Polaris (PII) risk factors, FY2025 10-K

Macroeconomic Risks

1. 01Our business may be sensitive to economic conditions, including those that impact our customers’ spending
2. 02Adverse changes in these factors has previously, and may in the future, lead to a decreased level of demand for our products, which could negatively impact our business, results of operations, financial condition and cash flows
3. 03Shortages or increases in the cost of raw materials, commodities, component parts, and transportation could negatively impact our business49% rewritten
4. 04Our business may be adversely affected by trade matters, including tariffsNew

Market and Competitive Risks

1. 05We face intense competition in all product lines. Failure to compete effectively against competitors could negatively impact our business and operating results
2. 06If we are unable to continue to enhance existing products and develop and market new or enhanced products that respond to customer needs and preferences, we may experience a decrease in demand for our products and our business and operating results could be negatively impacted22% rewritten
3. 07Our continued success is dependent on positive perceptions of our Polaris brands which, if weakened, could adversely affect our sales
4. 08Negative 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
5. 09From 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 business68% rewritten
6. 10continue 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 resultsNew

Operational Risks

1. 11Disruption in our suppliers’ operations could disrupt our production schedule
2. 12We manufacture our products at, and distribute our products from, several locations in North America and internationally. An unforeseen change in the level of demand for our products or any disruption at any of these facilities or manufacturing delays could adversely affect our business and operating results27% rewritten
3. 13We 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
4. 14Failure 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 results42% rewritten
5. 15Our operations require significant management attention and financial resources, expose us to difficulties presented by global economic, political, regulatory, accounting, and business factors, and may not be successful or produce desired levels of sales and profitability
6. 16Weather conditions may reduce demand and negatively impact net sales and production of certain of our products
7. 17A significant adverse determination in any material litigation claim against us could adversely affect our operating results or financial condition53% rewritten
8. 18Significant 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

Regulatory, Intellectual Property, Cybersecurity and Privacy Risks

1. 19Our business, properties and products are subject to extensive United States federal and state and international safety, environmental, trade and other government regulation and any failure to comply with these regulations could harm our reputation, expose us to damages and otherwise adversely affect our business
2. 20Our reliance upon patents, trademark laws, and contractual provisions to protect our proprietary rights may not be sufficient to protect our intellectual property from others who may sell similar products and may lead to costly litigation
3. 21We may be subject to cybersecurity events and other disruptions to our information technology systems, data and products that could adversely affect our business48% rewritten
4. 22Fluctuations in foreign currency exchange rates could result in declines in our reported sales and net earnings27% rewritten
5. 23Retail credit market deterioration and volatility may restrict the ability of our retail customers to finance the purchase of our products
6. 24We have outstanding debt and must comply with restrictive covenants in our debt agreements. 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

General Risks

1. 25Additional tax expense or tax exposure could impact our financial performance70% rewritten
2. 26An impairment in the carrying value of goodwill and trade names could negatively impact our consolidated results of operations and net worth
3. 27Expectations relating to environmental, social and governance considerations expose us to potential liabilities, increased costs, reputational harm and other adverse effects on our business