Polaris Inc., formerly known as Polaris Industries Inc., a MinnesotaDelaware corporation, was formed in 1994 and is the successor to Polaris Industries Partners LP. The terms “Polaris,” the “Company,” “we,” “us,” and “our” as used herein refer to the business and operations of Polaris Inc., its subsidiaries and its predecessors, which began doing business in 1954. We design, engineer, manufacture and manufacturemarket powersports vehicles which include, Off-Road Vehicles (ORV)include: off-road vehicles (“ORV”), including All-Terrain Vehicles (ATV)all-terrain vehicles (“ATV”) and side-by-side vehicles for recreationalvehicles; military and utility use, Snowmobiles, Motorcycles, Global Adjacent Markets vehicles, including Commercial, Governmentcommercial ORVs; snowmobiles; motorcycles; moto-roadsters; quadricicycles; and Defense vehicles,boats. We also design and Boats. Polaris also designs and manufacturesmanufacture or sourcessource parts, garments and accessories (PG&A) related to its vehicles(“PG&A”), which includes aftermarket accessories and aftermarket products and services for off-road and on-road vehicles. Polarisapparel. Our products are sold online and through dealers distributors, and retail storesdistributors principally located in the United States, Canada, Western Europe, Australia, and Mexico.

We operate in sixthree business segments; ORV, Snowmobiles, Motorcycles, Global Adjacent Markets, Aftermarket,Off Road, On Road, and Boats.Marine. Our products are sold through a network of approximately 2,3002,500 independent dealers in North America, approximately 1,4001,500 independent international dealers through over 3025 subsidiaries, and approximately 9070 independent distributors in over 120nearly 90 countries outside of North America. A majority of our dealers and distributors are multi-line and also carry competitor products, however fewsome dealers carry our full line of products and, while relatively consistent, the actual number of dealers carrying our products can vary from time to time. We also sell through a network

The Off Road segment primarily consists of brick-and-mortar retail centers.

Estimated North America and worldwide ORV industry retail sales are summarized as follows:

We sell our ORVs directly to a network of overapproximately 1,400 dealers in North America and over 1,0001,100 international dealers. Many of our ORV dealers and distributors are also authorized snowmobile dealers. We produce and deliver our products throughout the year based on dealer, distributor, and customer orders. ORV retail sales activity at the dealer level drives orders whichthat are incorporated into each product’s production scheduling. International distributor ORV orders

are taken throughout the year. We utilize our Retail Flow Management (RFM)(“RFM”) ordering system for ORV dealers, which allows dealers to order daily and create a segment stocking order which reduceshelps to reduce order fulfillment times.

The ORV industry in the United States, Canada and other global markets is highly competitive. As an ORV original equipment manufacturer (OEM)(“OEM”), our competition primarily comes from North American and Asian manufacturers. Competition in such markets is based upon a number of factors, including price, quality, reliability, styling, product features, warranties and warranties.

Snowmobiles have been manufactured under the Polaris name since 1954. We estimate that worldwide industry sales of snowmobiles totaled approximately 125,000, 135,000,130,000, and 125,000135,000 units for the 12 month seasons ended March 31, 2020, 2019,2023, 2022, and 2018,2021, respectively.

For the 12 month season ended March 31, 2020,2023, we held the number two market share position for North America. We produce a full line of snowmobiles consisting of 8057 models, ranging from youth models to utility and economy models to performance and competition models. Polaris snowmobiles are sold principally

Key model introductions in the United States, Canada, Russia and Northern Europe. 2020 snowmobile product introductions2023 included the all new Matryx Platform available with 7S display as well as the 650 Patriot Engine. Key models includeSeries 9 325 track that further elevates the Polaris INDY VR1 129/137, Polaris INDY XC Launch Edition, Polaris SWITCHBACK ASSAULT 146, Polaris PRO RMK QD2, Polaris RMK KHAOS QD2.Weline. We also manufacture a snow bike conversion kit system under the Timbersled brand.brand and in 2023 we launched the new RIOT Gen 2 system, as well as more trim levels and options.

We design, engineer, produce or supply a variety of replacement partsPolaris snowmobiles are sold principally in the United States, Canada, and Polaris Engineered Accessories for our snowmobiles and snow bike conversion kits. Snowmobile accessories include covers, traction products, reverse kits, electric starters, tracks, bags, windshields, oil and lubricants. We also market a full line of gear and apparel for our snowmobiles, including helmets, goggles, jackets, gloves, boots, bibs, pants and hats. Gear and apparel is purchased from independent vendors and sold by us through our dealers, distributors, and online.

The global Snowmobilesnowmobile industry is primarily comprised of North American Japanese, and RussianJapanese competitors. Competitive market share position is driven heavily by product news (styling, technology, performance) and attractivenesspricing.

Our commercial and government/defense businesses each have their own distribution networks outside of promotional incentives.our traditional dealer channels through which their respective vehicles are distributed. ProXD, one of our vehicle brands, is sold through a growing network of over 200 dealers and also direct to customer where permitted.

Motorcycles are utilized as a mode of transportation as well as for recreational purposes. The industry is comprised of several segments. We currently compete in three segments: cruisers, touring (including 3-wheel)three-wheel), and standard motorcycles. 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.

In 2020,2023, we held the number two position in North America market share for the 900cc+ category. Our motorcycles lineup includes Indian Motorcycle and Slingshot, a 3-wheelthree-wheel open air roadster. Our 20212024 model year line of motorcycles for Indian Motorcycle and Slingshot consists of 2538 models. In 2020,2023, Indian Motorcycle launched its all-new 20212024 lineup, delivering next-level technologyfeaturing a limited edition FTR x 100% R Carbon, a new Challenger Elite, and a robust suite of new accessories. Polariscompletely redesigned PowerBand Audio system. Slingshot launched its much-anticipated AutoDrive transmission technology in the 2020all-new 2024 lineup then expanded the 2021 lineup, which now includes a base model Slingshot S.with thoughtful refinement and bold graphics.

We design, engineer, produce or source a variety of replacement parts and accessories for our motorcycles. Motorcycle accessories include saddle bags, handlebars, backrests, exhausts, windshields, seats, oil and various chrome accessories. We also market a full line of gear and apparel for our motorcycles, including helmets, jackets, leathers and hats. Gear and apparel isare purchased from independent vendors and sold by us through our dealers, and 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.

Indian Motorcycle and Slingshot are distributed directly through independently owned dealers and distributors. Indian motorcyclesMotorcycles are sold through a network of over 200 dealers in North America and over 300350 international dealers. Slingshot currently has over 350325 dealers globally. We utilize our RFM ordering system for motorcycle dealers, which allows dealers to order daily and create a segment stocking order which reduceshelps to reduce order fulfillment times.

Our aftermarket portfolio of brands include Transamerican Auto Parts (“TAP”), which is a vertically integrated manufacturer, distributor, retailerMarine segment designs and installer of off-road Jeep and truck accessories. TAP owned brands include 4WP, 4 Wheel Parts, Pro Comp, Smittybilt, Rubicon Express, G2 Axle & Gear, Poison Spyder, Trail Master, 4WP Factory, and LRG. We compete primarily in North America and our competition is highly fragmented across the retail and online channels. TAP sells through its retail stores, call center, and e-commerce sites, while also supporting numerous independent accessory retailers/installers through their wholesale distribution network. TAP conducts business through a three-pronged sales, service, and manufacturing paradigm. TAP has 95 brick-and-mortar retail centers, staffed with experienced product and installation specialists. TAP’s omni-channel retail strategy includes a significant e-commerce business with 4WheelParts.com and 4WD.com. The TAP e-commerce network facilitates consumer sales, service and support, including “pick-up-in-store.”

U.S. 20202023 powerboats market sales were approximately $13.0$15.0 billion, with pontoon being one of the largestlarger segments therein.

Our brands, include Bennington, Godfrey and Hurricane, with a full offering of pontoon and deck boats. These brands are strategically positioned with over 500 base models across a range of price points. We also offer custom layouts and features and work with numerousmost engine manufacturers enabling customers to build exactly what they want. In 2020, Polaris Boats, includinga boat that meets their specifications. We believe that the combination of our Bennington and Godfrey brands is projected to becurrently the market share leader in pontoon boats and our Hurricane brand the market share leader in deck boats.

In 2023, Polaris Marine launched the model year 2024 boats for the Bennington, Godfrey and Hurricane brands. Notable launches include Bennington’s SV and S series refresh that offers an enhanced style and streamlined product offering at a highly fragmented industry, ourcompetitive price point, and Godfrey’s XP series, a new halo product that elevates design, sound and lighting. Additionally, Godfrey launched the entry level Xperience series and Hurricane launched the Sundeck 217/Sundeck Sport 218 models as well as the Sundeck 2050/Sundeck Sport 2050 models.

Our extensive, experienced and loyal network of over 600 active550 global dealers is a competitive advantage, helping to generate steady demand. 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. 

Our products are primarily assembled at our 20 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. CertainRaw materials and other component parts are purchased from third-party vendors. Raw materials or standard parts are available from multiple sources for the components manufactured by us. Polaris Boats hasWe have a long-term supply contract with ana 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. 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 3040 distribution centers, including third-party providers.

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. 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 also provide print materials, signage and other promotional items for use by dealers. We spent $544.3$542.3 million, $559.2$480.8 million and $491.8$458.2 million for sales and marketing activities in 2020, 20192023, 2022 and 2018,2021, respectively. Our corporate headquarters facility is in Medina, Minnesota, and we maintain over 30 othernumerous sales and administrative facilities across the world.

We have approximately 1,300over 1,400 employees who are engaged in the development and testing of existing products and research and development of new products and improved production techniques, located primarily in Roseau, Minnesota,Minnesota; Wyoming, Minnesota, Chula Vista, California,Minnesota; Elkhart, Indiana,Indiana; Novi, Michigan; Burgdorf, Switzerland; and Burgdorf, Switzerland.Bangalore, India.

We utilize internal combustion engine testing facilities to design engine configurations for our products. We utilize specialized facilities for matching engine, exhaust system and clutch performance parameters in our products to achieve desired fuel consumption, power output, noise level and other objectives. Further, we are currently executing ancontinuing 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. We utilize our Wyoming, Minnesota facility for engineering, design and development personnel for our line of engines and powertrains, ORVs, motorcycles, and certain Global Adjacent Market vehicles,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 also own Swissauto

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, KLIM, and 4 WHEEL PARTS.KLIM. 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. 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. 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.

Best Team, Best Culture is a Notice of Proposed Rulemaking that includes proposed mandatory safety standards for ROVs in the areas of lateral stability, steering and handling, and occupant retention. Polaris and powersports industry associations have expressed concerns about the proposed mandatory standards, whether they would actually reduce ROV incident rates, whether the proposed tests are repeatable and appropriate for ROVs, and the unintended safety consequences that could result from them. As a result of those concerns, revisions to voluntary industry standards were proposed. In 2015, CPSC staff expressed support for the proposed 2016 revisions to the ANSI standard, and subsequently recommended that the CPSC terminate its rule-making process.guiding principle. Our greatest asset is our employee base. We are unablecommitted to predict the outcome of the CPSC rule-making process or the ultimate impact of any resulting rules onproviding an inclusive and engaging work environment, and we aim to leverage our business and operating results.

Our leaders are equipped to foster a diverse and engaging work environment. With almost 15,000 employees globally atinclusive workplace through leadership training and tools for inclusive team conversations. We undertake regular reviews of human capital practices to assess for unintended bias and to improve our practices. We have leveraged external partners to review our performance management, talent acquisition, inclusion and pay equity. As members of the endCorporate Partnership Council of 2020,the Society of Women Engineers and the Women in Manufacturing Association, we aimhave enabled team development opportunities and a pipeline for future talent. We have also created partnerships with the Society for Professional Hispanic Engineers, People of Color Careers, Disability Solutions, DoD Skillbridge and others to leveragefurther our Polaris valuesability to drivereach a positive culture.diverse candidate base. Our relationship with Code2College is helping us create a non-traditional talent pipeline for technical talent, and our early career leadership development programs are a catalyst for future diverse leaders.

We also remained committed to focused development forAttracting and developing early career talent.talent remains a key element of our talent strategy. We revampedinvest in the development of early talent, providing our 2020 interninterns with weekly development opportunities. Our internship programs to support both onsite and remote interns, launching development programs across the hybrid workforce. We believe our intern programs provideare a strong talentkey pipeline to our early career functionalleadership development programs across engineering, operations, sales, marketing, finance, human resources and information services. Eachtechnology. Our first leadership development program consists oflaunched over 20 years ago, and the structured rotations and additional formal development acceleratingwithin the programs have proven successful in bolstering our talent pipeline.functional and management leadership succession. For our interns and post-graduate development program participants, we host a week-long summit event in Minnesota, providing an opportunity to learn from executives, network with others, participate in professional development activities, and experience Polaris products.

Our strong safety culture remains a primary focus. In 2023, we launched a year-long Rider Safety campaign to provide employees with additional training and valuestools to operate our vehicles safely both while working at our facilities and

outside the unique skills, perspectivesoffice. Wellness is a significant focus with the personalized well-being model that provides employees with the tools to manage a diverse set of needs. Financial well-being is one of our focuses, and contributionswe endeavor to support our employees’ financial wellness in a variety of each employee. In 2020, we madeways, including by offering financial wellness education that supports employees navigating market volatility and inflation. We also offer free one-on-one financial counseling sessions to employees, allowing employees to receive counseling tailored to their priorities. We view our comprehensive total rewards package with a corporate commitmentbroad focus on employee well-being as instrumental in our ability to the CEO Action Pledge for Diversity & Inclusion, which outlines specific sets of actions designed to advance diversityattract, motivate and inclusion in the workplace. To further this work, we created a Diversityretain quality candidates and Inclusion Steering Team to accelerate our progress. We partnered with external training organizationsemployees to drive a culture of inclusion, including a partnership with Franklin Covey for interactive training for all employees atour strategic mission to continue to be the Director+ levelglobal leader in the company. In addition to other actions, we joined the Corporate Partnership Council of the Society of Women Engineers to promote opportunities for development for our team, as well as to build a pipeline for future talent.

We have obtained the market and industry data presented in this year’s Annual Report from a combination of internal surveys, third partythird-party information and estimates by management. There are limited sources that report on our markets and industries. As such, much of the market and industry data presented in this year’s Annual Report is based on internally-generated management estimates, including estimates based on extrapolations from third partythird-party surveys of the industries in which we compete. While we believe internal surveys, third partythird-party information and our estimates are reliable, we have not verified them, nor have they been verified by any independent sources and we have no assurance that the information contained in third partythird-party websites is current, up-to date, or accurate. 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 Forward-Looking Statementsheadings “Forward-Looking Statements” and in our Risk“Risk Factors.”

Our Internet website is http://www.polaris.com. We make available free of charge, on or through our website, our annual, quarterly and current reports, and any amendments to those reports, as soon as reasonably practicable after electronically filing such reports with the Securities and Exchange Commission.Commission (SEC). We also make available through our website our corporate governance materials, including our Corporate Governance Guidelines, the charters of the Audit Committee, Compensation Committee, Corporate Governance and Nominating Committee and Technology Committee of our Board of Directors, our Code of Business Conduct and Ethics, and our Corporate Responsibility 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.Relations or email polaris.investorrelations@polaris.com. Information contained on our website is not part of this report. In addition, the SEC maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC and state the address of that side (http://www.sec.gov).

This 2020 Annual Report contains not only historical information, but also “forward-looking statements” intended to qualify for the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These “forward-looking

Potential risks and uncertainties include such factors as severity and duration of the COVID-19 pandemic and the resulting impact on the Company’s business, supply chain, and the global economy; the Company’s ability to successfully implement its manufacturing operations expansionstrategy and supply chain initiatives, product offerings, promotional activities and pricing strategies by competitors;initiatives; the Company’s ability to successfully source necessary parts and materials andon a timely basis; the ability of the Company to manufacture and deliver products to dealers to meet increasing demand, including as a result of supply chain disruptions; the Company’s ability to identify and to bringmeet optimal dealer inventory levels back to optimal levels; the continuation of the increasingCompany’s ability to accurately forecast and sustain consumer demand fordemand; the Company’s products;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;spending or consumer credit, including recessionary conditions and changes in interest rates; disruptions in manufacturing facilities; acquisition integration costs; 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;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); changes to international trade policies and agreements; uninsured product liability claims;and class action claims (including claims seeking punitive damages) and other litigation expenses incurred due to the nature of our business; uncertainty in the consumer retail and wholesale credit markets; performance of affiliate partners; changes in tax policy; relationships with dealers and suppliers; and the general overallglobal economic, social and political environment.

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. We advise you, however, to consult any further disclosures made on related subjects in future quarterly reportsAnnual Reports on Form 10-K, Quarterly Reports on Form 10-Q and current reportsCurrent Reports on Form 8-K that are filed with or furnished to the Securities and Exchange Commission.

Set forth below are the names of our executive officers as of February 16, 2021,2024, their ages, titles, the year first appointed as an executive officer, and employment for at least the pastlast five years:

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.

Our results of operations may be sensitive to changes in overall economic conditions, primarily in North America and Europe, that impact spending on our products, including discretionary spending. Weakening of, and fluctuations in, economic conditions affecting disposable consumer income or our customers’ budgets, such as employment levels, inflation, business conditions, the level of governmental financial assistance, changes in housing market conditions, capital markets, tax rates, savings rates, interest rates, fuel and energy costs, the economic impacts of natural disasters or other severe weather conditions, acts of war, and acts of terrorism, the availability of consumer credit could reduce overall spending or reduce spending on our products. AOur sales growth and profitability have been affected, from time to time, from a general reduction in consumer spending or a reduction in consumer spending on powersports, boats and aftermarket products could adversely affect our sales growth and profitability. Overall demand for products sold in the Jeep and truck aftermarket is dependent upon many factors including the total number of vehicle

Adverse changes in these factors could lead to a decreased level of demand for our products, which could negatively impact our business, results of operations, financial condition and cash flows.

In addition, we have financial services partnership arrangements with subsidiaries of Wells Fargo Bank, N.A. and TCF Financial Corporationa subsidiary of Huntington Bancshares Incorporated that require us to repurchase products financed and repossessed bypursuant to the partnership,terms of such arrangements and subject to certain limitations. 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. If adverse changes to economic conditions result in increased defaults on the loans made by this financial services partnership,under these arrangements, our contractual repurchase obligationobligations (or demands under the partnership arrangementany guarantees or other credit support) could adversely affect our liquidity and harm our business.

The primary commodities used in manufacturing our products are aluminum, steel, copper, petroleum-based resins and certain rare earth metals, used in our charging systems, as well as diesel fuel to transport the products. Our profitability ishas been affected by significant fluctuations in the prices of the raw materials and commodities we use in our products and in the cost of freight and shipping to source materials, commodities, and other component parts necessary to assemble our products. In the past, we have experienced significant increases in the cost of these commodities and materials due generally to an inflationary environment driven by high demand and supply chain disruptions. Additionally, there continues to be uncertainty with respect tofluctuating policies and the implementation of current trade regulations (including the USMCA), future trade regulations and existing international trade agreements which could further disrupt our supply chain or increase the cost of raw materials and commodities necessary to manufacture our products. The impact from tariffs or other trade regulations could require us to shift our manufacturing footprint or result in decreased demand for our products orfootprint. Such restructuring actions that could negatively impact our operational costs, work force and/or our investments in research and development or other growth initiatives. All of these could materially and adversely affect our results of operations and financial condition.

The markets in which we operate in are highly competitive. Competition in such markets is based upon a number ofseveral factors, including price, quality, reliability, styling, product features and warranties. At the dealer level, competition is based on a number ofadditional factors, including product availability, sales and marketing support programs (such as financing and cooperative advertising), and dealer and customer perception. Certain of our competitors are more diversified and have advantagedadvantageous manufacturing footprints, and may invest more heavily in intellectual property, product development, promotions and advertising.advertising or online presence. If we are not able to compete with new or enhanced products or models of our competitors or compete in the digital marketplace, our ability to retain and attract customers and future business performance may be materially and adversely affected. Internationally, our products typically face more competition where certain foreign competitors manufacture and market products in their respective countries. This allows those competitors to sell products at lower prices, which could adversely affect our competitiveness. In addition, our products compete with many other recreational, utility, and work products for the discretionary spending of consumers and, to a lesser extent, with other vehicles designed for utility applications.our customers. A failure to compete effectively compete with these other competitors or adjust pricing to offset inflation or increased supply chain costs could materially and adversely affect our financial results and have a material adverse effect on our performance.

We believe thatthe strength of our Polaris brands areis one of the reasons our customers choose our products. To be successful, we must preserve our reputation. Reputational value is based in large part on perceptions and opinions, and broad access to social media makes it easy for anyone to provide public feedback that can influence perceptions of our company. It may be difficult to control negative publicity, regardless of whether it is accurate. While reputations may take decades to build, any negative incidents can quickly erode trust and confidence, particularly if they result in negative mainstream and social media publicity, governmental investigations, or litigation. Negative incidents, such as quality and safety concerns or incidents related to our products or actions or statements of our employees, suppliers or dealers, could lead to tangible adverse effects on our business, including lost sales or employee retention and recruiting difficulties. In addition, the reputation of our vendors and others with whom we choose to do business may affect our reputation.

Demand for the Company’s products depends in part on their social acceptability. Public concerns about the environmental impact of the Company’s products or their perceived safety could result in diminished public perception of the products we sell. Government, community, media, or activist pressure to limit emissions or perceived land and water impacts could also negatively impact consumers’ perceptions of the Company’s products or limit access to areas where customers can use our products. Any decline in the social acceptability of the Company’s products could negatively impact their sales or lead to changes in laws, rules and regulations that prevent their access to certain locations or restrict their use or manner of use in certain areas or during certain times, which could also negatively impact sales. 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.

From time to time, we drive growth in our businesses and accelerate opportunities to expand our global presence and customer base through targeted acquisitions, non-consolidating investments, alliances, and new joint ventures and partnerships (each a “Strategic Transaction”) that we believe add value while consideringto our existing brands and product portfolio. 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 anythe expected benefits.

There can be no assurance that Strategic Transactions will be completed or that, if completed, they will be successful. Strategic TransactionTransactions 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 continue to grow, in part, through Strategic Transaction,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 resultsresults.

In many cases, Strategic Transactions present a number of integration risks. For example, the acquisition may: disrupt operations in core, adjacent or acquired businesses; require more time or resources than anticipated to be fully integrated into our operations and systems;systems, causing operational disruption; create more costs than projected; divert management attention; create the potential of losing customer, supplier or other critical business relationships; and pose difficulties retaining employees. The inability to successfully integrate new businesses may result in higher production costs, lost sales or otherwise negatively affect earnings and financial results.

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. The

Our operations and ability to maintain production is dependent upon our suppliers delivering sufficient quantities of systems, components, raw materials and partparts on time to manufacture our products and on time to 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.

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. Any number of factors, including labor disruptions, catastrophic weather events, the occurrence of a contagious disease or illness, contractual or other disputes, unfavorable economic or industry conditions, port, rail, or truck delivery delays, acts of war, or other performance problems or financial difficulties or solvency problems, could disrupt our suppliers’ operations and lead to uncertainty in our supply chain or cause supply disruptions for us, which could, in turn, disrupt our operations. If we experience material supply disruptions—like those that we experienced in 2020 related to COVID-19 delays—we may not be able to develop alternate sourcing quickly or at all. Any material disruption

Material disruptions of our production schedule caused by ana worsening, prolonged, or other unexpected shortage of systems, components, raw materials or parts have caused, and could continue to cause, us to not to be able to meet customer demand, to alter production schedules, to delay product launch schedules, or to suspend production entirely, which could cause a loss of revenues, which could materially and adversely affect our results of operations. These disruptions have had and may continue to have in the future an adverse impact on our prospects and operating results.

We assemble vehicles at various facilities around the world. Our facilities are typically designed to produce particular models for particular geographic markets. 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. 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. 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 2020 our ability to meet customer demand was constrained by our manufacturing capacity.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. There can be no assurance that our current or future manufacturing footprint will improve and be sufficient to meet customer demand or that we will be able to successfully expand or contract our manufacturing capacity to meet demand in a more efficient manner, which could result in loss of revenue, decreased margins and loss of market share.

Although we maintain insurance for damage to our property and disruption of our business from casualties, such insurance may not be sufficient to cover all of our potential losses. Any disruption in our manufacturing capacity could

have an adverse impact on our ability to produce sufficient inventory of our products or may require us to incur additional expenses in order to produce sufficient inventory, and therefore, may adversely affect our net sales and operating results. Any disruptionDisruptions or delaydelays at our manufacturing facilities could impair our ability to meet the demands of our customers, and our customers may cancel orders or purchase products from our competitors, which could adversely affect our business and operating results.

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. Our sales growth and profitability could be adversely affected if deterioration of economic or business conditions results in a weakening of the financial condition of a material number of our suppliers or financing sources, or if uncertainty about inflation, the economy or the demand for our products causes these business partners to voluntarily or involuntarily reduce or terminate their relationship with us.us, impose less favorable terms or require guarantees or credit support.

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. Weakening of the end customers. Our sales growth and profitability could be adversely affected iffinancial condition of our dealers or distributors due to deterioration of business conditions or reputational harm results in a weakening of the financial condition of a material number ofcould negatively affect our dealerssales growth and distributors.profitability. Additionally, weak demand for, or quality issues with, our products may cause dealers and distributors to voluntarily or

Investments to increase our global presence, including adding employees and dealers and continuing to invest in business infrastructure and operations, might not produce the returns we expect, which could adversely affect our profitability. 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. 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.

Unfavorable weather conditions may reduce demand and negatively impact sales of certain of the Company’s products. Unfavorable weather, including conditions caused in part by climate change, in any particular geographic region may have an adverse effect on sales of the Company’s products in that region. In particular,For example, lack of snowfall during winter may materially adversely affect snowmobile sales, whilesales; excessive rain before and during spring and summer may materially adversely affect sales of off-road vehicles ATVs, and boats. boats; a lack of rain in certain areas may limit boat usage and may materially adversely affect sales of boats; and wild fires can limit areas where our customers ride our off-road vehicles. Weather conditions may also disrupt our manufacturing and distribution facilities and our supply chain, which could impact our ability to manufacture products to fulfill customer demand. Such disruptions could be caused by natural disasters, inclement weather and/or climate change-related events, such as tornadoes, hurricanes, earthquakes, floods, tsunamis, typhoons, drought, fire, other extreme weather conditions or natural disasters and events that occur as a result of such events, such as water and natural resource shortages, power outages or shortages, or telecommunications failures. These weather conditions could pose physical risks to our facilities and critical infrastructure in the U.S. and internationally, disrupt the operation of our supply chain and third-party vendors, and may impact operational results.

There iscan be no assurance that weather conditions or natural disasters couldwill not have a material effect on our sales, production capability or component supply continuity for any of our products.

Our success depends on attracting and retaining qualified personnel. Our ability to sustain and grow our business requires us to hire, retain and develop a highly skilled and diverse management team and workforce. Many members of the Company’s management team and other key employees have extensive experience in the Company’s industry and with its business, products and customers. The unplanned loss of members of the Company’s management team or other key employees, particularly if combined with difficulties in finding qualified substitutes,replacements, could negatively affect the Company’s ability to develop and pursue its business strategy, which could materially adversely affect the Company’s business, results of operations or financial condition. In addition, the Company’s success depends to a large extent upon its ability to attract and retain skilled employees. There is intense competition for qualified and skilled employees, and a failure to recruit, train and retain such employees could have a material adverse effect on its business, results of operations or financial condition.

The manufacture, saleWe are subject to legal proceedings in the U.S. and usage of products expose us to significant risks associated withelsewhere involving various issues, including product liability economic loss, and other claims. If our products are found to be defective or used incorrectly by our customers, bodily injury,lawsuits for property damage or otherserious bodily injury, including death, maywarranty litigation, and class actions alleging claims for product defects, product recalls, economic losses, breach of warranty, and violations of various consumer protection laws, among other claims. A negative outcome in one or more of these lawsuits could result and this could give rise to additional product liabilityin an award of damages (for which we are not insured), including punitive damages, or economic loss claims against usfines, reputational harm, interruption or adversely affect our brand image or reputation. Any losses that we may suffer from any such claims, and the effect that any such liability may have upon the reputation and marketabilitymodification of our products,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 operating results.cash flows.

The Company purchases excess insurance coverage for product liability claims forrelated to incidents occurring subsequent toduring the policy date thatperiod which exceed our self-insured retention levels. However,thresholds. Disputes with insurers could impact our recoveries under these policies. Furthermore, certain claims that are not typically covered under commercial excess policies would be excluded from coverage, such as economic loss claims, and false marketing claims, are uninsured.and in some historical policies, punitive damages.

No assurance can be given that our historicalProduct liability claims record, which hashave 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. An unanticipated adverse determination of a material product liability claim or other material claim (particularly an uninsured matter)issue) made against us could materially and adversely affect our financial condition.position, results of operations or cash flows.

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 and may also provide longer warrantiesor 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. Although we employ quality control procedures, sometimes a product is distributed that needs repair or replacement. Our standard warranties require us, through our dealer network, to repair or replace defective products during such warranty periods.

Historically, product recalls have been administered throughIf a recall of our dealers and distributors. Theproducts were to be implemented, the repair and replacement costs we could incur in connection with a recalltherewith could materially and adversely affect our business. Past product recalls have harmed our reputation and caused us to lose customers. Future product recalls could increasingly cause consumers to question the safety or reliability of our products.products and could materially impact our results of operations and financial condition.

Our business, properties, and products are subject to numerous international, federal, state, and other governmental laws, rules, and regulations relating to, among other things: climate change; emissions to air; discharges to water; restrictions placed on water and land usage and water availability; product and associated packaging; use of certain chemicals; import and export compliance, including but not limited to classification and valuation of products, country of origin certification requirements;requirements, and laws relating to forced labor in the supply chain; worker and product user health and safety; consumer privacy; energy efficiency; product life-cycles; outdoor noise laws; and the generation, use, handling, labeling, collection, management, storage, transportation, treatment, and disposal of hazardous substances, wastes, and other regulated materials. We are unable to predict the ultimate impact of adopted or future laws, rules, and regulations on our business, properties, or products.

Any of these laws, rules, or regulations may cause us to incur significant expenses to achieve or maintain compliance, require us to modify our products, or modify our approach to our workforce, adversely affecting the price of or demand for some of our products, and ultimately affect the way we conduct our operations. Failure to comply with any of these laws, rules, or regulations could result in harm to our reputation and/or could lead to fines and other penalties, including restrictions on the importation of our products into, and the sale of our products in, one or more jurisdictions until compliance is achieved. In addition, changes to regulations may require us to incur expenses or modify product offerings in order to maintain compliance with the actions of regulators and could decrease the demand for our products.

We hold patents and trademarks relating to various aspects of our products, suchOur proprietary intellectual property rights are enforceable against third parties as our patented “on demand” all-wheel drive, and believe that proprietary technical know-how is important to our business. Proprietary rights relating to our products are protected from unauthorized use by third partiesinfringement or misappropriation allegations or actions only to the extent that they are covereddemonstrated by valid and enforceable patents or trademarks or are maintained in reasonable confidence sufficient to qualify as trade secrets. WeDespite our best efforts, we cannot be certainguarantee that we will be issued any patents from any pending or future patent applications owned by or licensed to us or that the claims allowedgranted under any issued patents will be sufficiently broad to protect our technology.technology against any current or future competitor. 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 products, gain access totechnology or product designs, exploit our trade secrets and know-how, or tarnish or diminish goodwill in our brand, through unauthorized use of our trademarks, all of which could adversely affect our business. OthersEven with applicable and enforceable patent or trademark protection, others may initiate litigation to challenge to validity of our intellection property, allege that we infringe their intellectual property rights, or they may use their resources to design comparable products that recreate as near as possible yet do not technically infringe our patents. 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, or theypatents. Substantial costs may use their resources to design comparable products that do not infringe our patents. We may incur substantial costs if our competitors initiate litigation to challenge the validity of our patents, or allege that we infringe their patents, or ifalso be incurred should we initiate proceedings to protect our proprietary rights.intellectual property rights against misappropriation or infringement by others. If the outcome of any suchintellection property-related litigation is unfavorable to us, our business, operating results, and financial condition could be adversely affected. Regardless of whether litigation relating to our intellectual property rights is successful, theongoing litigation as described herein could significantly increase our costs and divert management’s attention from operation of our business, which could adversely affect our results of operations and financial condition. We also cannot be certainAlthough we take all reasonable measures to verify that our products, or technologies haveand marks do not infringedinfringe on the intellectual property rights of others, we cannot guarantee that they do not or will not infringenot. Allegations, litigation, cease and desist letters, court ordered injunctions, and the proprietary rightslike relating to potential infringement of others. Any such infringementthird-party intellectual property could cause third parties, including our competitors, to bring claims against us, resultingresult in significant costs, possible damages and substantial uncertainty.

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. Those systems and products process potentially sensitive information, including intellectual property; proprietary business information of Polaris and our dealers, suppliers, and other business partners; and personal information of consumers and employees. 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 ofor error by individuals with access to our systems. WhileAlthough we investmonitor 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 monitor continually evolving cybersecurity threats,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, and connected products.

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 connected products.operations as a result of such cyber-attacks. We could, however, experience material disruptions or breaches in the future. Such disruptions or breaches of our information technology systems, and 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 thoseour 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 (v)(vi) government enforcement, litigation or regulatory proceedings.

We could be required to make a significant investment to remedy, mitigate or remediate the effects of any failures, including, but not limited to, harm to our reputation, legal claims that we and/or our business partners (including third-party vendors and service providers) may be subjected to, regulatory or enforcement action arising out of applicable privacy and other laws, adverse publicity, or other events that may affect our business and financial performance.

As a global company, we are subject to laws and regulations in the United States and other countries concerning the handling of personal information,data, including laws that require usbut not limited to notify governmental authorities and/or affected individualsthose related to the collection, storage, handling, use, disclosure, transfer, and security of data breaches involving certain personal information.data. These laws and regulations include, for example, the European Union’s General Data Protection Regulation (GDPR), effective May 25, 2018,(“GDPR”) and the California Consumer Privacy Act (CCPA)(“CCPA”), effective January 1, 2020. Regulatory actionsand other similar United States state privacy laws. 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 litigation seekingconflicting requirements. 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 impose significant penalties could be brought against usincrease over time, particularly in the event of a data breachwe introduce new connected products. Any failure, or alleged non-complianceperceived failure, by us or third-party service providers to comply with such lawsour privacy or security policies or privacy-related legal obligations may result in governmental enforcement actions, litigation, or negative publicity, and regulations.could have an adverse effect on our operating results and financial condition.

The changing relationships of the United States dollar to the Canadian dollar, Australian dollar, the Euro, the Swiss franc, the Mexican peso, and certain other foreign currencies have from time to time had a negative impact on our results of operations. Fluctuations in the value of the United States dollar relative to these foreign currencies can adversely affect the price of our products in foreign markets, the costs we incur to import certain components for our products, and the translation of our foreign balance sheets. 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. While we actively manage our exposure to fluctuating foreign currency exchange rates by entering into foreign exchange hedging contracts from time to time, these contracts hedge foreign currency denominated transactions, and any change in the fair value of the contracts would be offset by changes in the underlying value of the transactions being hedged.

We have arrangements with each of Performance Finance, Sheffield Financial and Synchrony Bankthird parties to make retail financing available to consumers who purchase our products in the United States. During 2020, consumers financed approximately 30 percent of the vehicles we sold in the United States through these installment retail credit programs.and Canada. Furthermore, somemany customers use financing from lenders who do not partner with us, such as local banks and credit unions. There can be no assurance that retail financing will continue to be available in the same amounts and under the same terms that had been previously available to our customers. If retail financing is not available to customers on satisfactory terms, it is possible thatconsumer demand could be materially impacted and our sales and profitability could be adversely affected.

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. While we are currently in compliance with the financial covenants, increasesIncreases in our debt or decreases in our earnings could cause us to fail to comply with these financial covenants. Failing to comply with such covenants could result in an event of default that, if not cured or waived, could result in the acceleration of all our indebtedness or otherwise have a material adverse effect on our financial position, results of operation and debt service capability.

Our level ofoutstanding debt and the financial and restrictive covenants contained in our credit agreement could have important consequences on our financial position and results of operations, including increasing our vulnerability to increases in interest rates because debt under our credit agreement bears interest at variable rates.

We are subject to income taxes and other business taxes in various jurisdictions in which we operate. Our tax liabilities are dependent upon the earnings generated in these different jurisdictions. 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

Goodwill and indefinite-lived intangible assets, such as our trade names, are recorded at fair value at the time of acquisition and are not amortized but are reviewed for impairment at least annually or more frequently if impairment indicators arise. Our determination of whether goodwill impairment has occurred is based on a comparison of each of our reporting units’ fair market value with its carrying value. Significant and unanticipated changes in circumstances, such as significant and long-term adverse changes in business climate, negative perception of the Company’s brands and tradenames, unanticipated competition, and/or changes in technology or markets, could require a provision for impairment in a future period that could negatively impact our reported earnings and reduce our consolidated net worth and shareholders’ equity.

Not Applicable.

The following sets forth the Company’s material properties as of December 31, 2020:2023:

Including the material properties listed above and those properties not listed, we have over fiveseven million square feet of global manufacturing and research and development space. Additionally, we have over sixseven million square feet of global warehouse and distribution center space. InFor product development and testing of our vehicles, we utilize various parcels of land, including owned or public land near our manufacturing and engineering facilities, land owned in Texas dedicated to testing of our ORVs, and other pieces of public land around the United States and Canada, we lease 95 retail stores with approximately two million square feet of space.world that provide the appropriate conditions for testing. 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 (including heavy presses, conventional and computer-controlled welding facilities for steel and aluminum, assembly lines and paint lines) 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 believe our current manufacturing and distribution facilities are adequate in size and suitable for our present manufacturing and distribution needs.

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.

With respect to each of these three putative class action lawsuits, the Company iswe 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.

Not applicable.

Shares of common stock of Polaris Inc. trade on the New York Stock Exchange under the symbol PII. On February 9, 2021,2024, there were 1,601 shareholders of record of the Company’s common stock were 1,809 and the last reported sale price for shares of our common stock on the New York Stock Exchange was $121.70$91.06 per share. The Company has historically paid cash dividends and expects to continue to pay comparable cash dividends in the future.future, subject to the approval of the Company’s Board of Directors, which will depend on market and other conditions.

The following graph compares the five-year cumulative total return to shareholders (stock price appreciation plus reinvested dividends) for the Company’s common stock with the comparable cumulative return of two indexes: S&P Midcap 400 Index and Morningstar’s Recreational Vehicles Industry GroupS&P Composite 1500 Leisure Products Index.

The graph assumes the investment of $100 at the close on December 31, 20152018 in common stock of the Company and in each of the indexes, and the reinvestment of all dividends since that date to December 31, 2020.2023. Points on the graph represent the performance as of the last business day of each of the years indicated.

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, 2020.2023.

The following discussion pertains to the results of operations and financial position of the Company and should be read in conjunction with the Consolidated Financial Statements and the Notes thereto included elsewhere in this report. This section of this Form 10-K generally discusses 20202023 and 20192022 items and year-to-year comparisons between 20202023 and 2019.2022. Discussions of 20182021 items and year-to-year comparisons between 20192022 and 20182021 that are not included in this Form 10-K can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of Polaris’our Annual Report on Form 10-K for the fiscal year ended December 31, 2019.2022.

20202023 was a record year for sales, which totaled approximately $7.0$8.9 billion, a four percent increase from 2019,2022. The year-over-year increase in sales was driven primarily by product mix and increased shipments.

Gross profit totaled $2.0 billion in both 2023 and 2022. Expressed as a percentage of sales, gross profit decreased in 2023 as compared to 2022, primarily due to strong ORV sales. Our annual sales to North American customers increased approximately four percentunfavorable foreign currency exchange rate movement and our annual sales to customers outside of North America increased approximately one percent in 2020.higher finance interest, both partially offset by higher net pricing.

Full year net income from continuing operations attributable to Polaris Inc. of $124.8$502.8 million was a 61decreased 17 percent decrease from 2019,2022, with diluted earnings per share from continuing operations decreasing 62 percentfrom $10.04 to $1.99$8.71 per share. The decrease was primarily dueIn addition to the $379.2 million (pre-tax) impairment of goodwill and other intangible assets inreasons discussed above, these decreases were primarily the second quarter associated with the Company’s Aftermarket segment as a result of marketincreased operating expenses and economic conditions resultinghigher interest expense. We reported Adjusted EBITDA of $1,020.9 million in 2023 compared to $1,075.9 million in 2022. For information on how we define and calculate Adjusted EBITDA, and a reconciliation from the novel coronavirus (COVID-19) pandemic and financial performance and restructuring actions.net income from continuing operations to Adjusted EBITDA, see “Non-GAAP Financial Measures”.

On January 28, 2021,February 1, 2024, we announced that our Board of Directors approveddeclared a two percent increase in the regular quarterly cash dividend to $0.63of $0.66 per share for the first quarter of 2021,2024, a two percent increase from the prior quarterly cash dividend, representing the 26th29th consecutive year of increased dividends to shareholders effective with the 2021 first quarter dividend.shareholders.

The consolidated results of operations were as follows:

The three percentyear-over-year increase in sales was driven primarily by product mix and increased shipments.

The year-over-year volume increase in 2020 was primarily the result ofdriven by increased ORV shipments and related PG&A.snowmobile shipments. Product mix and price contributed a one percentdrove an increase in 2020, primarily due to lower promotional costs for ORVs.sales as a result of a higher sales mix of premium ORV models, which was partially offset by higher finance interest.

Sales by geographic region were as follows:

Sales in the United States for 20202023 increased fourfive percent compared to 2019,during the year, primarily due todriven by product mix and increased ORV wholegood shipments, andpartially offset by higher ORV PG&A sales. The United States represented 82 percent of total company sales in 2020.finance interest.

Sales in Canada for 2020 were flat compareddecreased four percent during 2023, primarily due to 2019.unfavorable foreign currency exchange rate movement. Currency rate movements had less than a onean unfavorable impact of three percentage point impactpoints on year-over-year sales. Sales in Canada represented six percent of total company sales in 2020.2023.

Sales in other foreign countries, primarily in Europe, increased onefive percent in 2020 compared to 2019. This increase wasduring 2023, primarily driven by higher ORV shipments.product mix. Currency rate movements had less than a onefavorable impact of two percentage point impactpoints on year-over-year sales. Sales in other foreign countries represented 12 percent of total company sales in 2020.2023.

The following table reflects our cost of sales in dollars and as a percentage of sales:

For 2020, cost of sales increased four percent to $5,317.7 million compared to $5,133.7 million in 2019. The year-over-year increase in cost of sales in 2020 iswas primarily attributeddue to increased purchased materialshigher labor, warranty, and services relateddepreciation and amortization expenses. Higher sales volumes and product mix also contributed to increased ORV shipments and higher PG&A sales.the increase.

Consolidated grossGross profit for 2020,2023, as a percentage of sales, was approximately flat compareddecreased primarily due to the 2019. Lower promotional costsunfavorable foreign currency exchange rate movement and dealer floor plan financing costs werehigher finance interest, both partially offset by increased costs resulting from supply chain disruption and higher depreciation related to capital expenditures associated with recent new product launches.net pricing.

Operating expenses for 2020,2023, in absolute dollars and as a percentpercentage of sales, increased compared to 2022, primarily due to the $379.2 million impairment of goodwillhigher general and other intangible assets associated with the Company’s Aftermarket segment, partially offset by decreased stock compensation expense related to the CEO departureadministrative and lower non-essential expenses driven by our ongoing cautionary approach to spending given the pandemic-generated economic uncertainty.selling and marketing expenses.

The following table reflects our income from financial services:

Income from financial services decreased oneincreased 66 percent to $80.4 million in 2020 compared to $80.9 million in 2019. The decrease in 2020 was2023, primarily due to lowerhigher wholesale financing income due to lower dealer inventory levels, partially offset by higher retail credit incomefrom Polaris Acceptance driven by higher retail sales.dealer inventory levels.

The decrease in 2020 compared to 2019, was primarilyInterest expense increased for 2023 due to lowerhigher interest rates.

The change in Other (income) expense netis primarily relates to foreignthe result of currency exchange rate movements and the corresponding effects on foreign currency transactions currency hedging positions and balance sheet positions related to our foreign subsidiaries from period to period.international subsidiaries.

Income tax expense was $16.5 million, or 11.6% of income before income taxes, for 2020 compared with income tax expense of $83.9 million, or 20.6% of income before income taxes, for 2019. The lowerdecrease in the effective income tax rate for 20202023 was primarily due to an increase in research and development credits, a non-cash increase of deferred tax assets, and the favorable impact of lower pretax income generated combined with the incremental benefit from the passingin 2023, partially offset by a decreased deduction for Foreign Derived Intangible Income (“FDII”).

Adjusted EBITDA, in absolute dollars and as a percentage of the statute of limitations on certain tax positions during the year.sales, decreased in 2023 due to increased operating expenses, higher finance interest and unfavorable foreign currency exchange rate movement, partially offset by higher net pricing.

The change in the weightedWeighted average diluted shares outstanding from 2019 to 2020 wasdecreased throughout 2023 primarily due to share issuances under employee plans.repurchases.

The summary that follows provides a discussion of the results of operations of each of our fivethree reportable segments.segments, Off Road, On Road, and Marine. Each of these segments is comprised of various product offerings that serve multiple end markets. We evaluate performance based on sales and gross profit. The Corporate amounts include revenues and costs of businesses that were divested in 2021, as well as costs that are not allocated to segments, including certain unallocated manufacturing costs. Businesses that are presented as discontinued operations are excluded from the tables below.

Our sales and gross profit by reporting segment, which includes the respective PG&A, were as follows: