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What changed in Polaris Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Polaris Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+257 added−249 removedSource: 10-K (2025-02-18) vs 10-K (2024-02-16)

Top changes in Polaris Inc.'s 2024 10-K

257 paragraphs added · 249 removed · 210 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

58 edited+10 added−18 removed39 unchanged
Biggest changeAs a core element of our human capital management strategy, we developed a multi-faceted employee listening strategy inclusive of new hire pulse surveys across the global salaried employee base, our bi-annual engagement survey of global salaried employees, and our bi-annual ethical culture survey.
Biggest changeOur multi-faceted employee listening strategy includes our new hire pulse surveys, engagement survey of global salaried employees, bi-annual ethical cultural survey, and exit interviews. In 2024, our Ethical Culture and Compliance Perceptions Assessment Survey resulted in a higher score compared to our inaugural survey in 2022 and a greater percentage of employees participated in the survey than had previously.
ORVs are four-wheel vehicles designed for off-road use and traversing a wide variety of terrain, including dunes, trails, and mud. The vehicles can be multi-passenger or single passenger, are used for recreation in such sports as fishing and hunting and for trail and dune riding, and for utility purposes on farms, ranches, and construction sites.
ORVs are four-wheel vehicles designed for off-road use and traversing a wide variety of terrain, including dunes, trails, and mud. The vehicles can be multi-passenger or single passenger, are used for recreation in sports such as fishing and hunting and for trail and dune riding, and for utility purposes on farms, ranches, and construction sites.
Brands in our Apparel category include Klim, which specializes in premium technical riding gear for snowmobile and off-road activities, and 509, which is an aftermarket leader in snowmobile and off-road apparel, helmets and goggles. Kolpin, Pro Armor and Trail Tech are marketed through Apex Product Group, a unified sales, customer service, distribution and vertically integrated manufacturing organization.
Brands in our Apparel category include Klim, an aftermarket leader in premium technical riding gear for snowmobile and off-road activities, and 509, which specializes in snowmobile and off-road apparel, helmets and goggles. Kolpin, Pro Armor and Trail Tech are marketed through Apex Product Group, a unified sales, customer service, distribution and vertically integrated manufacturing organization.
Similarly, statements that describe our future plans, objectives or goals, such as future sales, future cash flows and capital requirements, operational initiatives, supply chain, tariffs, currency fluctuations, interest rates, and commodity costs, are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those forward-looking statements, are also forward-looking.
Similarly, statements that describe our future plans, objectives or goals, such as future sales, shipments, future cash flows and capital requirements, operational initiatives, supply chain, tariffs, currency fluctuations, interest rates, and commodity costs, are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those forward-looking statements, are also forward-looking.
Potential risks and uncertainties include such factors as the Company’s ability to successfully implement its manufacturing operations strategy and supply chain initiatives; the Company’s ability to successfully source necessary parts and materials on a timely basis; the ability of the Company to manufacture and deliver products to dealers to meet demand, including as a result of supply chain disruptions; the Company’s ability to identify and meet optimal dealer inventory levels; the Company’s ability to accurately forecast and sustain consumer demand; the Company’s ability to mitigate increasing input costs through pricing or other measures; product offerings, promotional activities and pricing strategies by competitors that may make our products less attractive to consumers; the Company’s ability to strategically invest in innovation and new products, including as compared to our competitors; economic conditions that impact consumer spending or consumer credit, including recessionary conditions and changes in interest rates; disruptions in manufacturing facilities; product recalls and/or warranty expenses; product rework costs; impact of changes in Polaris stock price on incentive compensation plan costs; foreign currency exchange rate fluctuations; environmental and product safety regulatory activity; effects of weather on the Company’s supply chain, manufacturing operations and 9 Table of Contents consumer demand; commodity costs; freight and tariff costs (tariff relief or ability to mitigate tariffs); changes to international trade policies and agreements; uninsured product liability and class action claims (including claims seeking punitive damages) and other litigation expenses incurred due to the nature of our business; uncertainty in the consumer retail and wholesale credit markets; performance of affiliate partners; changes in tax policy; relationships with dealers and suppliers; and the general global economic, social and political environment.
Potential risks and uncertainties include such factors as the Company’s ability to successfully implement its manufacturing operations strategy and supply chain initiatives; the Company’s ability to successfully source necessary parts and materials on a timely basis; the ability of the Company to manufacture and deliver products to dealers to meet demand, including as a result of supply chain disruptions; the Company’s ability to identify and meet optimal dealer inventory levels; the Company’s ability to accurately forecast and sustain consumer demand; the Company’s ability to mitigate increasing input costs through pricing or other measures; product offerings, promotional activities and pricing strategies by competitors that may make our products less attractive to consumers; the Company’s ability to strategically invest in innovation and new products, including as compared to our competitors; economic conditions that impact consumer spending or consumer credit, including recessionary conditions and changes in interest rates; disruptions in 9 Table of Contents manufacturing facilities; product recalls and/or warranty expenses; product rework costs; impact of changes in Polaris stock price on incentive compensation plan costs; foreign currency exchange rate fluctuations; environmental and product safety regulatory activity; effects of weather on the Company’s supply chain, manufacturing operations and consumer demand; commodity costs; freight and tariff costs (tariff relief or ability to mitigate tariffs, particularly in light of the proposed policies of the new presidential administration); changes to international trade policies and agreements; uninsured product liability and class action claims (including claims seeking punitive damages) and other litigation expenses incurred due to the nature of the Company’s business; uncertainty in the consumer retail and wholesale credit markets; performance of affiliate partners; changes in tax policy; relationships with dealers and suppliers; and the general global economic, social and political environment.
The financial results of the Polaris Adventures business are included within the Off Road and On Road segments, depending on the vehicle platform used in the ride experience. Financial Services Arrangements Floor plan financing.
The financial results of the Polaris Adventures business are included within the Off Road, On Road and Marine segments, depending on the vehicle platform used in the ride experience. Financial Services Arrangements Floor plan financing.
We also offer custom layouts and features and work with most engine manufacturers enabling customers to build a boat that meets their specifications. We believe that the combination of our Bennington and Godfrey brands is currently the market share leader in pontoon boats. In 2023, Polaris Marine launched the model year 2024 boats for the Bennington, Godfrey and Hurricane brands.
We also offer custom layouts and features and work with most engine manufacturers enabling customers to build a boat that meets their specifications. We believe that the combination of our Bennington and Godfrey brands is currently the market share leader in pontoon boats. In 2024, Polaris Marine launched model year 2025 boats for the Bennington, Godfrey and Hurricane brands.
We design, engineer, produce or supply a variety of replacement parts and Polaris Engineered Accessories for our Off Road Segment. ORV accessories include winches, bumper/brushguards, plows, racks, wheels and tires, pull-behinds, cab systems, lighting and audio systems, cargo box accessories, tracks and oil.
We design, engineer, produce or supply a variety of replacement parts, lubricants and Polaris Engineered Accessories for our Off Road Segment. ORV accessories include winches, bumper/brushguards, plows, racks, wheels and tires, pull-behinds, cab systems, lighting and audio systems, cargo box accessories and tracks.
We also market a full line of gear and apparel related to our ORVs, including helmets, jackets, gloves, pants and hats. Snowmobile accessories include covers, traction products, reverse kits, electric starters, tracks, bags, windshields, oil and lubricants. We also market a full line of gear and apparel for our snowmobiles, including helmets, goggles, jackets, gloves, boots, bibs, pants and hats.
We also market a full line of gear and apparel related to our ORVs, including helmets, jackets, gloves, pants and hats. Snowmobile accessories include covers, traction products, reverse kits, electric starters, tracks, bags and windshields. We also market a full line of gear and apparel for our snowmobiles, including helmets, goggles, jackets, gloves, boots, bibs, pants and hats.
See Market and Industry Data section for additional information. The side-by-side market has been consistently strong over the past several years primarily due to continued innovation by manufacturers. In 2023, we continued to be the North America market share leader in off-road vehicles.
See Market and Industry Data section for additional information. The side-by-side market has been consistently strong over the past several years primarily due to continued innovation by manufacturers. In 2024, we continued to be the North America market share leader in off-road vehicles.
Instead, we have agreements in place with third-party financing companies to provide financing services to those end consumers. We have no material contingent liabilities for residual value or credit collection risk under these agreements. Manufacturing and Distribution Operations Our products are primarily assembled at our 20 global manufacturing facilities, many of which are shared across business segments.
Instead, we have agreements in place with third-party finance companies to provide financing services to those end consumers. We have no material contingent liabilities for residual value or credit collection risk under these agreements. Manufacturing and Distribution Operations Our products are primarily assembled at our 22 global manufacturing facilities, many of which are shared across business segments.
Our ORV lineup includes the RZR sport side-by-side, the RANGER utility side-by-side, the GENERAL crossover side-by-side, the Polaris XPEDITION adventure side-by-side and the Sportsman ATV. The full line spans 107 models, including two-, four- and six-wheel drive general purpose and recreational vehicles.
Our ORV lineup includes the RZR sport side-by-side, the RANGER utility side-by-side, the GENERAL crossover side-by-side, the Polaris XPEDITION adventure side-by-side and the Sportsman ATV. The full line spans 111 models, including two-, four- and six-wheel drive general purpose and recreational vehicles.
Our vehicle brands include Goupil and Aixam which are primarily marketed in Western Europe. We offer 13 models across these brands. These businesses each have their own distribution networks through which their respective vehicles are distributed.
Our vehicle brands include Goupil and Aixam which are primarily marketed in Western Europe. We offer 15 models across these brands. These businesses each have their own distribution networks through which their respective vehicles are distributed.
Goupil and Aixam sell directly to customers in France, through subsidiaries in certain Western European countries and through several dealers and distributors for markets outside such countries. Marine: Our Marine segment designs and manufactures boats that are designed to compete in key segments of the recreational marine industry, specifically pontoon and deck boats.
Goupil and Aixam sell directly to customers in France, through subsidiaries in certain Western European countries and through several dealers and distributors for markets outside such countries. 5 Table of Contents Marine: Our Marine segment designs and manufactures boats that are designed to compete in key segments of the recreational marine industry, specifically pontoon and deck boats.
See Market and Industry Data section for additional information. In 2023, we held the number two position in North America market share for the 900cc+ category. Our motorcycles lineup includes Indian Motorcycle and Slingshot, a three-wheel open air roadster. Our 2024 model year line of motorcycles for Indian Motorcycle and Slingshot consists of 38 models.
See Market and Industry Data section for additional information. In 2024, we held the number two position in North America market share for the 900cc+ category. Our motorcycles lineup includes Indian Motorcycle and Slingshot, a three-wheel open air roadster. Our 2025 model year line of motorcycles for Indian Motorcycle and Slingshot consists of 40 models.
We have arrangements with Polaris Acceptance (United States), a joint venture between Polaris and a subsidiary of Wells Fargo Bank, N.A., Wells Fargo affiliates (who provide floor plan financing for customers in many countries and regions, including Canada, Australia, France, Germany, the United Kingdom and Scandinavia), and a subsidiary of Huntington Bancshares Incorporated to provide floor plan financing for many of our dealers.
We have arrangements with Polaris Acceptance (United States), a joint venture between Polaris and a subsidiary of Wells Fargo Bank, N.A., and Wells Fargo affiliates (who provide floor plan financing for customers in many countries and regions, including Canada, France, Germany, the United Kingdom and Scandinavia) to provide floor plan financing for many of our dealers.
Information about our Executive Officers Set forth below are the names of our executive officers as of February 16, 2024, their ages, titles, the year first appointed as an executive officer, and employment for at least the last five years: Name and Position Age Business Experience During the Last Five or More Years Michael T.
Information about our Executive Officers Set forth below are the names of our executive officers as of February 18, 2025, their ages, titles, the year first appointed as an executive officer, and employment for at least the last five years: Name and Position Age Business Experience During the Last Five or More Years Michael T.
Estimated combined 900cc and above cruiser, touring, and standard market segments (including the moto-roadster Slingshot ® ) motorcycle industry sales in North America and worldwide are summarized as follows: Twelve months ended December 31, Estimated* Industry Sales (in units) 2023 2022 2021 North America 900cc cruiser, touring, and standard retail sales 180,000 195,000 220,000 Worldwide 900cc cruiser, touring, and standard retail sales 300,000 315,000 350,000 *Estimates are unaudited and based on internally-generated management estimates, including estimates based on extrapolations from third-party surveys of the industries in which we compete.
Estimated combined 900cc and above cruiser, touring, and standard market segments (including the moto-roadster Slingshot ® ) motorcycle industry sales in North America and worldwide are summarized as follows: Twelve months ended December 31, Estimated* Industry Sales (in units) 2024 2023 2022 North America 900cc cruiser, touring, and standard retail sales 170,000 180,000 195,000 Worldwide 900cc cruiser, touring, and standard retail sales 280,000 300,000 315,000 *Estimates are unaudited and based on internally-generated management estimates, including estimates based on extrapolations from third-party surveys of the industries in which we compete.
Polaris Adventures Our Polaris Adventures business partners with local outfitters to deliver unique ride experiences leveraging many of our global vehicle platforms. The Polaris Adventures network has completed over 1,500,000 rides since 2017, and had over 250 locations as of December 31, 2023.
Polaris Adventures Our Polaris Adventures business partners with local outfitters to deliver unique ride experiences leveraging many of our global vehicle platforms. The Polaris Adventures network has completed over 1,750,000 rides since 2017, and had over 250 locations as of December 31, 2024.
Engineering, Research and Development, and New Product Introduction We have over 1,400 employees who are engaged in the development and testing of existing products and research and development of new products and improved production techniques, located primarily in Roseau, Minnesota; Wyoming, Minnesota; Elkhart, Indiana; Novi, Michigan; Burgdorf, Switzerland; and Bangalore, India.
Engineering, Research and Development, and New Product Introduction We have approximately 1,300 employees who are engaged in the development and testing of existing products and research and development of new products and improved production techniques, located primarily in Roseau, Minnesota; Wyoming, Minnesota; Elkhart, Indiana; Novi, Michigan; Burgdorf, Switzerland; and Bangalore, India.
We view our comprehensive total rewards package with a broad focus on employee well-being as instrumental in our ability to attract, motivate and retain quality candidates and employees to drive our strategic mission to continue to be the global leader in powersports.
We view our comprehensive total rewards package with a broad focus on employee well-being as instrumental in our ability to attract, motivate and retain quality candidates and employees to drive our strategic mission to continue to be the global leader in powersports. The safety of our employees remains a primary focus.
We estimate that worldwide industry sales of snowmobiles totaled approximately 125,000, 130,000, and 135,000 units for the 12 month seasons ended March 31, 2023, 2022, and 2021, respectively. For the 12 month season ended March 31, 2023, we held the number two market share position for North America.
We estimate that worldwide industry sales of snowmobiles totaled approximately 110,000, 125,000, and 130,000 units for the 12 month seasons ended March 31, 2024, 2023, and 2022, respectively. For the 12 month snowmobile season ended March 31, 2024, we held the number two market share position for North America.
PG&A products for the On Road segment include our OEM brands as well as other portfolio brands including Klim and 509. Indian Motorcycle and Slingshot are distributed directly through independently owned dealers and distributors. Indian Motorcycles are sold through a network of over 200 dealers in North America and over 350 international dealers. Slingshot currently has over 325 dealers globally.
PG&A products for the On Road segment include our OEM brands as well as other portfolio brands including Klim and 509. Indian Motorcycle and Slingshot are distributed directly through independently owned dealers and distributors. Indian Motorcycles are sold through a network of approximately 230 dealers in North America and over 370 international dealers. Slingshot currently has approximately 300 dealers globally.
Inclusive of the segments in which we compete, we estimate total 5 Table of Contents U.S. 2023 powerboats market sales were approximately $15.0 billion, with pontoon being one of the larger segments therein. Our brands, Bennington, Godfrey and Hurricane, are strategically positioned with over 500 base models across a range of price points.
Inclusive of the segments in which we compete, we estimate total U.S. 2024 powerboats market sales were approximately $14.0 billion, with pontoon being one of the larger segments therein. Our brands, Bennington, Godfrey and Hurricane, are strategically positioned with over 500 base models across a range of price points.
As a part of our growth strategy, we are committed to strategically and intentionally developing our current employees to become the next generation of leaders through external partnerships and employee development programs such as Succeeding as a Polaris Leader and Polaris Leadership Development 1 and 2. These programs provide high-potential employees opportunities to gain experience and prepare for next-level roles.
As a part of our talent strategy, we strategically and intentionally develop employees to become the next generation of leaders through external partnerships and employee development programs such as Succeeding as a Polaris Leader and Polaris Leadership Development 1 and 2. These programs provide high-potential employees opportunities to gain experience and prepare for next-level roles.
Motorcycle accessories include saddle bags, handlebars, backrests, exhausts, windshields, seats, oil and various chrome accessories. We also market a full line of gear and apparel for our motorcycles, including helmets, jackets, leathers and hats. Gear and apparel are purchased from independent vendors and sold by us through our dealers, distributors, and online under our brand names.
Motorcycle accessories include performance enhancements, saddle bags, handlebars, backrests, exhausts, windshields, seats and various chrome accessories. We also market a full line of gear and apparel for our motorcycles, including casual wear, helmets, gloves, jackets, pants and hats. Gear and apparel are purchased from independent vendors and sold by us through our dealers, distributors, and online under our brand names.
We utilize public relations and partnerships to drive earned media. We provide advertising assets and content and partially underwrite dealer and distributor advertising to a degree and on terms which vary by brand and from year to year. We also provide print materials, signage and other promotional items for use by dealers.
We provide advertising assets and content and partially underwrite dealer and distributor advertising to a degree and on terms which vary by brand and from year to year. We also provide print materials, signage and other promotional items for use by dealers.
For our interns and post-graduate development program participants, we host a week-long summit event in Minnesota, providing an opportunity to learn from executives, network with others, participate in professional development activities, and experience Polaris products. Employee well-being.
For our interns and development program participants, we host a multi-day summit event in Minnesota, providing an opportunity to learn from executives, network with peers, participate in professional development activities, and experience Polaris products. Employee well-being.
We believe the holistic focus on well-being, including our employees’ health, safety, and financial security drives our success and is a key focus of our guiding principles.
We believe the holistic focus on well-being, including our employees’ health, safety, and financial security, drives our success and is a key focus of our Best Team, Best Culture pillar.
We spent $542.3 million, $480.8 million and $458.2 million for sales and marketing activities in 2023, 2022 and 2021, respectively. Our corporate headquarters facility is in Medina, Minnesota, and we maintain numerous sales and administrative facilities across the world.
We spent $500.4 million, $542.3 million and $480.8 million for sales and marketing activities in 2024, 2023 and 2022, respectively. Our corporate headquarters facility is in Medina, Minnesota, and we maintain numerous sales and administrative facilities around the world.
We make available and advertise discount or rebate programs, 6 Table of Contents retail financing or other incentives for our dealers and distributors to remain price competitive to accelerate retail sales to consumers. We advertise our brands directly to consumers via digital, television, print, out of home, radio, events and sponsorships.
We make available and advertise discount or rebate programs, retail financing or other incentives for our dealers and distributors to remain price competitive to accelerate retail sales to consumers. We advertise our brands directly to consumers via digital, television, print, out of home, radio, events and sponsorships. We utilize public relations and partnerships to drive earned media.
Our commercial and government/defense businesses each have their own distribution networks outside of our traditional dealer channels through which their respective vehicles are distributed. ProXD, one of our vehicle brands, is sold through a growing network of over 200 dealers and also direct to customer where permitted.
We also offer more than 25 commercial ORV models. Our commercial and government/defense businesses each have their own distribution networks outside of our traditional dealer channels through which their respective vehicles are distributed. ProXD, one of our vehicle brands, is sold through a growing network of approximately 250 dealers and also direct to customer where permitted.
Our products are sold online and through dealers and distributors principally located in the United States, Canada, Western Europe, Australia, and Mexico. Business Segments We operate in three business segments; Off Road, On Road, and Marine.
Our products are sold online and through dealers and distributors principally located in the United States, Canada, Western Europe, Australia, and Mexico. Business Segments We operate in three business segments; Off Road, On Road, and Marine. Our products are sold through a network of approximately 2,500 independent dealers in North America.
Estimated North America and worldwide ORV industry retail sales are summarized as follows: Twelve months ended December 31, Estimated* Approximate Industry Sales (in units) 2023 2022 2021 North America ATV retail sales 240,000 250,000 285,000 North America side-by-side retail sales 565,000 535,000 560,000 North America ORV retail sales 805,000 785,000 845,000 Worldwide ATV retail sales 335,000 355,000 415,000 Worldwide side-by-side retail sales 620,000 590,000 620,000 Worldwide ORV retail sales 955,000 945,000 1,035,000 *Estimates are unaudited and based on internally-generated management estimates, including estimates based on extrapolations from third-party surveys of the industries in which we compete.
Estimated North America and worldwide ORV industry retail sales are summarized as follows: Twelve months ended December 31, Estimated* Approximate Industry Sales (in units) 2024 2023 2022 North America ATV retail sales 240,000 240,000 250,000 North America side-by-side retail sales 565,000 565,000 545,000 North America ORV retail sales 805,000 805,000 795,000 Worldwide ATV retail sales 340,000 335,000 355,000 Worldwide side-by-side retail sales 620,000 620,000 600,000 Worldwide ORV retail sales 960,000 955,000 955,000 *Estimates are unaudited and based on internally-generated management estimates, including estimates based on extrapolations from third-party surveys of the industries in which we compete.
ORV retail sales activity at the dealer level drives orders that are incorporated into each product’s production scheduling. International distributor ORV orders 3 Table of Contents are taken throughout the year.
We produce and deliver our 3 Table of Contents products throughout the year based on dealer, distributor, and customer orders. ORV retail sales activity at the dealer level drives orders that are incorporated into each product’s production scheduling. International distributor ORV orders are taken throughout the year.
Mack also serves as Executive Vice President of Finance and Corporate Development. Mr. Mack was Interim Chief Financial Officer since January 2021 and originally joined Polaris in 2016 as Senior Vice President of Corporate Development and Strategy, and President of Global Adjacent Markets and Marine. Steven D. Menneto President of Off Road 58 Mr.
Mack also serves as Executive Vice President of Finance and Corporate Development. Mr. Mack was Interim Chief Financial Officer since January 2021 and originally joined Polaris in 2016 as Senior Vice President of Corporate Development and Strategy, and President of Global Adjacent Markets and Marine. James P. Williams Senior Vice President and Chief Human Resources Officer 62 Mr.
Our products are sold through a network of approximately 2,500 independent dealers in North America, approximately 1,500 independent international dealers through over 25 subsidiaries, and approximately 70 independent distributors in nearly 90 countries outside of North America.
Internationally, products are sold through over 25 subsidiaries to over 1,500 independent international dealers and 70 independent distributors that serve over 90 countries outside of North America.
We maintain several leased wholegoods distribution centers where final set-up and up-fitting is completed for certain models before shipment to dealers, distributors, and customers. Our products are distributed to our dealers, distributors, and customers through a network of over 40 distribution centers, including third-party providers.
We maintain several leased wholegoods distribution centers where final set-up and up-fitting is completed for certain models before shipment to dealers, distributors, and customers.
Motorcycles are utilized as a mode of transportation as well as for recreational purposes. The industry is comprised of several segments. We currently compete in three segments: cruisers, touring (including three-wheel), and standard motorcycles.
Motorcycles are utilized as a mode of transportation as well as for recreational purposes. The industry is comprised of several segments. We currently compete in two segments: cruisers and touring (including three-wheel). Competition in these segments of the motorcycle industry is based on a number of factors, including styling, price, quality, reliability and the dealer network supporting the brand.
Forward-Looking Statements This Annual Report contains not only historical information, but also “forward-looking statements” intended to qualify for the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
In addition, the SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC (http://www.sec.gov). Forward-Looking Statements This Annual Report contains not only historical information, but also “forward-looking statements” intended to qualify for the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Speetzen Chief Executive Officer 54 Mr. Speetzen was appointed Chief Executive Officer in April 2021; preceding this, Mr. Speetzen was Interim Chief Executive Officer since January 2021. Mr. Speetzen joined Polaris in August 2015 as Executive Vice President and Chief Financial Officer. Lucy Clark Dougherty Senior Vice President, General Counsel and Corporate Secretary 54 Ms.
Speetzen Chief Executive Officer 55 Mr. Speetzen was appointed Chief Executive Officer in April 2021; preceding this, Mr. Speetzen was Interim Chief Executive Officer since January 2021. Mr. Speetzen joined Polaris in August 2015 as Executive Vice President and Chief Financial Officer. Michael D. Dougherty President of On Road and International 57 Mr.
Executive officers of the Company are elected at the discretion of the Board of Directors with no fixed terms. There are no family relationships between or among any of the executive officers or directors of the Company.
Williams joined Polaris in April 2011 as Senior Vice President and Chief Human Resources Officer. Executive officers of the Company are elected at the discretion of the Board of Directors with no fixed terms. There are no family relationships between or among any of the executive officers or directors of the Company.
In 2023, Indian Motorcycle launched its all-new 2024 lineup, featuring a limited edition FTR x 100% R Carbon, a new Challenger Elite, and completely redesigned PowerBand Audio system. Slingshot launched its all-new 2024 lineup with thoughtful refinement and bold graphics. We design, engineer, produce or source a variety of replacement parts and accessories for our motorcycles.
In 2024, Indian Motorcycle launched all-new 2025 models, featuring a limited edition Roadmaster Elite and a completely redesigned Scout lineup of mid-size cruisers. In 2024, the Slingshot lineup received thoughtful refinements and bold graphics. We design, engineer, produce or source a variety of replacement parts, lubricants and accessories for our motorcycles and moto-roadsters.
Sales and Marketing Our marketing activities are designed primarily to promote and communicate with consumers to enable the marketing and selling efforts of our dealers and distributors globally.
Our products are distributed to our dealers, distributors, and customers through a network of over 40 distribution centers, including third-party providers. 6 Table of Contents Sales and Marketing Our marketing activities are designed primarily to promote and communicate with consumers to enable the marketing and selling efforts of our dealers and distributors globally.
We sell our snowmobiles directly to a network of over 580 dealers in North America, primarily located in the snowbelt regions of the United States and Canada, and over 300 international dealers. We offer a pre-order SnowCheck program in the spring for our customers that assists us in production planning.
Polaris snowmobiles are sold principally in the United States, Canada, and Northern Europe. We sell our snowmobiles directly to a network of over 560 dealers in North America, primarily located in the snowbelt regions of the United States and Canada, and over 300 international dealers.
Clark Dougherty joined Polaris in January 2018 as Senior Vice President—General Counsel and Corporate Secretary. Michael D. Dougherty President of On Road and International 56 Mr. Dougherty was appointed President of On Road and International in December 2019. Prior to this, Mr. Dougherty was President of International since September 2015. Benjamin D. Duke President of Marine 51 Mr.
Dougherty was appointed President of On Road and International in December 2019. Prior to this, Mr. Dougherty was President of International since September 2015. Benjamin D. Duke President of Marine 52 Mr. Duke was appointed President of Marine in May 2022. Prior to this, Mr. Duke was General Manager of Godfrey and Hurricane Boats since joining Polaris in 2019.
Financial well-being is one of our focuses, and we endeavor to support our employees’ financial wellness in a variety of ways, including by offering financial wellness education that supports employees navigating market volatility and inflation. We also offer free one-on-one financial counseling sessions to employees, allowing employees to receive counseling tailored to their priorities.
Employees are provided with customized, comprehensive total rewards statements and resources to understand the various pay and benefits elements of our total rewards program. Financial well-being is one of our focuses, and we endeavor to support our employees’ financial wellness in a variety of ways, including by offering financial wellness education that supports employees navigating market volatility and inflation.
As members of the Corporate Partnership Council of the Society of Women Engineers and the Women in Manufacturing Association, we have enabled team development opportunities and a pipeline for future talent.
As members of the Corporate Partnership Council of the Society of Women Engineers and the Women in Manufacturing Association, we drive team development opportunities and a potential pipeline for future talent. Our partnerships with the Society of Professional Hispanic Engineers, Disability Solutions, and DoD Skill Bridge further our ability to broaden our base of potential qualified candidates.
Eastman was appointed President of PG&A and Aftermarket in September 2015. Prior to this, Mr. Eastman was Vice President of PG&A since joining Polaris in February 2012. Robert P. Mack Chief Financial Officer and Executive Vice President of Finance and Corporate Development 54 Mr. Mack was appointed Chief Financial Officer in April 2021. Mr.
Prior to joining Polaris, Mr. Duke was President of the Job Site and Standby Power Group at Briggs and Stratton, a manufacturing company. Robert P. Mack Chief Financial Officer and Executive Vice President of Finance and Corporate Development 55 Mr. Mack was appointed Chief Financial Officer in April 2021. Mr.
We sell our ORVs directly to a network of approximately 1,400 dealers in North America and 1,100 international dealers. Many of our ORV dealers and distributors are also authorized snowmobile dealers. We produce and deliver our products throughout the year based on dealer, distributor, and customer orders.
New models to the lineup included the addition of the GENERAL 4 1000 Sport and the return of the RANGER XP NorthStar Trail Boss. We sell our ORVs directly to a network of approximately 1,400 dealers in North America and 1,100 international dealers. Many of our ORV dealers and distributors are also authorized snowmobile dealers.
In many of our segments, we offer youth, value, mid-size, premium and extreme-performance vehicles, which come in both single passenger and multi-passenger seating arrangements. Key 2023 ORV product introductions included the Extreme Duty RANGER XD 1500, RANGER XP Kinetic and the Polaris XPEDITION.
In many of our segments, we offer youth, value, mid-size, premium and extreme-performance vehicles, which come in both single passenger and multi-passenger seating arrangements. Key 2024 ORV product introductions and upgrades included a redesigned and enhanced RZR Pro lineup and new trim offerings, as well as refreshed style and updated colors and graphics on select RANGER models.
Our defense vehicles, which include ATVs and side-by-side vehicles with features specifically designed for military applications, provide versatile mobility for up to nine passengers, and include our DAGOR, Sportsman MV and MRZR models. We offer 26 models across our brands.
Our commercial and government/defense businesses design and manufacture vehicles that support various commercial and government applications for transporting people and hauling equipment, as well as tactical defense vehicles. Our defense vehicles, which include ATVs and side-by-side vehicles with modified features for military applications, provide versatile mobility for up to five passengers, and include our DAGOR, Sportsman MV and MRZR models.
We remain committed to a multi-year strategy, R.I.D.E. Together, that defines and progresses our commitment to Respect, Inclusion, Diversity, and Equity, with our assertion that we will make meaningful progress leveraging our full workforce.
We remain committed to a multi-year strategy of R.I.D.E. Together that defines and progresses our commitment of Respect, Inclusion, Diversity, and Excellence. The composition of our employee base reflects this priority and our commitment to cultivating a wide range of ideas and experiences.
This program allows our customers to order a true factory-customized snowmobile by selecting various options, including chassis, track, suspension, colors and accessories. Manufacturing of snowmobiles generally commences in late winter of the previous season and continues through late autumn or early winter of the current season. The global snowmobile industry is primarily comprised of North American and Japanese competitors.
Manufacturing of snowmobiles generally commences in late winter of the previous season and continues through late autumn or early winter of the current season. The global snowmobile industry is primarily comprised of North American and Japanese competitors. Competitive market share position is driven heavily by product news (styling, technology, performance) and pricing.
Additionally, Godfrey launched the entry level Xperience series and Hurricane launched the Sundeck 217/Sundeck Sport 218 models as well as the Sundeck 2050/Sundeck Sport 2050 models. Our extensive, experienced and loyal network of over 550 global dealers is a competitive advantage, helping to generate steady demand.
Godfrey redesigned the seating system and layouts of its most popular Sweetwater models and further expanded the optional upgrades to its entry level Experience lineup. Our extensive, experienced and loyal network of over 600 global dealers is a competitive advantage, helping to generate steady demand.
Risk Factors of this Annual Report. Human Capital Management Best Team, Best Culture is a Polaris guiding principle. Our greatest asset is our employee base. We are committed to providing an inclusive and engaging work environment, and we aim to leverage our Polaris values to drive a positive 7 Table of Contents culture.
Risk Factors of this Annual Report. 7 Table of Contents Human Capital Management Best Team, Best Culture is a strategic pillar at Polaris and a critical part of our long-term success. We continue to see our employees as our greatest asset.
In 2023, we expanded that investment with additional external partnerships to bolster our succession and development processes for senior leadership, including external leadership courses and internally hosted acumen training. Attracting and developing early career talent remains a key element of our talent strategy. We invest in the development of early talent, providing our interns with weekly development opportunities.
Attracting and developing early career talent remains a key element of our talent strategy. We invest in the development of early talent, providing our interns with weekly development opportunities. Our internship programs are a key pipeline to our early career leadership development programs across engineering, operations, sales, marketing, finance, human resources, and information technology.
We produce a full line of snowmobiles consisting of 57 models, ranging from youth models to utility and economy models to performance and competition models. Key model introductions in 2023 included the new Series 9 325 track that further elevates the Polaris RMK line.
We produce a full line of snowmobiles consisting of 61 models, ranging from entry models to utility and economy models to performance and competition models. Key model enhancements in 2024 included the introduction of patented DYNAMIX suspension technology as well as a lighter RMK lineup. New models introduced included the RMK SP and 650 Titan Adventure Widetrack.
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We also manufacture a snow bike conversion kit system under the Timbersled brand and in 2023 we launched the new RIOT Gen 2 system, as well as more trim levels and options. Polaris snowmobiles are sold principally in the United States, Canada, and Northern Europe.
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We offer a pre-order SnowCheck program in the spring for our customers that assists us in production planning. This program allows our customers to order a true factory-customized snowmobile by selecting various options, including chassis, track, suspension, colors and accessories.
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Competitive market share position is driven heavily by product news (styling, technology, performance) and pricing. Our commercial and government/defense businesses design and manufacture vehicles that support various commercial and government applications for transporting people and hauling equipment, as well as tactical defense vehicles.
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Bennington launched a new M-Series family of boats that retail at a competitive price point. Hurricane launched two entirely new models to extend its deck boat lineup, including a 24-foot center console fishing and family boat and the 3200, its newest extension in luxury deck boats.
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Competition in these segments of the motorcycle industry is based on a number of factors, including styling, price, quality, reliability and the dealer network supporting the brand.
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As a commitment to our employees, we have built a work environment founded on Polaris values and supported by a culture of engagement. Our employees are also among our largest shareholder groups, driven by our Employee Stock Ownership Plan (“ESOP”) and our equity compensation programs. Headcount.
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Notable launches include Bennington’s SV and S series refresh that offers an enhanced style and streamlined product offering at a competitive price point, and Godfrey’s XP series, a new halo product that elevates design, sound and lighting.
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Due to the seasonality of our business and changes in production cycles, total employment levels vary throughout the year. Aligned to our business performance, we reduced the size of our workforce over the year. As of December 31, 2024, we had approximately 15,000 full-time employees globally, with approximately 5,000 in salaried roles.
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Our employees are also among our largest shareholder groups, driven by our Employee Stock Ownership Plan (“ESOP”) and our equity compensation program. Headcount. Due to the seasonality of our business and changes in production cycles, total employment levels vary throughout the year. Despite such variations in employment levels, employee turnover has not been materially disruptive to our business.
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Our employees are based in 20 countries with approximately 50% of our workforce located outside of the United States. Governance. Our Board of Directors has active oversight of our human capital management practices. The Committees of the Board regularly review key performance indicators from the business, including employee relations feedback, retention, and attrition statistics, and key talent succession.
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As of December 31, 2023, we had approximately 18,500 full-time employees globally, with approximately 5,500 in salaried roles. Our employees are based in 19 countries with approximately 53% of our employees located outside of the United States. Commitment to diversity, equity, and inclusion. Our commitment to diversity, equity, and inclusion is foundational to our success.
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Annually, our full Board reviews the human capital strategy, core processes, leadership development and succession, employee engagement and retention, workplace fairness, and overall workforce performance. Culture. We believe the Polaris culture is a competitive advantage, and our environment has continued to evolve to support employee and business performance. A core element of our human capital management strategy is employee engagement.
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The composition of our employee base reflects this priority, as seen in the increase in diverse representation across the enterprise since the introduction of the R.I.D.E Together framework. Our leaders are equipped to foster a diverse and inclusive workplace through leadership training and tools for inclusive team conversations.
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We have established an additional pipeline for non-traditional technical talent through Code2College, and our early career leadership development programs remain a key pipeline. In 2024, we also established a new Manufacturing Development Program to support skill development for trade workers. Leadership development.
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We undertake regular reviews of human capital practices to assess for unintended bias and to improve our practices. We have leveraged external partners to review our performance management, talent acquisition, inclusion and pay equity.
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We also offer free one-on-one financial counseling sessions to employees, allowing employees to receive counseling tailored to their priorities. We launched the Polaris Assistance Fund in March 2023 to provide vital financial relief during times of natural disaster and personal hardship, aiming to ease the unexpected stressors that can impact our 8 Table of Contents employees and their families.
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We have also created partnerships with the Society for Professional Hispanic Engineers, People of Color Careers, Disability Solutions, DoD Skillbridge and others to further our ability to reach a diverse candidate base.
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Our goal is to keep safety at the forefront for employees both in the workplace and when enjoying their own adventures outdoors. In 2023, we launched a Rider Safety Awareness Campaign to help further educate employees on safe, responsible product operation.
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Our relationship with Code2College is helping us create a non-traditional talent pipeline for technical talent, and our early career leadership development programs are a catalyst for future diverse leaders. Employee engagement.
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Each month, employees receive updates on a different topic, including our Rider Safety Policy, required protective gear, how to help kids ride safely, rules of the road, avalanche training and more. Whether riding for work or play, operating vehicles in a safe and responsible manner is a top priority.
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In 2023, 96% of our employees participated in the employee engagement survey, and the positive responses rated Polaris in the top quartile compared with a best-in-class global normative database, on par with high performing company norms. Consistent positive employee responses across diverse groups reflect the results of our focus on building an inclusive work environment.
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Our leaders continue to evaluate and implement opportunities for improvement identified by these sources of employee feedback. Leadership development.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeA failure to compete effectively with these other competitors or adjust pricing to offset inflation or increased supply chain costs could materially and adversely affect our financial results and have a material adverse effect on our performance. 11 Table of Contents If we are unable to continue to enhance existing products and develop and market new or enhanced products that respond to customer needs and preferences, we may experience a decrease in demand for our products and our business could suffer.
Biggest changeA failure to compete effectively with these other competitors, adjust our manufacturing and production levels to meet fluctuating demand, or adjust pricing to offset inflation, tariffs or increased supply chain costs could materially and adversely affect our financial results and have a material adverse effect on our performance.
There can be no assurance that our current or future manufacturing footprint will improve and be sufficient to meet customer demand or that we will be able to successfully expand or contract our manufacturing capacity to meet demand in a more efficient manner, which could result in loss of revenue, decreased margins and loss of market share.
There can be no assurance that our current or future manufacturing footprint will improve and be sufficient to meet customer demand or that we will be able to successfully expand or contract our manufacturing capacity to meet changing demand in a more efficient manner, which could result in loss of revenue, decreased margins and loss of market share.
Even with applicable and enforceable patent or trademark protection, others may initiate litigation to challenge to validity of our intellection property, allege that we infringe their intellectual property rights, or they may use their resources to design comparable products that recreate as near as possible yet do not technically infringe our patents.
Even with applicable and enforceable patent or trademark protection, others may initiate litigation to challenge to validity of our intellectual property, allege that we infringe their intellectual property rights, or they may use their resources to design comparable products that recreate as near as possible yet do not technically infringe our patents.
Failure to establish and maintain the appropriate level of dealers and distributor relationships or weak economic conditions impacting those relationships may negatively impact our business and operating results. We distribute our products through numerous dealers and distributors and rely on them to retail our products to our end customers and provide service on these products.
Failure to establish and maintain the appropriate level of dealer and distributor relationships or weak economic conditions impacting those relationships may negatively impact our business and operating results. We distribute our products through numerous dealers and distributors and rely on them to retail our products to our end customers and provide service on these products.
Our proprietary intellectual property rights are enforceable against third parties as infringement or misappropriation allegations or actions only to the extent that they are demonstrated by valid and enforceable patents or trademarks or are maintained in reasonable confidence sufficient to qualify as trade secrets.
Our intellectual property rights are enforceable against third parties as infringement or misappropriation allegations or actions only to the extent that they are demonstrated by valid and enforceable patents or trademarks or are maintained in reasonable confidence sufficient to qualify as trade secrets.
This allows those competitors to sell products at lower prices, which could adversely affect our competitiveness. In addition, our products compete with many other recreational, utility, and work products for the discretionary spending of our customers.
This allows those competitors to sell products at lower prices, which could adversely affect our competitiveness in those countries. In addition, our products compete with many other recreational, utility, and work products for the discretionary spending of our customers.
Our operations and sales are also subject to risks related to political and economic instability, trade and political tension between the United States and countries in which we have operations or do business, increased enforcement and scrutiny from tax and trade authorities across the globe, acts of war, increased costs of customizing products for foreign countries, labor market conditions, the imposition of tariffs and other trade barriers or costs, the impact of government laws and regulations, the effects of income and withholding taxes, governmental expropriation and differences in business practices in different markets, and multiple, changing, and often inconsistent enforcement of laws, rules, and regulations, including rules relating to environmental, health, and safety matters.
Our operations and sales are also subject to risks related to political and economic instability, trade and political tension between the United States and countries in which we have operations or do business, increased enforcement and scrutiny from tax and trade authorities across the globe, acts of war, increased costs of customizing products for foreign countries, labor market conditions, the imposition of tariffs and other trade barriers or costs, the impact of government laws and 14 Table of Contents regulations, the effects of income and withholding taxes, governmental expropriation and differences in business practices in different markets, and multiple, changing, and often inconsistent enforcement of laws, rules, and regulations, including rules relating to environmental, health, and safety matters.
Our competitors’ new products may be of a better quality, beat our products to market, and be more attractive in terms of features and price than our products. Our continued success is dependent on positive perceptions of our Polaris brands which, if impaired, could adversely affect our sales.
Our competitors’ new products may be of a better quality, beat our products to market, and be more attractive in terms of features and price than our products. Our continued success is dependent on positive perceptions of our Polaris brands which, if weakened, could adversely affect our sales.
In addition, the reputation of our vendors and others with whom we choose to do business may affect our reputation. Increased negative public perception of our products or any increased restrictions on the access or the use of our products in certain locations could materially adversely affect our business or results of operations.
In addition, the reputation of our vendors and others with whom we choose to do business may affect our reputation. Increased negative public perception of the social acceptability of our products or any increased restrictions on the access or the use of our products in certain locations could materially adversely affect our business or results of operations.
In addition, we have financial services arrangements with subsidiaries of Wells Fargo Bank, N.A. and a subsidiary of Huntington Bancshares Incorporated that require us to repurchase products financed and repossessed pursuant to the terms of such arrangements and subject to certain limitations.
In addition, we have current and prior financial services arrangements with subsidiaries of Wells Fargo Bank, N.A. and a subsidiary of Huntington Bancshares Incorporated that require us to repurchase products financed and repossessed pursuant to the terms of such arrangements and subject to certain limitations.
As we continue to grow, in part, through Strategic Transactions, our success depends on our ability to anticipate and effectively manage these risks. If acquired businesses do not achieve forecasted results or otherwise fail to meet projections, it could affect our results. 12 Table of Contents In many cases, Strategic Transactions present a number of integration risks.
As we continue to grow, in part, through Strategic Transactions, our success depends on our ability to anticipate and effectively manage these risks. If acquired businesses do not achieve forecasted results or otherwise fail to meet projections, it could affect our results. In many cases, Strategic Transactions present a number of integration risks.
Significant and unanticipated changes in circumstances, such as significant and long-term adverse changes in business climate, negative perception of the Company’s brands and tradenames, unanticipated competition, and/or changes in technology or markets, could require a provision for impairment in a future period that could negatively impact our reported earnings and reduce our consolidated net worth and shareholders’ equity.
Significant and unanticipated changes in circumstances, such as significant and long-term adverse changes in business climate, negative perception of the Company’s brands and tradenames, unanticipated competition, and/or changes in technology or markets, have required and could in the future require a provision for impairment that could negatively impact our reported earnings and reduce our consolidated net worth and shareholders’ equity.
Investments to increase our global presence, including adding employees and dealers and continuing to invest in business infrastructure and operations, might not produce the returns we expect, which could adversely affect our profitability.
Investments to increase our global presence, including adding employees and dealers and continuing to invest in business infrastructure and operations, may not produce the returns we expect, which could adversely affect our profitability.
Any number of factors, including labor disruptions, catastrophic weather events, the occurrence of a contagious disease or illness, contractual or other disputes, unfavorable economic or industry conditions, port, rail, or truck delivery delays, acts of war, or other performance problems or financial difficulties or solvency problems, could disrupt our suppliers’ operations and lead to uncertainty in our supply chain or cause supply disruptions for us, which could, in turn, disrupt our operations.
Any number of factors, including increased or new trade restrictions, labor disruptions, catastrophic weather events, the occurrence of a contagious disease or illness, contractual or other disputes, unfavorable economic or industry conditions, port, rail, or truck delivery delays, acts of war, or other performance problems or financial difficulties or solvency problems, could disrupt our suppliers’ operations and lead to uncertainty in our supply chain or cause supply disruptions for us, which could, in turn, disrupt our operations.
An unforeseen increase in demand for our products or any disruption at any of these facilities or manufacturing delays could adversely affect our business and operating results. We assemble vehicles at various facilities around the world. Our facilities are typically designed to produce particular models for particular geographic markets.
An unforeseen change in the level of demand for our products or any disruption at any of these facilities or manufacturing delays could adversely affect our business and operating results. We assemble vehicles at various facilities around the world. Our facilities are typically designed to produce particular models for particular geographic markets.
From time to time, we manage our portfolio and grow our business through acquisitions, non-consolidating investments, alliances and new joint ventures and partnerships, which could be risky and could harm our business.
From time to time, we manage our portfolio and grow our business through acquisitions, non-consolidated investments, alliances and new joint ventures and partnerships, which could be risky and could harm our business.
We may incur substantial costs defending our intellectual property rights in the event that others initiate litigation to challenge the validity of our patents or allege that we infringe their patents. Substantial costs may also be incurred should we initiate proceedings to protect our intellectual property rights against misappropriation or infringement by others.
We may incur substantial costs defending our intellectual property rights in the event that others initiate litigation to challenge the validity of our patents 16 Table of Contents or allege that we infringe their patents. Substantial costs may also be incurred should we initiate proceedings to protect our intellectual property rights against misappropriation or infringement by others.
Any disruption in our manufacturing capacity could 13 Table of Contents have an adverse impact on our ability to produce sufficient inventory of our products or may require us to incur additional expenses in order to produce sufficient inventory, and therefore, may adversely affect our net sales and operating results.
Any disruption in our manufacturing capacity could have an adverse impact on our ability to produce sufficient inventory of our products or may require us to incur additional expenses in order to produce sufficient inventory, and therefore, may adversely affect our net sales and operating results.
The first pillar will establish a new taxing right for countries in which a business has a significant economic presence, even though it may not have the degree of physical presence in that country needed to establish a taxing right under existing tax 18 Table of Contents treaties.
The first pillar will establish a new taxing right for countries in which a business has a significant economic presence, even though it may not have the degree of physical presence in that country needed to establish a taxing right under existing tax treaties.
If the outcome of any intellection property-related litigation is unfavorable to us, our business, operating results, and financial condition could be adversely affected.
If the outcome of any intellectual property-related litigation is unfavorable to us, our business, operating results, and financial condition could be adversely affected.
Any material decline in the social acceptability of the Company’s products could impact the Company’s ability to retain existing customers or attract new ones which, in turn, could have a material adverse effect on its business, results of operations or financial condition.
Any 12 Table of Contents material decline in the social acceptability of the Company’s products could impact the Company’s ability to retain existing customers or attract new ones which, in turn, could have a material adverse effect on its business, results of operations or financial condition.
Unfavorable weather conditions may reduce demand and negatively impact sales of certain of the Company’s products. Unfavorable weather, including conditions caused in part by climate change, in any particular geographic region may have an adverse effect on sales of the Company’s products in that region.
Unfavorable weather conditions or natural disasters may reduce demand and negatively impact sales of certain of the Company’s products. Unfavorable weather, including conditions caused in part by climate change, or natural disasters in any particular geographic region may have an adverse effect on sales of the Company’s products in that region.
Our ability to make payments on and to refinance our indebtedness depends on our ability to generate cash in the future. General Risks Additional tax expense or tax exposure could impact our financial performance. We are subject to income taxes and other business taxes in various jurisdictions in which we operate.
Our ability to make payments on and to refinance our indebtedness depends on our ability to generate cash in the future. 18 Table of Contents General Risks Additional tax expense or tax exposure could impact our financial performance. We are subject to income taxes and other business taxes in various jurisdictions in which we operate.
Weakening of, and fluctuations in, economic conditions affecting disposable consumer income or our customers’ budgets, such as employment levels, inflation, business conditions, the level of governmental financial assistance, changes in housing market conditions, capital markets, tax rates, savings rates, interest rates, fuel and energy costs, the economic impacts of natural disasters or other severe weather conditions, acts of war, and acts of terrorism, the availability of consumer credit could reduce overall spending or reduce spending on our products.
Weakening of, and fluctuations in, general economic conditions affecting the disposable income and budgets of our customers, such as employment levels, inflation, business conditions, the level of governmental financial assistance, the impacts of changing government regulation, changes in housing market conditions, capital markets, tax rates, savings rates, interest rates, fuel and energy costs, the economic impacts of natural disasters or other severe weather conditions, acts of war, acts of terrorism, and the availability of consumer credit, could reduce overall spending or reduce spending on our products.
As technological advances develop and our reliance on technology increases, our business is subject to risk from cybersecurity threats and incidents, including attempts to gain unauthorized access to our systems and networks, or those of our third-party vendors and service providers, the 16 Table of Contents disruption of operations, the corruption of data or theft of confidential or personal information, and other cybersecurity incidents.
As technological advances develop and our reliance on technology increases, our business is subject to risks from cybersecurity threats and incidents, including attempts to gain unauthorized access to our systems and networks, or those of our third-party vendors and service providers, the disruption of operations, the corruption of data or theft of confidential or personal information, and other cybersecurity incidents.
If retail financing is not available to customers on satisfactory terms, consumer demand could be materially impacted and our sales and profitability could be adversely affected. We have a significant amount of debt outstanding and must comply with restrictive covenants in our debt agreements.
If retail financing is not available to customers on satisfactory terms, consumer demand could be materially impacted and our sales and profitability could be adversely affected. We have outstanding debt and must comply with restrictive covenants in our debt agreements.
Our results of operations may be sensitive to changes in overall economic conditions, primarily in North America and Europe, that impact spending on our products, including discretionary spending.
Our results of operations have been, and may continue to be sensitive to changes in overall economic conditions, primarily in North America and Europe, that impact spending on our products, including discretionary spending.
In addition, with the recent strengthening of the United States dollar, we 17 Table of Contents have experienced a corresponding negative impact on our financial results with respect to our foreign operations.
In addition, with the recent strengthening of the United States dollar, we have experienced a corresponding negative impact on our financial results with respect to our foreign operations.
Negative incidents, such as quality and safety concerns or incidents related to our products or actions or statements of our employees, suppliers or dealers, could lead to tangible adverse effects on our business, including lost sales or employee retention and recruiting difficulties.
Negative incidents, such as those that give rise to quality and safety concerns or incidents related to our products or actions or statements of our employees, suppliers or dealers, could lead to tangible adverse effects on our business, including lost sales or employee retention and recruiting difficulties.
A negative outcome in one or more of these lawsuits could result in an award of damages (for which we are not insured), including punitive damages, or fines, reputational harm, interruption or modification of our business, or other sanctions, as well as legal and punitive damages, or fines, reputational harm, interruption or modification of our business, or other sanctions, as well as legal and other costs, any of which may be significant and may have a negative impact on our business, operating results and cash flows.
A negative outcome in one or more of these lawsuits could result in an award of damages (for which we are not insured or for which our insurance policies are insufficient to fully cover), including punitive damages, or fines, reputational harm, interruption or modification of our business, or other sanctions, as well as legal and punitive damages, or fines, reputational harm, interruption or modification of our business, or other sanctions, as well as legal and other costs, any of which may be significant and may have a negative impact on our business, operating results and cash flows.
These disruptions have had and may continue to have in the future an adverse impact on our prospects and operating results. We manufacture our products at, and distribute our products from, several locations in North America and internationally.
These disruptions have had and may continue to have in the future an adverse impact on our prospects and operating results. 13 Table of Contents We manufacture our products at, and distribute our products from, several locations in North America and internationally.
Weather conditions may also disrupt our manufacturing and distribution facilities and our supply chain, which could impact our ability to manufacture products to fulfill customer demand.
Weather conditions may also disrupt our manufacturing and distribution facilities, our supply chain, or our dealers, which could impact our ability to manufacture or sell products to fulfill customer demand.
Our operations are dependent upon attracting and retaining senior executives and skilled employees. Our future success depends on our continuing ability to identify, hire, develop, motivate, retain and promote skilled personnel for all areas of our organization and to retain or provide for adequate succession planning for our senior executives. Our success depends on attracting and retaining qualified personnel.
Our future success depends on our continuing ability to identify, hire, develop, motivate, retain and promote skilled personnel for all areas of our organization and to retain or provide for adequate succession planning for our senior executives. Our success depends on attracting and retaining qualified personnel.
From time to time, we drive growth in our businesses and accelerate opportunities to expand our global presence and customer base through targeted acquisitions, non-consolidating investments, alliances, and new joint ventures and partnerships (each a “Strategic Transaction”) that we believe add value to our existing brands and product portfolio.
From time to time, we drive growth in our businesses and accelerate opportunities to expand our global presence and customer base through targeted acquisitions, non-consolidated investments, alliances, and new joint ventures and partnerships (each a “Strategic Transaction”). We believe such Strategic Transactions add value to our existing brands and product portfolio.
These laws and regulations include, for example, the European Union’s General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act (“CCPA”), and other similar United States state privacy laws.
These laws and regulations include, for example, the European Union’s General Data Protection Regulation (“GDPR”) and the California Consumer Privacy Act (“CCPA”), and other similar United 17 Table of Contents States state privacy laws.
We have experienced cyber-attacks, as have third-parties who manage our information technology systems and other third-party suppliers and service providers, but to our knowledge, we have not experienced any material disruptions or breaches of our information technology systems, connected products, data or operations as a result of such cyber-attacks. We could, however, experience material disruptions or breaches in the future.
We have experienced cyber-attacks, as have third parties who manage our information technology systems and other third-party suppliers and service providers, but to our knowledge, we have not experienced any material disruptions or breaches of our information technology systems, connected products, data or operations as a result of such cyber-attacks.
The markets in which we operate are highly competitive. Competition in such markets is based upon several factors, including price, quality, reliability, styling, product features and warranties. At the dealer level, competition is based on additional factors, including product availability, sales and marketing support programs (such as financing and cooperative advertising), and dealer and customer perception.
Competition in such markets is based upon several factors, including price, quality, reliability, styling, product features and warranties. At the dealer level, competition is based on additional factors, including product availability, sales and marketing support programs (such as financing and cooperative advertising), and dealer and customer perception.
Adverse changes in these factors could lead to a decreased level of demand for our products, which could negatively impact our business, results of operations, financial condition and cash flows.
Adverse changes in these factors has previously, and may in the future, lead to a decreased level of demand for our products, which could negatively impact our business, results of operations, financial condition and cash flows.
Further, if we fail to establish and maintain an appropriate level of dealers and distributors for each of our products, we may not obtain adequate market coverage for the desired level of retail sales of our products.
Further, although we work to actively manage dealer inventory levels, if we fail to establish and maintain an appropriate level of dealers and distributors for each of our products, we may not obtain adequate market coverage for the desired level of retail sales of our products.
In the past, we have experienced significant increases in the cost of these commodities and materials due generally to an inflationary environment driven by high demand and supply chain disruptions.
In the past, we have experienced significant increases in the cost of these commodities and materials due generally to an inflationary environment driven by high demand and supply chain disruptions. All of these could adversely affect our results of operations and financial condition.
Additionally, fluctuating policies and the implementation of trade regulations and trade agreements could further disrupt our supply chain or increase the cost of raw materials and commodities necessary to manufacture our products. The impact from tariffs or other trade regulations could require us to shift our manufacturing footprint.
Additionally, fluctuating policies and the implementation of trade regulations and trade agreements could further disrupt our supply chain or increase the cost of raw materials and commodities necessary to manufacture our products.
Any of these laws, rules, or regulations may cause us to incur significant expenses to achieve or maintain compliance, require us to modify our products, or modify our approach to our workforce, adversely affecting the price of or demand for some of our products, and ultimately affect the way we conduct our operations.
Any of these laws, rules, or regulations or changes thereto may cause us to incur significant expenses to achieve or maintain compliance, require us to modify our facilities or products, implement changes in our supply chain, limit our expansion capabilities, or modify our approach to our workforce, each of which may ultimately adversely affect the price of or demand for some of our products and the way we conduct our operations.
Retail credit market deterioration and volatility may restrict the ability of our retail customers to finance the purchase of our products and adversely affect our income from financial services. We have arrangements with third parties to make retail financing available to consumers who purchase our products in the United States and Canada.
Retail credit market deterioration and volatility may restrict the ability of our retail customers to finance the purchase of our products. We have arrangements with third parties to make retail financing available to consumers who purchase our products in the United States and Canada and, to a lesser degree, in other international markets.
For example, lack of snowfall during winter may materially adversely affect snowmobile sales; excessive rain before and during spring and summer may materially adversely affect sales of off-road vehicles and boats; a lack of rain in certain areas may limit boat usage and may materially adversely affect sales of boats; and wild fires can limit areas where our customers ride our off-road vehicles.
For example, lack of snowfall during winter has, and may continue to, materially adversely affect snowmobile sales; excessive rain (including as a result of hurricanes or other extreme storm events) before and during spring and summer may materially adversely affect sales of off-road vehicles and boats; a lack of rain in certain areas may limit boat usage and may materially adversely affect sales of boats; and wild fires may damage areas where our customers ride our off-road vehicles.
In addition, some stakeholders may disagree with our goals and initiatives and the focus of stakeholders may change and evolve over time. Stakeholders also may have very different views on where ESG focus should be placed, including differing views of regulators in various jurisdictions in which we operate.
Stakeholders also may have very different views on where our ESG and sustainability focus should be placed, including differing views of regulators in various jurisdictions in which we operate.
Future product recalls could increasingly cause consumers to question the safety or reliability of our products and could materially impact our results of operations and financial condition. 15 Table of Contents Regulatory, Intellectual Property, Cybersecurity and Privacy Risks Our business, properties and products are subject to extensive United States federal and state and international safety, environmental, trade and other government regulation and any failure to comply with these regulations could harm our reputation, expose us to damages and otherwise adversely affect our business.
Regulatory, Intellectual Property, Cybersecurity and Privacy Risks Our business, properties and products are subject to extensive United States federal and state and international safety, environmental, trade and other government regulation and any failure to comply with these regulations could harm our reputation, expose us to damages and otherwise adversely affect our business.
Our sales growth and profitability have been affected, from time to time, from a general reduction in consumer spending or a reduction in consumer spending on powersports, boats and aftermarket products. A general reduction in spending by our customers for commercial equipment or a reduction in government budgets could adversely affect our related sales.
Our sales growth and profitability have been from time to time, and in the future could be, affected by a general reduction in consumer spending or a reduction in consumer spending on powersports, boats and aftermarket products in particular.
The second pillar is designed to ensure large corporations are taxed at a minimum rate of 15% in all countries of operation. The OECD continues to release guidance and countries are implementing legislation to adopt the rules, which are expected to become effective for the first time in 2024.
The second pillar is designed to ensure large corporations are taxed at a minimum rate of 15% in all countries of operation. The OECD continues to release guidance and countries have begun implementing legislation to adopt the rules. The United States has not yet enacted legislation implementing the second pillar.
Product liability claims have not historically resulted in any material adverse effects on our financial statements, however, no assurance can be given that this will not change or that material product liability, class action, or other claims against us will not be made in the future.
Furthermore, certain claims that are not typically covered under commercial excess policies would be excluded from coverage, such as economic loss claims, false marketing claims, and potentially punitive damages. 15 Table of Contents Product liability claims have not historically resulted in any material adverse effects on our financial statements, however, no assurance can be given that this will not change or that material product liability, class action, or other claims against us will not be made in the future.
Expectations relating to environmental, social and governance considerations expose us to potential liabilities, increased costs, reputational harm and other adverse effects on our business. Many governments, regulators, investors, employees, customers and other stakeholders are increasingly focused on environmental, social and governance (“ESG”) matters relating to businesses, including climate change and greenhouse gas emissions, human capital and diversity, equity and inclusion.
Many governments, regulators, investors, employees, customers and other stakeholders are increasingly focused on environmental, social and governance (“ESG”) and sustainability matters relating to businesses, including climate change and greenhouse gas emissions, data privacy, artificial intelligence, human capital and workplace fairness.
These weather conditions could pose physical risks to our facilities and critical infrastructure in the U.S. and internationally, disrupt the operation of our supply chain and third-party vendors, and may impact operational results. 14 Table of Contents There can be no assurance that weather conditions or natural disasters will not have a material effect on our sales, production capability or component supply continuity for any of our products.
These weather conditions could pose physical risks to our facilities and critical infrastructure in the U.S. and internationally, disrupt the operation of our supply chain and third-party vendors, and may impact operational results.
Such restructuring actions could negatively impact our operational costs, work force and/or our growth initiatives. All of these could adversely affect our results of operations and financial condition. Market and Competitive Risks We face intense competition in all product lines. Failure to compete effectively against competitors could negatively impact our business and operating results.
There is no assurance that suitable replacements for PFAS-containing parts and materials will be available at similar costs, or at all. 11 Table of Contents Market and Competitive Risks We face intense competition in all product lines. Failure to compete effectively against competitors could negatively impact our business and operating results. The markets in which we operate are highly competitive.
Removed
Furthermore, certain claims that are not typically covered under commercial excess policies would be excluded from coverage, such as economic loss claims, false marketing claims, and in some historical policies, punitive damages.
Added
A general reduction in spending by our customers for commercial equipment or a reduction in government budgets or actual spending could adversely affect our related sales.
Removed
In addition, changes to regulations may require us to incur expenses or modify product offerings in order to maintain compliance with the actions of regulators and could decrease the demand for our products.
Added
The impact from tariffs or other trade regulations or restrictions, particularly in light of the proposed policies of the new presidential administration (which include broad-based tariffs on imports from many countries) and potential retaliatory actions by other countries in response thereto, could require us to shift our manufacturing footprint, could have a negative impact on our ability to sell our products internationally and may in turn negatively impact our operational costs, work force and/or our growth initiatives.
Removed
The United States has not yet enacted legislation implementing the second pillar.
Added
Widespread tariffs may increase the cost of, and reduce the demand for, our products, which may require us to increase our prices or result in a negative impact on our profit margins. It is impossible to predict with any certainty the effects that any new tariffs may ultimately have on our industry or our financial condition.
Added
Furthermore, increased restrictions imposed on a class of chemicals know as per-and polyfluoroalkyl substances (“PFAS”), which are widely used in a large number of products, including parts and materials that are incorporated into our products, may negatively impact our supply chain due to the potentially decreased availability, or non-availability, of PFAS-containing products, which would adversely impact our business, operations, revenue, costs, and competitive position.
Added
If we are unable to continue to enhance existing products and develop and market new or enhanced products that respond to customer needs and preferences, we may experience a decrease in demand for our products and our business and operating results could be negatively impacted.
Added
There can be no assurance that weather conditions or natural disasters will not have a material effect on our sales, production capability or component supply continuity for any of our products. Our operations are dependent upon attracting and retaining senior executives and skilled employees.
Added
Future product recalls could increasingly cause consumers to question the safety or reliability of our products and could materially impact our results of operations and financial condition.
Added
We could, however, experience material disruptions or breaches in the future.
Added
Expectations relating to environmental, social and governance considerations expose us to potential liabilities, increased costs, reputational harm and other adverse effects on our business.
Added
In addition, some stakeholders may disagree with our goals and initiatives and the focus of stakeholders may change and evolve over time.
Added
We may also amend, abandon or replace our goals and initiatives due to a change in strategy, reduced relevance of such goals and initiatives or changing market conditions, and we may take certain actions that stakeholders or regulators view as contrary to such goals and initiatives.
Added
Furthermore, in recent years, “anti-ESG” sentiment has gained 19 Table of Contents momentum across the United States, with several states and the federal government having proposed or enacted anti-ESG policies, legislation or initiatives or issued related legal opinions.
Added
The Trump Administration also recently issued an executive order opposing diversity, equity and inclusion (“DEI”) initiatives in the private sector, which may draw additional attention to companies who provide products and services to the U.S. government.
Added
Such anti-ESG and anti-DEI-related policies, legislation, initiatives, litigation, legal opinions and scrutiny could result in us facing additional compliance obligations, becoming the subject of investigations, enforcement actions or litigation, or sustaining reputational harm. Item 1B. Unresolved Staff Comments Not Applicable.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeItem 1C. Cybersecurity As a key component of Polaris’ Enterprise Risk Management process, Polaris’ cybersecurity risk management program is designed to align with industry-standard cybersecurity frameworks and includes processes related to each of the following functions: identification, protection, detection, response, and recovery.
Biggest changeItem 1C. Cybersecurity As a key component of Polaris’ Enterprise Risk Management process, Polaris’ cybersecurity risk management program is designed to align with industry-standard cybersecurity frameworks and includes processes related to each of the following functions for assessing, identifying, and managing risks from cybersecurity threats: identification, protection, detection, response, and recovery.
In 2023, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced an undetected cybersecurity incident.
In 2024, we did not identify any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of operations, or financial condition. However, despite our efforts, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced an undetected cybersecurity incident.
Our cybersecurity risk management program also includes risk-based processes related to overseeing and identifying cybersecurity risks associated with the use of third-party providers, including processes related to: conducting cybersecurity assessments of third-party service providers, including cybersecurity obligations in contract with third-party service providers; and receiving and responding to notification of cybersecurity incidents of third-party service providers.
Our cybersecurity risk management program also includes risk-based processes related to overseeing and identifying cybersecurity risks associated with the use of third-party providers, including processes related to: conducting cybersecurity assessments of third-party service providers, including cybersecurity obligations in contracts with third-party service providers; and receiving and responding to notification of cybersecurity incidents of third-party service providers.
The Senior Vice President and Chief Digital and Information Officer received reports from our cybersecurity team on the prevention, detection, mitigation, and remediation of cybersecurity incidents.
The Senior Vice President and Chief Digital and Information Officer receives reports from our cybersecurity team on the prevention, detection, mitigation, and remediation of cybersecurity incidents.
Our cybersecurity team engages third-party security experts to assist with our processes for assessing, identifying, and managing risks from cybersecurity threat, including, for example, assessment of the maturity of our 19 Table of Contents cybersecurity risk management program, penetration testing, employee awareness testing, phish testing, and incident monitoring and response, including conducting tabletop exercises.
Our cybersecurity team engages third-party security experts to assist with our processes for assessing, identifying, and managing risks from cybersecurity threats, including, for example, assessment of the maturity of our cybersecurity risk management program, penetration testing, employee awareness testing, phish testing, and incident monitoring and response, including conducting tabletop exercises.
For more information about these risks, please see “Risk Factors - Regulatory, Intellectual Property, Cybersecurity and Privacy Risks” in this annual report on Form 10-K. 20 Table of Contents
For more information about these risks, please see “Risk Factors - Regulatory, Intellectual Property, Cybersecurity and Privacy Risks” in this Annual Report. 20 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperties The following sets forth the Company’s material properties as of December 31, 2023: Location Facility Type/Use Primary Segment* Owned or Leased Square Footage Medina, Minnesota Headquarters Corp Owned 130,000 Roseau, Minnesota Wholegoods manufacturing and R&D Off Owned 818,000 Huntsville, Alabama Wholegoods manufacturing Off / On Primarily owned 1,400,000 Monterrey, Mexico Wholegoods manufacturing Off Primarily owned 2,700,000 Elkhart, Indiana Wholegoods manufacturing M Primarily owned 1,420,000 Opole, Poland Wholegoods manufacturing Off / On Leased 365,000 Spirit Lake, Iowa Wholegoods manufacturing On Owned 448,000 Chanas, France Wholegoods manufacturing On Owned 196,000 Shanghai, China Wholegoods manufacturing Off Leased 215,000 Bourran, France Wholegoods manufacturing and R&D On Leased 105,000 Aix-les-Bains, France Wholegoods manufacturing and R&D On Owned 98,000 Osceola, Wisconsin Component parts & engine manufacturing Off / On Owned 293,000 Monticello, Minnesota Component parts manufacturing Off / On Owned 109,000 Wyoming, Minnesota Research and development facility Off / On Owned 272,000 Fernley, Nevada Distribution center Off / On Owned 475,000 Wilmington, Ohio Distribution center Off / On Owned 658,000 Vermillion, South Dakota Distribution center Off / On Owned 610,000 Rigby, Idaho Distribution center and office facility Off / On Owned 108,000 Plymouth, Minnesota Office facility Corp Primarily owned 170,000 *Legend: Corp - Corporate (all segments), Off - Off Road, On - On Road, M - Marine Including the material properties listed above and those properties not listed, we have over seven million square feet of global manufacturing and research and development space.
Biggest changeProperties The following sets forth the Company’s material properties as of December 31, 2024: Location Facility Type/Use Primary Segment* Owned or Leased Square Footage Medina, Minnesota Headquarters Corp Owned 130,000 Roseau, Minnesota Wholegoods manufacturing and R&D Off Owned 818,000 Huntsville, Alabama Wholegoods manufacturing Off / On Primarily owned 1,400,000 Monterrey, Mexico Wholegoods manufacturing Off Primarily leased 3,200,000 Elkhart, Indiana Wholegoods manufacturing M Primarily owned 1,420,000 Opole, Poland Wholegoods manufacturing Off / On Leased 365,000 Spirit Lake, Iowa Wholegoods manufacturing On Owned 448,000 Chanas, France Wholegoods manufacturing On Owned 196,000 Shanghai, China Wholegoods manufacturing Off Leased 215,000 Bourran, France Wholegoods manufacturing and R&D On Leased 105,000 Aix-les-Bains, France Wholegoods manufacturing and R&D On Owned 98,000 Andancette, France Wholegoods manufacturing and R&D On Owned 190,000 Vinh Phuc Province, Vietnam Wholegoods manufacturing and R&D On Primarily owned 235,000 Osceola, Wisconsin Component parts & engine manufacturing Off / On Owned 293,000 Monticello, Minnesota Component parts manufacturing Off / On Owned 109,000 Wyoming, Minnesota Research and development facility Off / On Owned 272,000 Fernley, Nevada Distribution center Off / On Owned 475,000 Wilmington, Ohio Distribution center Off / On Primarily Owned 658,000 Vermillion, South Dakota Distribution center Off / On Owned 610,000 Rigby, Idaho Distribution center and office facility Off / On Owned 108,000 Plymouth, Minnesota Office facility Corp Primarily owned 170,000 *Legend: Corp - Corporate (all segments), Off - Off Road, On - On Road, M - Marine Including the material properties listed above and those properties not listed, we have approximately eight million square feet of global manufacturing and research and development space.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

7 edited+1 added−8 removed2 unchanged
Biggest changeIn May 2023, the remaining plaintiff in the Berlanga case filed a motion for class certification. We have filed an opposition to the plaintiff’s motion for class certification and have filed a motion to exclude the opinions of certain of plaintiff’s expert witnesses.
Biggest changeSince then, the Hellman plaintiff has been dismissed and, in May 2023, the remaining plaintiff in the Berlanga case filed a motion for class certification, which we opposed. On July 16, 2024, the federal district court entered an order granting in part and denying in part plaintiff’s motion for class certification.
In June 2023, the Albright court granted the parties’ stipulation to stay that case pending a decision on class certification in the Guzman case. On September 27, 2023, the district court in Guzman entered an order granting in part and denying in part plaintiff’s motion for class certification.
In June 2023, the Albright court granted the parties’ stipulation to stay that case pending a decision on class certification in federal court in the Guzman case. On September 27, 2023, the district court in Guzman entered an order granting in part and denying in part plaintiff’s motion for class certification.
The first case brought related to this matter— Guzman/Albright —was first reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The district court granted summary judgment against both plaintiffs’ claims, which the plaintiffs appealed.
The first case brought in federal court in California related to this matter— Guzman/Albright —was first reported in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020. The district court granted summary judgment against both plaintiffs’ claims, which the plaintiffs appealed.
With respect to each of these putative class action lawsuits, we are unable to provide any reasonable evaluation of the likelihood that a loss will be incurred or any reasonable estimate of the range of possible loss.
With respect to each of the aforementioned putative class action lawsuits, we are unable to provide any reasonable evaluation of the likelihood that a loss will be incurred or any reasonable estimate of the range of possible loss.
As of the date hereof, we are party to certain putative class actions brought by the same plaintiff’s counsel and largely repeating the same allegations regarding various state consumer protection laws focused on rollover protection structures’ certifications for various Polaris off-road vehicles sold in California.
As of the date hereof, we are party to certain putative class actions brought by the same plaintiff’s counsel and largely repeating the same allegations regarding various state consumer protection laws focused on rollover protection 21 Table of Contents structures’ certifications for various Polaris off-road vehicles sold in California.
The Ninth Circuit issued two rulings in September 2022 that reversed the district court’s summary judgment 21 Table of Contents rulings and remanded the case to the district court with instructions to dismiss one plaintiff’s claims without prejudice. The plaintiff whose claims were dismissed without prejudice refiled a putative class action in California State Court under the name Albright .
The Ninth Circuit issued two rulings in September 2022 that reversed the district court’s summary judgment rulings and remanded the case to the district court with instructions to dismiss one plaintiff’s claims without prejudice. The plaintiff whose claims were dismissed without prejudice refiled the putative class action in California State Court under the name Albright .
On December 14, 2023, the Ninth Circuit denied Polaris’s petition. On December 20, 2023, the court in Albright entered an order setting a hearing for June 27, 2024 to review the stay of proceedings in that case.
On December 14, 2023, the Ninth Circuit denied Polaris’s petition. On December 18, 2024, the state court in Albright entered an order setting a hearing for June 20, 2025 to review the stay of proceedings in that case. Plaintiff’s counsel’s related case— Hellman/Berlanga —was first reported in the Company’s quarterly report for the period ended June 30, 2021.
Removed
On January 30, 2024, the Guzman court entered an amended scheduling order in that case setting dates for further expert discovery, the filing of dispositive motions and other pre-trial motions, and a trial date of December 3, 2024. The second case— Hellman/Berlanga —was first reported in the Company’s quarterly report for the period ended June 30, 2021.
Added
The federal district court certified a California class for plaintiff’s claim seeking money damages but denied class certification on plaintiff’s claim seeking injunctive relief. On July 17, 2024, the federal district court ordered that the Guzman case and the Berlanga case be consolidated for all purposes. Trial is currently set to begin on May 5, 2025.
Removed
Plaintiffs’ counsel, in both the Albright and Hellman/Berlanga cases, filed similar putative class actions on behalf of certain plaintiffs dismissed from the Hellman/Berlanga case in Texas ( Lollar ), Nevada ( Mitchell ), and Oregon ( Artoff ), though the Lollar and Mitchell matters have since been dismissed, the parties reached a final settlement agreement of the plaintiff’s individual claims in Artoff , and another plaintiff from the Hellman/Berlanga matter, Michael Hellman, has been dismissed.
Removed
On August 28, 2023, the United States District Court for the Eastern District of California transferred the Berlanga case to the United States District Court for the Central District of California. On September 13, 2023, the district court in the Guzman case consented to the transfer of the Berlanga case.
Removed
That district court has not yet ruled on the Berlanga plaintiff’s motion for class certification or Polaris’s motion to exclude the opinions of plaintiff’s expert witnesses in that case.
Removed
As previously reported in the Company’s quarterly report on Form 10-Q for the period ended September 30, 2021, the district court in In re Polaris dismissed half of the plaintiffs and their claims related to alleged fire hazards in certain Polaris products. Plaintiffs’ counsel voluntarily dismissed the remaining plaintiffs to appeal.
Removed
The Eighth Circuit affirmed dismissal of the claims brought by plaintiffs who had appealed. On April 28, 2022, the In re Polaris plaintiffs’ counsel filed a new, substantially similar putative class action in California State Court, seeking damages for alleged economic loss: James DeBiasio v. Polaris Industries Inc. (County of Los Angeles, Ca.).
Removed
We removed the matter to federal court (C.D. Cal) in June 2022 and have moved to dismiss the plaintiff’s claims; plaintiff filed a motion to remand the case. The district court denied plaintiff’s motion to remand and granted our motion to dismiss, allowing plaintiff to file an amended complaint.
Removed
We moved to dismiss plaintiff’s amended complaint, which the Court denied in March 2023. On February 5, 2024, the DeBiasio court entered an amended scheduling order setting dates for fact and expert discovery, and the filing of class certification, dispositive, and other motions. The court did not set a trial date. The parties are currently engaged in fact discovery.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+0 added−0 removed3 unchanged
Biggest changeAssumes $100 Invested at the close on December 31, 2018 Assumes Dividend Reinvestment Fiscal Year Ended December 31, 2023 2018 2019 2020 2021 2022 2023 Polaris Inc. $ 100.00 $ 136.45 $ 131.26 $ 154.63 $ 145.33 $ 139.86 S&P Midcap 400 Index 100.00 126.20 143.44 178.95 155.58 181.15 S&P Composite 1500 Leisure Products Index 100.00 129.24 148.71 180.32 125.97 131.61 23 Table of Contents Comparison of 5-Year Cumulative Total Return Among Polaris Inc., S&P Midcap 400 Index, and S&P Composite 1500 Leisure Products Index This performance graph shall not be deemed “soliciting material” or “filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Exchange Act.
Biggest changeAssumes $100 Invested at the close on December 31, 2019 Assumes Dividend Reinvestment Fiscal Year Ended December 31, 2024 2019 2020 2021 2022 2023 2024 Polaris Inc. $ 100.00 $ 96.20 $ 113.33 $ 106.51 $ 102.50 $ 64.40 S&P Midcap 400 Index 100.00 113.66 141.80 123.28 143.54 163.54 S&P Composite 1500 Leisure Products Index 100.00 115.06 139.52 97.46 101.83 87.16 23 Table of Contents Comparison of 5-Year Cumulative Total Return Among Polaris Inc., S&P Midcap 400 Index, and S&P Composite 1500 Leisure Products Index This performance graph shall not be deemed “soliciting material” or “filed” with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any of our filings under the Securities Act of 1933, as amended, or the Exchange Act.
The table below sets forth the information with respect to purchases made by or on behalf of Polaris of its own stock during the fourth quarter of the fiscal year ended December 31, 2023.
The table below sets forth the information with respect to purchases made by or on behalf of Polaris of its own stock during the fourth quarter of the fiscal year ended December 31, 2024.
The graph assumes the investment of $100 at the close on December 31, 2018 in common stock of the Company and in each of the indexes, and the reinvestment of all dividends since that date to December 31, 2023. Points on the graph represent the performance as of the last business day of each of the years indicated.
The graph assumes the investment of $100 at the close on December 31, 2019 in common stock of the Company and in each of the indexes, and the reinvestment of all dividends since that date to December 31, 2024. Points on the graph represent the performance as of the last business day of each of the years indicated.
As of December 31, 2023, the Company was authorized to repurchase up to an additional $1,185.1 million of the Company’s common stock. The share repurchase program does not have an expiration date. 24 Table of Contents Item 6. [Reserved]
As of December 31, 2024, the Company was authorized to repurchase up to an additional $1,109.3 million of the Company’s common stock. The share repurchase program does not have an expiration date. 24 Table of Contents Item 6. [Reserved]
On February 9, 2024, there were 1,601 shareholders of record of the Company’s common stock and the last reported sale price for shares of our common stock on the New York Stock Exchange was $91.06 per share.
On February 11, 2025, there were 1,851 shareholders of record of the Company’s common stock and the last reported sale price for shares of our common stock on the New York Stock Exchange was $44.39 per share.
Issuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (1) October 1–31, 2023 5,000 $ 86.60 5,000 $ 1,203,577,355 November 1–30, 2023 105,000 $ 89.41 105,000 $ 1,194,190,453 December 1–31, 2023 100,000 $ 90.89 100,000 $ 1,185,102,460 Total 210,000 $ 90.05 210,000 (1) In October 2023, the Company’s Board of Directors authorized the purchase of up to an additional $1.0 billion of the Company’s outstanding common stock, in addition to the amount still outstanding on its April 2021 share repurchase program.
Issuer Purchases of Equity Securities Period Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares That May Yet Be Purchased Under the Program (1) October 1–31, 2024 — $ — — $ 1,109,330,034 November 1–30, 2024 — $ — — $ 1,109,330,034 December 1–31, 2024 — $ — — $ 1,109,330,034 Total — $ — — (1) In October 2023, the Company’s Board of Directors authorized the purchase of up to an additional $1.0 billion of the Company’s outstanding common stock, in addition to the amount still outstanding on its April 2021 share repurchase program.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

68 edited+20 added−10 removed26 unchanged
Biggest changeOn February 1, 2024, we announced that our Board of Directors declared a quarterly cash dividend of $0.66 per share for the first quarter of 2024, a two percent increase from the prior quarterly cash dividend, representing the 29th consecutive year of increased dividends to shareholders. 25 Table of Contents Consolidated Results of Operations The consolidated results of operations were as follows: For the Years Ended December 31, ($ in millions except per share data) 2023 2022 Change 2023 vs. 2022 2021 Change 2022 vs. 2021 Sales $ 8,934.4 $ 8,589.0 4 % $ 7,439.2 15 % Cost of sales $ 6,974.5 $ 6,629.5 5 % $ 5,688.3 17 % Gross profit $ 1,959.9 $ 1,959.5 0 % $ 1,750.9 12 % Percentage of sales 21.9 % 22.8 % -88 basis points 23.5 % -72 basis points Operating expenses: Selling and marketing $ 542.3 $ 480.8 13 % $ 458.2 5 % Research and development 374.3 366.7 2 % 328.7 12 % General and administrative 422.8 355.9 19 % 305.8 16 % Total operating expenses $ 1,339.4 $ 1,203.4 11 % $ 1,092.7 10 % Percentage of sales 15.0 % 14.0 % +98 basis points 14.7% -68 basis points Income from financial services $ 80.4 $ 48.4 66 % $ 53.8 (10) % Operating income $ 700.9 $ 804.5 (13) % $ 712.0 13 % Non-operating expense: Interest expense $ 125.0 $ 71.7 74 % $ 44.2 62 % Other (income) expense, net $ (44.5) $ (28.6) 56 % $ 2.3 NM Loss on sale of businesses $ — $ — — $ 36.8 NM Income from continuing operations before income taxes $ 620.4 $ 761.4 (19) % $ 628.7 21 % Provision for income taxes $ 117.7 $ 158.0 (26) % $ 132.1 20 % Effective income tax rate 19.0 % 20.7 % -178 basis points 21.0 % -26 basis points Net income from continuing operations $ 502.7 $ 603.4 (17) % $ 496.6 22 % Net loss (income) attributable to noncontrolling interest 0.1 (0.5) NM (0.4) 25 % Net income from continuing operations attributable to Polaris Inc. $ 502.8 $ 602.9 (17) % $ 496.2 22 % Percentage of sales 5.6 % 7.0 % -140 basis points 6.7 % +35 basis points Adjusted EBITDA $ 1,020.9 $ 1,075.9 (5) % $ 956.2 13 % Adjusted EBITDA Margin 11.4 % 12.5 % -110 basis points 12.9 % -33 basis points Diluted net income from continuing operations per share attributable to Polaris Inc. shareholders $ 8.71 $ 10.04 (13) % $ 7.92 27 % Weighted average diluted shares outstanding 57.7 60.1 (4) % 62.7 (4) % NM = not meaningful 26 Table of Contents Sales: The year-over-year increase in sales was driven primarily by product mix and increased shipments.
Biggest changeOn January 30, 2025, we announced that our Board of Directors declared a quarterly cash dividend of $0.67 per share for the first quarter of 2025, a two percent increase from the prior quarterly cash dividend, representing the 30th consecutive year of increased dividends to shareholders. 25 Table of Contents Consolidated Results of Operations The consolidated results of operations were as follows: For the Years Ended December 31, ($ in millions except per share data) 2024 2023 Change 2024 vs. 2023 2022 Change 2023 vs. 2022 Sales $ 7,175.4 $ 8,934.4 (20) % $ 8,589.0 4 % Cost of sales $ 5,708.6 $ 6,974.5 (18) % $ 6,629.5 5 % Gross profit $ 1,466.8 $ 1,959.9 (25) % $ 1,959.5 0 % Percentage of sales 20.4 % 21.9 % -149 basis points 22.8 % -88 basis points Operating expenses: Selling and marketing $ 500.4 $ 542.3 (8) % $ 480.8 13 % Research and development 336.9 374.3 (10) % 366.7 2 % General and administrative 436.5 422.8 3 % 355.9 19 % Total operating expenses $ 1,273.8 $ 1,339.4 (5) % $ 1,203.4 11 % Percentage of sales 17.8 % 15.0 % +276 basis points 14.0% +98 basis points Income from financial services $ 97.6 $ 80.4 21 % $ 48.4 66 % Operating income $ 290.6 $ 700.9 (59) % $ 804.5 (13) % Non-operating expense: Interest expense $ 137.0 $ 125.0 10 % $ 71.7 74 % Other expense (income), net $ 12.8 $ (44.5) NM $ (28.6) 56 % Income from continuing operations before income taxes $ 140.8 $ 620.4 (77) % $ 761.4 (19) % Provision for income taxes $ 29.6 $ 117.7 (75) % $ 158.0 (26) % Effective income tax rate 21.0 % 19.0 % +207 basis points 20.7 % -178 basis points Net income from continuing operations $ 111.2 $ 502.7 (78) % $ 603.4 (17) % Net (income) loss attributable to noncontrolling interest (0.4) 0.1 NM (0.5) NM Net income from continuing operations attributable to Polaris Inc. $ 110.8 $ 502.8 (78) % $ 602.9 (17) % Percentage of sales 1.5 % 5.6 % -408 basis points 7.0 % -140 basis points Adjusted EBITDA $ 635.4 $ 1,020.9 (38) % $ 1,075.9 (5) % Adjusted EBITDA Margin 8.9 % 11.4 % -257 basis points 12.5 % -110 basis points Diluted net income from continuing operations per share attributable to Polaris Inc. shareholders $ 1.95 $ 8.71 (78) % $ 10.04 (13) % Weighted average diluted shares outstanding 56.8 57.7 (2) % 60.1 (4) % NM = not meaningful 26 Table of Contents Sales: The year-over-year decrease in sales was due to decreased shipments and lower net pricing driven by higher promotional costs, partially offset by product mix.
With respect to services provided by us, revenue is recognized upon completion of the service or over the term of the service agreement in proportion to the costs expected to be incurred in satisfying the obligations over the term of the service period.
With respect to services provided by us, revenue is recognized upon completion of the service or over the term of the service agreement in proportion to the costs expected to be incurred in satisfying the obligations over the service period.
We estimate expected returns based on historical sales levels, the timing and magnitude of historical sales return levels as a percent of sales, type of product, type of customer, and a projection of this experience into the future. We have agreed to repurchase products repossessed by the finance companies up to certain limits.
We estimate expected returns based on historical sales levels, the timing and magnitude of historical sales return levels as a percent of sales, type of product, type of customer, and a projection of this experience into the future. We have agreed to repurchase products repossessed by finance companies up to certain limits.
Revenues and EBITDA beyond five years are projected to grow at a terminal growth rate consistent with industry expectations. Actual results may significantly differ from those used in our valuations. The forecasted future cash flows are discounted using a discount rate developed for each reporting unit.
Revenues and EBITDA beyond five years are projected to grow at a terminal growth rate consistent with industry expectations. Actual results may differ significantly from those used in our valuations. The forecasted future cash flows are discounted using a discount rate developed for each reporting unit.
It was determined that goodwill was not impaired as each reporting unit’s fair value exceeded its carrying value. We completed a qualitative assessment for the Off Road and On Road reporting units and elected to perform a quantitative goodwill test for the Marine reporting unit.
It was determined that goodwill was not impaired as each reporting unit’s fair value exceeded its carrying value. We completed a qualitative assessment for the Off Road reporting unit and elected to perform a quantitative goodwill test for the On Road and Marine reporting units.
No material losses have been incurred under these agreements during the periods presented. Retail Customer Financing Arrangements: We have agreements with third-party financing companies to provide financing options to end consumers of our products. We have no material contingent liabilities for residual value or credit collection risk under these agreements.
No material losses have been incurred under these agreements during the periods presented. Retail Customer Financing Arrangements: We have agreements with third-party finance companies to provide financing options to end consumers of our products. We have no material contingent liabilities for residual value or credit collection risk under these agreements.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion pertains to the results of operations and financial position of the Company and should be read in conjunction with the Consolidated Financial Statements and the Notes thereto included elsewhere in this report.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion pertains to the results of operations and financial position of the Company and should be read in conjunction with the Consolidated Financial Statements and the Notes thereto included elsewhere in this Annual Report.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 that are not included in this Annual Report can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
There is significant judgment and estimation required in evaluating the possible outcomes and potential losses of product liability matters. We utilize claims experience, historical trends and actuarial analysis, along with an analysis of current claims, to assist in determining the appropriate loss reserve levels.
There is significant judgment and estimation required in evaluating the possible outcomes and potential losses of product liability matters. We utilize actuarial analysis, which considers claims experience and historical trends, along with an analysis of current claims, to assist in determining the appropriate loss reserve levels.
An accounting estimate is considered to be critical if it meets both of the following criteria: (i) the estimate requires assumptions about matters that are highly uncertain at the time the accounting estimate is made, and (ii) different 33 Table of Contents estimates reasonably could have been used, or changes in the estimate that are reasonably likely to occur may have a material impact on our financial condition or results of operations.
An accounting estimate is considered to be critical if it meets both of the following criteria: (i) the estimate requires assumptions about matters that are highly uncertain at the time the accounting estimate is made, and (ii) different estimates reasonably could have been used, or changes in the estimate that are reasonably likely to occur may have a material impact on our financial condition or results of operations.
We self-insure product liability claims before the policy date and up to the purchased 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 estimable.
We self-insure product liability claims before the policy date 34 Table of Contents and up to the purchased 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 estimable.
We use the non-GAAP financial measure of Adjusted EBITDA, which is defined as net income from continuing operations, excluding interest expense, income tax expense, depreciation and amortization, and certain other non-cash, non-recurring, or non-operating items impacting net income from continuing operations from time to time.
We use the non-GAAP financial measure of Adjusted EBITDA, which is defined as net income from continuing operations, excluding interest expense, income tax expense, depreciation and amortization, and certain other non-cash, 30 Table of Contents non-recurring, or non-operating items impacting net income from continuing operations from time to time.
Amounts estimated to be due and payable could differ materially from what will ultimately transpire in the future and have a material adverse effect on our financial condition and results of operations. Product liability. We are subject to product liability claims in the normal course of business. In 2012, we began purchasing excess insurance coverage for product liability claims.
Amounts estimated to be due and payable could differ materially from what will ultimately transpire in the future and have a material adverse effect on our financial condition and results of operations. Product liability. We are subject to product liability claims in the normal course of business. We purchase excess insurance coverage annually for product liability claims.
Inputs used to estimate these fair values include significant unobservable inputs that reflect our assumptions about the inputs that market participants would use and, therefore, the fair value assessments are classified within Level 3 of the fair value hierarchy. In the fourth quarter of 2023, we completed the annual impairment test.
Inputs used to estimate these fair values include significant unobservable inputs that reflect our assumptions about the inputs that market participants would use and, therefore, the fair value assessments are classified within Level 3 of the fair value hierarchy. 35 Table of Contents In the fourth quarter of 2024, we completed the annual impairment test.
Sales promotion and incentive expenses are estimated based on current programs, planned programs, and historical rates for each product line. We record these amounts as a liability in the consolidated balance sheet until they are ultimately paid. As of December 31, 2023 and 2022, accrued sales promotions and incentives were $230.9 million and $127.0 million, respectively.
Sales promotion and incentive expenses are estimated based on current programs, planned programs, and historical rates for each product line. We record these amounts as a liability in the consolidated balance sheets until they are ultimately paid. As of December 31, 2024 and 2023, accrued sales promotions and incentives were $249.0 million and $230.9 million, respectively.
The discount rates are 35 Table of Contents developed using the market observable inputs used in the development of the reporting unit discount rates, as well as our assessment of risks inherent in the future cash flows of each respective brand/trade name. In the fourth quarter of 2023, we completed the annual impairment test.
The discount rates are developed using the market observable inputs used in the development of the reporting unit discount rates, as well as our assessment of risks inherent in the future cash flows of each respective brand/trade name. In the fourth quarter of 2024, we completed the annual impairment test.
As of December 31, 2023 and 2022, the outstanding amount financed worldwide by dealers under these arrangements was approximately $2,629.9 million and $1,893.9 million, respectively. We participate in the cost of dealer financing up to certain limits. Under these arrangements, we have agreed to repurchase products repossessed by these finance companies.
As of December 31, 2024 and 2023, the outstanding amount financed worldwide by dealers under these arrangements was approximately $2,255.5 million and $2,629.9 million, respectively. We participate in the cost of dealer financing up to certain limits. Under these arrangements, we have agreed to repurchase products repossessed by these finance companies.
As of December 31, 2023, the potential aggregate repurchase obligations were approximately $496.3 million. Our financial exposure under these repurchase agreements 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.
As of December 31, 2024, the potential aggregate repurchase obligations were approximately $372.8 million. Our financial exposure under these repurchase agreements is limited to the difference between the amounts unpaid by the dealer with respect to the repossessed product plus costs of repossession and the amount received on the resale of the repossessed product.
Income from financial services: The following table reflects our income from financial services: For the Years Ended December 31, ($ in millions) 2023 2022 Change 2023 vs. 2022 2021 Change 2022 vs. 2021 Income from Polaris Acceptance joint venture $ 41.5 $ 15.1 175 % $ 7.7 96 % Income from retail credit agreements 39.0 34.3 14 % 41.3 (17) % Net income (expense) from other financial services activities (0.1) (1.0) NM 4.8 NM Total income from financial services $ 80.4 $ 48.4 66 % $ 53.8 (10) % Percentage of sales 0.9 % 0.6 % +34 basis points 0.7 % -16 basis points Income from financial services increased 66 percent in 2023, primarily due to higher wholesale financing income from Polaris Acceptance driven by higher dealer inventory levels.
Income from financial services: The following table reflects our income from financial services: For the Years Ended December 31, ($ in millions) 2024 2023 Change 2024 vs. 2023 2022 Change 2023 vs. 2022 Income from Polaris Acceptance joint venture $ 53.8 $ 41.5 30 % $ 15.1 175 % Income from retail credit agreements 42.7 39.0 9 % 34.3 14 % Net income (expense) from other financial services activities 1.1 (0.1) NM (1.0) NM Total income from financial services $ 97.6 $ 80.4 21 % $ 48.4 66 % Percentage of sales 1.4 % 0.9 % +46 basis points 0.6 % +34 basis points Income from financial services increased 21 percent in 2024, primarily due to higher wholesale financing income from Polaris Acceptance driven by higher dealer inventory levels.
As of December 31, 2023, and December 31, 2022, we were in compliance with all debt covenants. Our debt to total capital ratio was 57 percent and 65 percent as of December 31, 2023 and December 31, 2022, respectively.
As of December 31, 2024, and December 31, 2023, we were in compliance with all debt covenants. Our debt to total capital ratio was 62 percent and 57 percent as of December 31, 2024 and December 31, 2023, respectively.
As a component of the Boat Holdings merger agreement, we have committed to make a series of deferred payments to the former owners through July 2030. The original discounted payable was for $76.7 million, of which $49.4 million was outstanding as of December 31, 2023.
As a component of the Boat Holdings merger agreement, we have committed to make a series of deferred payments to the former owners through July 2030. The original discounted payable was for $76.7 million, of which $43.2 million was outstanding as of December 31, 2024.
Interest expense: Interest expense increased for 2023 due to higher interest rates. Other (income) expense, net: Other (income) expense is primarily the result of currency exchange rate movements and the corresponding effects on currency transactions related to our international subsidiaries.
Interest expense: Interest expense increased for 2024 primarily as a result of higher interest rates. Other expense (income), net: Other expense (income) is primarily the result of currency exchange rate movements and the corresponding effects on currency transactions related to our international subsidiaries.
For example, costs associated with our multi-phase supply chain transformation initiative and certain corporate restructuring activities, such as acquisitions and divestitures, are included as non-GAAP adjustments. We use the non-GAAP financial measure of Adjusted EBITDA Margin, which is defined as Adjusted EBITDA divided by net sales.
For example, costs associated with certain corporate restructuring activities, such as acquisitions and divestitures, are included as non-GAAP adjustments. We use the non-GAAP financial measure of Adjusted EBITDA Margin, which is defined as Adjusted EBITDA divided by adjusted net sales.
Investing Activities: The primary sources and uses of cash were for the purchase of property, equipment and tooling for continued capacity and capability at our manufacturing, distribution and product development facilities, capital deployed for acquisitions and proceeds received from the disposal of businesses, and distributions from and contributions to Polaris Acceptance.
Investing Activities: The primary sources and uses of cash were for the purchase of property, equipment and tooling for continued capacity and capability at our manufacturing, distribution, and product development facilities, and distributions from and contributions to Polaris Acceptance.
We are also party to an unsecured credit facility, which includes a $1.0 billion variable interest rate Revolving Loan Facility that matures in June 2026, under which we have unsecured borrowings. As of December 31, 2023, there were borrowings of $228.2 million outstanding under the Revolving Loan Facility.
We are also party to an unsecured credit facility, which includes a $1.4 billion variable interest rate Revolving Loan Facility that matures in December 2029, under which we have unsecured borrowings. As of December 31, 2024, there were borrowings of $282.0 million outstanding under the Revolving Loan Facility.
Financing Arrangements: We are party to an unsecured Master Note Purchase Agreement, as amended and supplemented, under which we have issued senior notes. As of December 31, 2023, outstanding borrowings under the Master Note Purchase Agreement totaled $350.0 million.
Net borrowings totaled $165.8 million in 2024 compared to net repayments of $158.2 million in 2023. Financing Arrangements: We are party to an unsecured Master Note Purchase Agreement, as amended and supplemented, under which we have issued senior notes. As of December 31, 2024, outstanding borrowings under the Master Note Purchase Agreement totaled $350.0 million.
We record these amounts as a liability in the consolidated balance sheet until they are ultimately paid. As of December 31, 2023 and 2022, the accrued warranty liability was $181.1 million and $172.9 million, respectively.
We record these amounts as a liability in the consolidated balance sheets until they are ultimately paid. As of December 31, 2024 and 2023, the accrued warranty liability was $162.8 million and $181.1 million, respectively.
We complete our annual goodwill impairment test as of the first day of the fourth quarter. We may first perform a qualitative assessment to determine whether it is more likely than not that the fair value of each reporting unit is less than its carrying amount.
We may first perform a qualitative assessment to determine whether it is more likely than not that the fair value of each reporting unit is less than its carrying amount.
Identifiable intangible assets that are subject to amortization are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Identifiable intangible assets with indefinite lives are tested for impairment annually or more frequently when events or changes in circumstances indicate that the asset might be impaired.
Identifiable intangible assets with finite lives are amortized and identifiable intangible assets with indefinite lives are not amortized. Identifiable intangible assets that are subject to amortization are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
On July 2, 2018, pursuant to the Agreement and Plan of Merger dated May 29, 2018, we completed the acquisition of Boat Holdings, LLC, a privately held Delaware limited liability company, headquartered in Elkhart, Indiana which manufactures boats (“Boat Holdings”).
The indenture governing the senior notes is subject to customary covenants and make-whole provisions upon early redemption. On July 2, 2018, pursuant to the Agreement and Plan of Merger dated May 29, 2018, we completed the acquisition of Boat Holdings, LLC, a privately held Delaware limited liability company, headquartered in Elkhart, Indiana which manufactures boats (“Boat Holdings”).
Critical Accounting Policies and Critical Accounting Estimates We have adopted various accounting policies to prepare the consolidated financial statements in accordance with U.S. GAAP. Our significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements. Some of those significant accounting policies require us to make difficult, subjective, or complex judgments or estimates.
Our significant accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements. Some of those significant accounting policies require us to make difficult, subjective, or complex judgments or estimates.
Our credit facility also includes a Term Loan Facility, on which $780.0 million was outstanding as of December 31, 2023. We are required to make principal payments under the Term Loan Facility totaling $45 million over the next 12 months. Interest is charged at rates based on adjusted Term SOFR for the credit facility.
Our credit facility also includes a Term Loan Facility, on which $500.0 million was outstanding as of December 31, 2024. We are required to make principal payments under the Term Loan Facility totaling $25.0 million over the next 12 months.
We reported Adjusted EBITDA of $1,020.9 million in 2023 compared to $1,075.9 million in 2022. For information on how we define and calculate Adjusted EBITDA, and a reconciliation from net income from continuing operations to Adjusted EBITDA, see “Non-GAAP Financial Measures”.
For information on how we define and calculate Adjusted EBITDA, and a reconciliation from net income from continuing operations to Adjusted EBITDA, see “Non-GAAP Financial Measures”.
The following table presents a reconciliation of net income from continuing operations, the most comparable GAAP financial measure, to Adjusted EBITDA for each of the periods presented: 30 Table of Contents For the Years Ended December 31, ($ in millions) 2023 2022 2021 Sales $ 8,934.4 $ 8,589.0 $ 7,439.2 Net income from continuing operations 502.7 603.4 496.6 Provision for income taxes 117.7 158.0 132.1 Interest expense 125.0 71.7 44.2 Depreciation 241.2 214.0 193.4 Intangible amortization (1) 17.7 18.8 22.9 Distributions from other affiliates and impairment charges (2) (1.4) (0.7) 7.7 Acquisition-related costs (3) 1.3 — — Restructuring and realignment expenses (4) 8.2 6.2 13.1 Class action litigation expenses (5) 8.5 4.5 9.4 Loss on sale of businesses (6) — — 36.8 Adjusted EBITDA $ 1,020.9 $ 1,075.9 $ 956.2 Adjusted EBITDA Margin 11.4 % 12.5 % 12.9 % (1) Represents amortization expense for acquisition-related intangible assets (2) Represents impairment charges and subsequent distributions related to a strategic investment held by the Company (3) Represents adjustments for integration and acquisition-related expenses (4) Represents adjustments for corporate restructuring, network realignment costs, and supply chain transformation costs (5) Represents adjustments for certain class action litigation-related expenses (6) Represents the loss associated with the Company’s divestiture of the Global Electric Motorcar (GEM) and Taylor-Dunn businesses Liquidity and Capital Resources Our primary sources of liquidity have been cash provided by operating and financing activities, including funds as needed from our credit facility and issuances of long-term debt.
The following table presents a reconciliation of net income from continuing operations, the most comparable GAAP financial measure, to Adjusted EBITDA for each of the periods presented: For the Years Ended December 31, ($ in millions) 2024 2023 2022 Sales $ 7,175.4 $ 8,934.4 $ 8,589.0 FTR wind down (1) (0.7) — — Adjusted sales $ 7,174.7 $ 8,934.4 $ 8,589.0 Net income from continuing operations $ 111.2 $ 502.7 $ 603.4 Provision for income taxes 29.6 117.7 158.0 Interest expense 137.0 125.0 71.7 Depreciation 264.4 241.2 214.0 Intangible amortization (2) 21.9 17.7 18.8 Distributions from other affiliates (3) — (1.4) (0.7) Acquisition-related costs (4) 1.4 1.3 — Restructuring (5) 23.4 8.2 6.2 FTR wind down (1) 10.0 — — Class action litigation expenses (6) 7.0 8.5 4.5 Intangible asset and investment impairment (7) 29.5 — — Adjusted EBITDA $ 635.4 $ 1,020.9 $ 1,075.9 Adjusted EBITDA Margin 8.9 % 11.4 % 12.5 % (1) Represents adjustments for the wind down of the FTR product line within the Company’s On Road segment (2) Represents amortization expense for intangible assets acquired through business combinations and asset acquisitions (3) Represents distributions received related to an impaired investment held by the Company (4) Represents adjustments for integration and acquisition-related expenses (5) Represents adjustments for corporate restructuring (6) Represents adjustments for certain class action litigation-related expenses (7) Represents impairment charges related to other intangible assets associated with the Company’s Off Road segment and an impairment charge related to an investment held by the Company 31 Table of Contents Liquidity and Capital Resources Our primary sources of liquidity have been cash provided by operating and financing activities, including funds as needed from our credit facility and issuances of long-term debt.
The components of the consolidated sales change were as follows: Percent change in total Company sales compared to the prior year 2023 2022 Volume 2 % 1 % Product mix and price 2 16 Currency — (2) 4 % 15 % The year-over-year volume increase was driven by increased ORV and snowmobile shipments.
The components of the consolidated sales change were as follows: Percent change in total Company sales compared to the prior year 2024 2023 Volume (21) % 2 % Product mix and price 1 2 Currency — — (20) % 4 % The year-over-year volume decrease was the result of decreased shipments in all segments.
As of December 31, 2023 and 2022, we had accruals of $136.7 million and $107.5 million, respectively, for the probable payment of pending claims related to product liability litigation associated with our products.
As of December 31, 2024 and 2023, we had accruals of $385.3 million and $136.7 million, respectively, for the probable payment of pending claims related to product liability litigation associated with our products. Amounts due from insurance carriers, to the extent applicable, reduce our financial exposure to product liability claims.
This section of this Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
This section of this Annual Report generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Our financial exposure is limited to the difference between the amount paid to the finance companies and the amount received on the resale of the repossessed product. Sales promotions and incentives.
Our financial exposure is limited to the difference between the amount unpaid by the dealer with respect to repurchased product plus costs of repossession and the amount received on the resale of the repossessed product. Sales promotions and incentives.
It was determined that our indefinite-lived intangible assets were not impaired. New Accounting Pronouncements See Item 8 of Part II, “Financial Statements and Supplementary Data—Note 1—Organization and Significant Accounting Policies —New accounting pronouncements .”
New Accounting Pronouncements See Item 8 of Part II, “Financial Statements and Supplementary Data—Note 1—Organization and Significant Accounting Policies —New accounting pronouncements .”
Cost of sales: The following table reflects our cost of sales in dollars and as a percentage of sales: For the Years Ended December 31, ($ in millions) 2023 Percent of Total Cost of Sales 2022 Percent of Total Cost of Sales Change 2023 vs. 2022 2021 Percent of Total Cost of Sales Change 2022 vs. 2021 Purchased materials and services $ 5,802.9 83 % $ 5,606.4 84 % 4 % $ 4,826.8 85 % 16 % Labor and benefits 756.7 11 % 656.0 10 % 15 % 568.5 10 % 15 % Depreciation and amortization 205.8 3 % 183.6 3 % 12 % 162.6 3 % 13 % Warranty costs 209.1 3 % 183.5 3 % 14 % 130.4 2 % 41 % Total cost of sales $ 6,974.5 100 % $ 6,629.5 100 % 5 % $ 5,688.3 100 % 17 % Percentage of sales 78.1 % 77.2 % +88 basis points 76.5 % +72 basis points The year-over-year increase in cost of sales was primarily due to higher labor, warranty, and depreciation and amortization expenses.
Cost of sales: The following table reflects our cost of sales in dollars and as a percentage of sales: For the Years Ended December 31, ($ in millions) 2024 Percent of Total Cost of Sales 2023 Percent of Total Cost of Sales Change 2024 vs. 2023 2022 Percent of Total Cost of Sales Change 2023 vs. 2022 Purchased materials and services $ 4,693.6 82 % $ 5,802.9 83 % (19) % $ 5,606.4 84 % 4 % Labor and benefits 628.8 11 % 756.7 11 % (17) % 656.0 10 % 15 % Depreciation and amortization 220.8 4 % 205.8 3 % 7 % 183.6 3 % 12 % Warranty costs 165.4 3 % 209.1 3 % (21) % 183.5 3 % 14 % Total cost of sales $ 5,708.6 100 % $ 6,974.5 100 % (18) % $ 6,629.5 100 % 5 % Percentage of sales 79.6 % 78.1 % +149 basis points 77.2 % +88 basis points The year-over-year decrease in cost of sales was primarily as a result of reduced sales volumes driving lower purchased materials and decreased labor costs. 27 Table of Contents Gross profit: Gross profit for 2024, as a percentage of sales, decreased primarily due to lower net pricing driven by higher promotional costs, product mix, and decreased leverage of fixed costs as a result of reduced sales volumes, partially offset by favorable operational costs.
Operating expenses: Operating expenses for 2023, in absolute dollars and as a percentage of sales, increased compared to 2022, primarily due to higher general and administrative and selling and marketing expenses.
Operating expenses: Operating expenses for 2024, in absolute dollars, decreased due to reduced selling and marketing and research and development expenses, partially offset by increased general and administrative expenses. Operating expenses for 2024, as a percentage of sales, increased compared to 2023, primarily due to decreased leverage of fixed costs as a result of reduced sales volumes.
Sales to customers outside of North America increased one percent in 2023 driven by increased snowmobile shipments. The average per unit sales price for the Off Road segment increased approximately two percent, driven by higher pricing.
The average per unit sales price for the Off Road segment decreased approximately one percent, primarily due to lower net pricing driven by higher promotional costs, partially offset by product mix. Sales to customers outside of North America decreased 11 percent in 2024 due to lower ORV and snowmobile shipments.
Sales by geographic region were as follows: For the Years Ended December 31, ($ in millions) 2023 Percent of Total Sales 2022 Percent of Total Sales Percent Change 2023 vs. 2022 2021 Percent of Total Sales Percent Change 2022 vs. 2021 United States $ 7,122.2 80 % $ 6,809.2 79 % 5 % $ 5,742.3 77 % 19 % Canada 584.0 6 % 606.7 7 % (4) % 573.7 8 % 6 % Other countries 1,228.2 14 % 1,173.1 14 % 5 % 1,123.2 15 % 4 % Total sales $ 8,934.4 100 % $ 8,589.0 100 % 4 % $ 7,439.2 100 % 15 % Sales in the United States for 2023 increased five percent during the year, primarily driven by product mix and increased shipments, partially offset by higher finance interest.
Sales by geographic region were as follows: For the Years Ended December 31, ($ in millions) 2024 Percent of Total Sales 2023 Percent of Total Sales Percent Change 2024 vs. 2023 2022 Percent of Total Sales Percent Change 2023 vs. 2022 United States $ 5,629.0 79 % $ 7,122.2 80 % (21) % $ 6,809.2 79 % 5 % Canada 446.2 6 % 584.0 6 % (24) % 606.7 7 % (4) % Other countries 1,100.2 15 % 1,228.2 14 % (10) % 1,173.1 14 % 5 % Total sales $ 7,175.4 100 % $ 8,934.4 100 % (20) % $ 8,589.0 100 % 4 % Sales in the United States decreased primarily as a result of lower shipments in all segments.
Businesses that are presented as discontinued operations are excluded from the tables below. 28 Table of Contents Our sales and gross profit by reporting segment, which includes the respective PG&A, were as follows: For the Years Ended December 31, ($ in millions) 2023 Percent of Sales 2022 Percent of Sales Percent Change 2023 vs. 2022 2021 Percent of Sales Percent Change 2022 vs. 2021 Off Road $ 6,984.4 78 % $ 6,436.2 75 % 9 % $ 5,574.6 75 % 15 % On Road 1,184.6 13 % 1,163.4 14 % 2 % 1,031.8 14 % 13 % Marine 765.4 9 % 989.4 11 % (23) % 760.2 10 % 30 % Corporate — — % — — % NM 72.6 1 % NM Total sales $ 8,934.4 100 % $ 8,589.0 100 % 4 % $ 7,439.2 100 % 15 % For the Years Ended December 31, ($ in millions) 2023 Percent of Sales 2022 Percent of Sales Percent Change 2023 vs. 2022 2021 Percent of Sales Percent Change 2022 vs. 2021 Off Road $ 1,531.6 21.9 % $ 1,523.4 23.7 % 1 % $ 1,329.8 23.9 % 15 % On Road 240.4 20.3 % 206.3 17.7 % 17 % 160.7 15.6 % 28 % Marine 169.0 22.1 % 222.5 22.5 % (24) % 170.6 22.4 % 30 % Corporate 18.9 7.3 NM 89.8 NM Total gross profit $ 1,959.9 21.9 % $ 1,959.5 22.8 % 0 % $ 1,750.9 23.5 % 12 % NM = not meaningful Off Road: Off Road sales, inclusive of PG&A sales, increased nine percent in 2023 driven by increased shipments and product mix, partially offset by higher finance interest.
Our sales and gross profit by reporting segment, which includes the respective PG&A, were as follows: For the Years Ended December 31, ($ in millions) 2024 Percent of Sales 2023 Percent of Sales Percent Change 2024 vs. 2023 2022 Percent of Sales Percent Change 2023 vs. 2022 Off Road $ 5,706.7 79 % $ 6,984.4 78 % (18) % $ 6,436.2 75 % 9 % On Road 987.8 14 % 1,184.6 13 % (17) % 1,163.4 14 % 2 % Marine 480.9 7 % 765.4 9 % (37) % 989.4 11 % (23) % Total sales $ 7,175.4 100 % $ 8,934.4 100 % (20) % $ 8,589.0 100 % 4 % For the Years Ended December 31, ($ in millions) 2024 Percent of Sales 2023 Percent of Sales Percent Change 2024 vs. 2023 2022 Percent of Sales Percent Change 2023 vs. 2022 Off Road $ 1,160.5 20.3 % $ 1,531.6 21.9 % (24) % $ 1,523.4 23.7 % 1 % On Road 179.4 18.2 % 240.4 20.3 % (25) % 206.3 17.7 % 17 % Marine 80.6 16.8 % 169.0 22.1 % (52) % 222.5 22.5 % (24) % Corporate 46.3 18.9 NM 7.3 NM Total gross profit $ 1,466.8 20.4 % $ 1,959.9 21.9 % (25) % $ 1,959.5 22.8 % 0 % NM = not meaningful Off Road: Off Road sales, inclusive of PG&A sales, decreased 18 percent in 2024 primarily as a result of decreased ORV and snowmobile shipments.
Financing Activities: The increase in net cash used for financing activities was attributable to decreased net borrowings under debt arrangements. Net repayments totaled $158.2 million in 2023 compared to $257.7 million of net borrowings in 2022. This increase was partially offset by lower share repurchases and increased proceeds from stock issuances under employee plans.
Financing Activities: The decrease in net cash used for financing activities was primarily the result of net borrowings under debt arrangements in 2024 compared to net repayments under debt arrangements in 2023, as well as lower share repurchases. These changes were partially offset by reduced proceeds from stock issuances under employee plans.
Additional information on our end markets for 2023: • Polaris North America ATV unit retail sales up low-single digits percent • Polaris North America side-by-side unit retail sales up mid-single digits percent • Total Polaris North America ORV unit retail sales up mid-single digits percent • Estimated North America industry ORV unit retail sales up low-single digits percent • Total Polaris North America ORV dealer inventories up approximately 55 percent • Polaris North America snowmobile unit retail sales for the 2023-2024 season-to-date period through December 31, 2023 up low-teens percent • Estimated North America industry snowmobile unit retail sales for the 2023-2024 season-to-date period through December 31, 2023 up low-double digits percent • Total Polaris North America snowmobile dealer inventories up approximately 120 percent Gross profit, as a percentage of sales, decreased in 2023 primarily due to unfavorable product mix, higher finance interest, and foreign currency exchange rate movement, partially offset by lower input costs.
Gross profit, as a percentage of sales, decreased in 2024 primarily due to lower net pricing driven by higher promotional costs, decreased leverage of fixed costs as a result of reduced sales volumes, product mix, and higher finance interest, partially offset by favorable operational costs. 29 Table of Contents Additional information on our end markets for 2024: • Polaris North America utility unit retail sales flat • Polaris North America recreation unit retail sales down mid-single digits percent • Total Polaris North America ORV unit retail sales down low-single digits percent • Estimated North America industry ORV unit retail sales flat • Total Polaris North America ORV dealer inventories down approximately 16 percent • Polaris North America snowmobile unit retail sales for the 2024-2025 season-to-date period through December 31, 2024 down low-forties percent • Estimated North America industry snowmobile unit retail sales for the 2024-2025 season-to-date period through December 31, 2024 down mid-thirties percent • Total Polaris North America snowmobile dealer inventories up approximately 10 percent On Road: On Road sales, inclusive of PG&A sales, decreased 17 percent in 2024 primarily as a result of decreased shipments across the product portfolio.
Forecasted revenues are derived from our annual budget and long-term business plan and royalty rates are based on brand profitability.
This method requires us to estimate the future revenue for the related brand/trade names, the appropriate royalty rate and the discount rate. Forecasted revenues are derived from our annual budget and long-term business plan and royalty rates are based on brand profitability.
This method assumes the brand/trade name has value to the extent that the owner is relieved of the obligation to pay royalties for the benefits received from them. This method requires us to estimate the future revenue for the related brand/trade names, the appropriate royalty rate and the discount rate.
The impairment test consists of a comparison of the fair value of the brand/trade name to its carrying value. The fair value is determined using the relief-from-royalty method. This method assumes the brand/trade name has value to the extent that the owner is relieved of the obligation to pay royalties for the benefits received from them.
In November 2023, we amended the credit facility to terminate all guarantees provided by our subsidiaries under the credit facility, remove the requirement for our subsidiaries to provide guarantees of the obligations under the credit facility, and remove certain of our subsidiaries as co-borrowers. 32 Table of Contents The agreements governing the credit facility and the Master Note Purchase Agreement contain covenants that require us to maintain certain financial ratios, including minimum interest coverage and maximum leverage ratios.
The agreements governing the credit facility and the Master Note Purchase Agreement contain covenants that require us to maintain certain financial ratios, including minimum interest coverage and maximum leverage ratios.
Non-GAAP Financial Measures To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance.
Additional information on our end markets for 2024: • Polaris U.S pontoon unit retail sales down mid-teens percent • Estimated U.S. industry pontoon unit retail sales down low-double digits percent • Polaris U.S. deck boat unit retail sales down mid-thirties percent • Estimate U.S. industry deck boat unit retail sales down low-twenties percent Non-GAAP Financial Measures To supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use certain non-GAAP financial measures, as described below, to understand and evaluate our core operating performance.
The agreements require us to maintain an interest coverage ratio of not less than 3.00 to 1.00 and a leverage ratio of not more than 3.50 to 1.00 on a rolling four quarter basis. In November 2023, we issued $500 million aggregate principal amount of 6.950% Senior Notes pursuant to a public offering.
The agreements require us to maintain an interest coverage ratio of not less than 3.00 to 1.00 and a leverage ratio of not more than 3.50 to 1.00 on a rolling four quarter basis. In December 2024, the Company entered into an amendment (the “NPA Amendment”) to the Existing Master Note Purchase Agreement.
The average per unit sales price for the On Road segment increased five percent, driven by product mix. 29 Table of Contents Additional information on our end markets for 2023: • Indian Motorcycle North America unit retail sales up mid-single digits percent • Estimated North America industry 900cc cruiser, touring, and standard motorcycle unit retail sales down high-single digits percent • Polaris North America motorcycle dealer inventories up approximately 20 percent Gross profit, as a percentage of sales, increased in 2023 due to favorable product mix and lower input costs, partially offset by increased warranty costs and higher finance interest.
Additional information on our end markets for 2024: • Indian Motorcycle North America unit retail sales down high-single digits percent • Estimated North America industry 900cc cruiser, touring, and standard motorcycle unit retail sales down mid-single digits percent • Polaris North America motorcycle dealer inventories up approximately five percent Marine: Marine sales decreased 37 percent as a result of decreased shipments.
As of December 31, 2023, we had $764.3 million of availability on the Revolving Loan Facility. In December 2021, we amended the credit facility to provide an unsecured incremental 364-day term loan (the “Incremental Term Loan”) in the amount of $500 million, which was fully drawn on closing.
As of December 31, 2024, we had $1.1 billion of availability on the Revolving Loan Facility. 32 Table of Contents In July 2024, the Company amended the credit facility to provide for a new incremental 364-day term loan in the amount of $400.0 million (the “Incremental Term Loan Facility”).
Adverse determination of material product liability claims made against us could have a material adverse effect on our financial condition and results of operations. 34 Table of Contents Goodwill. Goodwill is tested at least annually for impairment and is tested for impairment more frequently when events or changes in circumstances indicate that the asset might be impaired.
Goodwill is tested at least annually for impairment and is tested for impairment more frequently when events or changes in circumstances indicate that the asset might be impaired. We complete our annual goodwill impairment test as of the first day of the fourth quarter.
We believe that existing cash balances and cash flows to be generated from operating activities, borrowing capacity under our credit facility and from future issuances or borrowings of long-term debt, will be sufficient to fund operations, new product development, cash dividends to shareholders, repurchases and retirement of common stock, and capital requirements for at least the next 12 months and for the foreseeable future thereafter. 31 Table of Contents Cash Flows The following table summarizes the cash flows from operating, investing and financing activities of continuing operations: ($ in millions) For the Years Ended December 31, 2023 2022 Change 2023 vs. 2022 2021 Change 2022 vs. 2021 Total cash provided by (used for): Operating activities $ 925.8 $ 534.5 $ 391.3 $ 286.8 $ 247.7 Investing activities (462.0) (319.3) (142.7) (288.4) (30.9) Financing activities (431.3) (363.2) (68.1) (107.6) (255.6) Operating Activities: The increase in net cash provided by operating activities of continuing operations in 2023 was primarily the result of reduced working capital in the current year compared to working capital additions in the prior year, partially offset by lower net income from continuing operations.
We believe that existing cash balances and cash flows to be generated from operating activities, borrowing capacity under our credit facility and from future issuances or borrowings of long-term debt, will be sufficient to fund operations, new product development, cash dividends to shareholders, repurchases and retirement of common stock, and capital requirements for at least the next 12 months and for the foreseeable future thereafter.
Overview 2023 was a record year for sales, which totaled $8.9 billion, a four percent increase from 2022. The year-over-year increase in sales was driven primarily by product mix and increased shipments. Gross profit totaled $2.0 billion in both 2023 and 2022.
Overview 2024 sales totaled $7.2 billion, a decrease of 20 percent from 2023. The year-over-year decrease in sales was primarily due to decreased shipments in all segments and lower net pricing driven by higher promotional costs, partially offset by product mix. Our gross profit of $1.5 billion decreased 25 percent from $2.0 billion in 2023.
We repurchased a total of 1.6 million shares of our common stock for $178.6 million during 2023, which had a favorable impact on diluted net income from continuing operations per share of 13 cents. Wholesale Customer Financing Arrangements: We have arrangements with certain finance companies to provide secured floor plan financing for our dealers.
Additionally, as of December 31, 2024, we had letters of credit outstanding of $46.1 million, primarily related to purchase obligations for raw materials. Share Repurchases: We repurchased a total of 1.0 million shares of our common stock for $82.7 million during 2024, which had a favorable impact on diluted net income from continuing operations per share of three cents.
We complete our annual impairment test for identifiable intangible assets with indefinite lives as of the first day of the fourth quarter. Our identifiable intangible assets with indefinite lives include brand/trade names. The impairment test consists of a comparison of the fair value of the brand/trade name to its carrying value. The fair value is determined using the relief-from-royalty method.
Identifiable intangible assets with indefinite lives are tested for impairment annually or more frequently when events or changes in circumstances indicate that the asset might be impaired. We complete our annual impairment test for identifiable intangible assets with indefinite lives as of the first day of the fourth quarter. Our identifiable intangible assets with indefinite lives include brand/trade names.
The notes bear interest at a rate of 6.950% per year, with interest payable semi-annually in arrears in March and September of each year. The notes mature in March of 2029. The indenture governing the senior notes is subject to customary covenants and make-whole provisions upon early termination.
We received approximately $492 million in net proceeds from the notes offering after deducting the underwriting discount and other fees and expenses. The notes bear interest at a rate of 6.95% per year, with interest payable semi-annually in arrears in March and September of each year. The notes mature in March of 2029.
Expressed as a percentage of sales, gross profit decreased in 2023 as compared to 2022, primarily due to unfavorable foreign currency exchange rate movement and higher finance interest, both partially offset by higher net pricing.
Gross profit, as a percentage of sales, decreased in 2024 due to product mix and lower net pricing driven by higher promotional costs, partially offset by reduced warranty expense and favorable operational costs.
During 2023, consumers financed 27 percent of our vehicles sold in the United States through these arrangements. The volume of installment credit contracts written in calendar year 2023 with these institutions was $1,403.1 million, a 28 percent increase from 2022.
During 2024, consumers financed 31 percent of our vehicles sold in the United States through these arrangements.
Higher sales volumes and product mix also contributed to the increase. 27 Table of Contents Gross profit: Gross profit for 2023, as a percentage of sales, decreased primarily due to unfavorable foreign currency exchange rate movement and higher finance interest, both partially offset by higher net pricing.
Gross profit, as a percentage of sales, decreased primarily due to lower net pricing driven by higher promotional costs, product mix, and decreased leverage of fixed costs as a result of reduced sales volumes. These decreases were partially offset by favorable operational costs.
Segment Results of Operations The summary that follows provides a discussion of the results of operations of each of our three reportable segments, Off Road, On Road, and Marine. Each of these segments is comprised of various product offerings that serve multiple end markets. We evaluate performance based on sales and gross profit.
Each of these segments is comprised of various product offerings that serve multiple end 28 Table of Contents markets. We evaluate performance based on sales and gross profit. The Corporate amounts include costs that are not allocated to segments, including certain unallocated manufacturing costs, the impacts from certain foreign currency transactions, and certain unallocated incentive compensation costs.
Adjusted EBITDA: Adjusted EBITDA, in absolute dollars and as a percentage of sales, decreased in 2023 due to increased operating expenses, higher finance interest and unfavorable foreign currency exchange rate movement, partially offset by higher net pricing. Weighted average diluted shares outstanding: Weighted average diluted shares outstanding decreased throughout 2023 primarily due to share repurchases.
Adjusted EBITDA: Adjusted EBITDA, in absolute dollars and as a percentage of sales, decreased in 2024 primarily as a result of decreased shipments and lower net pricing driven by higher promotional costs. These decreases were partially offset by favorable operating costs.
Additionally, as of December 31, 2023, we had letters of credit outstanding of $42.6 million, primarily related to purchase obligations for raw materials. Share Repurchases: As of December 31, 2023, our Board of Directors has authorized us to repurchase up to an additional $1,185.1 million of our common stock.
As of December 31, 2024, our Board of Directors has authorized us to repurchase up to an additional $1,109.3 million of our common stock. Wholesale Customer Financing Arrangements: We have arrangements with certain finance companies to provide secured floor plan financing for our dealers.
Full year net income from continuing operations attributable to Polaris Inc. of $502.8 million decreased 17 percent from 2022, with diluted earnings per share from continuing operations decreasing from $10.04 to $8.71 per share. In addition to the reasons discussed above, these decreases were primarily the result of increased operating expenses and higher interest expense.
Full year net income from continuing operations attributable to Polaris Inc. was $110.8 million, or $1.95 per diluted share, compared to 2023 full year net income from continuing operations attributable to Polaris Inc. of $502.8 million, or $8.71 per diluted share.
Net cash used for investing activities of continuing operations increased in 2023 due to an increase in property, equipment and tooling purchases, as well as cash utilized for an acquisition in the current period compared to proceeds received for the disposal of certain businesses in the prior year.
Net cash used for investing activities decreased due to a reduction in property, equipment and tooling purchases, as well as net distributions from Polaris Acceptance in 2024 compared to net contributions to Polaris Acceptance in 2023. These decreases were partially offset by increased strategic investments in 2024.
Sales in Canada decreased four percent during 2023, primarily due to unfavorable foreign currency exchange rate movement. Currency rate movements had an unfavorable impact of three percentage points on sales in 2023. Sales in other countries, primarily in Europe, increased five percent during 2023, primarily driven by product mix.
Sales in Canada decreased primarily as a result of decreased snowmobile shipments. Currency rate movements had an unfavorable impact of one percentage point on sales in 2024. Sales in other countries decreased primarily as a result of lower ORV and motorcycle shipments. Currency rate movements had no impact on sales in 2024.
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Product mix and price drove an increase in sales as a result of a higher sales mix of premium ORV models, which was partially offset by higher finance interest.
Added
These decreases were primarily the result of decreased shipments in all segments, lower net pricing driven by higher promotional costs, and decreased leverage of fixed costs as a result of reduced sales volumes, partially offset by favorable operating costs. We reported Adjusted EBITDA of $635.4 million in 2024 compared to $1,020.9 million in 2023.
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Currency rate movements had a favorable impact of two percentage points on sales in 2023.
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Product mix was favorable as a result of a higher sales mix of ORVs.
Removed
Provision for income taxes: The decrease in the effective income tax rate for 2023 was primarily due to an increase in research and development credits, a non-cash increase of deferred tax assets, and the favorable impact of lower pretax income generated in 2023, partially offset by a decreased deduction for Foreign Derived Intangible Income (“FDII”).
Added
The increase in other expenses in 2024 was also attributable to an impairment charge recorded related to an investment held by the Company.
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The Corporate amounts include revenues and costs of businesses that were divested in 2021, as well as costs that are not allocated to segments, including certain unallocated manufacturing costs.
Added
Provision for income taxes: The increase in the effective income tax rate for 2024 was primarily due to lower pretax earnings which resulted in an increase in the foreign tax rate detriment, as well as unfavorable impacts related to share-based compensation due to a lower stock price, and a valuation allowance related to an investment impairment charge recorded in 2024.
Removed
On Road: On Road sales, inclusive of PG&A sales, increased two percent in 2023 driven by product mix. On Road sales to customers outside of North America increased nine percent in 2023, driven by product mix.
Added
These items were partially offset by a tax rate benefit related to reduced research and development credits compared to the prior year and the related beneficial impact due to lower pretax earnings.
Removed
Marine: Marine sales decreased 23 percent, primarily due to decreased shipments, partially offset by higher net pricing.
Added
Weighted average diluted shares outstanding: Weighted average diluted shares outstanding decreased throughout 2024 primarily due to share repurchases and a reduction in the dilutive effect of share-based equity awards. Segment Results of Operations The summary that follows provides a discussion of the results of operations of each of our three reportable segments, Off Road, On Road, and Marine.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeForeign Exchange Rates: The changing relationships of the U.S. dollar to foreign currencies can have a material impact on our financial results. Euro: We have operations in the Eurozone through wholly owned subsidiaries and distributors. We also purchase components from certain suppliers directly for our U.S. operations in transactions denominated in Euros.
Biggest changeEuro: We have operations in the Eurozone through wholly owned subsidiaries and distributors. We also purchase components from certain suppliers directly for our U.S. operations in transactions denominated in Euros. Fluctuations in the Euro to U.S. dollar exchange rate impacts sales, cost of sales, and net income. Canadian Dollar: We operate in Canada through a wholly owned subsidiary.
We are subject to changes in the fair value of fixed-rate borrowings as a result of potential changes in prevailing interest rates. Changes in the fair value of fixed-rate borrowings have no impact on the amount of interest incurred, cash flows or our financial position. 37 Table of Contents
We are subject to changes in the fair value of fixed-rate borrowings as a result of potential changes in prevailing interest rates. Changes in 37 Table of Contents the fair value of fixed-rate borrowings have no impact on the amount of interest incurred, cash flows or our financial position. 38 Table of Contents
We expect currencies to have a negative impact on net income in 2024 compared to 2023. The assets and liabilities in all of our international entities are translated at the foreign exchange rate in effect at the balance sheet date.
We expect currencies to have a negative impact on net income in 2025 compared to 2024. The assets and liabilities in all of our international entities are translated at the foreign exchange rate in effect at the balance sheet date.
Based on the unhedged variable-rate debt included in our debt portfolio as of December 31, 2023, a 100 basis point increase or decrease in interest rates would increase or decrease interest expense by approximately $6 million. Borrowings pursuant to our private senior notes and public senior notes bear interest at fixed rates.
Based on the unhedged variable-rate debt included in our debt portfolio as of December 31, 2024, a 100 basis point increase or decrease in interest rates would increase or decrease interest expense by approximately $8 million. Borrowings pursuant to our private senior notes and public senior notes bear interest at fixed rates.
All other things being equal, at current annual volumes, a hypothetical 10 percent fluctuation of the U.S. dollar compared to the Euro impacts annual operating income by approximately $21 million and a hypothetical 10 percent fluctuation of the U.S. dollar compared to the Canadian Dollar impacts annual operating income by approximately $47 million.
All other things being equal, at current annual volumes, a hypothetical 10 percent fluctuation of the U.S. dollar compared to the Euro impacts annual operating income by approximately $17 million and a hypothetical 10 percent fluctuation of the U.S. dollar compared to the Canadian Dollar impacts annual operating income by approximately $30 million.
The relationship of the U.S. dollar in relation to these other currencies impacts sales, cost of sales and net income. Foreign exchange risk can be quantified by performing a sensitivity analysis assuming a hypothetical change in the value of the U.S. dollar compared to other currencies in which we transact. We are most exposed to the Euro and Canadian dollar.
Foreign exchange risk can be quantified by performing a sensitivity analysis assuming a hypothetical change in the value of the U.S. dollar compared to other currencies in which we transact. We are most exposed to the Euro and Canadian dollar.
A portion of our foreign currency exposure is mitigated with the following open foreign currency hedging contracts as of December 31, 2023: 36 Table of Contents Foreign Currency Foreign currency hedging contracts Currency Position Notional amounts (in millions of U.S. dollars) Average exchange rate of open contracts Australian Dollar Long $ 25.6 $0.66 to 1 AUD Canadian Dollar Long $ 196.7 $0.74 to 1 CAD Mexican Peso Short $ 28.0 20 Peso to $1 In 2023, after consideration of the existing foreign currency hedging contracts, foreign currencies had a negative impact on net income compared to 2022.
A portion of our foreign currency exposure is mitigated with the following open foreign currency hedging contracts as of December 31, 2024: Foreign Currency Foreign currency hedging contracts Currency Position Notional amounts (in millions of U.S. dollars) Average exchange rate of open contracts Australian Dollar Long $ 12.0 $0.67 to 1 AUD Canadian Dollar Long $ 79.2 $0.74 to 1 CAD Mexican Peso Short $ 102.5 19.4 Peso to $1 In 2024, after consideration of the existing foreign currency hedging contracts, foreign currencies had a negative impact on net income compared to 2023.
The total impact of commodities had a favorable impact on our gross profit margins for 2023 when compared to 2022. Based on our current outlook for commodity prices, the total impact of commodities is expected to have a favorable impact on our gross profit margins for 2024 when compared to 2023.
The total impact of commodities had a favorable impact on our gross profit margins for 2024 when compared to 2023.
As of December 31, 2023, there was $228.2 million outstanding on the revolving loan and $780.0 million outstanding on the term loan. We enter into interest rate swaps in order to maintain a balanced risk of fixed and variable interest rates associated with our debt.
As of December 31, 2024, there was $282.0 million outstanding on the Revolving Loan Facility, $500.0 million outstanding on the Term Loan Facility and $400.0 million outstanding on the Incremental Term Loan Facility. We enter into interest rate swaps in order to manage our exposure to fixed and variable interest rates associated with our debt.
Other currencies: We operate in various countries, principally in Europe, Mexico and Australia, through wholly owned subsidiaries. We also sell to certain distributors in other countries and purchase components from certain suppliers directly for our U.S. operations in transactions denominated in these foreign currencies.
We also sell to certain distributors in other countries and purchase components from certain suppliers directly for our U.S. operations in transactions denominated in these foreign currencies. The relationship of the U.S. dollar in relation to these other currencies impacts sales, cost of sales and net income.
Fluctuations in the Euro to U.S. dollar exchange rate impacts 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.
The relationship of the U.S. dollar in relation to the Canadian dollar impacts sales, cost of sales and net income. Other currencies: We operate in various countries, principally in Europe, Mexico and Australia, through wholly owned subsidiaries.
Interest Rates: We are a party to an unsecured credit facility with various lenders consisting of a $1.0 billion revolving loan facility and a $1.2 billion term loan facility. Interest accrues on the revolving loan and term loans at variable rates based on adjusted Term SOFR plus the applicable add-on percentage as defined.
Interest accrues on the revolving loan, term loans and Incremental Term Loan Facility at variable rates based on Adjusted Term SOFR plus the applicable add-on percentage, as defined in the agreements governing the credit facility.
Added
Based on our current outlook for commodity prices, we expect total commodities to have a neutral impact on our gross profit margins for 2025 when compared to 2024. 36 Table of Contents Foreign Exchange Rates: The changing relationships of the U.S. dollar to foreign currencies can have a material impact on our financial results.
Added
Interest Rates: We are a party to an unsecured credit facility with various lenders consisting of a $1.4 billion Revolving Loan Facility, a $500.0 million Term Loan Facility and a $400.0 million Incremental Term Loan Facility.

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