component of certain past acquisition agreements, Polaris has committed to make additional payments to certain sellers contingent upon either the passage of time or certain financial performance criteria. Polaris initially records the fair value of each commitment as of the respective opening balance sheet, and each reporting period the fair value is evaluated, using level 3 inputs, with the change in value reflected in the consolidated statements of income. As of September 30, 2014 and December 31, 2013, the fair value of contingent purchase price commitments was $19,265,000 and $18,249,000, respectively, recorded in other long-term liabilities in the consolidated balance sheets.

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Financial Services Arrangements

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Financial Services Arrangements

Note 6. Financial Services Arrangements

Polaris Acceptance, a joint venture between Polaris and GE Commercial Distribution Finance Corporation, an indirect subsidiary of General Electric Capital Corporation, which is supported by a partnership agreement between their respective wholly owned subsidiaries, finances substantially all of Polaris' United States sales whereby Polaris receives payment within a few days of shipment of the product. Polaris’ subsidiary has a 50 percent equity interest in Polaris Acceptance. Polaris Acceptance sells a majority of its receivable portfolio to a securitization facility (the "Securitization Facility") arranged by General Electric Capital Corporation. The sale of receivables from Polaris Acceptance to the Securitization Facility is accounted for in Polaris Acceptance’s financial statements as a “true-sale” under Accounting Standards Codification Topic 860. Polaris’ allocable share of the income of Polaris Acceptance has been included as a component of income from financial services in the accompanying consolidated statements of income. The partnership agreement is effective through February 2017.

Polaris’ total investment in Polaris Acceptance of $71,515,000 at September 30, 2014 is accounted for under the equity method, and is recorded in investment in finance affiliate in the accompanying consolidated balance sheets. At September 30, 2014, the outstanding amount of net receivables financed for dealers under this arrangement was $1,072,372,000, which included $300,693,000 in the Polaris Acceptance portfolio and $771,679,000 of receivables within the Securitization Facility ("Securitized Receivables").

Polaris has agreed to repurchase products repossessed by Polaris Acceptance up to an annual maximum of 15 percent of the aggregate average month-end outstanding Polaris Acceptance receivables and Securitized Receivables during the prior calendar year. For calendar year 2014, the potential 15 percent aggregate repurchase obligation is approximately $120,815,000. Polaris’ financial exposure under this arrangement is limited to the difference between the amounts unpaid by the dealer with respect to the repossessed product plus costs of repossession and the amount received on the resale of the repossessed product. No material losses have been incurred under this agreement during the periods presented.

Polaris has agreements with Capital One, Sheffield Financial and Synchrony Bank, formerly GE Money Bank, under which these financial institutions provide financing to end consumers of Polaris products. Polaris' income generated from these agreements has been included as a component of income from financial services in the accompanying consolidated statements of income.

Polaris also administers and provides extended service contracts to consumers and certain insurance contracts to dealers and consumers through various third-party suppliers. Polaris does not retain any warranty, insurance or financial risk under any of these arrangements. Polaris’ service fee income generated from these arrangements has been included as a component of income from financial services in the accompanying consolidated statements of income.

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Investment in Other Affiliates

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Investment in Other Affiliates

Note 7. Investment in Other Affiliates

Investment in other affiliates in the consolidated balance sheets represents the Company’s investment in nonmarketable securities of strategic companies. Investment in other affiliates as of September 30, 2014 and December 31, 2013 is comprised of investments in Brammo, Inc. ("Brammo") and Eicher-Polaris Private Limited (EPPL) with the following balances (in thousands):

	September 30, 2014		December 31, 2013
Investment in Brammo	$	9,500	$	9,500
Investment in EPPL	12,002		6,456
Total investment in other affiliates	$	21,502	$	15,956

Brammo is a privately held designer and developer of electric vehicles. The investment in Brammo is accounted for under the cost method. Brammo is in the early stages of designing and developing electric vehicles. As such, a risk exists that Brammo may not be able to secure sufficient financing to reach viability through cash flow from operations.

EPPL is a joint venture established in 2012 with Eicher Motors Limited ("Eicher"). Polaris and Eicher each control 50 percent of the joint venture, which is intended to design, develop and manufacture a full range of new vehicles for India and other emerging markets. The investment in EPPL is accounted for under the equity method, with Polaris’ proportionate share of income or loss recorded within the consolidated financial statements on a one month lag due to financial information not being available timely. The overall investment is expected to be approximately $50,000,000, shared equally with Eicher over a three year period. Through September 30, 2014, Polaris has invested $17,749,000 in the joint venture. Polaris' share of EPPL loss for the three and nine months ended September 30, 2014 was $1,036,000 and $2,899,000, respectively, compared to $631,000 and $1,629,000 for the same respective periods in 2013. The loss is included in equity in loss of other affiliates on the consolidated statements of income.

Polaris will impair or write-off an investment and recognize a loss when events or circumstances indicate there is impairment in the investment that is other-than-temporary. No impairments were recognized on currently held investments in the three or nine months ended September 30, 2014.

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Derivative Instruments and Hedging Activities

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Derivative Instruments and Hedging Activities

Note 9. Derivative Instruments and Hedging Activities

The Company is exposed to certain risks relating to its ongoing business operations. From time to time, the primary risks managed by using derivative instruments are foreign currency risk, interest rate risk and commodity price fluctuations. Derivative contracts on various currencies are entered into in order to manage foreign currency exposures associated with certain product sourcing activities and intercompany cash flows. Interest rate swaps are entered into in order to manage interest rate risk associated with the Company’s variable-rate borrowings. Commodity hedging contracts are entered into in order to manage fluctuating market prices of certain purchased commodities and raw materials that are integrated into the Company’s end products.

The Company’s foreign currency management objective is to mitigate the potential impact of currency fluctuations on the value of its U.S. dollar cash flows and to reduce the variability of certain cash flows at the subsidiary level. The Company actively manages certain forecasted foreign currency exposures and uses a centralized currency management operation to take advantage of potential opportunities to naturally offset foreign currency exposures against each other. The decision of whether and when to execute derivative instruments, along with the duration of the instrument, can vary from period to period depending on market conditions, the relative costs of the instruments and capacity to hedge. The duration is linked to the timing of the underlying exposure, with the connection between the two being regularly monitored. Polaris does not use any financial contracts for trading purposes.

At September 30, 2014, Polaris had the following open foreign currency contracts (in thousands):

Foreign Currency	Notional Amounts (in U.S. Dollars)		Net Unrealized Gain (Loss)
Australian Dollar	$	7,991	$	404
Canadian Dollar	91,050		2,826
Japanese Yen	17,200		(599		)
Mexican Peso	14,803		(77		)
Total	$	131,044	$	2,554

These contracts, with maturities through September 30, 2015, met the criteria for cash flow hedges and the unrealized gains or losses, after tax, are recorded as a component of accumulated other comprehensive (loss) income in shareholders’ equity.

Polaris enters into derivative contracts to hedge a portion of the exposure related to diesel fuel and aluminum. These diesel fuel and aluminum derivative contracts have not met the criteria for hedge accounting. The impact to cost of sales in the consolidated statements of income for diesel fuel and aluminum derivative contracts during the three and nine months ended September 30, 2014 and 2013, and the value of outstanding contracts at September 30, 2014, were not material.

The table below summarizes the carrying values of derivative instruments as of September 30, 2014 and December 31, 2013 (in thousands):

	Carrying Values of Derivative Instruments as of September 30, 2014
	Fair Value— Assets		Fair Value— (Liabilities)			Derivative Net Carrying Value
Derivatives designated as hedging instruments
Foreign exchange contracts(1)	$	3,280	$	(726	)	$	2,554
Total derivatives designated as hedging instruments	$	3,280	$	(726	)	$	2,554

	Carrying Values of Derivative Instruments as of December 31, 2013
	Fair Value— Assets		Fair Value— (Liabilities)			Derivative Net Carrying Value
Derivatives designated as hedging instruments
Foreign exchange contracts(1)	$	1,194	$	(1,203	)	$	(9	)
Total derivatives designated as hedging instruments	$	1,194	$	(1,203	)	$	(9	)
Commodity contracts(1)	$	46	$	(16	)	$	30
Total derivatives not designated as hedging instruments	$	46	$	(16	)	$	30
Total derivatives	$	1,240	$	(1,219	)	$	21

(1) Assets are included in prepaid expenses and other and liabilities are included in other accrued expenses on the accompanying consolidated balance sheets.

For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of accumulated other comprehensive (loss) income and reclassified into the income statement in the same period or periods during which the hedged transaction affects the income statement. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in the current income statement.

The table below provides data about the amount of gains and losses, net of tax, related to derivative instruments designated as cash flow hedges included in accumulated other comprehensive (loss) income for the three and nine ended September 30, 2014 and 2013 (in thousands):

Gains and (Losses) From Derivatives in Cash Flow Hedging Relationships	Three months ended September 30,					Nine months ended September 30,
	2014		2013			2014		2013
Foreign currency contracts	$	2,603	$	(1,131	)	$	1,588	$	1,889

See Note 5 for information about the amount of gains and losses, net of tax, reclassified from accumulated other comprehensive (loss) income into the income statement for derivative instruments designated as hedging instruments. The ineffective portion of foreign currency contracts was not material for the three and nine month periods ended September 30, 2014.

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Goodwill and Other Intangible Assets Other Intangible Assets, Changes in Net Carrying Amount (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014
Other Intangible Assets, Gross Amount [Roll Forward]
Other intangible assets, beginning of period			$ 116,279
Finite-lived Intangible Assets Acquired			11,100
Foreign currency translation effect on balances			(5,553)
Other intangible assets, end of period	121,826		121,826
Other Intangible Assets, Accumulated Amortization [Roll Forward]
Other intangible assets, beginning of period			(13,268)
Amortization expense	(3,029)	(2,727)	(8,737)
Foreign currency translation effect on balances			1,120
Other intangible assets, end of period	$ (20,885)		$ (20,885)

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Schedule of changes in carrying amount of goodwill

The changes in the carrying amount of goodwill for the nine months ended September 30, 2014 were as follows (in thousands):

	Nine months ended September 30, 2014
Goodwill, beginning of period	$	126,697
Goodwill acquired during the period	4,157
Currency translation effect on foreign goodwill balances	(7,352		)
Goodwill, end of period	$	123,502

Schedule of other intangible assets, changes in net carrying amount

For other intangible assets, the changes in the net carrying amount for the nine months ended September 30, 2014 were as follows (in thousands):

	Nine months ended September 30, 2014
	Gross Amount			Accumulated Amortization
Other intangible assets, beginning of period	$	116,279		$	(13,268	)
Intangible assets acquired during the period	11,100			—
Amortization expense	—			(8,737		)
Foreign currency translation effect on balances	(5,553		)	1,120
Other intangible assets, end of period	$	121,826		$	(20,885	)

Schedule of components of other intangible assets

The components of other intangible assets were as follows (in thousands):

	Total estimated life (years)	September 30, 2014			December 31, 2013
Non-amortizable—indefinite lived:
Brand names		$	44,198		$	41,188
Amortized:
Non-compete agreements	5	540			540
Dealer/customer related	7	62,304			59,244
Developed technology	5-7	14,784			15,307
Total amortizable		77,628			75,091
Less: Accumulated amortization		(20,885		)	(13,268		)
Net amortized other intangible assets		56,743			61,823
Total other intangible assets, net		$	100,941		$	103,011

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Significant Accounting Policies Major Components of Inventories (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2014	Dec. 31, 2013
Inventories [Abstract]
Raw materials and purchased components	$ 149,555	$ 107,496
Service parts, garments and accessories	161,877	125,765
Finished goods	298,314	206,290
Less: reserves	(27,553)	(21,603)
Inventories	$ 582,193	$ 417,948

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Shareholders' Equity Additional Information (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Stockholders Equity Note [Line Items]
Common Stock, Dividends, Per Share, Declared	$ 0.48
Repurchase and retirement of common stock			$ 3,970
Repurchase and retirement of common stock, shares	30
Shares remaining available for repurchases	1,574		1,574
Cash dividend paid during period, per share	$ 0.48	$ 0.42	$ 1.44	$ 1.26
Common stock excluded from calculation of diluted earnings per share	647	67	562	870

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Consolidated Statements Of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Statement of Comprehensive Income [Abstract]
Net income	$ 140,826	$ 113,144	$ 318,632	$ 268,612
Other comprehensive income, net of tax:
Foreign currency translation adjustments, net of tax benefit (expense) of $91 and ($48) in 2014 and $60 and $281 in 2013	(22,424)	8,982	(22,576)	2,655
Unrealized gain (loss) on derivative instruments, net of tax (expense) benefit of ($1,549) and ($945) in 2014 and $672 and ($1,124) in 2013	2,603	(1,131)	1,588	1,889
Comprehensive income	$ 121,005	$ 120,995	$ 297,644	$ 273,156

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Financing Agreement

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Financing Agreement

Note 3. Financing Agreements

Debt and capital lease obligations and the average related interest rates were as follows (in thousands):

	Average interest rate at September 30, 2014	Maturity	September 30, 2014		December 31, 2013
Revolving loan facility	—	January 2018	—		$	80,500
Senior notes—fixed rate	3.81%	May 2018	$	25,000	25,000
Senior notes—fixed rate	4.60%	May 2021	75,000		75,000
Senior notes—fixed rate	3.13%	December 2020	100,000		100,000
Capital lease obligations	4.99%	Various through 2029	28,023		7,123
Total debt and capital lease obligations			$	228,023	$	287,623
Less: current maturities			2,809		3,281
Total long-term debt and capital lease obligations			$	225,214	$	284,342

In August 2011, Polaris entered into a $350,000,000 unsecured revolving loan facility. In January 2013, Polaris amended the loan facility to provide more beneficial covenant and interest rate terms and extend the expiration date from August 2016 to January 2018. Interest is charged at rates based on LIBOR or “prime.”

In December 2010, the Company entered into a Master Note Purchase Agreement to issue $25,000,000 of unsecured senior notes due May 2018 and $75,000,000 of unsecured senior notes due May 2021 (collectively, the “Senior Notes”). The Senior Notes were issued in May 2011. In December 2013, the Company entered into a First Supplement to Master Note Purchase Agreement, under which the Company issued $100,000,000 of unsecured senior notes due December 2020.

The unsecured revolving loan facility and the Master Note Purchase Agreement contain covenants that require Polaris to maintain certain financial ratios, including minimum interest coverage and maximum leverage ratios. Polaris was in compliance with all such covenants as of September 30, 2014.

A property lease agreement for a manufacturing facility which Polaris began occupying in Opole, Poland commenced in February 2014. The Poland property lease is accounted for as a capital lease.

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Significant Accounting Policies Activity in Polaris Accrued Warranty Reserve (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Activity in Product Warranty Reserve [Roll Forward]
Balance at beginning of period	$ 44,811	$ 42,717	$ 52,818	$ 47,723
Additions to warranty reserve through acquisitions	0	0	110	1,602
Additions charged to expense	21,227	16,860	44,524	38,850
Warranty claims paid	(14,644)	(11,475)	(46,058)	(40,073)
Balance at end of period	$ 51,394	$ 48,102	$ 51,394	$ 48,102

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Shareholders' Equity Reconciliation of Weighted Average Number of Shares (Detail) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Weighted Average Number of Shares Outstanding [Line Items]
Weighted average number of common shares outstanding	65,988	68,910	65,771	68,600
Director Plan and deferred stock units	201	196	204	257
ESOP	72	73	76	89
Common shares outstanding—basic	66,261	69,179	66,051	68,946
Common and potential common shares outstanding—diluted	68,328	71,186	68,125	70,901
Option Plans And Omnibus Plan [Member]
Weighted Average Number of Shares Outstanding [Line Items]
Dilutive effect of Option Plans and Omnibus Plan	2,067	2,007	2,074	1,955

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Financing Agreement (Tables)

9 Months Ended

Sep. 30, 2014

Debt Instrument [Line Items]

Debt and Capital Lease Obligations

Debt and capital lease obligations and the average related interest rates were as follows (in thousands):

	Average interest rate at September 30, 2014	Maturity	September 30, 2014		December 31, 2013
Revolving loan facility	—	January 2018	—		$	80,500
Senior notes—fixed rate	3.81%	May 2018	$	25,000	25,000
Senior notes—fixed rate	4.60%	May 2021	75,000		75,000
Senior notes—fixed rate	3.13%	December 2020	100,000		100,000
Capital lease obligations	4.99%	Various through 2029	28,023		7,123
Total debt and capital lease obligations			$	228,023	$	287,623
Less: current maturities			2,809		3,281
Total long-term debt and capital lease obligations			$	225,214	$	284,342