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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1933
FOR THE TRANSITION PERIOD FROM TO
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COMMISSION FILE
NO. 333 - 94451
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A. 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. 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
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POLARIS 401(K) RETIREMENT SAVINGS PLAN
REPORT ON AUDITS OF FINANCIAL STATEMENTS
as of December 31, 1999 and 1998
and
SUPPLEMENTARY SCHEDULE
as of December 31, 1999 and
for the year then ended
INDEX
Report of Independent Public Accountants
Financial Statements:
Statements of net assets available for
benefits as of December 31, 1999 and 1998
Statement of changes in net assets available
for benefits for the year ended December 31, 1999
Notes to Financial Statements
Supplemental Schedule:
Schedule of assets held for investment purposes
as of December 31, 1999
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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Plan Administrator of
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, 1999 and 1998, and
the related statement of changes in net assets available for benefits for the
year ended December 31, 1999. These financial statements are the responsibility
of the Plan's administrator. Our responsibility is to express an opinion on
these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the 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. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as 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 Polaris 401(k)
Retirement Savings Plan as of December 31, 1999 and 1998, and the changes in net
assets available for benefits for the year ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedule of assets held for
investment purposes is presented for purposes of additional analysis and is not
a required part of the basic 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. The supplemental schedule has been subjected to the auditing procedures
applied in the audit of the basic financial statements and, in our opinion, is
fairly stated in all material respects, in relation to the basic financial
statements taken as a whole.
Arthur Andersen LLP
Minneapolis, Minnesota,
May 27, 2000
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POLARIS 401(K) RETIREMENT SAVINGS PLAN
Statements of net assets available for benefits
As of December 31
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
CASH $ 24,804 $ 2,160
INVESTMENTS, at market value 92,247,124 74,951,623
ACCRUED INCOME RECEIVABLE 1,603 65,981
------------ ------------
Total assets 92,273,531 75,019,764
ACCRUED EXPENSES (3,892) --
------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $ 92,269,639 $ 75,019,764
============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
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POLARIS 401(K) RETIREMENT SAVINGS PLAN
Statement of changes in net assets available for benefits
For the year ended December 31, 1999
<TABLE>
<S> <C>
NET ASSETS AVAILABLE FOR BENEFITS, beginning of year $ 75,019,764
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INCREASES DURING THE YEAR:
Contributions-
Employer 4,970,338
Employee 6,939,566
Rollover 462,820
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Total contributions 12,372,724
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Investment income-
Interest and dividend income 3,979,847
Realized gains on sale of investments 9,431,033
Unrealized depreciation in market value of investments, net (3,546,246)
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Total investment income 9,864,634
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DISTRIBUTIONS TO PARTICIPANTS (4,970,414)
ADMINISTRATIVE EXPENSES (17,069)
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Total deductions (4,987,483)
------------
Net increase 17,249,875
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NET ASSETS AVAILABLE FOR BENEFITS, end of year $ 92,269,639
============
</TABLE>
The accompanying notes are an integral part of this statement.
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POLARIS 401(K) RETIREMENT SAVINGS PLAN
Notes to financial statements
December 31, 1999 and 1998
1 DESCRIPTION OF THE PLAN
The following description of 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). It is subject to the
provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
PLAN OPERATIONS
Certain administrative costs totaling $120,998 for the plan year ended December
31, 1999 were paid by the Company.
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.
PARTICIPANT ACCOUNTS
Participants may elect to make contributions (limited to a maximum of 15 percent
of the participant's compensation, as defined in the Plan) to their account
balances. The Company makes a corresponding matching contribution, limited to a
maximum of 5 percent of the employee's compensation.
Additional profit-sharing contributions may be made annually at the discretion
of the Company's board of directors. Discretionary profit-sharing contributions
of $98,238 were made in 1999. Plan earnings, as defined, are allocated pro rata
based on participants' account balances.
VESTING
Participants are immediately vested in their voluntary and employer
contributions, plus actual earnings thereon.
PARTICIPANT LOANS
Participants may apply for loans from the Plan in amounts of up to one-half of
their account balances, subject to certain limitations. Loans must be paid back
within 5 years; however, this period may be extended to 10 years if the loan is
utilized for the acquisition of a primary
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residence. The interest rate charged on loans outstanding as of December 31,
1999 was 9.5 percent.
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.
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.
Effective January 1, 1999, the Company exercised its right to amend and restate
the Plan to include employees of Polaris Sales Inc. (a wholly owned subsidiary
of the Company) as eligible participants.
Effective April 1, 1999, the Company exercised its right to amend the Plan and
appointed Fidelity Management Trust Company as the new plan administrator,
record keeper and trustee, replacing U.S. Bank National Association. The
amendment also changed the investment options to those outlined in Note 3 of
these statements. Eligibility requirements changed to the first of the month
following the employee's hire date for salaried exempt and nonexempt employees,
the completion of 480 hours of service for full-time hourly employees and the
completion of 1,000 hours of service for seasonal and part-time employees. The
previous requirement was six months of full-time service for all employees.
Daily fund valuation was added with immediate access to fund balances and
investment elections via telephone and Internet accounts. The amendment provides
for employees to take loans against their accounts. The amendment also changed
the name of the Plan from Polaris Industries Inc. 401(k) Retirement/Savings Plan
to Polaris 401(k) Retirement Savings Plan in all instances in which it appears.
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2 SIGNIFICANT ACCOUNTING POLICIES AND PROCEDURES
BASIS OF ACCOUNTING
The accompanying financial statements have been prepared on the accrual basis of
accounting.
INVESTMENT VALUATION AND INCOME RECOGNITION
Investments of the Plan are stated at market value. Shares of registered
investment companies are valued at quoted market prices, which represent the net
asset value of shares held by the Plan at year-end. Realized gains and losses on
sales of investments represent the difference between the net proceeds from the
sale of investments and their market values at the beginning of the year or
original cost if purchased during the year. Unrealized appreciation or
depreciation of investments represents changes in the market value of
investments since the beginning of the year.
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 generally accepted
accounting principles requires the Plan's management to make estimates and
assumptions that affect the reported amounts of net assets available for
benefits at the date of the financial statements and the reported amounts of
changes in net assets available for benefits during the year. Ultimate results
could differ from those estimates.
3 INVESTMENT OPTIONS
The investment options of the Plan at December 31, 1999 consist of deposits with
three funds managed by the Trustee, three externally managed funds, and the
Polaris Stock Fund. Participants elect to have their account balances invested
in one or more of the following funds and may change the fund investment mix at
their discretion via a voice response system or the Internet.
SPARTAN U.S. EQUITY FUND
This fund invests in common stocks included in the Standard & Poor's 500 Index
and in other securities that are based on the value of the index. It aims at
duplicating the composition and performance of the Standard & Poor's 500 Index.
NICHOLAS FUND, INC.
This fund invests in mid- to large-sized companies' common stocks showing
favorable long-term growth potential. It aims at long-term capital growth, with
income a secondary objective.
FIDELITY MANAGED INCOME PORTFOLIO
This fund invests in contracts offered by major insurance companies and approved
financial institutions, certain types of fixed-income securities and money
market funds. It aims at preserving the principal investment while earning a
moderate interest income.
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FIDELITY PURITAN FUND
This fund invests in high-yield U.S. and foreign securities, common and
preferred stocks, bonds and other debt securities. It aims at providing as much
income as possible with preservation of capital.
NEUBERGER BERMAN GENESIS TRUST
This fund invests in small cap companies. It aims at capital appreciation.
FIDELITY DIVERSIFIED INTERNATIONAL FUND
This fund invests in the common stocks of foreign issuers. It aims at increasing
the value of the investment over the long term.
POLARIS STOCK FUND
This fund invests in Polaris stock and a small amount of short-term investments.
It aims at providing ownership to the Company's employees.
4 TAX STATUS
The Internal Revenue Service has determined and informed the Company by a letter
dated October 27, 1997, that the Plan is qualified as tax-exempt under the
appropriate sections of the Internal Revenue Code (the Code) and was designed in
accordance with applicable sections of the Code. Although the Plan has been
amended since receiving the determination letter, the plan administrator and the
Plan's tax counsel believe that the Plan is currently designed and being
operated in compliance with the applicable requirements of the Code.
5 PARTY-IN-INTEREST TRANSACTIONS
The accounts managed by the Trustee, as well as the Polaris Stock Fund, qualify
as exempt party-in-interest transactions.
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6 RECONCILIATION TO THE FORM 5500
As of December 31, 1999 and 1998, the Plan had $0 and $574,921, respectively, of
distributions which were payable to participants. These amounts are recorded as
a liability in the Plan's Form 5500; however, in accordance with the Plan's
accounting policies, these amounts are not recorded as a liability in the
accompanying statement of net assets available for benefits.
The following table reconciles net assets available for benefits per the
financial statements to the amounts reflected in the Form 5500 as filed by the
Plan as of December 31:
<TABLE>
<CAPTION>
1999 1998
------------ ------------
<S> <C> <C>
Net assets available for benefits per the financial statements $ 92,269,638 $ 75,019,764
Current year distribution payable -- (574,921)
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Net assets available for benefits per the Form 5500 $ 92,269,638 $ 74,444,843
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</TABLE>
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500 for the year ended December 31, 1999:
<TABLE>
<S> <C>
Benefits paid to participants per the financial statements $ 4,970,414
Add- Amounts allocated to withdrawing participants at December 31, 1999 --
Less- Amounts allocated to withdrawing participants at December 31, 1998 (574,921)
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Benefits paid to participants per the Form 5500 $ 4,395,493
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</TABLE>
7 ADOPTION OF NEW ACCOUNTING STANDARD
The Plan adopted Statement of Position (SOP) 99-3, "Accounting for and Reporting
of Certain Defined Contribution Plan Investments and Other Disclosure Matters."
As a result, all prior periods presented have been restated to conform to the
provisions of SOP 99-3. SOP 99-3 eliminates the requirement for defined
contribution plans to disclose investments by general type for
participant-directed investments. This change had no effect on the amount of net
assets available for benefits reported in prior periods.
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SUPPLEMENTAL SCHEDULE
POLARIS 401(K) RETIREMENT SAVINGS PLAN
Schedule of assets held for investment purposes
As of December 31, 1999
EIN: 41-1797637
PLAN NUMBER: 001
<TABLE>
<CAPTION>
Description Cost Market value
----------- ---- ------------
<S> <C> <C>
Spartan U.S. Equity Fund ** $31,357,548
Nicholas Fund, Inc. ** 19,811,977
Fidelity Managed Income Portfolio* ** 14,061,617
Fidelity Puritan Fund* ** 10,013,023
Neuberger Berman Genesis Trust ** 9,430,503
Fidelity Diversified International Fund* ** 4,080,305
Polaris Stock Fund* ** 338,503
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Total investment funds 89,093,476
Participant loans 3,153,648
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Total investments $92,247,124
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</TABLE>
*Denotes party in interest.
**Historical cost is omitted for participant-directed investments.
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POLARIS 401(K) RETIREMENT SAVINGS PLAN
EXHIBITS
Exhibit No. Description
23.1 Consent of Independent Public Accountants
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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, thereunto duly authorized.
Date: June 28, 2000 POLARIS 401(k) RETIREMENT SAVINGS PLAN
By the Members of the 401(k) Retirement
Committee as Plan Administrator
/s/ Thomas C. Tiller
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Thomas C. Tiller
/s/ Michael W. Malone
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Michael W. Malone
/s/ John B. Corness
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John B. Corness
/s/ Scott Swenson
--------------------------------------------
Scott Swenson
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POLARIS 401(k) RETIREMENT SAVINGS PLAN
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number Document Method of Filing
------ -------- ----------------
<S> <C> <C>
23.1 Consent of Arthur Andersen LLP Filed herewith
dated June 21, 2000 electronically
</TABLE>
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