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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark one)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2022
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 INC.
(Exact name of registrant as specified in its charter)
Minnesota41-1790959
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
2100 Highway 55,MedinaMN55340
(Address of principal executive offices)(Zip Code)
763542-0500
(Registrant’s telephone number, including area code)
N/A
(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $.01 par valuePIINew York Stock Exchange
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.    Yes  x    No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).    Yes  x    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerxAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨ 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes      No   x
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 18, 2022, 57,958,514 shares of Common Stock, $.01 par value, of the registrant were outstanding. 
1

 
  POLARIS INC.
FORM 10-Q
For Quarterly Period Ended September 30, 2022
Page
2

Part I FINANCIAL INFORMATION
Item 1 – FINANCIAL STATEMENTS
POLARIS INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
(Unaudited)
September 30, 2022December 31, 2021
Assets
Current assets:
Cash and cash equivalents $318.9 $502.3 
Trade receivables, net 329.5 227.9 
Inventories, net 1,929.4 1,510.7 
Prepaid expenses and other 158.3 150.9 
Income taxes receivable 98.7 4.0 
Current assets held for sale 163.2 
Total current assets2,834.8 2,559.0 
Property and equipment, net957.9 927.7 
Investment in finance affiliate 58.6 49.3 
Deferred tax assets 150.1 162.9 
Goodwill and other intangible assets, net 907.6 935.2 
Operating lease assets105.5 90.5 
Other long-term assets 78.9 97.2 
Long-term assets held for sale 226.0 
Total assets $5,093.4 $5,047.8 
Liabilities and Equity
Current liabilities:
Current portion of debt, finance lease obligations and notes payable $553.5 $553.3 
Accounts payable 850.8 776.0 
Accrued expenses772.9 756.5 
Current operating lease liabilities22.2 19.4 
Income taxes payable 13.3 17.1 
Current liabilities held for sale 107.8 
Total current liabilities 2,212.7 2,230.1 
Long-term income taxes payable 14.7 13.3 
Finance lease obligations9.4 12.1 
Long-term debt 1,571.5 1,235.3 
Deferred tax liabilities4.9 5.5 
Long-term operating lease liabilities83.6 71.3 
Other long-term liabilities 165.2 176.6 
Long-term liabilities held for sale 66.1 
Total liabilities $4,062.0 $3,810.3 
Deferred compensation$12.0 $11.2 
Shareholders’ equity:
Preferred stock 0.01 par value per share, 20.0 shares authorized, no shares issued and outstanding
  
Common stock 0.01 par value per share, 160.0 shares authorized, 58.0 and 60.4 shares issued and outstanding, respectively
$0.6 $0.6 
Additional paid-in capital 1,155.5 1,143.8 
Retained earnings (accumulated deficit)(20.2)157.3 
Accumulated other comprehensive loss, net (119.0)(77.4)
Total shareholders’ equity 1,016.9 1,224.3 
Noncontrolling interest2.5 2.0 
Total equity 1,019.4 1,226.3 
Total liabilities and equity $5,093.4 $5,047.8 
The accompanying footnotes are an integral part of these consolidated statements.
3

POLARIS INC.
CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
(Unaudited)
Three months ended September 30,Nine months ended September 30,
2022202120222021
Sales $2,340.6 $1,777.7 $6,184.9 $5,446.6 
Cost of sales 1,781.4 1,357.7 4,798.4 4,097.4 
Gross profit 559.2 420.0 1,386.5 1,349.2 
Operating expenses:
Selling and marketing 120.7 112.0 347.8 348.4 
Research and development 98.5 84.8 266.1 249.1 
General and administrative 97.8 76.3 258.7 240.8 
Total operating expenses 317.0 273.1 872.6 838.3 
Income from financial services 12.1 11.3 33.7 41.2 
Operating income254.3 158.2 547.6 552.1 
Non-operating expense:
Interest expense 20.1 10.7 46.8 33.0 
Other (income) expense, net (7.4)(0.1)(13.9)(5.4)
Income from continuing operations before income taxes 241.6 147.6 514.7 524.5 
Provision for income taxes 50.9 30.4 107.9 119.0 
Net income from continuing operations190.7 117.2 406.8 405.5 
Income (loss) from discontinued operations, net of tax(3.5)(2.4)(11.9)2.0 
Loss from sale / impairment of discontinued operations, net of tax(0.6) (142.8) 
Net income186.6 114.8 252.1 407.5 
Net income attributable to noncontrolling interest(0.3)(0.2)(0.5)(0.4)
Net income attributable to Polaris Inc.$186.3 $114.6 $251.6 $407.1 
Amounts attributable to Polaris Inc. common shareholders:
Net income from continuing operations$190.7 $117.2 $406.8 $405.5 
Less net income attributable to noncontrolling interest(0.3)(0.2)(0.5)(0.4)
Net income from continuing operations attributable to Polaris Inc. common shareholders190.4 117.0 406.3 405.1 
Net income (loss) from discontinued operations attributable to Polaris Inc. common shareholders(4.1)(2.4)(154.7)2.0 
Net income attributable to Polaris Inc.$186.3 $114.6 $251.6 $407.1 
Net income (loss) per share attributable to Polaris Inc. common shareholders:
Basic
Continuing operations$3.21 $1.92 $6.80 $6.60 
Discontinued operations$(0.06)$(0.04)$(2.59)$0.03 
Basic $3.15 $1.88 $4.21 $6.63 
Diluted
Continuing operations$3.17 $1.88 $6.71 $6.44 
Discontinued operations$(0.07)$(0.04)$(2.56)$0.04 
Diluted $3.10 $1.84 $4.15 $6.48 
Weighted average shares outstanding:
Basic 59.261.059.861.4
Diluted 60.062.360.662.9
The accompanying footnotes are an integral part of these consolidated statements.
4

POLARIS INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
(Unaudited)
 
Three months ended September 30,Nine months ended September 30,
2022202120222021
Net income$186.6 $114.8 $252.1 $407.5 
Other comprehensive income, net of tax:
Foreign currency translation adjustments(33.5)(12.9)(64.4)(21.4)
Unrealized gain on derivative instruments8.2 2.5 22.6 5.7 
Retirement plan and other activity  0.2 0.2 
Comprehensive income161.3 104.4 210.5 392.0 
Comprehensive income attributable to noncontrolling interest(0.3)(0.2)(0.5)(0.4)
Comprehensive income attributable to Polaris Inc.$161.0 $104.2 $210.0 $391.6 
The accompanying footnotes are an integral part of these consolidated statements.
5

POLARIS INC.
CONSOLIDATED STATEMENTS OF EQUITY
(In millions)
(Unaudited)
Number
of Shares
Common
Stock
Additional
Paid-
In Capital
Retained
Earnings
(Accumulated
Deficit)
Accumulated Other
Comprehensive
Income (loss)
Non Controlling InterestTotal Equity
Balance, June 30, 2022
59.5 $0.6 $1,161.4 $3.1 $(93.7)$2.2 $1,073.6 
Employee stock compensation
 — 15.9 — — — 15.9 
Deferred compensation
— — (1.1)0.5 — — (0.6)
Proceeds from stock issuances under employee plans
0.2 — 12.9 — — — 12.9 
Cash dividends declared (1)
— — — (37.5)— — (37.5)
Repurchase and retirement of common shares
(1.7)— (33.6)(172.6)— — (206.2)
Net income
— — — 186.3 — 0.3 186.6 
Other comprehensive loss
— — — — (25.3)— (25.3)
Balance, September 30, 2022
58.0 0.6 1,155.5 (20.2)(119.0)2.5 1,019.4 
 
Number
of Shares
Common
Stock
Additional
Paid-
In Capital
Retained
Earnings
Accumulated Other
Comprehensive
Income (loss)
Non Controlling InterestTotal Equity
Balance, June 30, 2021
60.6 $0.6 $1,110.0 $73.5 $(63.5)$1.7 $1,122.3 
Employee stock compensation
0.1 — 20.0 — — — 20.0 
Deferred compensation
— — (1.0)1.4 — — 0.4 
Proceeds from stock issuances under employee plans
 — 5.6 — — — 5.6 
Cash dividends declared (1)
— — — (38.2)— — (38.2)
Repurchase and retirement of common shares
 —  (0.8)— — (0.8)
Net income
— — — 114.6 — 0.2 114.8 
Other comprehensive income
— — — — (10.4)— (10.4)
Balance, September 30, 2021
60.7 0.6 1,134.6 150.5 (73.9)1.9 1,213.7 
(1) Polaris Inc. declared a $0.64 dividend per share for the three month period ended September 30, 2022 and a $0.63 dividend per share for the three month period ended September 30, 2021.

6

Number
of Shares
Common
Stock
Additional
Paid-
In Capital
Retained
Earnings
(Accumulated
Deficit)
Accumulated Other
Comprehensive
Income (loss)
Non Controlling InterestTotal Equity
Balance, December 31, 2021
60.4 $0.6 $1,143.8 $157.3 $(77.4)$2.0 $1,226.3 
Employee stock compensation
0.4 — 44.7 — — — 44.7 
Deferred compensation
— — (2.6)1.8 — — (0.8)
Proceeds from stock issuances under employee plans
0.4 — 30.7 — — — 30.7 
Cash dividends declared (2)
— — — (113.5)— — (113.5)
Repurchase and retirement of common shares
(3.2)— (61.1)(317.4)— — (378.5)
Net income
— — — 251.6 — 0.5 252.1 
Other comprehensive loss
— — — — (41.6)— (41.6)
Balance, September 30, 2022
58.0 0.6 1,155.5 (20.2)(119.0)2.5 1,019.4 
 
Number
of Shares
Common
Stock
Additional
Paid-
In Capital
Retained
Earnings
Accumulated Other
Comprehensive
Income (loss)
Non Controlling InterestTotal Equity
Balance, December 31, 2020
61.9 $0.6 $983.9 $218.4 $(58.4)$0.3 $1,144.8 
Employee stock compensation
0.4 — 49.7 — — — 49.7 
Deferred compensation
— — 1.9 (1.1)— — 0.8 
Proceeds from stock issuances under employee plans
1.7 — 151.7 — — — 151.7 
Cash dividends declared (2)
— — — (115.2)— — (115.2)
Repurchase and retirement of common shares
(3.3)— (52.6)(358.7)— — (411.3)
Net income
— — — 407.1 — 0.4 407.5 
Contributions— — — — — 1.2 1.2 
Other comprehensive loss
— — — — (15.5)— (15.5)
Balance, September 30, 2021
60.7 0.6 1,134.6 150.5 (73.9)1.9 1,213.7 
(2) Polaris Inc. declared a $1.92 dividend per share for the nine month period ended September 30, 2022 and a $1.89 dividend per share for the nine month period ended September 30, 2021.

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

7

POLARIS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions) (Unaudited)
Nine months ended September 30,
20222021
Operating Activities:
Net income$252.1 $407.5 
(Income) loss from discontinued operations, net of tax11.9 (2.0)
Loss from sale / impairment of discontinued operations, net of tax142.8  
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization 169.9 162.2 
Noncash compensation 47.5 45.2 
Noncash income from financial services (8.5)(5.7)
Deferred income taxes 11.9 17.1 
Other, net(0.6) 
Changes in operating assets and liabilities:
Trade receivables (120.7)8.7 
Inventories (442.5)(597.0)
Accounts payable 82.9 154.4 
Accrued expenses 12.4 (104.4)
Income taxes payable/receivable (49.7)17.8 
Prepaid expenses and others, net 30.0 31.6 
Net cash provided by operating activities of continuing operations139.4 135.4 
Net cash provided by (used for) operating activities of discontinued operations(25.8)18.0 
Net cash provided by operating activities113.6 153.4 
Investing Activities:
Purchase of property and equipment (193.6)(189.2)
Investment in finance affiliate, net (0.8)33.7 
Distributions from other affiliates0.7  
Proceeds from sale of businesses, net40.8  
Net cash used for investing activities of continuing operations(152.9)(155.5)
Net cash used for investing activities of discontinued operations(5.3)(10.1)
Net cash used for investing activities(158.2)(165.6)
Financing Activities:
Borrowings under debt arrangements1,364.0 1,250.1 
Repayments under debt arrangements(1,028.0)(1,176.4)
Repurchase and retirement of common shares (378.5)(411.3)
Cash dividends to shareholders (113.5)(115.2)
Proceeds from stock issuances under employee plans 30.7 151.7 
Net cash used for financing activities(125.3)(301.1)
Impact of currency exchange rates on cash balances (24.5)(6.9)
Net decrease in cash, cash equivalents and restricted cash (194.4)(320.2)
Cash, cash equivalents and restricted cash at beginning of period 529.1 657.5 
Cash, cash equivalents and restricted cash at end of period $334.7 $337.3 
Supplemental Cash Flow Information:
Interest paid on debt borrowings$51.0 $38.0 
Income taxes paid$152.9 $86.3 
Leased assets obtained for operating lease liabilities$44.5 $69.9 
The following presents the classification of cash, cash equivalents and restricted cash within the consolidated balance sheets:
Cash and cash equivalents$318.9 $309.7 
Current assets held for sale 6.8 
Other long-term assets15.8 20.8 
Total$334.7 $337.3 
The accompanying footnotes are an integral part of these consolidated statements.
8

POLARIS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation and Significant Accounting Policies
Basis of presentation. The accompanying unaudited consolidated financial statements of Polaris 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, 2021 previously filed with the Securities and Exchange Commission (“SEC”). 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, equity, and cash flows for the periods presented. Due to the seasonality trends for certain products 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.
Reclassifications. Reclassifications of certain prior year segment results and account balances have been made to conform to the current-year presentation. The reclassifications had no impact on the consolidated balance sheets, statements of income, comprehensive income, equity, or cash flows, as previously reported. See further information in Note 12.
On July 1, 2022, the Company completed the sale of its Transamerican Auto Parts (“TAP”) business. The operating results of the TAP business are reported in Income (loss) from discontinued operations, net of tax, in the Consolidated statements of income for all periods presented. In addition, the related assets and liabilities are reported as assets and liabilities held for sale in the consolidated balance sheets. All amounts and disclosures included in the Notes to consolidated financial statements reflect only the Company's continuing operations unless otherwise noted. See further information in Note 4.
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 interest rate 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 interest rate transactions.
Assets and liabilities measured at fair value on a recurring basis are summarized below (in millions):
Input LevelSeptember 30, 2022December 31, 2021
Assets
Non-qualified deferred compensation assetsLevel 1$38.3 $52.4 
Foreign exchange contracts, netLevel 2$17.9 $2.1 
Interest rate contracts, netLevel 27.0 $— 
Liabilities
Non-qualified deferred compensation liabilitiesLevel 1$(38.3)$(52.4)
Interest rate contracts, netLevel 2$— $(7.8)
9

Fair value of other financial instruments. The carrying values of the Company’s short-term financial instruments, including cash and cash equivalents, trade receivables and short-term debt, including current maturities of long-term debt, finance lease obligations and notes payable, approximate their fair values. As of September 30, 2022 and December 31, 2021, the fair value of the Company’s long-term debt, finance lease obligations and notes payable was approximately $2,141.6 million and $1,870.0 million, respectively, and was determined primarily using Level 2 inputs, including quoted market prices or discounted cash flows based on quoted market rates for similar types of debt. The carrying value of long-term debt, finance lease obligations and notes payable including current maturities was $2,134.4 million and $1,800.7 million as of September 30, 2022 and December 31, 2021, respectively.
Property and equipment. Depreciation expense was $51.7 million and $48.8 million for the three months ended September 30, 2022 and 2021, respectively, and $155.6 million and $141.2 million for the nine months ended September 30, 2022 and 2021, respectively. Substantially all of the Company’s property and equipment is located in North America.  
Product warranties. The activity in the warranty reserve during the periods presented was as follows (in millions):
Three months ended September 30,Nine months ended September 30,
2022202120222021
Balance at beginning of period $128.7 $140.0 $132.9 $138.6 
Additions charged to expense 60.5 26.9 121.2 97.3 
Warranty claims paid, net (32.1)(32.0)(97.0)(101.0)
Balance at end of period $157.1 $134.9 $157.1 $134.9 
New accounting pronouncements.
Reference Rate Reform. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides practical expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The FASB also issued ASU 2021-01, Reference Rate Reform (Topic 848): Scope, in January 2021, which adds implementation guidance to clarify which optional expedients in Topic 848 may be applied to derivative instruments that do not reference LIBOR or a reference rate that is expected to be discontinued, but that are being modified as a result of the transition. The Company adopted ASU 2020-04 and ASU 2021-01 on January 1, 2022. The adoption of the ASUs did not have a material impact on the Company’s consolidated financial position, results of operations, equity or cash flows.
There are no other new accounting pronouncements that are expected to have a significant impact on the Company’s consolidated financial statements.

10

Note 2. Supplemental Balance Sheet Information
In millionsSeptember 30, 2022December 31, 2021
Inventories
Raw materials and purchased components$884.5 $720.2 
Service parts, garments and accessories369.2 276.4 
Finished goods758.1 588.2 
Less: reserves(82.4)(74.1)
Inventories, net$1,929.4 $1,510.7 
Property and equipment
Land, buildings and improvements$508.9 $501.1 
Equipment and tooling1,715.0 1,598.3 
2,223.9 2,099.4 
Less: accumulated depreciation(1,266.0)(1,171.7)
Property and equipment, net$957.9 $927.7 
Accrued expenses
Compensation$188.4 $205.9 
Warranties157.1 132.9 
Sales promotions and incentives98.6 96.9 
Dealer holdback115.5 98.9 
Other accrued expenses213.3 221.9 
Accrued expenses$772.9 $756.5 

Note 3. Revenue Recognition
The Company recognizes revenue when it satisfies a performance obligation by transferring control of a good or service to a customer (primarily dealers and distributors). Revenue is measured based on the amount of consideration that the Company expects to be entitled to in exchange for the goods or services transferred. Sales, value add, and other taxes that are collected from a customer concurrent with revenue-producing activities are excluded from revenue. Revenue from goods and services transferred to customers at a point-in-time accounts for the majority of the Company’s revenue. Revenue from products or services transferred over time is discussed in the contract liabilities section.
11

The following tables disaggregate the Company's revenue by major product type and geography (in millions):
Three months ended September 30, 2022
Off-RoadOn-RoadMarineCorporateTotal
Revenue by product type
Wholegoods$1,345.7

$282.1$260.2

$$1,888.0
PG&A400.7

51.9452.6
Total revenue $1,746.4

$334.0$260.2

$$2,340.6

Revenue by geography

United States$1,472.2$191.7$251.2$$1,915.1
Canada127.217.49.0153.6
EMEA86.5101.9188.4
APLA60.523.083.5
Total revenue $1,746.4$334.0$260.2$$2,340.6
Three months ended September 30, 2021
Off-RoadOn-RoadMarineCorporateTotal
Revenue by product type
Wholegoods$977.1$213.4$183.6$17.0$1,391.1
PG&A339.144.43.1386.6
Total revenue $1,316.2$257.8$183.6$20.1$1,777.7
Revenue by geography
United States$1,057.3$141.0$177.6$18.8$1,394.7
Canada120.8