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Income Taxes (Tables)
12 Months Ended
Dec. 31, 2014
Income Tax Disclosure [Abstract]  
Income Before Income Taxes
Polaris’ income from continuing operations before income taxes was generated from its United States and foreign operations as follows (in thousands):
 
For the Years Ended December 31,
 
2014
 
2013
 
2012
United States
$
666,323

 
$
535,265

 
$
458,635

Foreign
32,994

 
39,164

 
21,208

Income from continuing operations before income taxes
$
699,317

 
$
574,429

 
$
479,843

Components of Provision for Income Taxes
Components of Polaris’ provision for income taxes for continuing operations are as follows (in thousands):
 
For the Years Ended December 31,
 
2014
 
2013
 
2012
Current:
 
 
 
 
 
Federal
$
255,299

 
$
167,690

 
$
169,833

State
20,438

 
12,942

 
15,366

Foreign
21,584

 
15,457

 
8,593

Deferred
(52,033
)
 
(2,729
)
 
(26,259
)
Total provision for income taxes for continuing operations
$
245,288

 
$
193,360

 
$
167,533

Reconciliation of Federal Statutory Income Tax Rate to Effective Tax Rate
Reconciliation of the Federal statutory income tax rate to the effective tax rate is as follows:
 
For the Years Ended December 31,
 
2014
 
2013
 
2012
Federal statutory rate
35.0
 %
 
35.0
 %
 
35.0
 %
State income taxes, net of federal benefit
1.5

 
1.5

 
1.8

Domestic manufacturing deduction
(1.1
)
 
(1.0
)
 
(1.5
)
Research and development tax credit
(1.1
)
 
(2.2
)
 

Valuation allowance for foreign subsidiaries net operating losses

 
0.3

 

Other permanent differences
0.8

 
0.1

 
(0.4
)
Effective income tax rate for continuing operations
35.1
 %
 
33.7
 %
 
34.9
 %
Net Deferred Income Taxes
The net deferred income taxes consist of the following (in thousands):
 
December 31,
 
2014
 
2013
Current deferred income taxes:
 
 
 
Inventories
$
9,034

 
$
6,306

Accrued expenses
104,279

 
87,157

Derivative instruments
864

 
(107
)
Total current
114,177

 
93,356

Noncurrent deferred income taxes:
 
 
 
Cost in excess of net assets of business acquired
(13,111
)
 
(13,594
)
Property and equipment
(28,921
)
 
(36,069
)
Compensation payable in common stock
58,446

 
42,528

Net operating loss carryforwards and impairments
12,693

 
5,782

Valuation allowance
(6,097
)
 
(5,059
)
Total noncurrent
23,010

 
(6,412
)
Total net deferred income tax asset
$
137,187

 
$
86,944

Reconciliation of Beginning and Ending Amount of Unrecognized Tax Benefits
A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows (in thousands):
 
For the Years Ended December 31,
 
2014
 
2013
Balance at January 1,
$
13,199

 
$
6,704

Increases due to acquisition opening balance sheet positions

 
6,420

Gross increases for tax positions of prior years
55

 
561

Gross increases for tax positions of current year
1,456

 
3,755

Decreases due to settlements and other prior year tax positions
(2,346
)
 
(3,310
)
Decreases for lapse of statute of limitations
(1,586
)
 
(1,344
)
Currency translation effect on foreign balances
(942
)
 
413

Balance at December 31,
9,836

 
13,199

Reserves related to potential interest at December 31,
732

 
1,093

Unrecognized tax benefits at December 31,
$
10,568

 
$
14,292