Polaris 2015 Annual Report Download - page 45

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• new or enhanced trade restrictions and restrictions on the activities of foreign agents, representatives,
and distributors; and the imposition of increases in costly and lengthy import and export licensing and
other compliance requirements, customs duties and tariffs, license obligations, and other non-tariff
barriers to trade;
• the imposition of United States and/or international sanctions against a country, company, person, or
entity with whom we do business that would restrict or prohibit our continued business with the
sanctioned country, company, person, or entity;
• international pricing pressures;
• laws and business practices favoring local companies;
• adverse currency exchange rate fluctuations;
• longer payment cycles and difficulties in enforcing agreements and collecting receivables through
certain foreign legal systems;
• difficulties in enforcing or defending intellectual property rights; and
• multiple, changing, and often inconsistent enforcement of laws, rules, and regulations, including rules
relating to environmental, health, taxes, and safety matters.
Our international operations may not produce desired levels of total sales or one or more of the factors listed
above may harm our business and operating results. Any material decrease in our international sales or
profitability could also adversely impact our operating results.
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 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, a
change in our assertion regarding the permanent reinvestment of the undistributed earnings of international
affiliates and changes in tax laws and regulations in various jurisdictions. We are also subject to the continuous
examination of our income tax returns by various tax authorities. The results of audits and examinations of
previously filed tax returns and continuing assessments of our tax exposures may have an adverse effect on the
Company’s provision for income taxes and cash tax liability.
If we are unable to continue to enhance existing products and develop and market new products that respond to
customer needs and preferences and achieve market acceptance, we may experience a decrease in demand for our
products and our business could suffer.
One of our growth strategies is to develop innovative, customer-valued products to generate revenue growth.
Our sales from new products in the past have represented a significant component of our sales and are
expected to continue to represent a significant component of our future sales. We may not be able to compete
as effectively with our competitors, and ultimately satisfy the needs and preferences of our customers, unless
we can continue to enhance existing products and develop new innovative products in the global markets in
which we compete. Product development requires significant financial, technological, and other resources.
While we expended $166.4 million, $148.5 million and $139.2 million for research and development efforts in
2015, 2014 and 2013, respectively, there can be no assurance that this level of investment in research and
development will be sufficient to maintain our competitive advantage in product innovation, which could cause
our business to suffer. Product improvements and new product introductions also require significant planning,
design, development, and testing at the technological, product, and manufacturing process levels and we may
not be able to timely develop product improvements or new products. Our competitors’ new products may
beat our products to market, be more effective with more features and/or less expensive than our products,
obtain better market acceptance, or render our products obsolete. Any new products that we develop may not
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