Segment Reporting
The Company’s reportable segments are based on the Company’s method of internal reporting and are comprised of various product offerings that serve multiple end markets. These results are not necessarily indicative of the results of operations that would have occurred had each segment been an independent, stand-alone entity during the periods presented. The internal reporting of these operating segments is based, in part, on the reporting and review process used by the Company’s chief operating decision maker (“CODM”), its Chief Executive Officer. The Company primarily uses gross profit, a measure that is determined in accordance with U.S. GAAP, to evaluate segment profitability and make decisions about resource allocation. The Company’s CODM does not utilize segment asset information to evaluate performance and make resource allocation decisions, and thus such disclosures are not provided. The Company has three operating segments: 1) Off Road, 2) On Road, and 3) Marine, which are all reportable segments. The Company’s consolidated sales are derived entirely from the operations of its three reportable segments. The Corporate amounts include costs that are not allocated to segments, including certain manufacturing costs, the impacts of certain foreign currency transactions, and certain incentive compensation costs and related adjustments.
The Company has determined its significant segment expense categories based on amounts regularly provided to the Company’s CODM to evaluate segment profitability and drive strategic decision making. Reportable segment sales and
significant reportable segment expense categories and amounts included in the Company’s measure of segment profit or loss, gross profit, were as follows (in millions):
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| For the Year Ended December 31, 2025 |
| Off Road | | On Road | | Marine | | Total |
| Sales | $ | 5,713.1 | | | $ | 926.5 | | | $ | 512.4 | | | $ | 7,152.0 | |
| Purchased materials, logistics and labor | 4,286.1 | | | 714.5 | | | 420.1 | | | 5,420.7 | |
| Depreciation and amortization | 171.1 | | | 30.5 | | | 9.0 | | | 210.6 | |
| Warranty | 100.8 | | | 24.3 | | | 10.8 | | | 135.9 | |
| Reportable segment gross profit | $ | 1,155.1 | | | $ | 157.2 | | | $ | 72.5 | | | $ | 1,384.8 | |
| Corporate costs and other | | | | | | | (16.1) | |
| Total gross profit | | | | | | | $ | 1,368.7 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| For the Year Ended December 31, 2024 |
| Off Road | | On Road | | Marine | | Total |
| Sales | $ | 5,706.7 | | | $ | 987.8 | | | $ | 480.9 | | | $ | 7,175.4 | |
| Purchased materials, logistics and labor | 4,250.3 | | | 744.5 | | | 382.4 | | | 5,377.2 | |
| Depreciation and amortization | 170.1 | | | 34.1 | | | 8.1 | | | 212.3 | |
| Warranty | 125.8 | | | 29.8 | | | 9.8 | | | 165.4 | |
| Reportable segment gross profit | $ | 1,160.5 | | | $ | 179.4 | | | $ | 80.6 | | | $ | 1,420.5 | |
| Corporate costs and other | | | | | | | 46.3 | |
| Total gross profit | | | | | | | $ | 1,466.8 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| For the Year Ended December 31, 2023 |
| Off Road | | On Road | | Marine | | Total |
| Sales | $ | 6,984.4 | | | $ | 1,184.6 | | | $ | 765.4 | | | $ | 8,934.4 | |
| Purchased materials, logistics and labor | 5,149.7 | | | 867.9 | | | 574.2 | | | 6,591.8 | |
| Depreciation and amortization | 156.6 | | | 29.3 | | | 6.6 | | | 192.5 | |
| Warranty | 146.5 | | | 47.0 | | | 15.6 | | | 209.1 | |
| Reportable segment gross profit | $ | 1,531.6 | | | $ | 240.4 | | | $ | 169.0 | | | $ | 1,941.0 | |
| Corporate costs and other | | | | | | | 18.9 | |
| Total gross profit | | | | | | | $ | 1,959.9 | |
About Segments Disclosures
Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.
Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.