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What changed in Polaris Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Polaris Inc.'s 2024 and 2025 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 2025 report.

+290 added−262 removedSource: 10-K (2026-02-13) vs 10-K (2025-02-18)

Top changes in Polaris Inc.'s 2025 10-K

290 paragraphs added · 262 removed · 226 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

62 edited+11 added−14 removed31 unchanged
Biggest changePotential 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.
Biggest changePotential 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; the Company’s ability to derive the expected benefits from the Indian Motorcycle separation including the separation being accretive, within the expected timeline or at all; the actual amount of pre-tax charges incurred in connection with the separation of our Indian Motorcycle business; 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; freight and tariff costs (tariff relief or ability to mitigate tariffs, particularly in light of the policies of the current presidential administration and retaliatory actions in response thereto); environmental and product safety regulatory activity; effects of weather on the Company’s supply chain, manufacturing operations and consumer demand; commodity costs; 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; impact of changes in Polaris stock price on incentive compensation plan costs; foreign currency exchange rate fluctuations; 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.
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.
Internationally, products are sold through 25 subsidiaries to over 1,500 independent international dealers and 70 independent distributors that serve over 90 countries outside of North America.
Any shareholder or other interested party wishing to receive a copy of these corporate governance materials should write to Polaris Inc., 2100 Highway 55, Medina, Minnesota 55340, Attention: Investor Relations or email polaris.investorrelations@polaris.com. Information contained on our website is not part of this report.
Any shareholder or other interested party wishing to receive a copy of these corporate governance materials should write to Polaris Inc., 2100 Highway 55, Medina, Minnesota 55340, Attention: Investor Relations or email polaris.investorrelations@polaris.com. Information contained on our website is not part of this Annual Report.
We protect these marks as appropriate through registrations in the United States and other jurisdictions. Depending on the jurisdiction, trademarks are generally valid as long as they are in use or their registrations are properly maintained and they have not been found to have become generic.
We protect these marks as appropriate through registrations in the United States and many other jurisdictions. Depending on the jurisdiction, trademarks are generally valid as long as they are in use or their registrations are properly maintained and they have not been found to have become generic.
Any forward-looking statements made in this report or otherwise speak only as of the date of such statement, and we undertake no obligation to update such statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.
Any forward-looking statements made in this Annual Report or otherwise speak only as of the date of such statement, and we undertake no obligation to update such statements to reflect actual results or changes in factors or assumptions affecting such forward-looking statements.
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.
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 network of approximately 250 dealers globally and also direct to customer where permitted.
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 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 2025, Polaris Marine launched model year 2026 boats for the Bennington, Godfrey and Hurricane brands.
We utilize our RFM ordering system for motorcycle dealers, which allows dealers to order daily and create a segment stocking order which helps to reduce order fulfillment times. We also design and manufacture vehicles that support various commercial and industrial work applications and include products in the light-duty hauling, industrial and urban/suburban commuting sub-sectors.
We utilize our RFM ordering system for these dealers, which allows dealers to order daily and create a segment stocking order which helps to reduce order fulfillment times. We also design and manufacture vehicles that support various commercial and industrial work applications and include products in the light-duty hauling, industrial and urban/suburban commuting sub-sectors.
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.
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, pull-behinds, 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.
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.
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 2,400 independent dealers in North America.
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 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, cab systems, lighting and audio systems, cargo box accessories and tracks.
While we are not aware of any misstatements regarding the market and industry data presented in this Annual Report, whether any such future-looking data will be accurate involves risks and uncertainties and are subject to change based on various factors, including those factors discussed under the headings “Forward-Looking Statements” and “Risk Factors.” Available Information Our internet website is http://www.polaris.com.
While we are not aware of any misstatements regarding the market and industry data presented in this Annual Report, whether any such future-looking data will be accurate involves risks and uncertainties and is subject to change based on various factors, including those factors discussed under the headings “Forward-Looking Statements” and “Risk Factors.” 8 Table of Contents Available Information Our internet website is http://www.polaris.com.
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.
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 2025, we continued to be the North America market share leader in off-road vehicles.
For example, in the United States: (i) the Consumer Product Safety Commission (“CPSC”) has federal oversight over product safety issues related to snowmobiles, snow-bikes and off-road vehicles; (ii) the National Highway Traffic Safety Administration (“NHTSA”) has federal oversight over product safety issues related to motorcycles and Slingshot; and (iii) the U.S.
For example, in the United States: (i) the Consumer Product Safety Commission (“CPSC”) has federal oversight over product safety issues related to snowmobiles and off-road vehicles; (ii) the National Highway Traffic Safety Administration (“NHTSA”) has federal oversight over product safety issues related to motorcycles and Slingshot; and (iii) the U.S.
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 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 90 models, including two-, four- and six-wheel drive general purpose and recreational vehicles.
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.
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.
Concentrated primarily in North America, this dealer network is organized into distinct sales territories supported by experienced sales representatives and leadership. Through the use of offseason incentive programs, we adhere to level production throughout the year, minimizing disruption to the workforce and vendor network.
Concentrated primarily in North America, this dealer network is organized into distinct sales 5 Table of Contents territories supported by experienced sales representatives and leadership. Through the use of offseason incentive programs, we adhere to level production throughout the year, minimizing disruption to the workforce and vendor network.
We design, engineer, manufacture and market powersports vehicles which include: off-road vehicles (“ORV”), including all-terrain vehicles (“ATV”) and side-by-side vehicles; military and commercial ORVs; snowmobiles; motorcycles; moto-roadsters; quadricicycles; and boats. We also design and manufacture or source parts, garments and accessories (“PG&A”), which includes aftermarket accessories and apparel.
We design, engineer, manufacture and market powersports vehicles which include: off-road vehicles (“ORV”), including all-terrain vehicles (“ATV”) and side-by-side vehicles; military and commercial ORVs; snowmobiles; moto-roadsters; quadricycles; and boats. We also design and manufacture or source parts, garments and accessories (“PG&A”), which includes aftermarket accessories and apparel.
Registrations of trademarks can also generally be renewed indefinitely for as long as the trademarks are in use. We continue our focus on developing and marketing innovative, proprietary products, many of which use proprietary expertise, trade secrets, and know-how.
Registrations of trademarks can also generally be renewed indefinitely for as long as the trademarks are in use. We continue our focus on developing and marketing innovative products, many of which make use of or embody our proprietary expertise, trade secrets, and know-how.
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.
Inclusive of the segments in which we compete, we estimate total U.S. 2025 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.
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.
As 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 Programs 1-3. These programs offer high-potential employees opportunities to gain experience and prepare for next-level roles.
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.
We estimate that worldwide industry sales of snowmobiles totaled approximately 90,000, 110,000, and 125,000 units for the 12 month seasons ended March 31, 2025, 2024, and 2023, respectively. For the 12 month snowmobile season ended March 31, 2025, we held the number two market share position for North America.
Apex allows us to access customers through strategic retail and e-commerce marketplaces, as well as dealerships (Polaris and non-Polaris), to reach owners of Polaris and other OEM’s products. Klim and 509 each have their own dealer/distributor networks. On Road: Our On Road segment designs and manufactures motorcycles, moto-roadsters, light duty hauling, and passenger vehicles.
Apex allows us to access customers through strategic retail and e-commerce marketplaces, as well as dealerships (Polaris and non-Polaris), to reach owners of Polaris and other OEM’s products. Klim and 509 each have their own dealer/distributor networks. On Road: Our On Road segment historically designed and manufactured motorcycles, moto-roadsters, light duty hauling, and passenger vehicles.
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.
Similarly, statements that describe our future plans, objectives or goals, such as future sales, future cash flows and capital requirements, operational initiatives, supply chain, tariff mitigation strategy, 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.
We utilize our Wyoming, Minnesota facility for engineering, design and development for our line of engines and powertrains, ORVs, and motorcycles, and our Roseau, Minnesota facility for our snowmobile, ATV and powertrain research and development. We utilize our Elkhart, Indiana facility for engineering, design and development for our boats research and development.
We utilize our Wyoming, Minnesota facility for engineering, design and development for our line of engines and powertrains, as well as ORVs, and our Roseau, Minnesota facility for our snowmobile, ATV and powertrain research and development. We utilize our Elkhart, Indiana facility for engineering, design and development for our boats research and development.
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.
Annually, our full Board reviews the human capital strategy, 7 Table of Contents 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.
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 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 continues to be a core value.
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.
Many of our ORV dealers and distributors are also authorized snowmobile dealers. 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. James P. Williams Senior Vice President and Chief Human Resources Officer 62 Mr.
Mack was appointed Chief Financial Officer in April 2021. 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.
We offer our employees a total rewards package that includes competitive base pay, annual incentives, product discounts, comprehensive health and wellness benefits, and equity compensation plans that include the ESOP, the Employee Stock Purchase Plan (“ESPP”), and additional incentive equity grants for certain levels.
We offer our employees a total rewards package that includes competitive base pay, annual incentives to the direct labor level to reinforce an ownership culture, product discounts, comprehensive health and wellness benefits, and equity compensation plans that include the ESOP, our Employee Stock Purchase Plan (“ESPP”), and additional incentive equity grants for certain levels.
We have a long-term supply contract with a boat engine manufacturer, which requires a certain volume of total engine purchases, and includes favorable pricing, as well as various growth and volume incentives. Contract carriers ship our products from our manufacturing and distribution facilities to our customers.
Raw materials and other component parts are purchased from third-party vendors. We have a long-term supply contract with a boat engine manufacturer, which requires a certain volume of total engine purchases, and includes favorable pricing, as well as various growth and volume incentives. Contract carriers ship our products from our manufacturing and distribution facilities to our customers.
Further, we are continuing to execute our electrification initiative to position the Company as a leader in powersports electrification. Our engineering department is equipped to make small quantities of new product prototypes for testing and for the planning of manufacturing procedures. In addition, we maintain numerous facilities where each of the products is extensively tested under actual use conditions.
Our engineering department is equipped to make small quantities of new product prototypes for testing and for the planning of manufacturing procedures. In addition, we maintain numerous facilities where each of the products is extensively tested under actual use conditions.
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.
Prior to this, Mr. Duke was General Manager of Godfrey and Hurricane Boats since joining Polaris in 2019. 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 56 Mr.
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.
Engineering, Research and Development, and New Product Introduction As of the date of the filing of this Annual Report, we have approximately 1,200 employees who are engaged in the development and testing of existing products and research and development of new products and improved production 6 Table of Contents techniques, located primarily in Wyoming, Minnesota; Medina, Minnesota; Roseau, Minnesota; Novi, Michigan; Elkhart, Indiana; Monterrey, Mexico; and Bangalore, India.
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.
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.
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.
Key performance enhancements included upgraded suspensions, drivetrain commonization, and refreshed model configurations in core segments. Polaris snowmobiles are sold principally in the United States, Canada, and Northern Europe. We sell our snowmobiles directly to a network of approximately 550 dealers in North America, primarily located in the snowbelt regions of the United States and Canada, and over 300 international dealers.
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.
Speetzen Chief Executive Officer 56 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. Benjamin D. Duke President of Marine 53 Mr. Duke was appointed President of Marine in May 2022.
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 also provide print materials, signage and other promotional items for use by dealers. We spent $505.0 million, $500.4 million and $542.3 million for sales and marketing activities in 2025, 2024 and 2023, respectively. Our corporate headquarters facility is in Medina, Minnesota, and we maintain numerous sales and administrative facilities around the world.
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.
The Polaris Adventures network has completed over 2,000,000 rides since 2017, and had over 250 locations as of December 31, 2025. 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 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.
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.
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.
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.
A majority of our sales of ORVs, snowmobiles, motorcycles, boats, and related PG&A are financed under these arrangements whereby we receive payment within a few days of shipment of our product. We participate in the cost of dealer financing and have agreed to repurchase products from the finance companies under certain circumstances and subject to certain limitations.
A majority of our sales of ORVs, snowmobiles, motorcycles, boats, and related PG&A are financed under these arrangements whereby we receive payment within a few days of shipment of our product.
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.
Estimated North America and worldwide ORV industry retail sales are summarized as follows: Twelve months ended December 31, Estimated* Approximate Industry Sales (in units) 2025 2024 2023 North America ATV retail sales 255,000 265,000 270,000 North America side-by-side retail sales 525,000 510,000 550,000 North America ORV retail sales 780,000 775,000 820,000 Worldwide ATV retail sales 395,000 390,000 370,000 Worldwide side-by-side retail sales 575,000 555,000 595,000 Worldwide ORV retail sales 970,000 945,000 965,000 *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.
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 design, engineer, produce or source a variety of replacement parts, lubricants and accessories for motorcycles and our moto-roadster products. 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, including casual wear, helmets, gloves, jackets, pants and hats.
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.
Gear and apparel are purchased from independent vendors and sold by us through our dealers, distributors, and online under our brand names. PG&A products for the On Road segment include our OEM brands as well as other portfolio brands including Klim and 509. Slingshot is distributed directly through independently owned dealers and distributors. Slingshot currently has approximately 275 dealers globally.
We consider the collective rights under our various patents, which expire from time to time, a valuable asset, but we do not believe that our businesses are materially dependent upon any single patent or group of related patents.
We have a robust patent portfolio in the United States and other jurisdictions, which we consider to be among our most valuable assets, but we do not believe that our businesses are materially dependent upon any single patent or group of related patents.
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.
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 2025 ORV product introductions and upgrades included the RANGER 500 mid-size utility vehicle, a new value offering, as well as updates within the RANGER XD 1500, including two new trim levels, Mountaineer and Texas Edition.
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.
Risk Factors of this Annual Report. Human Capital Management Best Team, Best Culture is a strategic pillar at Polaris and a critical part of our long-term success. Our employees remain at the core of our success. In recognition of the value of employees, we have established a work environment grounded in Polaris values and reinforced by a culture of engagement.
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.
We advise you, however, to consult any further disclosures made on related subjects in future Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K that are filed with or furnished to the SEC. 9 Table of Contents Information About our Executive Officers Set forth below are the names of our executive officers as of February 13, 2026, 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.
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.
Financial education and wellness education are some of our key focuses, and we continue to offer educational wellness sessions and have introduced additional programs to support employee well-being. 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.
Our 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.
A core element of our human capital management strategy is employee engagement. Our 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.
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.
Godfrey also launched an upgraded Monaco model, which is the first level of premium boat in its lineup. Our extensive, experienced and loyal network of approximately 600 global dealers is a competitive advantage, helping to generate steady demand.
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.
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 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.
No material losses have been incurred under these agreements during the periods presented. See Note 11 of Notes to Consolidated Financial Statements for a discussion of these financial services arrangements. Customer financing. We do not offer consumer financing directly to the end users of our products.
We participate in the cost of dealer financing up to certain limits and have agreed to repurchase products from the finance companies under certain circumstances and subject to certain limitations. No material losses have been incurred under these agreements. Customer financing. We do not offer consumer financing directly to the end users of our products.
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.
Polaris Adventures Our Polaris Adventures business partners with local outfitters to deliver unique ride experiences leveraging many of our global vehicle platforms. Polaris Adventures includes Polaris Adventures Elite, which offers proprietary technology and services to local outfitters to enhance the overall customer experience.
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 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. 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 are vertically integrated in several key components of our manufacturing process, including plastic injection molding, precision machining, welding, clutch assembly and painting. Raw materials and other component parts are purchased from third-party vendors.
Manufacturing and Distribution Operations As of the date of the filing of this Annual Report, our products are primarily assembled at our 18 global manufacturing facilities, many of which are shared across business segments. We are vertically integrated in several key components of our manufacturing process, including plastic injection molding, precision machining, welding, clutch assembly and painting.
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.
Our goal is to “Do No Harm” and a large part of that focus is to keep safety at the forefront for employees both in the workplace and when enjoying their own adventures outdoors. In 2025, our Marine and On Road segments did not have any lost time injuries.
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.
Our employees are also among our largest shareholder groups, driven by our Employee Stock Ownership Plan (“ESOP”) and our equity compensation programs. Headcount. Due to the seasonality of our business and changes in production cycles, total employment levels vary throughout the year. In 2025, we focused on efficient operations and reduced the size of our workforce.
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.
There are no family relationships between or among any of the executive officers or directors of the Company.
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 the RZR portfolio, we introduced a redesigned RZR XP and a new 72-inch wide RZR XP S. In addition, we added the largest screen on the market, a 10.4-inch touchscreen, to our popular RZR Pro R models. We sell our ORVs directly to a network of approximately 1,300 dealers in North America and 1,000 international dealers.
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.
Competition in this segment is based on a number of factors, including styling, price, quality, reliability and the dealer network supporting the brand. In 2025, the Slingshot lineup was updated with elevated colors, style and the reintroduction of the Grand Touring LE model.
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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 produce a full line of snowmobiles consisting of 68 models, ranging from entry models to utility and economy models to performance and competition models. In 2025, we introduced several snowmobile updates across our Mountain, Trail, Crossover, Sport Utility and Widetrack offerings, including new SnowCheck exclusive limited edition models and expanded display availability.
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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.
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On October 10, 2025, we entered into a definitive agreement to sell a majority interest in the Indian Motorcycle business, and the sale closed in the first quarter of 2026. We currently design and manufacture moto-roadsters, light duty hauling, and passenger vehicles. Our current lineup includes Slingshot, a three-wheel open air roadster that competes in the motorcycle touring segment.
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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.
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Bennington redesigned the flagship QX line and launched new S Sport and Luxe models. The S Sport and Luxe models created a new line of entry level boats with more interior luxury. Godfrey redesigned and launched two entirely upgraded models in its lineup, including its flagship Sanpan model, which was awarded pontoon boat of the year by Boating Magazine.
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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.
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Intellectual Property Our products are marketed globally under a variety of valuable trademarks.
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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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As of the date of the filing of this Annual Report, key trademarks used in our global operations include POLARIS and the Polaris star logo, as well as word and/or design marks for each of our major product platforms, including RANGER, RZR, GENERAL, POLARIS XPEDITION, SPORTSMAN, SLINGSHOT, BENNINGTON, and KLIM.
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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.
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As of December 31, 2025, we had approximately 14,500 full-time employees globally, with approximately 5,000 in salaried roles. Our employees are based in 24 countries with approximately 47% of our workforce located outside of the United States. In the first quarter of 2026, we completed the separation of our Indian Motorcycle business, which further reduced our workforce. Governance.
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We also own Polaris Technology Center Burgdorf LLC, an engineering company that develops high-performance and high-efficiency engines and innovative vehicles. Intellectual Property Our products are marketed under a variety of valuable trademarks. Some of the more important trademarks used in our global operations include POLARIS, RANGER, RZR, GENERAL, Polaris XPEDITION, SPORTSMAN, INDIAN MOTORCYCLE, SLINGSHOT, BENNINGTON, and KLIM.
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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.
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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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In 2025, we introduced the concept of Potential Service Injuries or Fatalities (“PSIF”) focused on the potential risk associated with our injuries and incidents to help us implement corrective actions for high risk events, not just those that result in an actual injury.
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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.
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We also continued to expand our Rider Safety Awareness Campaign to help further educate employees on safe, responsible use of our products at our international operations, in addition to existing educational opportunities for our domestic operations.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFurthermore, 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.
Biggest changeFurthermore, 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.
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, the reputation of our vendors and others with whom we choose to do business may affect our reputation. 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.
We depend on suppliers, financing sources and other strategic partners who may be sensitive to economic conditions that could affect their businesses in a manner that adversely affects their relationship with us. We source component parts and raw materials through numerous suppliers and have relationships with a limited number of product financing sources for our dealers and consumers.
We depend on suppliers, financing sources and other strategic partners who may be sensitive to economic conditions that could affect their businesses in a manner that adversely affects their relationship with us. We source component parts and raw materials through numerous suppliers and have relationships with a limited number of product financing partners for our dealers and consumers.
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.
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 and tariffs, 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.
Such disruptions or breaches of our information technology systems, connected products, data, or operations could adversely affect our business by resulting in, among other things: (i) disruption to our business operations; (ii) compromise or loss of the information processed by our information technology systems and connected products, such as intellectual property, confidential or proprietary information, or personal information; (iii) impact to the performance and/or safety of our connected products; (iv) damage to our reputation; (v) requirements to notify government authorities or affected individuals; and (vi) government enforcement, litigation or regulatory proceedings.
Such disruptions or breaches of our information technology systems, products, data, or operations could adversely affect our business by resulting in, among other things: (i) disruption to our business operations; (ii) compromise or loss of the information processed by our information technology systems and products, such as intellectual property, confidential or proprietary information, or personal information; (iii) impact to the performance and/or safety of our products; (iv) damage to our reputation; (v) requirements to notify government authorities or affected individuals; and (vi) government enforcement, litigation or regulatory proceedings.
Although we monitor continually evolving cybersecurity threats, have implemented various measures designed to manage risks relating to these types of threats, and have invested in layers of data and information technology protection, these measures and the systems supporting them could prove to be inadequate and there can be no assurance that our efforts will prevent disruptions or breaches of our information technology systems, connected products, data and/or operations.
Although we monitor continually evolving cybersecurity threats, have implemented various measures designed to manage risks relating to these types of threats, and have invested in layers of data and information technology protection, these measures and the systems supporting them could prove to be inadequate and there can be no assurance that our efforts will prevent disruptions or breaches of our information technology systems, products, data and/or operations.
Allegations, litigation, cease and desist letters, court ordered injunctions, and the like relating to potential infringement of third-party intellectual property could result in significant costs, damages and substantial uncertainty. We may be subject to cybersecurity events and other disruptions to our information technology systems, data and connected products that could adversely affect our business.
Allegations, litigation, cease and desist letters, court ordered injunctions, and the like relating to potential infringement of third-party intellectual property could result in significant costs, damages and substantial uncertainty. We may be subject to cybersecurity events and other disruptions to our information technology systems, data and products that could adversely affect our business.
We may have to cease operations at impacted facilities or may not be able to easily shift production to other facilities or to make up for lost production. In addition, inefficiencies in our manufacturing due to labor shortages, part shortages, new production lines and the complexity of the start-up of manufacturing new premium products may impact operations negatively.
We may have to cease operations at impacted facilities or may not be able to easily shift production or distribution to other facilities or to make up for lost production. In addition, inefficiencies in our manufacturing due to labor shortages, part shortages, new production lines and the complexity of the start-up of manufacturing new premium products may impact operations negatively.
We generally provide limited warranties for our vehicles and boats. We may also provide longer warranties in certain geographical markets as determined by local regulations and customary practice or related to certain promotional programs. We also provide a limited emission warranty for certain emission-related parts in our ORVs, snowmobiles, and motorcycles as required by the EPA and CARB.
We generally provide limited warranties for our vehicles, boats and related accessories. We may also provide longer warranties in certain geographical markets as determined by local regulations and customary practice or related to certain promotional programs. We also provide a limited emission warranty for certain emission-related parts in our ORVs, snowmobiles, and motorcycles as required by the EPA and CARB.
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.
Our competitors’ new products may be of a better quality, beat our products to market, and be more attractive than other products in terms of features and price. Our continued success is dependent on positive perceptions of our Polaris brands which, if weakened, could adversely affect our sales.
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.
Furthermore, increased restrictions imposed on a class of chemicals known 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.
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 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.
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.
There can be no assurance that our current or future manufacturing and distribution footprint will improve and be sufficient to meet customer demand or that we will be able to successfully expand or contract our manufacturing and distribution capacity in a more efficient manner, which could result in loss of revenue, decreased margins and loss of market share.
Provisions in our debt agreements could adversely affect our operating flexibility, pose risks of default and reduce our flexibility to respond to an economic downturn. Our credit agreement and other debt agreements contain financial and restrictive covenants that may limit our ability to, among other things, borrow additional funds or take advantage of business opportunities.
Provisions in our debt agreements could adversely affect our operating flexibility, pose risks of default and reduce our flexibility to respond to an economic downturn. Our credit agreement contains financial and restrictive covenants that may limit our ability to, among other things, borrow additional funds or take advantage of business opportunities.
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.
Even with applicable and enforceable intellectual property 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.
Should the credit rating agencies lower our credit ratings or if we were to lose our investment-grade rating, we could face further constraints on our ability to raise additional capital and face an increase in borrowing costs on future debt.
Should the credit rating agencies lower our credit ratings or if we were to lose our investment-grade rating, we could face further constraints on our ability to raise additional capital and face an increase in borrowing costs on both existing and future debt.
Potential divestiture activity poses similar risks, including the potential to: disrupt operations in core, adjacent or acquired businesses; require more time or resources than anticipated to be fully completed; deleverage manufacturing operations or reduce sourcing efficiencies; reduce gross profit if the Company is not able to reduce fixed cost (including corporate overhead); not deliver the value anticipated for shareholders; divert management attention; create the potential of losing customer, supplier or other critical business relationships; and pose difficulties retaining employees.
Divestiture activity, including the recently completed separation of Indian Motorcycle, poses similar risks, including the potential to: disrupt operations in core, adjacent or acquired businesses; require more time or resources than anticipated to be fully completed; deleverage manufacturing operations or reduce sourcing efficiencies; reduce gross profit if the Company is not able to reduce fixed cost (including corporate overhead); not deliver the value anticipated for shareholders; divert management attention; create the potential of losing customer, supplier or other critical business relationships; and pose difficulties retaining employees.
Item 1A. Risk Factors The following are factors known to us that could materially adversely affect our business, financial condition, cash flows, or operating results, as well as adversely affect the value of an investment in our common stock. 10 Table of Contents Macroeconomic Risks Our business may be sensitive to economic conditions, including those that impact our customers’ spending.
Item 1A. Risk Factors The following are factors known to us that could materially adversely affect our business, financial condition, cash flows, or operating results, as well as adversely affect the value of an investment in our common stock. Macroeconomic Risks Our business may be sensitive to economic conditions, including those that impact our customers’ spending.
The realization of any of these risks or unfavorable changes in the political, regulatory and business climate in any of the jurisdictions where we operate could have a material adverse effect on our total sales, financial condition, profitability, or cash flows. Weather conditions may reduce demand and negatively impact net sales and production of certain of our products.
The realization of any of these risks or unfavorable changes in the political, regulatory and business climate in any of the jurisdictions where we operate could have a material adverse effect on our total sales, financial condition, profitability, or cash flows. 14 Table of Contents Weather conditions may reduce demand and negatively impact net sales and production of certain of our products.
No single facility is designed to manufacture our full range of vehicles. We also have several locations that serve as wholegoods and PG&A distribution centers, warehouses and office facilities. In addition, we have agreements with other third-party manufacturers to manufacture products on our behalf.
No single facility is designed to manufacture our full range of vehicles. We also have several locations that serve as wholegoods and PG&A distribution centers, warehouses and office facilities. In addition, we have agreements with other third-party manufacturers to manufacture products on our behalf, and certain of our distribution centers are third-party managed.
Any failure, or perceived failure, by us or third-party service providers to comply with our privacy or security policies or privacy-related legal obligations may result in governmental enforcement actions, litigation, or negative publicity, and could have an adverse effect on our operating results and financial condition.
Any failure, or perceived failure, by us or third-party service providers to comply with our privacy or cybersecurity-related legal obligations may result in governmental enforcement actions, litigation, or negative publicity, and could have an adverse effect on our operating results and financial condition.
Our provision for income taxes and cash tax liability could be adversely affected by numerous factors, including income before taxes being lower than anticipated in jurisdictions with lower statutory tax rates and higher than anticipated in jurisdictions with higher statutory tax rates, changes in the valuation of deferred tax assets and liabilities and changes in tax laws and regulations in various jurisdictions.
Our provision for income taxes and cash tax 18 Table of Contents liability could be adversely affected by numerous factors, including income before taxes being lower than anticipated in jurisdictions with lower statutory tax rates and higher than anticipated in jurisdictions with higher statutory tax rates, changes in the valuation of deferred tax assets and liabilities and changes in tax laws and regulations in various jurisdictions.
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.
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.
Cybersecurity threats and incidents have been occurring globally at a more frequent and severe level and will likely continue to increase in frequency and severity in the future.
Cybersecurity threats, incidents, and similar disruptions have been occurring globally at a more frequent and severe level and will likely continue to increase in frequency and severity in the future.
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.
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.
In the absence of directly applicable and enforceable patent or trademark protection, we may be vulnerable to loss with respect to competitors who attempt to copy our technology or product designs, exploit our trade secrets and know-how, or tarnish or diminish goodwill in our brand, all of which could adversely affect our business.
In the absence of directly applicable and enforceable intellectual property protection, we may be vulnerable to loss with respect to competitors who attempt to copy our technology or product designs, exploit our trade secrets and know-how, or tarnish or diminish goodwill in our brand, all of which could adversely affect our business.
A 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.
A failure to compete effectively with these other competitors, adjust our manufacturing and production 11 Table of Contents 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.
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.
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.
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.
Stakeholders also may have very different views on where our ESG and sustainability focus should be placed, including differing 19 Table of Contents views of regulators in various jurisdictions in which we operate.
If the outcome of any intellectual 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 16 Table of Contents affected.
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.
Furthermore, in recent years, “anti-ESG” sentiment has gained 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.
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.
A negative outcome in one or more of these lawsuits, whether pursuant to a judgment, ruling or a settlement, could result in an award or the payment 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 other costs, any of which may be significant and may have a negative impact on our business, operating results and cash flows.
From time to time, we may also elect to provide guarantees or other credit support in favor of, or related to, these arrangements, including to increase capacity thereunder.
From time to time, we may also elect to 10 Table of Contents provide guarantees or other credit support in favor of, or related to, these arrangements, including to increase capacity thereunder.
We use many information technology systems, some of which are managed or hosted by third parties, and manufacture connected products (including connected vehicles), some of which are managed by third parties, in operating our business.
We use many information technology systems, some of which are managed or hosted by third parties, and manufacture products, some of which are managed by third parties, in operating our business.
Should these or other facilities become unavailable either temporarily or permanently for any number of reasons, including supply chain constraints, labor disruptions, changes in legal or regulatory requirements, the occurrence of a contagious disease or illness or catastrophic weather events (including events caused by climate change), the inability to manufacture at the affected facility may result in harm to our reputation, supply shortages, long lead times in supply, increased costs, lower revenues and the loss of customers.
Should these or other facilities become unavailable either temporarily or permanently for any number of reasons, such as supply chain constraints, labor disruptions, changes in legal or regulatory requirements, the occurrence of a contagious disease or illness or catastrophic weather events (including 13 Table of Contents events caused by climate change), the inability to manufacture at or distribute products from the affected facility may result in harm to our reputation, supply shortages, long lead times in supply, increased costs, lower revenues and the loss of customers.
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.
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.
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.
Failure to establish and maintain the appropriate number of dealer and distributor relationships or a deterioration of those relationships due to weak economic conditions 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.
The Company purchases excess insurance coverage for product liability claims related to incidents during the policy period which exceed our self-insured retention thresholds. Disputes with insurers could impact our recoveries under these policies.
The Company purchases excess insurance coverage for product liability claims related to incidents during the policy period which exceed our self-insured retention thresholds. Disputes with insurers have in the past impacted, and could in the future, impact our recoveries under these policies.
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 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, products, data or operations as a result of such cyber-attacks. We could, however, experience material disruptions or breaches in the future.
Our information technology systems and connected products, including those managed or hosted by third parties, have been, and could be in the future vulnerable to breach, damage, disruption, or breakdown from various sources, including power loss, viruses, malware, ransomware, phishing, denial of service, and other cyber-attacks that may be random, targeted, or the result of misconduct or error by individuals with access to our systems.
These information technology systems and products, including those managed or hosted by third parties, could be vulnerable to breach, damage, disruption, or breakdown from various threats, viruses, malware, ransomware, phishing, denial of service, and other cyber-attacks that may be random, targeted, or the result of misconduct or error by individuals with access to our systems.
Unless we can continue to enhance existing products, develop and market new products and services, including in the digital and electrification markets, we may not be able to compete effectively in the market, and ultimately satisfy the needs and preferences of our customers in the global markets in which we compete. Product development requires significant financial, technological and other resources.
Unless we can continue to enhance existing products, develop and market new products and services, including in the digital and electrification markets, we may not be able to compete effectively in the market, and ultimately satisfy the needs and preferences of our customers in the global markets in which we compete.
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.
For example, lack of snowfall during winter has in the past, and may in the future, materially adversely affect snowmobile sales; excessive rain (including as a result of hurricanes or other extreme storm events) may materially adversely affect sales of off-road vehicles and boats during rainy seasons in various geographies; 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.
Our business, data, services and products are subject to United States federal and state and international data privacy laws and regulations and any failure to comply with these laws and regulations could harm our reputation, expose us to damages and otherwise adversely affect our business.
Our business, data, services and products are subject to increasingly complex data privacy and cybersecurity laws and regulations in the United States (federal and state) as well as internationally, and any failure to comply with these laws and regulations could harm our reputation, expose us to damages and otherwise adversely affect our business.
Our ongoing compliance with the GDPR, CCPA, and other privacy and data protection laws may result in significant costs and challenges that are likely to increase over time, particularly in the event we introduce new connected products.
Our ongoing efforts to comply with privacy and cybersecurity laws may result in significant costs and challenges that are likely to increase over time, particularly in the event we introduce new connected products.
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.
The current presidential administration issued an executive order in 2025 opposing diversity, equity and inclusion (“DEI”) initiatives in the private sector, drawing additional attention to companies who provide products and services to the U.S. government.
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.
From time to time, we manage our portfolio through acquisitions, non-consolidated investments, alliances, new joint ventures and partnerships, and divestitures, which could be risky and could harm our business. From time to time, we manage our portfolio through targeted acquisitions, non-consolidated investments, alliances, and new joint ventures and partnerships, as well as through divestitures (each a “Strategic Transaction”).
These laws and regulations are continuously evolving and developing, creating significant uncertainty as privacy and data protection laws may be interpreted and applied differently from country to country and may create inconsistent or conflicting requirements.
These laws and regulations 17 Table of Contents are continuously evolving, developing, and becoming more complex, punitive, and restrictive, creating significant uncertainty as these laws may be interpreted and applied differently from country to country and may create inconsistent or conflicting requirements.
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.
Furthermore, if we fail to establish and maintain an appropriate number of dealers and distributors for each of our products, we may not be able to obtain or sustain adequate market coverage for the desired level of retail sales of our products.
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.
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 or separation risks.
The inability to successfully manage the risks associated with the Company’s divestiture activity may result in higher production costs, lost sales or otherwise negatively affect earnings and financial results. Operational Risks Disruption in our suppliers’ operations could disrupt our production schedule.
The inability to successfully manage the risks associated with the Company’s divestiture activity, including the recently completed separation of Indian Motorcycle, may result in higher production costs, lost sales or otherwise negatively affect earnings and financial results.
In some instances, we purchase systems, components, raw materials and parts that are ultimately derived from a single source or geography and may be at an increased risk for supply disruptions. If necessary, we may not be able to develop alternate sourcing quickly or at all.
For example, if we experience supply disruptions and sourcing challenges for various components critical to the manufacture of our products, our operations may be impacted negatively. In some instances, we purchase systems, components, raw materials and parts that are ultimately derived from a single source or geography and may be at an increased risk for supply disruptions.
Alternatively, we may not be able to identify an attractive Strategic Transaction. The benefits of a Strategic Transaction may take more time than expected to develop or integrate into our operations, and we cannot guarantee that any Strategic Transaction will ultimately produce the expected benefits.
The benefits of a Strategic Transaction may take more time than expected to develop or integrate into our operations or separate from our business, and we cannot guarantee that any Strategic Transaction will ultimately produce the expected benefits. There can be no assurance that Strategic Transactions will be completed or that, if completed, they will be successful.
There can be no assurance that our level of investment in research and development will be a sufficient competitive advantage in product innovation, which could cause our business to suffer.
Product development requires significant financial resources, technological resources, innovations (including technological advancements, such as artificial intelligence, machine learning and augmented reality) and other resources. There can be no assurance that our level of investment in research and development will be a sufficient competitive advantage in product innovation, which could cause our business to suffer.
An impairment in the carrying value of goodwill and trade names could negatively impact our consolidated results of operations and net worth.
The OBBBA is not expected to have a material impact on our consolidated financial statements in future periods. An impairment in the carrying value of goodwill and trade names could negatively impact our consolidated results of operations and net worth.
An unanticipated adverse determination of a material product liability claim or other material claim (particularly an uninsured issue) made against us could materially and adversely affect our financial position, results of operations or cash flows. Significant product repair and/or replacement costs due to product warranty claims or product recalls could have a material adverse impact on our results of operations.
Claims against us that result in entry of a judgment or that we settle that are not covered or not sufficiently covered by insurance (particularly an uninsured issue), or which fall within retained liability under our insurance, could materially and adversely affect our financial position, results of operations or cash flows. 15 Table of Contents Significant product repair and/or replacement costs due to product warranty claims or product recalls could have a material adverse impact on our results of operations.
Weakening of the financial condition of our dealers or distributors due to deterioration of business conditions or reputational harm could negatively affect our sales growth and profitability. Additionally, weak demand for, or quality issues with, our products may cause dealers and distributors to voluntarily or involuntarily reduce or terminate their relationship with us.
Weakening of the financial condition of our dealers or distributors due to deterioration of macroeconomic business conditions or reputational harm could negatively affect our sales growth and profitability.
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.
These laws and regulations include, for example, the European Union’s General Data Protection Regulation (“GDPR”), the California Consumer Privacy Act (“CCPA”), the United States Department of Commerce Supply Chain Security Rule, the EU Cyber Resilience Act (“CRA”), the EU Machinery Regulation, the United Nations Regulation 155 Cybersecurity and Cybersecurity Management System, and other similar privacy and cybersecurity laws.
Certain of our competitors are more diversified and have advantageous manufacturing footprints, and may invest more heavily in intellectual property, product development, promotions and advertising or online presence.
At the dealer level, competition is based on additional factors, including product availability, sales, service and marketing support programs (such as financing and cooperative advertising), and dealer and customer perception. Certain of our competitors are more diversified and have advantageous manufacturing footprints, and may invest more heavily in intellectual property, product development, promotions and advertising or online presence.
Our operations and ability to maintain production is dependent upon our suppliers delivering sufficient quantities of systems, components, raw materials and parts on time to manufacture our products and meet our production schedules. For example, if we experience supply disruptions and sourcing challenges for various components critical to the manufacture of our products, our operations may be impacted negatively.
Operational Risks Disruption in our suppliers’ operations could disrupt our production schedule. Our operations and ability to maintain production is dependent upon our suppliers delivering sufficient quantities of systems, components, raw materials and parts on time to manufacture our products and meet our production schedules.
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.
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. Competition in such markets is based upon several factors, including price, quality, reliability, styling, product features and warranties.
There can be no assurance that Strategic Transactions will be completed or that, if completed, they will be successful. Strategic Transactions pose risks with respect to our ability to project and evaluate market demand, potential synergies and cost savings, make correct accounting estimates and achieve anticipated business goals and objectives.
Strategic Transactions pose risks with respect to our ability to project and evaluate market demand, potential synergies and cost savings, make correct accounting estimates and achieve anticipated business goals and objectives. As we 12 Table of Contents continue to grow, in part, through Strategic Transactions, our success depends on our ability to anticipate and effectively manage these risks.
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.
The tariff policy environment is rapidly evolving, however, and it is impossible to predict with any certainty the effects that these and any new tariffs may ultimately have on our industry or our financial condition.
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.
Fluctuations in the relationship of the United States dollar to these currencies has recently resulted in a corresponding negative impact on our financial results.
Removed
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.
Added
There is no assurance that suitable replacements for PFAS-containing parts and materials will be available at similar costs, or at all. Our business may be adversely affected by trade matters, including tariffs.
Removed
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.
Added
Tariffs on goods imported to the United States, or countermeasures imposed in response to such tariffs, have increased, and may in the future increase, the cost of goods for our products and reduce our ability to sell our products globally, which may adversely affect our operating results and financial condition.
Removed
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.
Added
The U.S. government has implemented a general tariff on all imports from countries not exempted under certain trade reciprocity criteria and elevated tariffs have been imposed on imports from major trading partners. We currently procure components from countries subject to such tariffs, which are utilized in our facilities in the United States and Mexico.
Removed
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.
Added
A portion of our annual sales originate from products manufactured in our facilities in Mexico, and we sell our products globally.
Removed
We could, however, experience material disruptions or breaches in the future.
Added
As a result of the current tariffs, we anticipate increased supply chain challenges, commodity cost volatility, economic uncertainty, and economic pressures on customers and consumers as a result of the challenges of high inflation combined with the effects of increased tariffs.
Removed
For example, in 2021, the Organization for Economic Cooperation and Development (“OECD”) announced that 136 countries and tax jurisdictions have agreed to implement a new “Two Pillar” approach to international taxation.
Added
The ultimate impact of any tariffs will depend on various factors, including how long such tariffs remain in place, the ultimate levels of such tariffs and how other countries respond to the U.S. tariffs.
Removed
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.
Added
While we have implemented measures to mitigate these potential impacts and continue to evaluate additional measures that may be appropriate, the current and proposed tariffs and these other factors have had, and may in the future have, a material negative effect on our profitability. We continue to evaluate these factors and their potential effects.
Removed
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.
Added
We believe such Strategic Transactions add value to our existing brands and product portfolio. Alternatively, we may not be able to identify an attractive Strategic Transaction.
Removed
Depending on how the jurisdictions in which we operate choose to implement the OECD’s approach in their tax treaties and domestic tax laws, we and our subsidiaries could be adversely affected due to some of our income being taxed at higher effective rates, once these new rules come into force.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur 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.
Biggest changeThe processes cover: conducting cybersecurity assessments of third-party service providers; incorporating cybersecurity obligations into contracts with third-party providers; and receiving and responding to notification of cybersecurity incidents of third-party service providers, among other things.
Those updates include information regarding our cybersecurity risks and risk management program; cybersecurity incidents and our response to them; and, as appropriate, developments in the external cybersecurity landscape, including any learnings from external cybersecurity incidents.
Those updates include information regarding our cybersecurity risks and risk management 20 Table of Contents program; cybersecurity incidents and our response to them; and, as appropriate, developments in the external cybersecurity landscape, including any learnings from cybersecurity incidents.
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.
In 2025, Polaris 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.
Our Executive Cybersecurity Council meets as appropriate and receives updates from the Senior Vice President and Chief Digital and Information Officer and the cybersecurity team regarding our cybersecurity risks and risk management program; cybersecurity incidents and our response to them; and, as appropriate, developments in the external cybersecurity landscape, including learnings from external cybersecurity incidents.
Polaris maintains a cybersecurity council made up of senior executives across the business who meet regularly to receive updates from the Senior Vice President and Chief Digital and Information Officer and the cybersecurity team regarding our cybersecurity risks and risk management program; cybersecurity incidents and our response to them; and, as appropriate, developments in the external cybersecurity landscape, including learnings from external cybersecurity incidents.
Our cybersecurity risk management program is under the direction of our Senior Vice President and Chief Digital and Information Officer, who has 30 years of technology leadership, and staffed by a cybersecurity team that includes personnel with a range of information and product security experience, from early-career professionals with cybersecurity degrees to seasoned professionals with multiple cybersecurity-related certifications and more than twenty years of experience.
He is supported by a staff of cybersecurity professionals that includes personnel with a range of information and product security experience, from early-career professionals with cybersecurity degrees to seasoned professionals with multiple cybersecurity-related certifications and more than twenty years of experience.
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
For more information about these risks, please see “Risk Factors - Regulatory, Intellectual Property, Cybersecurity and Privacy Risks” in this Annual Report. Cybersecurity Governance. Our Senior Vice President and Chief Digital and Information Officer, who has 30 years of technology leadership, leads the Polaris cybersecurity risk management program.
Removed
Item 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.
Added
Item 1C. Cybersecurity Cybersecurity Risk Management & Strategy. Polaris’ has implemented a cybersecurity risk management program, which is part of Polaris’ overall enterprise risk management program, that is designed to align with industry-standard cybersecurity frameworks, addressing both information security and product security, including connected vehicles, embedded systems, and related technologies.
Removed
Examples of relevant processes include steps for: assessing the severity of a cybersecurity threat; identifying the source of a cybersecurity threat, including whether the cybersecurity threat is associated with a third-party service provider; implementing cybersecurity countermeasures and mitigation strategies; and remediating and escalating cybersecurity incidents using cross-functional expertise.
Added
Polaris’ cybersecurity risk management program is assessed against the NIST Cybersecurity Framework, which incorporates processes for each of the core functions (i.e., Identify, Protect, Detect, Respond, and Recover) to assess, manage, and mitigate risks from cybersecurity threats. Our cybersecurity risk management program also includes risk-based processes for managing third-party cybersecurity risks.

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, 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.
Biggest changeProperties The following sets forth the Company’s material properties, including certain properties classified as held for sale, as of December 31, 2025: 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 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 300,000 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.
We also have international office facilities in Western Europe, Australia, New Zealand, Brazil, India, China, Japan, and Mexico. We own substantially all tooling and machinery used in the manufacture of our products. We make ongoing capital investments in our facilities. These investments have increased production capacity for our products.
We also have international office facilities in Western Europe, Australia, Brazil, India, China, Japan, and Mexico. We own substantially all tooling and machinery used in the manufacture of our products. We make ongoing capital investments in our facilities. These investments have increased production capacity for our products.
Additionally, we have over seven million square feet of global warehouse and distribution center space.
Additionally, we have approximately seven million square feet of global warehouse and distribution center space.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAs 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.
Biggest changeLegal Proceedings We are involved in a number of legal proceedings incidental to our business, none of which is presently expected to have a material effect on our financial position, results of operations or cash flows, or the financial results of our business. 21 Table of Contents As of the date of the filing of this Annual Report, we are party to certain class action and putative class action lawsuits 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.
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.
With respect to each of the aforementioned class action and 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.
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.
On December 14, 2023, the Ninth Circuit denied Polaris’s petition. On January 16, 2026, the state court in Albright entered an order setting a hearing for March 24, 2026 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.
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.
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.
Removed
Item 3. Legal Proceedings We are involved in a number of legal proceedings incidental to our business, none of which is presently expected to have a material effect on our financial position, results of operations or cash flows, or the financial results of our business.
Added
On February 27, 2025, the federal district court vacated the pretrial deadlines and the May 5, 2025 trial date. The court will issue a new schedule and trial date upon its rulings on the pending summary judgment and class decertification motions.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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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.
Biggest changeAssumes $100 Invested at the close on December 31, 2020 Assumes Dividend Reinvestment Fiscal Year Ended December 31, 2025 2020 2021 2022 2023 2024 2025 Polaris Inc. $ 100.00 $ 117.80 $ 110.71 $ 106.55 $ 66.94 $ 77.64 S&P Midcap 400 Index 100.00 124.76 108.47 126.29 143.89 154.68 S&P Composite 1500 Leisure Products Index 100.00 121.26 84.71 88.50 75.75 95.74 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.
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.
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, 2025 — $ — — $ 1,109,330,034 November 1–30, 2025 — $ — — $ 1,109,330,034 December 1–31, 2025 — $ — — $ 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.
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 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, 2025.
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.
The graph assumes the investment of $100 at the close on December 31, 2020 in common stock of the Company and in each of the indexes, and the reinvestment of all dividends since that date to December 31, 2025. Points on the graph represent the performance as of the last business day of each of the years indicated.
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]
As of December 31, 2025, the Company was authorized to repurchase up to an additional $1.1 billion 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 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.
On February 6, 2026, there were 1,782 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 $69.33 per share.

Item 7. Management's Discussion & Analysis

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

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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.
Biggest changeWe will continue to evaluate the impact of tariffs on our operations and profitability. 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) 2025 2024 Change 2025 vs. 2024 2023 Change 2024 vs. 2023 Sales $ 7,152.0 $ 7,175.4 — % $ 8,934.4 (20) % Cost of sales $ 5,783.3 $ 5,708.6 1 % $ 6,974.5 (18) % Gross profit $ 1,368.7 $ 1,466.8 (7) % $ 1,959.9 (25) % Percentage of sales 19.1 % 20.4 % -130 basis points 21.9 % -149 basis points Operating expenses: Selling and marketing $ 505.0 $ 500.4 1 % $ 542.3 (8) % Research and development 371.9 336.9 10 % 374.3 (10) % General and administrative 541.8 436.5 24 % 422.8 3 % Goodwill impairment 52.6 — NM — NM Loss on disposal group held for sale 330.4 — NM — NM Total operating expenses $ 1,801.7 $ 1,273.8 41 % $ 1,339.4 (5) % Percentage of sales 25.2 % 17.8 % +744 basis points 15.0% +276 basis points Income from financial services $ 84.3 $ 97.6 (14) % $ 80.4 21 % Operating (loss) income $ (348.7) $ 290.6 NM $ 700.9 (59) % Non-operating expense: Interest expense $ 131.4 $ 137.0 (4) % $ 125.0 10 % Other expense (income), net $ 52.6 $ 12.8 NM $ (44.5) NM (Loss) income before income taxes $ (532.7) $ 140.8 NM $ 620.4 (77) % (Benefit) provision for income taxes $ (67.9) $ 29.6 NM $ 117.7 (75) % Effective income tax rate 12.8 % 21.0 % -829 basis points 19.0 % +207 basis points Net (loss) income $ (464.8) $ 111.2 NM $ 502.7 (78) % Net (income) loss attributable to noncontrolling interest (0.7) (0.4) 75 % 0.1 NM Net (loss) income attributable to Polaris Inc. $ (465.5) $ 110.8 NM $ 502.8 (78) % Percentage of sales (6.5) % 1.5 % -805 basis points 5.6 % -408 basis points Adjusted EBITDA $ 410.2 $ 635.4 (35) % $ 1,020.9 (38) % Adjusted EBITDA Margin 5.7 % 8.9 % -311 basis points 11.4 % -257 basis points Diluted net (loss) income per share attributable to Polaris Inc. shareholders $ (8.18) $ 1.95 NM $ 8.71 (78) % Weighted average diluted shares outstanding 56.9 56.8 — % 57.7 (2) % 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 favorable product mix.
These arrangements provide liquidity by financing dealer purchases of our products without the use of our working capital. A majority of the worldwide sales of snowmobiles, ORVs, motorcycles, boats and related PG&A are financed under similar arrangements whereby we receive payment within a few days of shipment of the product.
These arrangements provide liquidity by financing dealer purchases of our products without the use of our working capital. A majority of the worldwide sales of ORVs, snowmobiles, motorcycles, boats and related PG&A are financed under similar arrangements whereby we receive payment within a few days of shipment of the product.
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.
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, capital investments, cash dividends to shareholders, and repurchases and retirement of common stock for at least the next 12 months and for the foreseeable future thereafter.
To the extent future operating results differ from those in our current forecast or our assumptions change pertaining to the markets in which we compete, it is possible that an impairment charge could be recorded in a future accounting period. Other intangible assets. Our primary identifiable intangible assets include: dealer/customer relationships, brand/trade names and developed technology.
To the extent future operating results differ from those in our current forecast or our assumptions change pertaining to the markets in which we compete, it is possible that an impairment charge could be recorded in a future accounting period. Other intangible assets. Our primary identifiable intangible assets include: dealer/customer relationships and brand/trade names.
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.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 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, 2024.
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 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 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.
We use the non-GAAP financial measure of Adjusted EBITDA, which is defined as net (loss) income, excluding interest expense, income tax expense, depreciation and amortization, and certain other non-cash, non-recurring, or non-operating 30 Table of Contents items impacting net (loss) income from time to time.
Adjusted EBITDA has limitations and should not be considered in isolation from, as a substitute for, or more meaningful than, net income from continuing operations as determined in accordance with GAAP. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance.
Adjusted EBITDA has limitations and should not be considered in isolation from, as a substitute for, or more meaningful than, net (loss) income as determined in accordance with GAAP. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance.
Under the quantitative goodwill impairment test, the fair value of each reporting unit is determined using a discounted cash flow analysis and market approach.
Under the quantitative goodwill impairment test, the fair value of each reporting unit is determined considering a discounted cash flow analysis and market approach.
As of December 31, 2024 and 2023, we recorded $227.1 million and $9.5 million, respectively, for probable insurance recoveries related to product liability accruals. Adverse determination of material product liability claims made against us could have a material adverse effect on our financial condition and results of operations. Goodwill.
As of December 31, 2025 and 2024, we recorded $182.5 million and $227.1 million, respectively, for probable insurance recoveries related to product liability accruals. Adverse determination of material product liability claims made against us could have a material adverse effect on our financial condition and results of operations. Goodwill.
The difference between the fair value and carrying value for both the On Road and Marine reporting units was in excess of 10%.
The difference between the fair value and carrying value for both the Off Road and Marine reporting units was in excess of 10%.
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, 2025 and 2024, the outstanding amount financed worldwide by dealers under these arrangements was approximately $2,085.5 million and $2,255.5 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.
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.
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, 2025 and 2024, accrued sales promotions and incentives were $278.4 million and $249.0 million, respectively.
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.
Additional information on our end markets for 2025: • Polaris U.S pontoon unit retail sales down high-single digits percent • Estimated U.S. industry pontoon unit retail sales down low-double digits percent • Polaris U.S. deck boat unit retail sales down high-teens percent • Estimate U.S. industry deck boat unit retail sales down high-teens 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.
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.
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, 2025, there were borrowings of $35.4 million outstanding under the Revolving Loan Facility.
This section of this Annual Report generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
This section of this Annual Report generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
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 .” 36 Table of Contents
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.
As of December 31, 2025 and 2024, we had accruals of $374.1 million and $385.3 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.
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.
Our financial exposure under these repurchase agreements is limited to the difference between the amounts unpaid by the dealer with respect to the repurchased product plus costs of repossession and the amount received on the resale of the repossessed product. Sales promotions and incentives.
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 of December 31, 2025 and December 31, 2024, we were in compliance with all debt covenants. Our debt to total capital ratio was 65 percent and 62 percent as of December 31, 2025 and December 31, 2024, 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 $43.2 million was outstanding as of December 31, 2024.
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 $36.8 million was outstanding as of December 31, 2025.
With respect to wholegood vehicles, boats, and PG&A, revenue is recognized when we transfer control of the product to our customer (primarily dealers and distributors).
For the majority of wholegood vehicles, boats, and PG&A, revenue is recognized when we transfer control of the product to our customer (primarily dealers and distributors).
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.
Our credit facility also includes a Term Loan Facility, pursuant to which $475.0 million was outstanding as of December 31, 2025. We are required to make principal payments under the Term Loan Facility totaling $25.0 million over the next 12 months.
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.
As of December 31, 2025, the potential aggregate repurchase obligations were approximately $333.9 million. Our financial 33 Table of Contents 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.
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.
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.
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.
Additional information on our end markets for 2025: • Indian Motorcycle North America unit retail sales down low-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 down approximately six percent Marine: Marine sales increased seven percent as a result of increased shipments.
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 record these amounts as a liability in the consolidated balance sheets until they are ultimately paid. As of December 31, 2025 and 2024, the accrued warranty liability was 34 Table of Contents $135.5 million and $162.8 million, respectively.
The following table presents a reconciliation of net income from continuing operations, the most comparable GAAP financial measure, to Adjusted EBITDA for each of the periods presented: For the Years Ended December 31, ($ 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 following table presents a reconciliation of net (loss) income, the most comparable GAAP financial measure, to Adjusted EBITDA for each of the periods presented: For the Years Ended December 31, ($ in millions) 2025 2024 2023 Sales $ 7,152.0 $ 7,175.4 $ 8,934.4 Product wind downs (5) (9.2) (0.7) — Adjusted sales $ 7,142.8 $ 7,174.7 $ 8,934.4 Net (loss) income $ (464.8) $ 111.2 $ 502.7 (Benefit) provision for income taxes (67.9) 29.6 117.7 Interest expense 131.4 137.0 125.0 Depreciation 263.5 264.4 241.2 Intangible amortization (1) 23.0 21.9 17.7 Distributions from other affiliates (2) — — (1.4) Acquisition-related costs (3) 0.2 1.4 1.3 Restructuring (4) 20.1 23.4 8.2 Product wind downs (5) 10.4 10.0 — Class action litigation expenses (6) 8.0 7.0 8.5 Impairment charges (7) 155.9 29.5 — Loss on disposal group held for sale (8) 330.4 — — Adjusted EBITDA $ 410.2 $ 635.4 $ 1,020.9 Adjusted EBITDA Margin 5.7 % 8.9 % 11.4 % (1) Represents amortization expense for intangible assets acquired through business combinations and asset acquisitions (2) Represents distributions received related to an impaired investment held by the Company (3) Represents adjustments for integration and acquisition-related expenses (4) Represents adjustments for corporate restructuring (5) Represents adjustments related to product wind downs, including the FTR product line within the Company’s On Road segment and the Timbersled product line within the Company’s Off Road segment (6) Represents adjustments for certain class action litigation-related expenses (7) Represents goodwill impairment charges associated with the Company’s On Road segment, impairment charges related to other intangible assets associated with the Company’s Off Road segment, and impairment charges related to strategic investments held by the Company (8) Represents impairment and other charges recorded to report the held for sale Indian Motorcycle business at fair value less an amount of estimated transaction costs 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.
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.
Income from financial services: The following table reflects our income from financial services: For the Years Ended December 31, ($ in millions) 2025 2024 Change 2025 vs. 2024 2023 Change 2024 vs. 2023 Income from Polaris Acceptance joint venture $ 42.1 $ 53.8 (22) % $ 41.5 30 % Income from retail credit agreements 39.5 42.7 (7) % 39.0 9 % Net income (expense) from other financial services activities 2.7 1.1 NM (0.1) NM Total income from financial services $ 84.3 $ 97.6 (14) % $ 80.4 21 % Percentage of sales 1.2 % 1.4 % -18 basis points 0.9 % +46 basis points Income from financial services decreased 14 percent in 2025, primarily as a result of lower wholesale financing income from Polaris Acceptance due to reduced interest rates and dealer inventory levels.
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.
Gross profit, as a percentage of sales, decreased in 2025 primarily due to incremental tariff charges and lower net pricing driven by higher promotional costs, partially offset by favorable operating costs, lower warranty expense and favorable product mix. 29 Table of Contents Additional information on our end markets for 2025: • Polaris North America utility unit retail sales up mid-single digits percent • Polaris North America recreation excluding youth unit retail sales down high-sigle digits percent • Total Polaris North America ORV excluding youth unit retail sales up low-single digits percent • Estimated North America industry ORV excluding youth unit retail sales up low-single digits percent • Total Polaris North America ORV excluding youth dealer inventories down approximately nine percent • Polaris North America snowmobile unit retail sales for the 2025-2026 season-to-date period through December 31, 2025 up high-forties percent • Estimated North America industry snowmobile unit retail sales for the 2025-2026 season-to-date period through December 31, 2025 up mid-teens percent • Total Polaris North America snowmobile dealer inventories down approximately 43 percent On Road: On Road sales, inclusive of PG&A sales, decreased six percent in 2025, primarily as a result of decreased shipments across the product portfolio.
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”).
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 average per unit sales price for the On Road segment decreased approximately six percent, primarily due to product mix and lower net pricing driven by higher promotional costs. On Road sales to customers outside of North America decreased 10 percent in 2024, primarily as a result of lower Indian Motorcycle shipments.
The average per unit sales price for the On Road segment increased approximately four percent, primarily driven by product mix and higher net pricing. On Road sales to customers outside of North America decreased six percent in 2025, primarily as a result of decreased sales in Europe.
These groups of comparable companies are used to develop multiples based on total market-based invested capital as a multiple of EBITDA. We determine our estimated values by applying these comparable EBITDA multiples to the operating results of our reporting units. The ultimate fair value of each reporting unit is determined considering the results of both valuation methods.
These groups of comparable companies are used to develop multiples based on total market-based invested capital as a multiple of revenue and EBITDA. We determine our estimated values by applying these comparable revenue and EBITDA multiples to the operating results of our reporting units.
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.
Gross profit, as a percentage of sales, decreased primarily due to incremental tariff charges, lower net pricing driven by higher promotional costs and increased incentive compensation costs, partially offset by favorable operational costs and reduced warranty expense.
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.
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) 2025 Percent of Total Cost of Sales 2024 Percent of Total Cost of Sales Change 2025 vs. 2024 2023 Percent of Total Cost of Sales Change 2024 vs. 2023 Purchased materials and logistics $ 4,801.8 83 % $ 4,693.6 82 % 2 % $ 5,802.9 83 % (19) % Labor costs 627.4 11 % 628.8 11 % — % 756.7 11 % (17) % Depreciation and amortization 218.2 4 % 220.8 4 % (1) % 205.8 3 % 7 % Warranty 135.9 2 % 165.4 3 % (18) % 209.1 3 % (21) % Total cost of sales $ 5,783.3 100 % $ 5,708.6 100 % 1 % $ 6,974.5 100 % (18) % Percentage of sales 80.9 % 79.6 % +130 basis points 78.1 % +149 basis points The year-over-year increase in cost of sales was primarily due to higher materials costs driven by incremental tariff charges, partially offset by reduced warranty expense. 27 Table of Contents Gross profit: Gross profit for 2025, as a percentage of sales, decreased primarily as a result of incremental tariff charges, lower net pricing driven by higher promotional costs and increased incentive compensation costs, partially offset by favorable operational costs and reduced warranty expense.
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.
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 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.
Our sales and gross profit by reporting segment, which includes the respective PG&A, as well as amounts related corporate costs and other activities, were as follows: For the Years Ended December 31, ($ in millions) 2025 Percent of Sales 2024 Percent of Sales Percent Change 2025 vs. 2024 2023 Percent of Sales Percent Change 2024 vs. 2023 Off Road $ 5,713.1 80 % $ 5,706.7 79 % — % $ 6,984.4 78 % (18) % On Road 926.5 13 % 987.8 14 % (6) % 1,184.6 13 % (17) % Marine 512.4 7 % 480.9 7 % 7 % 765.4 9 % (37) % Total sales $ 7,152.0 100 % $ 7,175.4 100 % — % $ 8,934.4 100 % (20) % For the Years Ended December 31, ($ in millions) 2025 Percent of Sales 2024 Percent of Sales Percent Change 2025 vs. 2024 2023 Percent of Sales Percent Change 2024 vs. 2023 Off Road $ 1,155.1 20.2 % $ 1,160.5 20.3 % — % $ 1,531.6 21.9 % (24) % On Road 157.2 17.0 % 179.4 18.2 % (12) % 240.4 20.3 % (25) % Marine 72.5 14.2 % 80.6 16.8 % (10) % 169.0 22.1 % (52) % Corporate costs and other (16.1) 46.3 NM 18.9 NM Total gross profit $ 1,368.7 19.1 % $ 1,466.8 20.4 % (7) % $ 1,959.9 21.9 % (25) % NM = not meaningful Off Road: Off Road sales, inclusive of PG&A sales, were approximately flat in 2025.
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.
Sales by geographic region were as follows: For the Years Ended December 31, ($ in millions) 2025 Percent of Total Sales 2024 Percent of Total Sales Percent Change 2025 vs. 2024 2023 Percent of Total Sales Percent Change 2024 vs. 2023 United States $ 5,662.3 79 % $ 5,629.0 79 % 1 % $ 7,122.2 80 % (21) % Canada 419.9 6 % 446.2 6 % (6) % 584.0 6 % (24) % Other countries 1,069.8 15 % 1,100.2 15 % (3) % 1,228.2 14 % (10) % Total sales $ 7,152.0 100 % $ 7,175.4 100 % — % $ 8,934.4 100 % (20) % Sales in the United States increased primarily as a result of higher Marine and ORV shipments, partially offset by reduced snowmobile and motorcycle shipments.
While management believes the projections, discount rate, and other assumptions and judgments made are reasonable, the estimated fair values for the On Road and Marine reporting units are particularly dependent upon industries to strengthen which will provide improved sales, margin expansion and cash flow growth.
While management believes the projections, discount rate, and other assumptions and judgments made were reasonable, the estimated fair value for the Marine reporting unit was particularly dependent upon future industry strength which will provide improved sales, margin expansion and cash flow growth.
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, 2024 2023 Change 2024 vs. 2023 2022 Change 2023 vs. 2022 Total cash provided by (used for): Operating activities $ 268.2 $ 925.8 $ (657.6) $ 534.5 $ 391.3 Investing activities (270.9) (462.0) 191.1 (319.3) (142.7) Financing activities (59.2) (431.3) 372.1 (363.2) (68.1) Operating Activities: The decrease in net cash provided by operating activities in 2024 was primarily the result of lower net income.
Cash Flows The following table summarizes the cash flows from operating, investing and financing activities: ($ in millions) For the Years Ended December 31, 2025 2024 Change 2025 vs. 2024 2023 Change 2024 vs. 2023 Total cash provided by (used for): Operating activities $ 741.0 $ 268.2 $ 472.8 $ 925.8 $ (657.6) Investing activities (139.5) (270.9) 131.4 (462.0) 191.1 Financing activities (693.0) (59.2) (633.8) (431.3) 372.1 Operating Activities: The increase in net cash provided by operating activities in 2025 was primarily the result of working capital improvements, partially offset by lower net income.
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.
Full year net loss attributable to Polaris Inc. was $465.5 million, or $8.18 net loss per diluted share, compared to 2024 full year net income attributable to Polaris Inc. of $110.8 million, or $1.95 per diluted share.
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.
As of December 31, 2025, up to an additional $1.1 billion of our common stock remains available for repurchase under our share repurchase program. Wholesale Customer Financing Arrangements: We have arrangements with certain finance companies to provide secured floor plan financing for our dealers.
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.
This was primarily the result of increased PG&A sales and utility ORV shipments, mostly offset by reduced snowmobile and recreational ORV shipments. The average per unit sales price for the Off Road segment decreased approximately two percent, primarily due to lower net pricing driven by higher promotional costs. Sales to customers outside of North America were approximately flat in 2025.
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.
The ultimate fair value of each reporting unit is determined considering the results of both valuation 35 Table of Contents methods. 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.
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.
Adjusted EBITDA: Adjusted EBITDA, in absolute dollars and as a percentage of sales, decreased in 2025 primarily due to increased incentive compensation costs, incremental tariff charges and lower net pricing driven by higher promotional costs, partially offset by favorable operating costs.
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.
Sales in Canada decreased primarily as a result of reduced snowmobile shipments. Currency rate movements had an unfavorable impact of two percentage points on sales in 2025. Sales in other countries decreased primarily as a result of reduced On Road shipments. Currency rate movements had a favorable impact of two percentage points on sales in 2025.
The average per unit sales price for the Marine segment increased approximately six percent, primarily driven by product mix. Gross profit, as a percentage of sales, decreased in 2024 due to decreased leverage of fixed costs as a result of reduced sales volumes and product mix.
The average per unit sales price for the Marine segment decreased approximately one percent, primarily due to product mix. Gross profit, as a percentage of sales, decreased in 2025 primarily due to higher operational costs and unfavorable product mix, partially offset by higher net pricing.
Through this analysis, as a result of financial performance, the Company recorded impairment charges of $9.5 million during the fourth quarter of 2024 related to certain indefinite-lived brand/trade name intangible assets within the Company’s Off Road segment. It was determined that all other remaining indefinite-lived intangible assets were not impaired.
Additionally, we recorded impairment charges of $53.9 million during the fourth quarter of 2025 related to an indefinite-lived brand/trade name and an amortizable developed technology intangible asset in the Company’s Off Road segment as a result of changes in the planned usage of such assets. It was determined that all other remaining intangible assets were not impaired.
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.
Overview 2025 sales totaled $7.2 billion and were approximately flat as compared to 2024. This was primarily driven by decreased shipments and lower net pricing driven by higher promotional costs, mostly offset by product mix. Our gross profit of $1.4 billion decreased seven percent from $1.5 billion in 2024.
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.
The components of the consolidated sales change were as follows: Percent change in total Company sales compared to the prior year 2025 2024 Volume (3) % (21) % Product mix and price 3 1 Currency — — — % (20) % The year-over-year volume decrease was primarily due to reduced recreational ORV, snowmobile and On Road shipments, partially offset by increased utility ORV shipments.
For the credit facility, interest is charged at rates based on Adjusted Term SOFR plus the applicable add-on percentage, as defined in the agreements governing the credit facility.
For the credit facility, interest is charged at rates based on adjusted Term SOFR plus the applicable add-on percentage, as defined in the credit agreement. As of December 31, 2025, we had $1.4 billion of availability on the Revolving Loan Facility.
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”).
In July 2024, we amended the credit facility to provide for a new incremental 364-day term loan in the amount of $400 million (the “Incremental Term Loan Facility”). At the time of issuance, the Incremental Term Loan Facility had a term ending in July 2025.
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.
The Company received approximately $497 million in net proceeds from the offering after deducting the underwriting discount and other fees and expenses. The 5.60% Senior Notes bear interest at a rate of 5.60% and mature in March 2031.
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 credit agreement contains covenants that require us to maintain certain financial ratios, including minimum interest coverage and maximum leverage ratios. 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.
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.
The Corporate amounts include costs that are not 28 Table of Contents allocated to segments, including certain manufacturing costs, the impacts from certain foreign currency transactions, and certain incentive compensation costs and related adjustments.
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.
Net cash used for investing activities decreased due to a reduction in property, equipment and tooling purchases, as well as strategic investments in 2024 that did not recur in 2025.
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.
Financing Activities: The increase in net cash used for financing activities was primarily the result of net repayments under debt arrangements in 2025 compared to net borrowings under debt arrangements in 2024, as well as lower share repurchases. Net repayments totaled $543.6 million in 2025 compared to net borrowings of $165.8 million in 2024.
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.
Subsequent to the impairment charge, there is no remaining goodwill balance for the On Road reporting unit. In the fourth quarter of 2025, we completed the annual impairment test. It was determined that goodwill was not impaired as each reporting unit’s fair value exceeded its carrying value.
Product mix was favorable as a result of a higher sales mix of ORVs.
Product mix was favorable as a result of a higher sales mix of ORVs. This favorability was partially offset by lower net pricing driven by higher promotional costs.
The increase in other expenses in 2024 was also attributable to an impairment charge recorded related to an investment held by the Company.
Interest expense: Interest expense decreased for 2025 primarily as a result of lower average debt levels. Other expense (income), net: The increase in other expenses in 2025 was primarily attributable to an impairment charge recorded related to a strategic investment held by the Company.
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.
Gross profit, as a percentage of sales, decreased in 2025 primarily due to unfavorable product mix and incremental tariff charges, partially offset by favorable operating costs.
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”.
We reported Adjusted EBITDA of $410.2 million in 2025 compared to $635.4 million in 2024. For information on how we define and calculate Adjusted EBITDA, and a reconciliation from net (loss) income to Adjusted EBITDA, see “Non-GAAP Financial Measures”. On October 10, 2025, we entered into a definitive agreement to sell a majority interest in the Indian Motorcycle business.
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.
Additionally, as of December 31, 2025, we had outstanding letters of credit of $58.4 million, primarily related to purchase obligations for raw materials. Share Repurchases: We did not repurchase shares of our common stock in open-market transactions under our share repurchase program during 2025.
During 2024, consumers financed 31 percent of our vehicles sold in the United States through these arrangements.
During 2025, consumers financed 30 percent of our vehicles sold in the United States through these arrangements. The volume of installment credit contracts written in calendar year 2025 with these institutions was $1,436.3 million, a three percent decrease from 2024.
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.
Financing Arrangements: We were party to an unsecured Master Note Purchase Agreement, as amended and supplemented, under which we previously issued senior notes. All outstanding unsecured senior notes were prepaid in full in June 2025 using proceeds of revolving loans under the Company’s unsecured credit facility.
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.
Operating expenses: Operating expenses for 2025, in absolute dollars and as a percentage of sales, increased primarily due to impairment and other charges recorded as a result of the Indian Motorcycle business being classified as held for sale, goodwill and other intangible asset impairment charges recorded, and higher general and administrative and research and development expenses.
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.
Other expense (income) is also impacted by currency exchange rate movements and the corresponding effects on currency transactions related to our international subsidiaries. Provision for income taxes: The income tax benefit for 2025 was primarily due to the pre-tax loss generated, partially offset by unfavorable adjustments related to non-deductible impairment charges.
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.
Weighted average diluted shares outstanding: Weighted average diluted shares outstanding increased throughout 2025 primarily due to reduced share repurchases, partially offset by a reduction in the dilutive effect of share-based equity awards as a result of the net loss incurred during 2025.
Removed
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.
Added
These decreases were primarily the result of impairment and other charges recorded as a result of the Indian Motorcycle business being classified as held for sale, goodwill and other intangible asset impairment charges recorded, incremental tariff charges and increased incentive compensation costs, partially offset by favorable operating costs.
Removed
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.
Added
During the year ended December 31, 2025, operating results of the Indian Motorcycle business were reported in our On Road segment and its assets and liabilities were classified as held for sale as of December 31, 2025. The sale closed in the first quarter of 2026.
Removed
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.
Added
On January 29, 2026, we announced that our Board of Directors declared a quarterly cash dividend of $0.68 per share for the first quarter of 2026, a one percent increase from the prior quarterly cash dividend, representing the 31st consecutive year of increased dividends to shareholders.
Removed
The Incremental Term Loan Facility is unsecured and has a term ending in July 2025. As with other borrowings under the credit facility, interest is charged at rates based on Adjusted Term SOFR plus the applicable add-on percentage, as defined in the agreements governing the credit facility.
Added
Global Economic Conditions We continue to monitor macroeconomic trends and uncertainties and changes in international trade relations and trade policy, including those related to tariffs. The U.S. government has implemented a general tariff on all imports from countries not exempted under certain trade reciprocity criteria and elevated tariffs have been imposed on imports from major trading partners.
Removed
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.
Added
Impacted countries have and may impose retaliatory tariffs, and such actions could give rise to an escalation of other trade measures by the countries subjected to such tariffs. Although the validity of certain tariffs are being challenged in litigation pending before the Supreme Court of the United States, there can be no guarantee about the outcome of such proceedings.
Removed
The NPA Amendment amended the Existing Note Purchase Agreement to revise the leverage ratio covenant from a gross leverage ratio to a net leverage ratio and revise the interest coverage ratio covenant definition to be based on EBITDA to interest expense.
Added
The tariff policy environment is rapidly evolving and there is no guarantee that additional or increased tariffs will not be imposed. We currently procure components from countries subject to such tariffs, which are utilized in our facilities in the United States and Mexico.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

14 edited+1 added−2 removed4 unchanged
Biggest changeWe generally buy these commodities and components based upon market prices that are established with the vendor as part of the purchase process. We enter into commodity hedging contracts in order to manage fluctuating market prices of certain commodities such as steel and diesel fuel.
Biggest changeFurther, the ultimate cost of certain commodities, raw materials, components and parts can fluctuate based on changes in international trade relations and trade policy, including those related to tariffs. We generally buy commodities and components based upon market prices that are established with the vendor as part of the purchase process.
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. 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.
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. Fluctuations in the Euro to U.S. dollar exchange rate impacts sales, cost of sales, and net (loss) income. Canadian Dollar: We operate in Canada through a wholly owned subsidiary.
In addition, we are a purchaser of components and parts containing various commodities, including steel, aluminum, rubber and others, which are integrated into our end products. While such materials are typically available from numerous suppliers, commodity raw materials are subject to price fluctuations.
In addition, we are a purchaser of components and parts containing various commodities, including steel, aluminum, rubber and others, which are integrated into our products. While such materials are typically available from numerous suppliers, commodity raw materials are subject to price fluctuations.
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.
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 (loss) income.
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 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. 38 Table of Contents
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.
The relationship of the U.S. dollar in relation to the Canadian dollar impacts sales, cost of sales and net (loss) income. Other currencies: We operate in various countries, principally in Europe, Mexico and Australia, through wholly owned subsidiaries.
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.
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 $41 million.
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.
We expect currencies to have a positive impact on net income in 2026 compared to 2025. The assets and liabilities in all of our international entities are translated at the foreign exchange rate in effect at the balance sheet date.
Certain assets and liabilities related to intercompany positions reported on our consolidated balance sheets that are denominated in a currency other than the entity’s functional currency are translated at the foreign exchange rates at the balance sheet date and the associated gains and losses are included in net income.
Certain 37 Table of Contents assets and liabilities related to intercompany positions reported on our consolidated balance sheets that are denominated in a currency other than the entity’s functional currency are translated at the foreign exchange rates at the balance sheet date and the associated gains and losses are included in net (loss) income.
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.
As of December 31, 2025, there was $35.4 million outstanding on the Revolving Loan Facility and $475.0 million outstanding on the 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.
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.
Based on the unhedged variable-rate debt included in our debt portfolio as of December 31, 2025, a 100 basis point increase or decrease in interest rates would increase or decrease interest expense by approximately $1 million. Our senior notes bear interest at fixed rates.
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.
Based on our current outlook for commodity prices, excluding the impact of tariffs and related items, we expect total commodities to have an unfavorable impact on our gross profit margins for 2026 when compared to 2025. Foreign Exchange Rates: The changing relationships of the U.S. dollar to foreign currencies can have a material impact on our financial results.
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.
A portion of our foreign currency exposure is mitigated with the following open foreign currency hedging contracts as of December 31, 2025: 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 $ 18.3 $0.65 to 1 AUD Canadian Dollar Long $ 127.6 $0.72 to 1 CAD Mexican Peso Short $ 55.6 18.9 Peso to $1 In 2025, after consideration of the existing foreign currency hedging contracts, foreign currencies had a negative impact on net (loss) income compared to 2024.
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.
Interest Rates: We are a party to an unsecured credit facility with various lenders consisting of a $1.4 billion Revolving Loan Facility and a $500.0 million 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 in the credit agreement.
Removed
The total impact of commodities had a favorable impact on our gross profit margins for 2024 when compared to 2023.
Added
We enter into commodity hedging contracts in order to manage fluctuating market prices of certain commodities such as steel and diesel fuel. Total commodities, excluding the impact of tariffs and related items, had an approximately neutral impact on our gross profit margins for 2025 when compared to 2024.
Removed
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.

Other PII 10-K year-over-year comparisons