Polaris 2010 Annual Report Download - page 34

Fifteen percent of our total sales are generated outside of North America, and we intend to continue to
expand our international operations. Our international operations require significant management
attention and financial resources, expose us to difficulties presented by international economic, political,
legal, accounting, and business factors, and may not be successful or produce desired levels of sales and
profitability.
We manufacture the substantial majority of our products in the United States and plan to begin manufacturing
products in Mexico in 2011. We sell our products throughout the world and maintain sales and administration
facilities in Canada, France, Norway, Sweden, United Kingdom, Switzerland, Germany, Spain, Australia, China
and Brazil. Our primary distribution facility is in Vermillion, South Dakota which distributes PG&A products to our
North American dealers and we have various other locations around the world that distribute PG&A to our
international dealers and distributors and one of our significant engine suppliers is located in Japan. Our total sales
outside North America were 15 percent, 16 percent, and 16 percent of our total sales for fiscal 2010, 2009, and 2008,
respectively. International markets have, and will continue to be, a focus for sales growth. We believe many
opportunities exist in the international markets, and over time we intend for international sales to comprise a larger
percentage of our total sales. Several factors, including weakened international economic conditions, could
adversely affect such growth. Additionally, the expansion of our existing international operations and entry into
additional international markets require significant management attention and financial resources. Some of the
countries in which we sell our products, or otherwise have an international presence, are to some degree subject to
political, economic and/or social instability. Our international operations expose us and our representatives, agents
and distributors to risks inherent in operating in foreign jurisdictions. These risks include:
• increased costs of customizing products for foreign countries;
• difficulties in managing and staffing international operations and increases in infrastructure costs including
legal, tax, accounting, and information technology;
• the imposition of additional United States and foreign governmental controls or regulations; new or
enhanced trade restrictions and restrictions on the activities of foreign agents, representatives, and distrib-
utors; 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, 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.
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