Polaris Inc.

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. Our primary uses of funds have been for new product development, capital investments, cash dividends to shareholders, repurchases and retirements of common stock, and acquisitions. The seasonality of production and shipments causes working capital requirements to fluctuate during the year and from year to year.

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 retirements of common stock for at least the next 12 months and for the foreseeable future thereafter.

Cash Flows

The following table summarizes the cash flows from operating, investing and financing activities:

Operating Activities:

The decrease in net cash from operating activities was primarily the result of a consistent working capital position over the nine months ended September 30, 2026 compared to working capital reductions in the prior year comparable period, partially offset by higher net income. Net income was $98.0 million for the nine months ended September 30, 2026, compared to a net loss of $161.5 million in the prior year comparable period.

Investing Activities:

The primary sources and uses of cash were for the purchase of property, equipment and tooling for continued capacity and capability at our manufacturing, distribution, and product development facilities, and distributions from and contributions to Polaris Acceptance. Net cash used for investing activities increased primarily due to incremental cash payments to facilitate the sale of the Indian Motorcycle business, increased property, equipment and tooling purchases, and strategic investments made during the first quarter of 2026, partially offset by higher net distributions from Polaris Acceptance.

Financing Activities:

The decrease in net cash used for financing activities was primarily the result of net borrowings under financing agreements in the nine months ended September 30, 2026 compared to net repayments under financing agreements during the comparable period in 2025. Net borrowings totaled $88.1 million for the nine months ended September 30, 2026 compared to net repayments of $346.7 million during the comparable period in 2025.

Financing Arrangements:

We are party to an unsecured credit facility, which includes a $1.4 billion variable interest rate revolving loan facility (the “Revolving Loan Facility”) that matures in December 2029, under which we have unsecured borrowings. As of September 30, 2026, there were borrowings of $149.2 million outstanding under the Revolving Loan Facility. Our credit facility also includes a term loan facility (the “Term Loan Facility”), pursuant to which $456.3 million was outstanding as of September 30, 2026. We are required to make principal payments under the Term Loan Facility totaling $25 million over the next 12 months. 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 September 30, 2026, we had $1,241.6 million of availability on the Revolving Loan Facility.

The credit agreement contains covenants that require us to maintain certain financial ratios, including minimum interest coverage and maximum leverage ratios. The credit agreement requires 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. The interest coverage ratio is calculated as Adjusted EBITDA to interest expense for the then most-recently ended four fiscal quarters. The leverage ratio is calculated as consolidated funded indebtedness less cash and cash equivalents, capped at $300 million, to Adjusted EBITDA for the then most-recently ended four fiscal quarters. The Company was previously subject to modified covenants during a covenant relief period applicable for each quarter ended June 30, 2025 through and including June 30, 2026. That covenant relief period ended in the third quarter of 2026.

In November 2023, we issued $500 million aggregate principal amount of 6.95% Senior Notes due 2029 (the “6.95% Senior Notes”) in an underwritten public offering. We received approximately $492 million in net proceeds from the offering after deducting the underwriting discount and other fees and expenses. The 6.95% Senior Notes bear interest at a rate of 6.95% per year and mature in March 2029. In November 2025, the Company issued $500 million aggregate principal amount of 5.60% Senior Notes due 2031 (the “5.60% Senior Notes” and together with the 6.95% Senior Notes, the “senior notes”) in an underwritten public offering. 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. All of our senior notes are governed by an indenture and are 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, the Company completed the acquisition of Boat Holdings, LLC, a privately held Delaware limited liability company, headquartered in Elkhart, Indiana which manufactures boats (“Boat Holdings”). 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 $30.0 million was outstanding as of September 30, 2026.

As of September 30, 2026, we were in compliance with all debt covenants and our debt to total capital ratio was 66 percent. Additionally, as of September 30, 2026, we had letters of credit outstanding of $59.4 million, primarily related to inventory purchases.

Share Repurchases:

We did not repurchase shares of our common stock in open-market transactions under our share repurchase program during the first nine months of 2026. As of September 30, 2026, 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. 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, boats and related PG&A are financed under similar arrangements whereby we receive payment within a few days of shipment of the product. 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 September 30, 2026, the potential aggregate repurchase obligations were approximately $138.0 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. No material losses have been incurred under these agreements during the periods presented.

Retail Customer Financing Arrangements:

We have agreements with third-party finance companies to provide financing options to end consumers of our products. We have no material contingent liabilities for residual value or credit collection risk under these agreements.