e11vk
As filed with the Securities and Exchange Commission on June 15, 2006
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
þ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
December 31, 2005
or
o TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1933
For the transition
period from
to
Commission File
No. 333 - 94451
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A. |
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Full title of the plan and the address of the plan, if different
from that of the issuer named below: |
POLARIS 401(k) RETIREMENT SAVINGS PLAN
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B. |
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Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office: |
POLARIS INDUSTRIES INC.
2100 Highway 55
Medina, Minnesota 55340
Polaris 401(k) Retirement Savings Plan
Financial Statements and Supplemental Schedule
Years Ended December 31, 2005 and 2004
Contents
Report of Independent Registered Public Accounting Firm
The Plan Administrator
Polaris 401(k) Retirement Savings Plan
We have audited the accompanying statements of net assets available for benefits of Polaris 401(k)
Retirement Savings Plan as of December 31, 2005 and 2004, and the related statements of changes in
net assets available for benefits for the years then ended. These financial statements are the
responsibility of the Plan’s management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement. We
were not engaged to perform an audit of the Plan’s internal control over financial reporting. Our
audits included consideration of internal control over financial reporting as a basis for designing
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Plan’s internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 2005 and 2004, and the
changes in net assets available for benefits for the years then ended, in conformity with U.S.
generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the financial statements taken
as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December
31, 2005, is presented for purposes of additional analysis and is not a required part of the
financial statements but is supplementary information required by the Department of Labor’s Rules
and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplemental schedule is the responsibility of the Plan’s management. The supplemental
schedule has been subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, is fairly stated in all material respects in relation to the
financial statements taken as a whole.
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/s/ Ernst & Young LLP |
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Minneapolis, Minnesota |
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June 12, 2006 |
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1
Polaris 401(k) Retirement Savings Plan
Statements of Net Assets Available for Benefits
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December 31 |
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2005 |
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2004 |
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Assets |
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Cash |
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$ |
— |
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$ |
9,770 |
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Investments, at fair value |
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192,670,130 |
|
|
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171,714,274 |
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Accrued income receivable |
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|
385 |
|
|
|
296 |
|
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Net assets available for benefits |
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$ |
192,670,515 |
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$ |
171,724,340 |
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See accompanying notes.
2
Polaris 401(k) Retirement Savings Plan
Statements of Changes in Net Assets Available for Benefits
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Year Ended December 31 |
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2005 |
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2004 |
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Net assets available for benefits, beginning of year |
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$ |
171,724,340 |
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$ |
143,738,770 |
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Contributions: |
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Employer |
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7,252,823 |
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|
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6,795,898 |
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Employee |
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10,795,622 |
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9,999,675 |
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Rollover |
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763,290 |
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1,320,003 |
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Total contributions |
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18,811,735 |
|
|
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18,115,576 |
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Investment gain: |
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Interest and dividend income |
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5,501,228 |
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4,554,412 |
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Net realized and unrealized (loss) gain in fair
value of investments: |
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Polaris Industries common stock |
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(1,330,759 |
) |
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1,834,911 |
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Registered investment companies |
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7,519,302 |
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10,099,829 |
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Total investment gain |
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11,689,771 |
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16,489,152 |
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Distributions to participants |
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(9,514,373 |
) |
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(6,579,098 |
) |
Administrative expenses |
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(40,958 |
) |
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(40,060 |
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Net increase |
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20,946,175 |
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27,985,570 |
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Net assets available for benefits, end of year |
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$ |
192,670,515 |
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$ |
171,724,340 |
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See accompanying notes.
3
Polaris 401(k) Retirement Savings Plan
Notes to Financial Statements
December 31, 2005
1. Description of the Plan
The following description of the Polaris 401(k) Retirement Savings Plan (the Plan) provides only
general information. Participants should refer to the plan agreement for a more complete
description of the Plan’s provisions.
General
The Plan is a defined contribution plan covering substantially all employees of the Plan’s sponsor,
Polaris Industries Inc. (the Company), and its U.S. subsidiaries. It is subject to the provisions
of the Employee Retirement Income Security Act of 1974 (ERISA).
Plan Operations
Certain administrative costs totaling $26,250 and $26,000 for the plan years ended December 31,
2005 and 2004, respectively, were paid by the Company. Administrative costs paid by the Company
include trustee/asset custodian fees, record-keeping fees, and investment management fees.
Plan Administration
The Plan’s trustee, Fidelity Management Trust Company (the Trustee), holds and invests the assets
of the Plan and also distributes the retirement benefits upon instruction from the plan
administrator. The Plan is administered by an executive committee appointed by the Board of
Directors of the Company.
Contributions/Participant Accounts
Participants may elect to make contributions (limited to a maximum of 50% of the participant’s
compensation or $14,000, as defined in the Plan) to their account balances.
The Company will make a fully vested matching contribution to each participant’s account in the
Plan of 100% of each dollar of 401(k) contributions up to 5% of covered compensation. This
contribution is intended to satisfy a safe harbor contribution formula permitted by Internal
Revenue Service (IRS) regulations. By making the safe harbor matching contribution, the Plan will
automatically satisfy the nondiscrimination requirements that otherwise would apply to 401(k)
contributions made to the Plan.
Plan earnings, as defined, are allocated pro rata based on participants’ account balances.
4
Polaris 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
1. Description of the Plan (continued)
Vesting
Participants are immediately vested in their pretax and employer contributions, plus actual
earnings thereon.
Participant Loans
Participants may apply for loans from the Plan in amounts of the lesser of 50% of their vested
account balances or $50,000. Loans must be paid back within five years; however, this period may be
extended to ten years if the loan is utilized for the acquisition of a primary residence. The
interest rate charged on loans outstanding ranged from 6.0% to 11.5% as of December 31, 2005.
Distributions to Participants
Employee account balances are distributable upon retirement, disability, death, termination from
the Company, or hardship. Upon the occurrence of one of these events, a participant (or the
participant’s beneficiary in the case of death) may receive his or her account balance as a
lump-sum payment or in monthly payments through an annuity as available per plan provisions.
Plan Amendment and Termination
The Company has the right to amend or terminate the Plan, subject to the provisions of ERISA. In
the event of the Plan’s termination, all assets of the Plan will be distributed to participants in
accordance with plan provisions.
2. Significant Accounting Policies and Procedures
Basis of Accounting
The accompanying financial statements have been prepared on the accrual basis of accounting.
5
Polaris 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
2. Significant Accounting Policies and Procedures (continued)
Investment Valuation and Income Recognition
Investments of the Plan are stated at fair value. Shares of registered investment companies and the
Company’s common stock are valued at quoted market prices, which represent the net asset value of
shares held by the Plan at year-end.
Purchases and sales of securities are reflected on a trade-date basis. Interest income is
recognized when earned. Dividend income is recorded on the ex-dividend date.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted
in the United States requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results could differ from those
estimates.
3. Investments
The investment options of the Plan at December 31, 2005 and 2004, consist of deposits with 15 funds
for 2005 and 15 funds for 2004 managed by the Trustee, 7 externally managed funds for 2005 and 4
externally managed funds for 2004, and the Polaris stock fund. Participants elect to have their
account balances invested in one or more of the funds and may change the fund investment mix daily
via a voice response system or the Internet.
The following presents investments that represent 5% or more of the Plan’s net assets as of
December 31:
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2005 |
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2004 |
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Neuberger Berman Genesis Trust |
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$ |
35,999,002 |
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$ |
29,911,737 |
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Fidelity Managed Income Portfolio |
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35,232,764 |
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30,943,139 |
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Spartan U.S. Equity Fund |
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30,920,425 |
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30,327,061 |
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Fidelity Dividend Growth Fund |
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25,304,408 |
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25,083,312 |
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Fidelity Puritan Fund |
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17,019,670 |
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15,925,438 |
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Fidelity Diversified International Fund |
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13,370,636 |
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9,775,177 |
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6
Polaris 401(k) Retirement Savings Plan
Notes to Financial Statements (continued)
4. Tax Status
The Plan has received a determination letter from the IRS dated August 3, 2004, stating that the
Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code), and therefore, the
related trust is exempt from taxation. Subsequent to this issuance of the determination letter, the
Plan was amended. Once qualified, the Plan is required to operate in conformity with the Code to
maintain its qualification. The plan administrator believes the Plan is being operated in
compliance with the applicable requirements of the Code and, therefore, believes that the Plan, as
amended, is qualified and the related trust is tax-exempt.
5. Party-in-Interest Transactions
The Plan invests in Fidelity funds and the
Company’s stock. These transactions qualify as exempt
party-in-interest transactions. The fair value of Polaris Industries, Inc. common stock was
$3,981,563 and $5,253,457 at December 31, 2005 and 2004, respectively.
6. Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are exposed to various
risks, such as interest rate, market, and credit risks. Due to the level of risk associated with
certain investment securities, it is at least reasonably possible that changes in the values of
investment securities will occur in the near term and that such changes could materially affect the
amounts reported in the statements of net assets available for benefits.
7. Plan Amendment
Effective March 28, 2005, the Plan was amended such that terminated participants with account
balances of $1,000 or less will receive a lump-sum cash payment as soon as administratively
practicable upon the participant’s employment termination.
7
Supplemental Schedule
Polaris 401(k) Retirement Savings Plan
Schedule H, Line 4i — Schedule of Assets (Held at End of Year)
Employer Identification Number 41-1857431
Plan Number: 001
December 31, 2005
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Description |
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Current Value |
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Neuberger Berman Genesis Trust |
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$ |
35,999,002 |
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Fidelity Managed Income Portfolio* |
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35,232,764 |
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Spartan U.S. Equity Fund |
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30,920,425 |
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Fidelity Dividend Growth Fund* |
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25,304,408 |
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Fidelity Puritan Fund* |
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17,019,670 |
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Fidelity Diversified International Fund* |
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13,370,636 |
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Polaris Industries Inc. common stock* |
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3,981,563 |
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PIMCO Total Return Fund |
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3,613,256 |
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Fidelity Growth Company Fund* |
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3,315,594 |
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Oakmark Select I |
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3,094,524 |
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Fidelity Blue Chip Growth Fund* |
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2,140,621 |
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Fidelity Freedom 2020 Fund* |
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1,910,319 |
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Fidelity Freedom 2030 Fund* |
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1,891,513 |
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Franklin Small Cap Growth Fund |
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1,832,521 |
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Fidelity Equity Income* |
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1,369,465 |
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Fidelity Freedom 2010 Fund* |
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1,301,913 |
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Fidelity Freedom 2040 Fund* |
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1,295,107 |
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Dreyfus Mid Cap Index |
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740,275 |
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Fidelity Aggressive Growth Fund* |
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462,867 |
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Dreyfus Small Cap Stock |
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179,436 |
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Fidelity Freedom Income Fund* |
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171,695 |
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Interest-bearing cash |
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117,573 |
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Fidelity Freedom 2000 Fund* |
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79,199 |
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185,344,346 |
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Participant loans, with interest rates ranging from
6.0% to 11.5%, maturing through September 2, 2015* |
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7,325,784 |
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Total investments |
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$ |
192,670,130 |
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| * Denotes party in interest. |
8
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees
(or other persons who administer the employee benefit plan) have duly caused this Annual Report to
be signed on its behalf by the undersigned hereunto duly authorized.
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| Date: June 15, 2006 |
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POLARIS 401(k) RETIREMENT SAVINGS PLAN |
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By the Members of the 401(k) Retirement
Committee as Plan Administrator |
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/s/ John B. Corness |
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John B. Corness |
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/s/ Shannon K. Knotts |
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Shannon K. Knotts |
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/s/ Michael W. Malone |
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Michael W. Malone |
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/s/ Mary P. McConnell |
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Mary P. McConnell |
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/s/ Thomas J. Rooney |
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Thomas J. Rooney |
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9
POLARIS 401(k) RETIREMENT SAVINGS PLAN
EXHIBIT INDEX
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| Number |
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Document |
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Method of Filing |
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23
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Consent of Ernst & Young LLP
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Filed herewith electronically |
10