6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16

OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of November, 2022

Commission File Number: 001-38648

BRP INC.

(Translation of registrant’s name into English)

726 Saint-Joseph Street

Valcourt, Quebec, Canada

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ☐ Form 40-F ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

EXHIBIT INDEX

Exhibits 99.1 and 99.2 to this report of a Foreign Private Issuer on Form 6-K are deemed filed for all purposes under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended.

Exhibit No.	Description
99.1	Unaudited Condensed Consolidated Interim Financial Statements for the Three- and Nine-Months Ended October 31, 2022
99.2	Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Three- and Nine-Months Ended October 31, 2022
99.3	Regulation 52-109F2 Certification of Chief Executive Officer
99.4	Regulation 52-109F2 Certification of Chief Financial Officer

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	BRP Inc.
By:	/s/ Sébastien Martel
Name:	Sébastien Martel
Title:	Chief Financial Officer

Date: November 30, 2022

EX-99.1

Exhibit 99.1

Unaudited Condensed Consolidated Interim Financial Statements

BRP Inc.

For the three- and nine-month periods ended October 31, 2022 and 2021

BRP Inc.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF NET INCOME

[Unaudited]

[in millions of Canadian dollars, except per share data]

			Three-month periods ended						Nine-month periods ended
	Notes		October 31, 2022			October 31, 2021			October 31, 2022			October 31, 2021
Revenues		16		$2,709.3			$1,588.0			$6,957.1			$5,300.4
Cost of sales				2,054.6			1,177.4			5,245.3			3,777.7
Gross profit				654.7			410.6			1,711.8			1,522.7
Operating expenses
Selling and marketing				113.3			97.8			316.0			293.3
Research and development				80.6			70.6			246.7			204.7
General and administrative				74.9			65.2			219.3			187.4
Other operating expenses (income)		17		1.1			(8.5	)		(0.4	)		(3.1)
Total operating expenses				269.9			225.1			781.6			682.3
Operating income				384.8			185.5			930.2			840.4
Financing costs		18		33.1			16.5			77.4			114.9
Financing income		18		(0.3	)		(0.7	)		(4.6	)		(3.5	)
Foreign exchange (gain) loss on long-term debt				132.6			(9.9	)		148.6			(58.9	)
Income before income taxes				219.4			179.6			708.8			787.9
Income tax expense		19		77.8			51.9			208.5			202.9
Net income				$141.6			$127.7			$500.3			$585.0
Attributable to shareholders				$141.2			$127.6			$498.6			$584.5
Attributable to non-controlling interest				$0.4			$0.1			$1.7			$0.5
Basic earnings per share		15		$1.79			$1.57			$6.27			$7.02
Diluted earnings per share		15		$1.76			$1.53			$6.15			$6.81

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

2

BRP Inc.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF COMPREHENSIVE INCOME

[Unaudited]

[in millions of Canadian dollars]

	Three-month periods ended				Nine-month periods ended
	October 31, 2022		October 31, 2021		October 31, 2022		October 31, 2021
Net income		$141.6		$127.7		$500.3		$585.0
Other comprehensive income
Items that will be reclassified subsequently to net income
Net changes in fair value of derivatives designated as cash flow hedges		(20.1)		8.3		15.0		14.6
Net changes in unrealized loss on translation of foreign operations		(0.3)		(8.5)		(30.3)		(28.1)
Income tax (expense) recovery		5.6		(2.4)		(3.9)		(4.0)
		(14.8)		(2.6)		(19.2)		(17.5)
Items that will not be reclassified subsequently to net income
Actuarial gains on defined benefit pension plans		56.3		26.2		128.1		59.1
Loss on fair value of restricted investments		(0.7)		(0.2)		(1.7)		—
Income tax expense		(14.2)		(6.9)		(32.0)		(15.6)
		41.4		19.1		94.4		43.5
Total other comprehensive income		26.6		16.5		75.2		26.0
Total comprehensive income		$168.2		$144.2		$575.5		$611.0
Attributable to shareholders		$168.2		$144.1		$574.6		$610.6
Attributable to non-controlling interest		$—		$0.1		$0.9		$0.4

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

3

BRP Inc.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

[Unaudited]

[in millions of Canadian dollars]

As at

	Notes		October 31, 2022		January 31, 2022
Cash and cash equivalents				$59.9		$265.8
Trade and other receivables				523.7		465.7
Income taxes and investment tax credits receivable				31.6		31.6
Other financial assets		4		85.5		73.6
Inventories		5		2,474.8		1,691.3
Other current assets		6		72.4		140.1
Total current assets				3,247.9		2,668.1
Investment tax credits receivable				28.2		24.4
Other financial assets		4		135.3		53.2
Property, plant and equipment				1,614.0		1,441.9
Intangible assets		7		735.4		494.9
Right-of-use assets				144.5		132.7
Deferred income taxes				241.8		212.8
Other non-current assets		6		3.9		2.9
Total non-current assets				2,903.1		2,362.8
Total assets				$6,151.0		$5,030.9
Revolving credit facilities and bank overdraft		8		$363.1		$—
Trade payables and accruals				1,858.4		1,622.9
Provisions		9		477.2		328.1
Other financial liabilities		10		135.5		152.3
Income tax payable				63.9		135.7
Deferred revenues				127.3		247.9
Current portion of long-term debt		11		51.0		103.1
Current portion of lease liabilities				36.0		29.4
Total current liabilities				3,112.4		2,619.4
Long-term debt		11		2,281.0		1,937.4
Lease liabilities				124.6		117.5
Provisions		9		123.4		86.2
Other financial liabilities		10		64.1		34.0
Deferred revenues				122.0		107.3
Employee future benefit liabilities				84.8		220.2
Deferred income taxes				54.3		22.4
Other non-current liabilities				14.6		19.3
Total non-current liabilities				2,868.8		2,544.3
Total liabilities				5,981.2		5,163.7
Equity (deficit)				169.8		(132.8	)
Total liabilities and equity (deficit)				$6,151.0		$5,030.9

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

4

BRP Inc.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CHANGES IN EQUITY

[Unaudited]

[in millions of Canadian dollars]

For the nine-month period ended October 31, 2022

	Attributed to shareholders
		Capital Stock (Note 12)	Contributed surplus		Retained losses	Translation of foreign operations	Cash- flow hedges	Total	Non- controlling interests	Total equity (deficit)
Balance as at January 31, 2022		$260.6	$(3.2)		$(404.3)	$(2.9)	$14.2	$(135.6)	$2.8	$(132.8)
Net income		—	—		498.6	—	—	498.6	1.7	500.3
Other comprehensive income (loss)		—	—		94.4	(29.5)	11.1	76.0	(0.8)	75.2
Total comprehensive income (loss)		—	—		593.0	(29.5)	11.1	574.6	0.9	575.5
Dividends		—	—		(38.2)	—	—	(38.2)	—	(38.2)
Issuance of subordinate shares		7.3	(2.1)		—	—	—	5.2	—	5.2
Repurchase of subordinate shares (Note 12)		(20.2)	47.2		(279.8)	—	—	(252.8)	—	(252.8)
Stock-based compensation		—	12.9	[a]	—	—	—	12.9	—	12.9
Non-controlling interest arising on business combination		—	—		—	—	—	—	20.4	20.4
Obligation to repurchase a non-controlling interest		—	—		—	—	—	—	(20.4)	(20.4)
Balance as at October 31, 2022		$247.7	$54.8		$(129.3)	$(32.4)	$25.3	$166.1	$3.7	$169.8

^[a] Includes $1.6 million of income tax expense.

For the nine-month period ended October 31, 2021

	Attributed to shareholders
		Capital Stock	Contributed surplus		Retained losses	Translation of foreign operations	Cash- flow hedges	Total	Non- controlling interests		Total deficit
Balance as at January 31, 2021		$210.4	$(154.0)		$(575.9)	$35.5	$5.3	$(478.7)	$3.8		$(474.9)
Net income		—	—		584.5	—	—	584.5	0.5		585.0
Other comprehensive income (loss)		—	—		43.5	(28.0)	10.6	26.1	(0.1	)	26.0
Total comprehensive income (loss)		—	—		628.0	(28.0)	10.6	610.6	0.4		611.0
Dividends		—	—		(32.4)	—	—	(32.4)	—		(32.4)
Issuance of subordinate shares		84.8	(20.7)		—	—	—	64.1	—		64.1
Repurchase of subordinate shares		(32.7)	200.0		(575.4)	—	—	(408.1)	—		(408.1)
Stock-based compensation		—	14.9	[a]	—	—	—	14.9	—		14.9
Other		—	—		—	—	—	—	(1.4)		(1.4)
Balance as at October 31, 2021		$262.5	$40.2		$(555.7)	$7.5	$15.9	$(229.6)	$2.8		$(226.8)

^[a] Includes $1.5 million of income tax recovery.

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

5

BRP Inc.

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

[Unaudited]

[in millions of Canadian dollars]

			Nine-month periods ended
	Notes		October 31, 2022		October 31, 2021
OPERATING ACTIVITIES
Net income				$500.3		$585.0
Non-cash and non-operating items:
Depreciation expense				220.4		199.1
Income tax expense		19		208.5		202.9
Foreign exchange (gain) loss on long-term debt				148.6		(58.9)
Interest expense and transaction costs		18		71.5		87.7
Other				1.3		39.1
Cash flows generated from operations before changes in working capital				1,150.6		1,054.9
Changes in working capital:
Increase in trade and other receivables				(58.9)		(180.4)
Increase in inventories				(753.6)		(703.1)
(Increase) decrease in other assets				32.4		(47.4)
Increase in trade payables and accruals				231.1		153.8
Increase (decrease) in other financial liabilities				(26.1)		7.3
Increase (decrease) in provisions				178.5		(83.3)
Decrease in other liabilities				(131.7)		(1.3)
Cash flows generated from operations				622.3		200.5
Income taxes paid, net of refunds				(280.0)		(139.3)
Net cash flows generated from operating activities				342.3		61.2
INVESTING ACTIVITIES
Additions to property, plant and equipment				(353.1)		(319.9)
Additions to intangible assets		7		(43.4)		(44.8)
Business combinations, net of acquired cash		3		(208.8)		—
Other				5.8		5.9
Net cash flows used in investing activities				(599.5)		(358.8)
FINANCING ACTIVITIES
Increase in revolving credit facilities and bank overdraft				365.1		58.5
Issuance of long-term debt		11		244.5		410.0
Long-term debt amendment fees		11		(1.9)		(20.0)
Repayment of long-term debt		11		(94.8)		(774.1)
Repayment of lease liabilities				(25.6)		(27.0)
Interest paid				(63.1)		(40.7)
Issuance of subordinate voting shares				5.2		64.1
Repurchase of subordinate voting shares		12		(305.5)		(638.2)
Dividends paid				(38.2)		(32.4)
Other				(5.1)		(4.4)
Net cash flows generated from (used in) financing activities				80.6		(1,004.2)
Effect of exchange rate changes on cash and cash equivalents				(29.3)		10.4
Net decrease in cash and cash equivalents				(205.9)		(1,291.4)
Cash and cash equivalents at the beginning of period				265.8		1,325.7
Cash and cash equivalents at the end of period				$59.9		$34.3

The accompanying notes are an integral part of these unaudited condensed consolidated interim financial statements.

6

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and nine-month periods ended October 31, 2022 and 2021

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

1. NATURE OF OPERATIONS

BRP Inc. (“BRP”) is incorporated under the laws of Canada. BRP’s multiple voting shares are owned by Beaudier Inc. and 4338618 Canada Inc. (collectively, “Beaudier Group”), Bain Capital Integral Investors II, L.P. (“Bain Capital”) and La Caisse de dépôt et placement du Québec (“CDPQ”), (collectively, the “Principal Shareholders”). BRP’s subordinate voting shares are listed in Canada on the Toronto Stock Exchange under the symbol DOO and in the United States on the Nasdaq Global Select Market under the symbol DOOO.

BRP and its subsidiaries (the “Company”) design, develop, manufacture and sell powersports vehicles and marine products. The Company’s Powersports segment comprises “Year-Round Products” which consists of all-terrain vehicles, side-by-side vehicles and three-wheeled vehicles; “Seasonal Products” which consists of snowmobiles, personal watercraft and pontoons; and “Powersports PA&A and OEM Engines” which consists of parts, accessories and apparel (“PA&A”), engines for karts and recreational aircraft and other services. Additionally, the Company’s “Marine” segment consists of boats, pontoons, jet boat and outboard engines and related PA&A and other services.

The Company’s products are sold mainly through a network of independent dealers, independent distributors and to original equipment manufacturers (the “Customers”). The Company distributes its products worldwide and manufactures them in Mexico, Canada, Austria, the United States, Finland, Australia and Germany.

The Company’s headquarters is located at 726 Saint-Joseph Street, Valcourt, Québec, J0E 2L0.

2. BASIS OF PRESENTATION

These unaudited condensed consolidated interim financial statements for the three- and nine-month periods ended October 31, 2022 and 2021 have been prepared using accounting policies consistent with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) and in accordance with IAS 34 “Interim Financial Reporting”. These unaudited condensed consolidated interim financial statements for the three- and nine-month periods ended October 31, 2022 and 2021 follow the same accounting policies as the audited consolidated financial statements for the year ended January 31, 2022 and, as such, should be read in conjunction with them.

The preparation of these unaudited condensed consolidated interim financial statements in accordance with the Company’s accounting policies requires management to make estimates and judgments that can affect the reported amounts of assets and liabilities, related amounts of revenues and expenses, other comprehensive income and disclosures made. The Company’s best estimates are based on the information, facts and circumstances available at the time estimates are made. Management uses historical experience and information, general economic conditions and trends, as well as assumptions regarding probable future outcomes as the basis for determining estimates. Actual results could differ from the estimates used and such differences could be significant.

7

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and nine-month periods ended October 31, 2022 and 2021

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

2. BASIS OF PRESENTATION [CONTINUED]

These unaudited condensed consolidated interim financial statements include the financial statements of BRP and its subsidiaries. BRP controls all of its subsidiaries that are wholly owned through voting equity interests, except for Regionales Innovations Centrum GmbH in Austria for which a non-controlling interest of 25% is recorded upon consolidation, BRP Commerce & Trade Shanghai Co. Ltd in China for which a non-controlling interest of 20% is recorded upon consolidation and Pinion GmbH in Germany for which there is a non-controlling interest of 20%. BRP is also part of a joint venture located in Austria. All inter-company transactions and balances have been eliminated upon consolidation.

The Company’s revenues and operating income experience substantial fluctuations from quarter to quarter. In general, wholesale of the Company’s products are higher in the period immediately preceding and during their particular season of use. However, the mix of product sales may vary considerably from time to time as a result of changes in seasonal and geographic demand, the introduction of new products and models and production scheduling for particular types of products.

On November 29, 2022, the Board of Directors of the Company approved these unaudited condensed consolidated interim financial statements for the three- and nine-month periods ended October 31, 2022 and 2021.

3. BUSINESS COMBINATIONS

Transactions for the three-month period ended October 31, 2022

On August 4, 2022, the Company completed the acquisition of 80% of the outstanding shares of Pinion GmbH (“Pinion”) for a consideration of €61.9 million ($81.4 million) paid in cash. Pinion is located in Denkendorf, Germany and designs, develops, assembles, and sells mechanical gearboxes for traditional and electric bicycles.

On October 5, 2022, the Company completed the acquisition of substantially all the assets related to the powersports business of Kongsberg Automotive ASA and its subsidiary Kongsberg Inc. located in Shawinigan, Quebec (“KA Shawinigan”) for a consideration of $127.8 million paid in cash. KA Shawinigan is a leading player in electronic and mechatronic product development and manufacturing and a long-standing supplier of BRP.

The Company will finalize the accounting for these acquisitions during the next quarters, specifically the assessment of the fair value of assets acquired and liabilities assumed, and goodwill related to these acquisitions.

Following the acquisition of Pinion and KA Shawinigan, the Company created a new Low Voltage & Human Assisted Group (“LVHA”). The creation of LVHA allows the Company to pursue its growth strategy with product categories that overlap recreational, urban mobility and services with low voltage and human assisted products. LVHA is not a reportable segment for the Company.

8

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and nine-month periods ended October 31, 2022 and 2021

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

3. BUSINESS COMBINATIONS [CONTINUED]

The preliminary value of the assets acquired, liabilities assumed and non-controlling interest were as follows, as at the acquisition date:

	Pinion			KA   Shawinigan			Total
Assets acquired
Current assets		$7.7	[a]		$26.2			$33.9
Non-current assets		5.3			3.2			8.5
Property, plant and equipment		1.3			9.5			10.8
Patents		16.2			28.3			44.5
Trademarks		15.4			—			15.4
Customer relationships		13.0			—			13.0
Goodwill [b] [c]		72.8			64.9			137.7
Total assets acquired		131.7			132.1			263.8
Liabilities assumed
Current liabilities		(11.1	)		(3.4	)		(14.5	)
Non-current liabilities		(18.8	)		(0.9	)		(19.7	)
Total liabilities assumed		(29.9	)		(4.3	)		(34.2	)
Non-controlling interest [d]		(20.4	)		—			(20.4	)
Total consideration paid in cash		$81.4			$127.8			$209.2

^[a]  Including $0.4 million (€0.3 million) of cash

^[b]  Goodwill arises principally from expected synergies and future growth.

^[c]  Goodwill is deductible for tax purposes only for KA Shawinigan.

^[d]  Non-controlling interest is measured at fair value as at the acquisition date.

Pinion

The Company’s consolidated statement of net income included the operating results of Pinion since the acquisition date. For the period ended October 31, 2022, it represented revenues of $5.1 million. Net income for the period ended October 31, 2022 was not significant.

Had the Company acquired Pinion at the beginning of the year ended October 31, 2022, its revenues and net income increase would not have been significant.

The Company incurred acquisition-related costs of $0.8 million for Pinion, which have been recorded in general and administrative expenses.

As part of the acquisition, the Company and the non-controlling interest shareholders in Pinion (the “Parties”) entered into put and call options, exercisable by the Parties after January 2026 and before June 2028, allowing or requiring the Company to acquire all the remaining shares for a cash consideration set according to a predetermined purchase price formula that is based on Pinion’s performance. At the acquisition date, the Company recorded a financial liability and reduced the non-controlling interests by $20.4 million, representing the estimated present value of the redemption amount. As a result, no profit is attributed to the non-controlling interest. Subsequent remeasurement adjustments of the financial liability will be recorded in the consolidated statements of net income.

9

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and nine-month periods ended October 31, 2022 and 2021

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

3. BUSINESS COMBINATIONS [CONTINUED]

KA Shawinigan

The Company’s consolidated statement of net income included the operating results of KA Shawinigan since the acquisition date. For the period ended October 31, 2022, revenues and net income were not significant.

Had the Company acquired KA Shawinigan at the beginning of the year ended October 31, 2022, its revenues and net income increase would not have been significant as the assets acquired of KA Shawinigan were used mainly to supply the Company.

The Company incurred acquisition-related costs of $0.8 million for KA Shawinigan, which have been recorded in general and administrative expenses.

4. OTHER FINANCIAL ASSETS

The Company’s other financial assets were as follows, as at:

	October 31, 2022		January 31, 2022
Restricted investments [a]		$11.8		$14.3
Derivative financial instruments		124.8		38.0
Advances to suppliers related to property, plant and equipment		57.6		50.4
Other		26.6		24.1
Total other financial assets		$220.8		$126.8
Current		85.5		73.6
Non-current		135.3		53.2
Total other financial assets		$220.8		$126.8

^[a]  The restricted investments are publicly traded bonds that can only be used for severance payments and pension costs associated with Austrian pension plans, and are not available for general corporate use.

The non-current portion is mainly attributable to the restricted investments and derivative financial instruments.

5. INVENTORIES

The Company’s inventories were as follows, as at:

	October 31, 2022		January 31, 2022
Materials and work in progress		$1,668.3		$1,193.6
Finished products		424.9		176.9
Parts, accessories and apparel		381.6		320.8
Total inventories		$2,474.8		$1,691.3

The Company recognized in the condensed consolidated interim statements of net income during the three- and nine-month periods ended October 31, 2022, a write-down on inventories of $18.7 million and $29.7 million respectively ($7.8 million and $16.8 million respectively during the three- and nine-month periods ended October 31, 2021).

10

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and nine-month periods ended October 31, 2022 and 2021

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

6. OTHER ASSETS

The Company’s other assets were as follows, as at:

	October 31, 2022		January 31, 2022
Prepaids		$35.0		$36.1
Deferred financing cost		5.7		4.1
Other [a]		35.6		102.8
Total other assets		$76.3		$143.0
Current		72.4		140.1
Non-current		3.9		2.9
Total other assets		$76.3		$143.0

^[a]  The balance is mainly attributable to the substantially completed units awaiting installation of missing components at dealers for which the legal property title has been transferred while not qualifying for revenue recognition as at October 31, 2022. The Company was either compensated for those units through its amended financing agreement with its third-party financing provider or has an unconditional right to be compensated, which ultimately resulted in the deferral of revenue recognition. The revenue will be recognized upon completion of its performance obligation, concurrently with the aforementioned other asset that will be recognized as cost of sales.

7. INTANGIBLE ASSETS

The Company’s intangible assets were as follows, as at:

	October 31, 2022						January 31, 2022
	Cost		Accumulated depreciation		Carrying amount		Cost		Accumulated depreciation		Carrying amount
Goodwill		$253.5		$—		$253.5		$115.9		$—		$115.9
Trademarks		216.7		—		216.7		197.2		—		197.2
Software and licences		293.3		138.1		155.2		249.2		125.4		123.8
Patents		48.1		2.5		45.6		5.1		1.9		3.2
Dealer networks		136.8		85.8		51.0		131.0		76.5		54.5
Customer relationships		35.1		21.7		13.4		22.9		22.6		0.3
Total		$983.5		$248.1		$735.4		$721.3		$226.4		$494.9

The following table explains the changes in Company’s intangible assets during the nine-month period ended October 31, 2022:

	Carrying amount as at January 31, 2022		Additions		Business combinations (Note 3)		Depreciation			Effect of foreign currency exchange rate changes			Carrying amount as at October 31, 2022
Goodwill		$115.9		$—		$137.7		$—			$(0.1	)		$253.5
Trademarks		197.2		—		15.4		—			4.1			216.7
Software and licences		123.8		43.2		0.8		(11.7	)		(0.9	)		155.2
Patents		3.2		—		44.5		(0.7	)		(1.4	)		45.6
Dealer networks		54.5		—		—		(5.0	)		1.5			51.0
Customer relationships		0.3		—		13.0		(0.4	)		0.5			13.4
Total		$494.9		$43.2		$211.4		$(17.8	)		$3.7			$735.4

11

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and nine-month periods ended October 31, 2022 and 2021

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

8. REVOLVING CREDIT FACILITIES

On February 16, 2022, the Company amended its $800.0 million revolving credit facilities to increase the availability to $1,100.0 million and replace LIBOR with the Secured Overnight Financing Rate (‘‘SOFR’’) as the benchmark interest rate. Subsequently, on June 10, 2022, the Company further added to its available commitment under its revolving credit facilities by $400 million the availability increasing to $1,500.0 million. The pricing grid and other conditions remained unchanged for both increases.

As at October 31, 2022, the Company had $356.5 million of outstanding indebtedness under the Revolving Credit Facilities and $6.6 million under bank overdraft.

The applicable interest rates vary depending on a leverage ratio. The leverage ratio is defined in the Revolving Credit Facilities agreement by the ratio of net debt to consolidated cash flows of the Company (the “Leverage ratio”). The applicable interest rates are as follows:

(i) U.S. dollars at either

(a) Term SOFR (defined as the forward-looking term rate based on SOFR plus a customary credit spread adjustment) plus 1.45% to 3.00% per annum; or

(b) U.S. Base Rate plus 0.45% to 2.00% per annum; or

(c) U.S. Prime Rate plus 0.45% to 2.00% per annum;

(ii) Canadian dollars at either

(a) Bankers’ Acceptance plus 1.45% to 3.00% per annum; or

(b) Canadian Prime Rate plus 0.45% to 2.00% per annum

(iii) Euros at EURIBOR plus 1.45% to 3.00% per annum.

In addition, the Company incurs commitment fees of 0.25% to 0.40% per annum on the undrawn amount of the Revolving Credit Facilities.

As at October 31, 2022, the cost of borrowing under the Revolving Credit Facilities was as follows:

(i) U.S. dollars at either

(a) Term SOFR plus 1.70% per annum; or

(b) U.S. Base Rate plus 0.70% per annum; or

(c) U.S. Prime Rate plus 0.70% per annum;

(ii) Canadian dollars at either

(a) Bankers’ Acceptance plus 1.70% per annum; or

(b) Canadian Prime Rate plus 0.70% per annum

(iii) Euros at EURIBOR plus 1.70% per annum.

As at October 31, 2022, the commitment fees on the undrawn amount of the Revolving Credit Facilities were 0.25% per annum.

The Company is required to maintain, under certain conditions, a minimum fixed charge coverage ratio. Additionally, the total available borrowing under the Revolving Credit Facilities is subject to a borrowing base calculation representing 75% of the carrying amount of trade and other receivables plus 50% of the carrying amount of inventories.

12

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and nine-month periods ended October 31, 2022 and 2021

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

9. PROVISIONS

The Company’s provisions were as follows, as at:

	October 31, 2022		January 31, 2022
Product-related		$550.7		$372.8
Restructuring		3.4		3.2
Other		46.5		38.3
Total provisions		$600.6		$414.3
Current		477.2		328.1
Non-current		123.4		86.2
Total provisions		$600.6		$414.3

Product-related provisions include provisions for regular warranty coverage on products sold, product liability provisions and provisions related to sales programs offered by the Company to its Customers in order to support the retail activity.

The non-current portion of provisions is mainly attributable to product-related provisions.

The changes in provisions were as follows:

	Product-related			Restructuring			Other			Total
Balance as at January 31, 2022		$372.8			$3.2			$38.3			$414.3
Expensed during the period		669.6			0.8			22.8			693.2
Additions through business combinations		0.2			—			—			0.2
Paid during the period		(503.1	)		(0.8	)		(14.2	)		(518.1	)
Reversed during the period		(2.4	)		—			—			(2.4	)
Effect of foreign currency exchange rate changes		21.7			0.2			(0.4	)		21.5
Unwinding of discount and effect of changes in discounting estimates		(8.1	)		—			—			(8.1	)
Balance as at October 31, 2022		$550.7			$3.4			$46.5			$600.6

10. OTHER FINANCIAL LIABILITIES

The Company’s other financial liabilities were as follows, as at:

	October 31, 2022		January 31, 2022
Dealer holdback programs and customer deposits		$60.5		$83.4
Due to Bombardier Inc.		23.1		22.1
Derivative financial instruments		81.2		10.3
Non-controlling interest liability		20.8		—
Financial liability related to share repurchase programs		—		47.2
Other		14.0		23.3
Total other financial liabilities		$199.6		$186.3
Current		135.5		152.3
Non-current [a]		64.1		34.0
Total other financial liabilities		$199.6		$186.3

^[a]  The non-current portion is mainly comprised of the amount due to Bombardier Inc. in connection with indemnification related to income taxes and the amount of the non-controlling interest liability.

13

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and nine-month periods ended October 31, 2022 and 2021

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

11. LONG-TERM DEBT

As at October 31, 2022 and January 31, 2022, the maturity dates, interest rates, outstanding nominal amounts and carrying amounts of long-term debt were as follows:

October 31, 2022
	Maturity date		Contractual interest rate		Effective interest rate		Outstanding nominal amount		Carrying   amount
Term Facility
Term Loan B-1		May 2027		5.75%		5.80%		U.S. $1,481.0		$2,016.9	[a]
Term Loan B-2		June 2024		6.83%		7.30%		U.S. $100.0		135.4	[a]
Term Loans		Dec. 2022 to Dec. 2030		0.80% to 2.70%		1.90% to 3.81%		€138.8		179.7
Total long-term debt										$2,332.0
Current										51.0
Non-current										2,281.0
Total long-term debt										$2,332.0

^[a]  Net of unamortized transaction costs of $3.3 million for Term Loan B-1 and $1.0 million for Term Loan B-2.

January 31, 2022
	Maturity date		Contractual interest rate		Effective interest rate		Outstanding nominal amount		Carrying   amount
Term Facility
Term Loan B-1		May 2027		2.11%		2.14%		U.S. $1,492.4		$1,891.1	[a]
Term Loans		Mar. 2022 to Dec. 2030		0.75% to 1.90%		0.88% to 4.67%		€110.5		149.4
Total long-term debt										$2,040.5
Current										103.1
Non-current										1,937.4
Total long-term debt										$2,040.5

^[a]  Net of unamortized transaction costs of $3.6 million.

The following table explains the changes in long-term debt during the nine-month period ended October 31, 2022:

			Statements of cash flows				Non-cash changes
	Carrying amount as at January 31, 2022		Issuance		Repayment		Effect of  foreign  currency  exchange rate  changes		Other		Carrying amount as at October 31, 2022
Term Facility		$1,891.1		$127.8		$(14.9)		$148.6		$(0.3)		$2,152.3
Term Loans		149.4		116.7		(79.9)		(6.9)		0.4		179.7
Total		$2,040.5		$244.5		$(94.8)		$141.7		$0.1		$2,332.0

14

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and nine-month periods ended October 31, 2022 and 2021

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

11. LONG-TERM DEBT [CONTINUED]

a) Term Facility

On June 14, 2022, the Company entered into an incremental U.S. $100.0 million tranche under its Term Facility. This new tranche matures in June 2024 and, consistent with the existing tranche of the Term Facility, is exempt of financial covenants. The Company incurred transaction costs of $1.1 million, which have been incorporated in the carrying amount of this new tranche of the Term Facility and are amortized over its expected life using the effective interest rate method.

As at October 31, 2022, the cost of borrowing under the Term Loan B-1 was as follows:

(i) LIBOR plus 2.00% per annum, with a LIBOR floor of 0.00%; or

(ii) U.S. Base Rate plus 1.00%; or

(iii) U.S. Prime Rate plus 1.00%

Under the Term Facility, the cost of borrowing in U.S. Base Rate or U.S. Prime Rate cannot be lower than the cost of borrowing in LIBOR.

As at October 31, 2022, the cost of borrowing under the Term Loan B-2 was as follows:

(i) Term SOFR (defined as the forward-looking term rate based on SOFR plus a customary credit spread adjustment) plus 3.00% per annum, with a Term SOFR floor of 0.5%; or

(ii) U.S. Base Rate plus 2.00%

The Company is required to repay a minimum of 0.25% of the nominal amount each quarter. Consequently, the Company repaid an amount of U.S. $11.4 million ($14.9 million) during the nine-month period ended October 31, 2022. Also, the Company may be required to repay a portion of the Term Facility in the event that it has an excess cash position at the end of the fiscal year and its leverage ratio is above a certain threshold level.

b) Term Loans

On May 5, 2022, the Company fully repaid the balance of its €55.0 million ($74.2 million) unsecured loan contracted under an Austrian government COVID-19 program in Fiscal 2021.

During the nine-month period ended October 31, 2022, the Company entered into unsecured loan agreements at favourable interest rates under an Austrian government program. This program supports research and development projects based on the Company’s incurred expenses in Austria. The term loans have a nominal amount of €86.8 million ($116.7 million) with an interest rate varying between 0.50% and 0.84% with maturity dates varying from June 2025 to June 2029. The Company recognized a deferred grant revenue, representing the difference between the fair value of the term loan at inception and the cash received, of €4.6 million ($6.2 million). The grants are recognized linearly over the maturity of the loans as other income.

15

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and nine-month periods ended October 31, 2022 and 2021

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

12. CAPITAL STOCK

The changes in capital stock issued and outstanding were as follows:

	Number of shares			Carrying Amount
Subordinate voting shares
Balance as at January 31, 2022		38,543,761			$257.1
Issued upon exercise of stock options		137,861			7.3
Issued in exchange of multiple voting shares		570,779			0.1
Repurchased under the substantial issuer bid offer		(2,427,184	)		(17.1	)
Repurchased under the normal course issuer bid program		(463,950	)		(3.1	)
Balance as at October 31, 2022		36,361,267			$244.3
Multiple voting shares
Balance as at January 31, 2022		42,954,979			$3.5
Exchanged for subordinate voting shares		(570,779	)		(0.1	)
Balance as at October 31, 2022		42,384,200			$3.4
Total outstanding as at October 31, 2022		78,745,467			$247.7

Substantial issuer bid offer (“SIB”)

On May 11, 2022, the Company repurchased for cancellation 2,427,184 subordinate voting shares following the completion of its SIB for a total consideration of $250.0 million, of which $16.1 million represents the carrying amount of the shares repurchased and $233.9 million represents the amount charged to retained losses. Prior to the completion of the SIB, Beaudier group converted 570,779 of multiple voting shares into an equivalent number of subordinate voting shares. These converted shares were repurchased and cancelled as part of the SIB. The Company incurred $1.0 million of fees and expenses relating to the SIB, which were recorded in capital stock.

Normal Course Issuer Bid Program (“NCIB”)

During the nine-month period ended October 31, 2022, the Company continued its share repurchases under the NCIB that was announced and started during the fiscal year ended January 31, 2022 and repurchased 463,950 subordinate voting shares for a total consideration of $47.2 million.

When the Company was not permitted to purchase subordinate voting shares due to regulatory restrictions or self-imposed blackout periods, an automatic share purchase plan with a designated broker allowed the purchase of subordinate voting shares under pre-set conditions. During the nine-month period ended October 31, 2022, the Company recognized a gain of $1.8 million in financing income related to the automatic share purchase plan. The gain represents the difference between the share price used to establish the financial liability at the end of each quarter and the amount actually paid to repurchase shares during the regulatory restrictions or self-imposed blackout periods.

Of the total consideration of $47.2 million, $3.1 million represents the carrying amount of the shares repurchased, $45.9 million represents the amount charged to retained losses and $1.8 million represents the gain recognized in net income.

16

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and nine-month periods ended October 31, 2022 and 2021

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

13. STOCK OPTION PLAN

During the nine-month period ended October 31, 2022 and 2021, the Company granted respectively 573,600 and 513,300 stock options to eligible officers and employees to acquire subordinated voting shares at an average exercise price of $103.55 and $109.88 respectively. The fair value of the options at the grant date was $40.72 and $48.89, respectively. Such stock options are time vesting and 25% of the options will vest on each of the first, second, third and fourth anniversary of the grant. The stock options have a ten-year term at the end of which the options expire.

14. SEGMENTED INFORMATION

Details of segment information were as follows:

For the three-month period ended October 31, 2022	Powersports segment		Marine     segment		Inter- segment eliminations		Total
Revenues		$2,598.7		$118.8		$(8.2)	$	2,709.3
Cost of sales		1,949.9		112.9		(8.2)		2,054.6
Gross profit		648.8		5.9		—		654.7
Total operating expenses								269.9
Operating income								384.8
Financing costs								33.1
Financing income								(0.3	)
Foreign exchange loss on long-term debt								132.6
Income before income taxes								219.4
Income tax expense								77.8
Net income								$141.6

17

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and nine-month periods ended October 31, 2022 and 2021

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

14. SEGMENTED INFORMATION [CONTINUED]

For the three-month period ended October 31, 2021	Powersports segment		Marine     segment		Inter- segment eliminations		Total
Revenues		$1,457.5		$136.3		$(5.8)	$	1,588.0
Cost of sales		1,067.5		115.7		(5.8)		1,177.4
Gross profit		390.0		20.6		—		410.6
Total operating expenses								225.1
Operating income								185.5
Financing costs								16.5
Financing income								(0.7	)
Foreign exchange gain on long-term debt								(9.9	)
Income before income taxes								179.6
Income tax expense								51.9
Net income								$127.7
For the nine-month period ended October 31, 2022	Powersports segment		Marine segment		Inter- segment eliminations		Total
Revenues		$6,592.2		$390.4		$(25.5)		$6,957.1
Cost of sales		4,925.7		345.1		(25.5)		5,245.3
Gross profit		1,666.5		45.3		—		1,711.8
Total operating expenses								781.6
Operating income								930.2
Financing costs								77.4
Financing income								(4.6	)
Foreign exchange loss on long-term debt								148.6
Income before income taxes								708.8
Income tax expense								208.5
Net income								$500.3

18

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and nine-month periods ended October 31, 2022 and 2021

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

14. SEGMENTED INFORMATION [CONTINUED]

For the nine-month period ended October 31, 2021	Powersports segment		Marine     segment		Inter- segment eliminations		Total
Revenues		$4,922.8		$392.7		$(15.1)	$	5,300.4
Cost of sales		3,457.1		335.7		(15.1)		3,777.7
Gross profit		1,465.7		57.0		—		1,522.7
Total operating expenses								682.3
Operating income								840.4
Financing costs								114.9
Financing income								(3.5	)
Foreign exchange gain on long-term debt								(58.9	)
Income before income taxes								787.9
Income tax expense								202.9
Net income								$585.0

15. EARNINGS PER SHARE

a) Basic earnings per share

Details of basic earnings per share were as follows:

	Three-month periods ended				Nine-month periods ended
	October 31, 2022		October 31, 2021		October 31, 2022		October 31, 2021
Net income attributable to shareholders		$141.2		$127.6		$498.6		$584.5
Weighted average number of shares		78,735,106		81,168,487		79,573,969		83,312,905
Earnings per share - basic		$1.79		$1.57		$6.27		$7.02

b) Diluted earnings per share

Details of diluted earnings per share were as follows:

	Three-month periods ended				Nine-month periods ended
	October 31, 2022		October 31, 2021		October 31, 2022		October 31, 2021
Net income attributable to shareholders		$141.2		$127.6		$498.6		$584.5
Weighted average number of shares		78,735,106		81,168,487		79,573,969		83,312,905
Dilutive effect of stock options		1,518,328		2,357,403		1,563,318		2,478,456
Weighted average number of diluted shares		80,253,434		83,525,890		81,137,287		85,791,361
Earnings per share - diluted		$1.76		$1.53		$6.15		$6.81

19

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and nine-month periods ended October 31, 2022 and 2021

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

16. REVENUES

Details of revenues were as follows:

	Three-month periods ended				Nine-month periods ended
	October 31, 2022		October 31, 2021		October 31, 2022		October 31, 2021
Powersports
Year-Round Products		$1,279.8		$736.3		$3,572.3		$2,614.4
Seasonal Products		1,020.9		437.3		2,120.8		1,475.2
Powersports PA&A and OEM Engines		297.5		283.7		898.3		832.8
Marine		111.1		130.7		365.7		378.0
Total		$2,709.3		$1,588.0		$6,957.1		$5,300.4

The following table provides geographic information on Company’s revenues. The attribution of revenues was based on customer locations.

	Three-month periods ended				Nine-month periods ended
	October 31,   2022		October 31,   2021		October 31,   2022		October 31,   2021
United States		$1,683.3		$836.8		$4,264.8		$2,981.9
Canada		441.9		294.7		1,077.9		864.8
Europe		308.7		272.4		851.6		867.3
Asia Pacific		173.0		125.1		482.6		380.3
Latin America		99.4		56.6		271.8		196.9
Other		3.0		2.4		8.4		9.2
		$2,709.3		$1,588.0		$6,957.1		$5,300.4

20

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and nine-month periods ended October 31, 2022 and 2021

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

17. OTHER OPERATING EXPENSES (INCOME)

Details of Other operating expenses (income) were as follows:

	Three-month periods ended				Nine-month periods ended
	October 31, 2022		October 31, 2021		October 31, 2022		October 31, 2021
Foreign exchange (gain) loss on working capital elements		$(9.2)		$(3.3)		$2.5	$(9.4)
(Gain) loss on forward exchange contracts		10.5		(2.1)		(2.6)	6.7
Other		(0.2)		(3.1)		(0.3)	(0.4)
Total		$1.1		$(8.5)		$(0.4)	$(3.1)

18. FINANCING COSTS AND INCOME

Details of financing costs and financing income were as follows:

	Three-month periods ended						Nine-month periods ended
	October 31, 2022			October 31, 2021			October 31, 2022			October 31, 2021
Interest on long-term debt		$21.4			$11.3			$51.0			$34.8
Transaction costs on long-term debt		—			—			0.7			44.3
Interest on lease liabilities		1.4			2.0			3.8			6.2
Net interest on employee future benefit liabilities		1.2			1.3			3.5			3.8
Interest and commitment fees on revolving credit facilities		7.9			0.9			16.0			2.4
Other		1.2			1.0			2.4			23.4
Financing costs		33.1			16.5			77.4			114.9
Financing income		(0.3	)		(0.7	)		(4.6	)		(3.5	)
Net financing costs		$32.8			$15.8			$72.8			$111.4

21

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and nine-month periods ended October 31, 2022 and 2021

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

19. INCOME TAXES

Details of income tax expense were as follows:

	Three-month periods ended		Nine-month periods ended
	October 31, 2022	October 31, 2021	October 31, 2022	October 31, 2021
Current income tax expense
Related to current year	$74.4	$38.8	$246.7	$201.0
Related to prior years	(2.4)	0.4	(3.3)	(0.2)
	72.0	39.2	243.4	200.8
Deferred income tax expense (recovery)
Temporary differences	(12.2)	13.9	(56.8)	10.3
Effect of income tax rate changes on deferred income taxes	(0.1)	—	—	—
Increase (decrease) in valuation allowance	18.1	(1.2)	21.9	(8.2)
	5.8	12.7	(34.9)	2.1
Income tax expense	$77.8	$51.9	$208.5	$202.9

The reconciliation of income taxes computed at the Canadian statutory rates to income tax expense recorded was as follows:

	Three-month periods ended								Nine-month periods ended
	October 31, 2022				October 31, 2021				October 31, 2022				October 31, 2021
Income taxes calculated at statutory rates		$58.1		26.5%		$47.6		26.5%		$187.8		26.5%		$208.8		26.5%
Increase (decrease) resulting from:
Income tax rate differential of foreign subsidiaries		(6.8	)			(0.9	)			(2.3	)			(4.4	)
Effect of income tax rate changes on deferred income taxes		(0.1	)			—				—				—
Increase (decrease) in valuation allowance		18.1				(1.2	)			21.9				(8.2	)
Recognition of income taxes on foreign currency translation		(7.4	)			0.7				(10.4	)			1.2
Permanent differences [a]		17.3				0.3				18.0				1.3
Other		(1.4	)			5.4				(6.5	)			4.2
Income tax expense		$77.8				$51.9				$208.5				$202.9

^[a]  The permanent differences result mainly from the foreign exchange (gain) loss on long-term debt denominated in U.S. dollars.

22

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and nine-month periods ended October 31, 2022 and 2021

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

20. FINANCIAL INSTRUMENTS

a) Fair value

The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair values of the Company’s financial instruments take into account the credit risk embedded in the instrument. For financial assets, the credit risk of the counterparty is considered whereas for financial liabilities, the Company’s credit risk is considered.

In order to determine the fair value of its financial instruments, the Company uses, when active markets exist, quoted prices from these markets (“Level 1” fair value). When public quotations are not available in the market, fair values are determined using valuation techniques. When inputs used in the valuation techniques are only inputs directly and indirectly observable in the marketplace, fair value is presented as “Level 2” fair value. If fair value is assessed using inputs that require considerable judgment from the Company in interpreting market data and developing estimates, fair value is presented as “Level 3” fair value. For Level 3 fair value, the use of different assumptions and/or estimation methodologies may have a material effect on the estimated fair values.

The fair value level, carrying amount and fair value of restricted investments, non-controlling interest liability, derivative financial instruments and long-term debt were as follows:

			As at October 31, 2022
	Fair value level		Carrying amount		Fair value
Restricted investments (Note 4)		Level 2		$11.8	$11.8
Non-controlling interest liability (Note 10)		Level 3		$(20.8)	$(20.8)
Derivative financial instruments
Forward exchange contracts
Favourable				$11.5	$11.5
(Unfavourable)				(80.9)	(80.9)
Interest rate cap				113.3	113.3
Inflation rate swap				(0.3)	(0.3)
		Level 2		$43.6	$43.6
Long-term debt (including current portion)
Term Facility (Note 11)		Level 1		$(2,152.3)	$(2,082.0)
Term Loans (Note 11)		Level 2		(179.7)	(185.0)
				$(2,332.0)	$(2,267.0)

For cash, trade and other receivables, revolving credit facilities and bank overdraft, trade payables and accruals, dealer holdback programs and customer deposits, the carrying amounts reported on the condensed consolidated interim statements of financial position or in the notes approximate the fair values of these items due to their short-term nature.

Cash includes $12.9 million held by BRP Saint Petersburg LLC. This cash is subject to regulatory restrictions and is therefore not available for general use by the other entities within the group.

23

BRP Inc.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the three- and nine-month periods ended October 31, 2022 and 2021

[Unaudited]

[Tabular figures are in millions of Canadian dollars, unless otherwise indicated]

20. FINANCIAL INSTRUMENTS [CONTINUED]

b) Liquidity risk

The following table summarizes the contractual maturities of the Company’s financial liabilities as at October 31, 2022:

	Less than 1 year		1-3 years		4-5 years		More than 5 years		Total amount
Trade payables and accruals		$1,858.4		$—		$—		$—		$1,858.4
Long-term debt (including interest)		179.5		485.6		2,175.1		56.4		2,896.6
Lease liabilities (including interest)		39.9		59.2		31.7		45.8		176.6
Derivative financial instruments		70.0		11.2		—		—		81.2
Other financial liabilities		65.5		25.5		0.5		26.9		118.4
Total		$2,213.3		$581.5		$2,207.3		$129.1		$5,131.2

24

EX-99.2

Exhibit 99.2

BRP INC.

MANAGEMENT’S

DISCUSSION AND

ANALYSIS

FOR THE THREE- AND NINE-MONTH PERIODS

ENDED OCTOBER 31, 2022

Table of contents

Glossary	2
Basis of Presentation	3
Forward-Looking Statements and Non-IFRS Measures	3
Business Overview	5
Reporting Segments	5
Factors Affecting the Company’s Results of Operations	6
Executive Summary	9
Retail Performance & Market Statistics	11
Results of Operations	12
Analysis of Results for the Third Quarter of Fiscal 2023	12
Analysis of Segment Results for the Third Quarter of Fiscal 2023	14
Geographical Trends for the Third Quarter of Fiscal 2023	15
Analysis of Results for the nine-month period ended October 31, 2022	16
Analysis of Segment Results for the nine-month period ended October 31, 2022	18
Geographical Trends for the nine-month period ended October 31, 2022	19
Foreign Exchange	20
Liquidity and Capital Resources	21
Contractual Obligations	23
Capital Resources	24
Consolidated Financial Position	27
Off-Balance Sheet Arrangements	28
Transaction Between Related Parties	30
Financial Instruments	30
Non-IFRS Measures and Reconciliation Tables	32
Reconciliation Tables	33
Summary of Consolidated Quarterly Results	35
Reconciliation Table for Consolidated Quarterly Results	36
Critical Accounting Estimates	39
Environmental, Social and Governance	41
Controls and Procedures	42
Risk Factors	43
Disclosure of Outstanding Shares	43
Additional Information	43

BRP Inc. Management’s Discussion and Analysis 1

Glossary

Abbreviations	Description	Abbreviations	Description
3WV	Three-Wheeled Vehicles	LIBOR	London Interbank Offered Rate
ATV	All-Terrain Vehicles	NCIB	Normal Course Issuer Bid
BPS	Basis points	MD&A	Management’s Discussion & Analysis
DB	Defined Benefits	OEM	Original Equipment Manufacturer
DC	Defined Contribution	ORV	Off-Road Vehicles
CAPEX	Capital Expenditure	PA&A	Parts, Accessories & Apparel
CGU	Cash Generating Unit	PP&E	Property, Plant & Equipment
EBITDA	Earnings Before Interest, Taxes, Depreciation &  Amortization	PWC	Personal Watercraft
EPS	Earnings Per Share	R&D	Research & development
ESG	Environmental, Social and Governance	SIB	Substantial Issuer Bid
EURIBOR	Euro Interbank Offered Rate	SOFR	Secured Overnight Financing Rate
G&A	General & Administrative	Term SOFR	Defined as the forward-looking term rate based on SOFR plus a customary credit spread adjustment
IAS	International Accounting Standards	SSV	Side-by-Side Vehicles
IFRS	International Financial Reporting Standards	Working Capital	Current assets less current liabilities
International	All region except United States & Canada

BRP Inc. Management’s Discussion and Analysis 2

Basis of Presentation

The following management’s discussion and analysis (“MD&A”) provides information concerning financial condition and results of operations of BRP Inc. (the “Company” or “BRP”) for the third quarter of the fiscal year ending January 31, 2023. This MD&A should be read in conjunction with the unaudited condensed consolidated financial statements for the three- and nine-month periods ended October 31, 2022. Some of the information included in this discussion and analysis contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from underlying forward-looking statements as a result of various factors, including those described in the “Forward-Looking Statements” section of this MD&A. This MD&A reflects information available to the Company as at November 29, 2022.

The unaudited condensed consolidated interim financial statements of the Company have been prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”) and in accordance with IAS 34 “Interim Financial Reporting”. All amounts presented are in Canadian dollars unless otherwise indicated. The Company’s fiscal year is the twelve-month period ending January 31. All references in this MD&A to “Fiscal 2023” are to the Company’s fiscal year ended January 31, 2023, and references to “Fiscal 2022” are to the Company’s fiscal year ended January 31, 2022 and references to “Fiscal 2021” are to the Company’s fiscal year ended January 31, 2021.

This MD&A, approved by the Board of Directors on November 29, 2022, is based on the Company’s unaudited condensed consolidated interim financial statements and accompanying notes thereto for the three- and nine-month periods ended October 31, 2022 and 2021.

Forward-Looking Statements and Non-IFRS Measures

Forward-Looking Statements

Certain statements in this MD&A about the Company’s current and future plans, prospects, expectations, anticipations, estimates and intentions, results, levels of activity, performance, objectives, targets, goals or achievements, priorities and strategies, financial position, market position, capabilities, competitive strengths, beliefs, the prospects and trends of the industries in which the Company operates, the expected growth in demand for products and services in the markets in which the Company competes, statements relating to the impact that the cybersecurity incident will have on its systems and operations, the Company’s ability to mitigate financial consequences due to the cybersecurity incident, and its lack of impact on its financial-year end guidance, research and product development activities, including projected design, characteristics, capacity or performance of future products and their expected scheduled entry to market expected financial requirements and the availability of capital resources and liquidities or any other future events or developments and other statements that are not historical facts constitute forward-looking statements within the meaning of applicable securities laws. The words “may”, “will”, “would”, “should”, “could”, “expects”, “forecasts”, “plans”, “intends”, “trends”, “indications”, “anticipates”, “believes”, “estimates”, “outlook”, “predicts”, “projects”, “likely” or “potential” or the negative or other variations of these words or other comparable words or phrases, are intended to identify forward-looking statements.

BRP Inc. Management’s Discussion and Analysis 3

Forward-looking statements are presented for the purpose of assisting readers in understanding certain key elements of the Company’s current objectives, goals, targets, strategic priorities, expectations and plans, and in obtaining a better understanding of the Company’s business and anticipated operating environment. Readers are cautioned that such information may not be appropriate for other purposes; readers should not place undue reliance on forward-looking statements contained herein. Forward-looking statements, by their very nature, involve inherent risks and uncertainties and are based on a number of assumptions, both general and specific. The Company cautions that its assumptions may not materialize and that current economic conditions render such assumptions, although believed reasonable at the time they were made, subject to greater uncertainty. Such forward-looking statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other factors which may cause the actual results or performance of the Company or the industry to be materially different from the outlook or any future results or performance implied by such statements. In addition, many factors could cause the Company’s actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including, without limitation, the risk factors discussed in greater detail under the heading “Risk Factors” of its Annual Information Form dated March 24, 2022.

The forward-looking statements contained in this MD&A are made as of the date of this MD&A, and the Company has no intention and undertakes no obligation to update or revise any forward-looking statements to reflect future events, changes in circumstances, or changes in beliefs, unless required by applicable securities regulations. In the event that the Company does update any forward-looking statements contained in this MD&A, no inference should be made that the Company will make additional updates with respect to that statement, related matters or any other forward-looking statement. The forward-looking statements contained in this MD&A are expressly qualified by this cautionary statement.

The Company made a number of economic, market and operational assumptions in preparing and making certain forward-looking statements contained in this MD&A, including the following: reasonable industry growth ranging from slightly down to up high-single digits, that is based on the assumption that the supply chain disruptions do not worsen; market share that will remain constant or moderately increase; stable global and North American economic conditions, a limited impact from the military hostilities in Ukraine and the ongoing global health crisis; main currencies in which the Company operates will remain at near current levels; inflation is expected to remain elevated from strong demand, supply shortages and high energy prices, and is expected to gradually decline as central banks gradually increase interest rates; there will be no significant changes in tax laws or free trade arrangements or treaties applicable to the Company; the Company’s margins, will remain at current levels; the supply base will remain able to support product development and planned production rates on commercially acceptable terms in a timely manner; the cybersecurity incident and its consequences will be adequately contained and will have limited impact on the planned wholesale; no new trade barriers will be imposed amongst jurisdictions in which the Company carries operations; the absence of unusually adverse weather conditions, especially in peak seasons. BRP cautions that its assumptions may not materialize and current economic conditions may render such assumptions, although believed reasonable at the time they were made, subject to greater uncertainty.

Non-IFRS Measures

This MD&A makes reference to certain non-IFRS measures. These measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS.

The Company defines and reconciles these measures in the “Non-IFRS Measures and Reconciliation Tables” section of this MD&A.

BRP Inc. Management’s Discussion and Analysis 4

Business Overview

BRP is a global leader in the design, development, manufacturing, distribution and marketing of powersports and marine products. The Company is a diversified manufacturer of powersports and marine products, providing enthusiasts with a variety of exhilarating, stylish and powerful products for year-round use on a variety of terrains. The Company’s diversified portfolio of brands and products includes for Powersports: Can-Am ATVs, SSVs, 3WVs, Ski-Doo and Lynx snowmobiles, Sea-Doo PWCs and pontoons, as well as Rotax engines for karts and recreational aircraft. For Marine, the portfolio of brands and products includes Alumacraft and Quintrex boats, Manitou pontoons and Rotax engines for jet boats and outboard engine, with stealth technology. Additionally, the Company supports its line of products with a dedicated PA&A business.

The Company employs close to 20,000 people mainly in manufacturing and distribution sites in Mexico, Canada, Austria, the United States, Finland, Australia and Germany. The Company sells its products in over 120 countries. The products are sold directly through a network of approximately 2,800 dealers in 21 countries, as well as through approximately 170 distributors serving approximately 460 additional dealers.

Reporting Segments

BRP and its subsidiaries (the “Company”) design, develop, manufacture and sell powersports and marine products. The Company has two operating segments consisting of Powersports (Year-Round Products, Seasonal Products and PA&A and OEM engines) and Marine Products.

Powersports

Year-Round Products

Year-Round Products consist of BRP vehicles that are sold and used throughout the year in most climates and include ATVs, SSVs and 3WVs product lines. All products within the Year-Round Product category are sold under the Can-Am brand. Can-Am ATVs, SSVs and 3WVs all leverage BRP’s Rotax engines.

Seasonal Products

Seasonal products consist of BRP products that are mostly used in specific seasons. These products include snowmobiles, which are mainly used during the winter season with sales to dealers concentrated in the months of September to January. PWC and Sea-Doo pontoons, which are mainly used during the summer season, with sales to dealers concentrated in the months of January to April. All these products leverage BRP’s Rotax engines.

Parts, Accessories & Apparel and OEM engines

PA&A and Rotax engines consist of parts, accessories and apparel (referred to as “PA&A”), engines for karts and recreational aircraft and other services.

Marine

Marine consists of boats, pontoons, jet boat and outboard engines and related PA&A and other services. BRP competes in the boat product category with Alumacraft and Quintrex boats, Manitou pontoons and in the marine engine product category with the Rotax engines for jet boats and outboard engine with stealth technology.

BRP Inc. Management’s Discussion and Analysis 5

The following table shows the percentage of total revenues for each segment:

Proportion of Total Revenues (in percentages)	Three-month periods ended				Nine-month periods ended
	October 31, 2022		October 31, 2021		October 31, 2022		October 31, 2021
Year-Round Products		47.2%		46.4%		51.3%		49.3%
Seasonal Products		37.7%		27.5%		30.5%		27.8%
Powersports PA&A and OEM Engines		11.0%		17.9%		12.9%		15.8%
Total Powersports		95.9%		91.8%		94.7%		92.9%
Marine		4.1%		8.2%		5.3%		7.1%
Total Revenues		100.0%		100.0%		100.0%		100.0%

Factors Affecting the Company’s Results of Operations

Revenues and Sales Program Costs

The Company’s revenues are primarily derived from the wholesale activities to dealers and distributors of the Company’s manufactured vehicles, including Year-Round Products, Seasonal Products, Powersports PA&A and OEM Engines, as well as Marine products. Revenue recognition normally occurs when products are shipped to dealers or distributors from the Company’s facilities.

In order to support the wholesale activities of the Company and the retail activities of dealers and distributors, the Company may provide support in the form of various sales programs consisting of cash and non-cash incentives. The cash incentives consist mainly of rebates given to dealers, distributors and consumers, volume discounts to dealers and distributors, free or extended coverage period under dealer and distributor inventory financing programs, and retail financing programs. The cost of these cash incentives is recorded as a reduction of revenues. The non-cash incentives mainly consist of extended warranty coverage or free PA&A. When an extended warranty coverage is given with the purchase of a product, a portion of the revenue recognized upon the sale of that product is deferred and recognized during the extended warranty coverage period. The cost of the free PA&A is recorded in cost of sales.

The support provided to dealers, distributors and consumers tends to increase when general economic conditions are difficult, when changing market conditions require the launch of new or more competitive programs, or when dealer and distributor inventory is above appropriate levels.

Under dealer and distributor inventory financing arrangements, the Company could be required to purchase repossessed new and unused products in certain cases of default by dealers or distributors. The cost of repossession tends to increase when dealers or distributors are facing challenging and prolonged difficult retail conditions and when their non-current inventory level is high. During the current fiscal year and previous fiscal year, the Company did not experience significant repossessions under its dealer and distributor inventory financing arrangements. Refer to the “Off-Balance Sheet Arrangements” section of this MD&A for more information on dealer and distributor inventory financing arrangements.

Commodity Costs

Approximately 75% of the Company’s cost of sales consists of material used in the manufacturing process. Therefore, the Company is exposed to the fluctuation of prices of certain raw materials such as aluminum, steel, plastic, resins, stainless steel, copper, rubber and certain rare earth metals. Additionally, the Company is exposed to fuel price fluctuations related to its procurement and distribution activities. The Company does not hedge its long-term exposure to such price fluctuations. Therefore, an increase in commodity prices could negatively impact the Company’s operating results if it is not able to transfer these cost increases to dealers, distributors or consumers.

BRP Inc. Management’s Discussion and Analysis 6

Warranty Costs

The Company’s regular warranty generally covers periods ranging from six months to five years for most products. In certain circumstances, the Company provides extended warranty coverage as a result of sales programs, under certain commercial accounts, or as required by local regulations. During the warranty period, the Company reimburses dealers and distributors for the entire cost of repair or replacement performed on the products (mainly composed of parts or accessories provided by the Company and labour costs incurred by dealers or distributors). In addition, the Company sells in the normal course of business and provides under certain sales programs extended product warranties.

During its product development process, the Company ensures that high quality standards are maintained at each development stage of a new product. This includes the development of detailed product specifications, the evaluation of the quality of the supply chain and the manufacturing methods and detailed testing requirements over the development stage of the products. Additionally, product quality is ensured by quality inspections during and after the manufacturing process.

The Company records a regular warranty provision when products are sold. Management believes that, based on available information, the Company has adequate provisions to cover any future warranty claims on products sold. However, future claim amounts can differ significantly from provisions that are recorded in the condensed consolidated interim statements of financial position. For extended warranty, the claims are recorded in cost of sales as incurred.

Foreign Exchange

The Company’s revenues are reported in Canadian dollars but are mostly generated in U.S. dollars, Canadian dollars and euros. The Company’s revenues reported in Canadian dollars are to a lesser extent exposed to foreign exchange fluctuations with the Australian dollar, the Brazilian real, the Swedish krona, the Norwegian krone, the British pound, the New Zealand dollar, Mexican pesos and the Russian ruble. The costs incurred by the Company are mainly denominated in Canadian dollars, U.S. dollars and euros and to a lesser extent in Mexican pesos. Therefore, recorded revenues, gross profit and operating income in Canadian dollars are exposed to foreign exchange fluctuations. The Company’s facilities are located in different countries, which helps mitigate some of its foreign currency exposure.

As of October 31, 2022, the Company had an outstanding balance of U.S. $1,581.0 million ($2,156.6 million) under its U.S. $1,635.0 million ($2,230.3 million) term facility agreement (the “Term Facility”), which results in a gain or loss in net income when the U.S. dollar/Canadian dollar exchange rate at the end of the period varies from the opening period rate. Additionally, the Company’s interest expense on the Term Facility is exposed to U.S. dollar/Canadian dollar exchange rate fluctuations. The Company does not currently hedge the U.S. dollar/Canadian dollar exchange rate fluctuation exposures related to its Term Facility, and therefore, an increase in the value of the U.S. dollar against the Canadian dollar could negatively impact the Company’s net income.

For further detail relating to the Company’s exposure to foreign currency fluctuations, see “Financial Instruments – Foreign Exchange Risk” section of this MD&A.

BRP Inc. Management’s Discussion and Analysis 7

Net Financing Costs (Financing Costs less Financing Income)

Net financing costs are incurred principally on long-term debt, defined benefit pension plan liabilities and revolving credit facilities. As at October 31, 2022, the Company’s long-term debt of $2,332.0 million was mainly comprised of the Term Facility, which bears interest at LIBOR plus 2.00% and Term SOFR plus 3.00%. The Company entered into interest rate cap contracts, which limit its exposure to interest rates increases.

Income Taxes

The Company is subject to federal, state and provincial income taxes in jurisdictions in which it conducts business. The Canadian income tax statutory rate was 26.5% for the three- and nine-month periods ended October 31, 2022. However, the Company’s effective consolidated tax rate is influenced by various factors, including the mix of accounting profits or losses before income tax among tax jurisdictions in which it operates and the foreign exchange gain or loss on the Term Facility. The Company expects to pay cash taxes in all tax jurisdictions for Fiscal 2023, except in the United States where the Company plans to utilize its tax attributes to offset taxable income or income tax payable.

Seasonality

The Company’s revenues and operating income experience substantial fluctuations from quarter to quarter. In general, wholesale sales of the Company’s products are highest in the period immediately preceding their respective season and during the said season of use. However, the mix of product sales may vary considerably, from time to time, as a result of changes in seasonal and geographic demand, the introduction of new products and models, and production scheduling for particular types of products. As a result, the Company’s financial results are likely to fluctuate significantly from period to period.

BRP Inc. Management’s Discussion and Analysis 8

Executive Summary

Following the global coronavirus (“COVID-19”) pandemic and the resulting worldwide enacting emergency measures, the Company’s solid position was only strengthened as its products provide an attractive outdoor and social-distancing solution for new and existing powersports consumers. This increase in commercial activity, felt across multiple industries, heightened the pressure on the global supply chain network as demand grew stronger and, in turn, forced multiple market participants, including BRP, to innovate and find alternate ways to source materials, revise and adapt production schedules, pursue strategic pricing initiatives aimed at offsetting inflationary pressures and deliver units to its dealer network, faced with an unprecedented retail demand.

Despite these challenges, and the recent cybersecurity incident, the Company increased revenues during the third quarter of Fiscal 2023, notably by increasing its production output and the conversion rate of substantially completed units available for retail. The increase in revenues for the three and nine-month periods this fiscal year compared to Fiscal 2022 is explained by the strong consumer demand and supported by the additional available capacity such as the new Juarez-3 facility dedicated to SSV production. However, the deliveries of PWC and 3WV in the quarter occurred after the peak in the retail season and drove an increase in the dealer network inventory at the end of the third quarter.

Financial Highlights

(in millions of Canadian dollars, except per share data and margin)	Three-month periods ended								Nine-month periods ended
	October 31, 2022		October 31, 2021		Variance ($)		Variance (%)		October 31, 2022		October 31, 2021		Variance ($)			Variance (%)
Income Statement
Revenues		$2,709.3		$1,588.0		$1,121.3		70.6%		$6,957.1		$5,300.4		$1,656.7			31.3%
Gross Profit		654.7		410.6		244.1		59.4%		1,711.8		1,522.7		189.1			12.4%
Gross Profit margin (%)		24.2%		25.9%		N/A		(170bps)		24.6%		28.7%		N/A			(410bps)
Operating income		384.8		185.5		199.3		107.4%		930.2		840.4		89.8			10.7%
Normalized EBITDA[1]		487.9		251.7		236.2		93.8%		1,178.3		1,045.7		132.6			12.7%
Net income		141.6		127.7		13.9		10.9%		500.3		585.0		(84.7	)		(14.5%)
Normalized net income[1]		292.5		123.7		168.8		136.5%		667.5		595.2		72.3			12.1%
EPS - diluted		1.76		1.53		0.23		15.0%		6.15		6.81		(0.66	)		(9.7%)
Normalized EPS – diluted [1]		3.64		1.48		2.16		145.9%		8.21		6.93		1.28			18.5%

 ^[1] See “Non-IFRS Measures” section.

BRP Inc. Management’s Discussion and Analysis 9

Significant transactions during the three-month period ended October 31, 2022

Acquisitions

On August 4, 2022, the Company completed the acquisition of 80% of the outstanding shares of Pinion GmbH (“Pinion”) for a consideration of €61.9 million ($81.4 million) paid in cash. Pinion is located in Denkendorf, Germany and designs, develops, assembles, and sells mechanical gearboxes for traditional and electric bicycles.

This acquisition is expected to enhance BRP’s expertise in electric powertrain technology for existing product lines and upcoming product introductions.

On October 5, 2022, the Company completed the acquisition of substantially all the assets related to the powersports business of Kongsberg Automotive ASA and its subsidiary Kongsberg Inc. located in Shawinigan, Quebec (“KA Shawinigan”) for a consideration of $127.8 million.

KA Shawinigan is a leading player in the development and manufacturing of electronic and mechatronic products and a long-standing supplier of BRP. This acquisition is in line with BRP’s product strategy, particularly as it relates to its electrification plan. It is expected to allow the Company to gain further expertise in mechatronics and bolster its innovation capabilities.

Following the acquisitions of Pinion and KA Shawinigan, the Company created a new Low Voltage & Human Assisted Group (“LVHA”). The creation of LVHA is intended to allow the Company to pursue its growth strategy with product categories that overlap recreational, urban mobility and services with low voltage and human assisted products. LVHA is not a reportable segment for the Company.

Recent events

On November 29, 2022, the Company’s Board of Directors authorized the renewal of its normal course issuer bid program which allows for the purchase for cancellation of up to approximately 3,519,398 million subordinate voting shares over the next twelve months, representing approximately 10% of the Company’s public float.

BRP Inc. Management’s Discussion and Analysis 10

Retail Performance & Market Statistics

North American dealer inventories

As at October 31, 2022, North American dealer inventories for Powersports products increased by 217% compared to October 31, 2021. The increase is across all product lines and mainly due to a significantly low level of inventory in Fiscal 2022 combined with shipment of PWC and 3WC late into the season after retail peak due to supply chain disruptions.

North American dealer inventories for Powersports products as at October 31, 2022 were down 19% compared to October 31, 2019 which further highlights the relatively low level of inventory in the Company’s dealer network in Fiscal 2022, despite the increase observed when comparing Fiscal 2023 and Fiscal 2022 levels.

North American retail sales - for the Third Quarter of Fiscal 2023

The Company’s North American retail sales for Powersports products increased by 43%^[1] for the three-month period ended October 31, 2022 compared to the three-month period ended October 31, 2021. The increase was mainly attributable to PWC and SSV.

✓ North American Year-Round Products retail sales increased on a percentage basis in the high-twenties range compared to the three-month period ended October 31, 2021. In comparison, the Year-Round Products industry recorded an increase on a percentage basis in the low single-digits over the same period.

✓ North American Seasonal Products retail sales increased on a percentage basis in the high-seventies range compared to the three-month period ended October 31, 2021. In comparison, the Seasonal Products industry increased on a percentage basis in the low-teens range over the same period while the Company increased on a percentage basis in the low-sixties range when excluding pontoons.

The Company’s North American retail sales for Marine products decreased by 47% compared to the three-month period ended October 31, 2021 as a result of lower product availability.

North American retail sales - for the nine-month period ended October 31, 2022

The Company’s North American retail sales for Powersports products increased by 1%^[1] for the nine-month period ended October 31, 2022 compared to the nine-month period ended October 31, 2021, mainly due to limited product availability driven by supply chain disruptions.

✓ North American Year-Round Products retail sales increased on a percentage basis in the low single-digits compared to the nine-month period ended October 31, 2021. In comparison, the Year-Round Products industry recorded a decrease on a percentage basis in the low-teens range over the same period.

✓ North American Seasonal Products retail sales decreased on a percentage basis in the low single-digits compared to the nine-month period ended October 31, 2021. In comparison, the Seasonal Products industry recorded a decrease on a percentage basis in the high single-digits over the same period while the Company decreased on a percentage basis in the high single-digits when excluding pontoons.

The Company’s North American retail sales for Marine products decreased by 29% compared to the nine-month period ended October 31, 2021 as a result of lower product availability.

^[1] Including Sea-Doo pontoons.

BRP Inc. Management’s Discussion and Analysis 11

Results of Operations

Analysis of Results for the Third Quarter of Fiscal 2023

The following section provides an overview of the financial performance of the Company for the three-month period ended October 31, 2022 compared to the same period ended October 31, 2021.

(in millions of Canadian dollars, except per share data and margin)	Three-month periods ended
	October 31, 2022		October 31, 2021		Variance ($)		Variance (%)
Income Statement
Revenues		$2,709.3		$1,588.0		$1,121.3		70.6%
Gross Profit		654.7		410.6		244.1		59.4%
Gross Profit margin (%)		24.2%		25.9%		N/A		(170bps)
Operating Expenses		269.9		225.1		44.8		19.9%
Normalized EBITDA[1]		487.9		251.7		236.2		93.8%
Net Financing Costs		32.8		15.8		17.0		107.6%
Income Taxes		77.8		51.9		25.9		49.9%
Net income		141.6		127.7		13.9		10.9%

 ^[1] See “Non-IFRS Measures” section

Revenues

The increase in revenue was primarily due to a higher wholesale volume of SSV, PWC, 3WV and snowmobile sold and the introduction of the Sea-Doo pontoon. The increase includes a favourable foreign exchange rate variation of $51 million.

Gross Profit

The increase in gross profit was primarily due to the favourable volume of SSV and PWC sold and a favourable pricing across all product lines. The decrease in gross profit margin percentage was attributable to higher logistics, commodities and labour costs due to inefficiencies related to supply chain disruptions, idle costs related to the cybersecurity incident and higher sales programs resulting from historical low levels in Fiscal 2022. The decrease was partially offset by higher volume and favourable pricing. The increase in gross profit includes a favourable foreign exchange rate variation of $29 million.

Operating Expenses

The following table provides a breakdown of the Company’s Operating Expenses for the three-month period ended October 31, 2022 compared to the three-month period ended October 31, 2021:

(in millions of Canadian dollars)	Three-month periods ended
	October 31, 2022		October 31, 2021		Variance ($)		Variance (%)
Selling and marketing		$113.3		$97.8		$15.5		15.8%
Research and development		80.6		70.6		10.0		14.2%
General and administrative		74.9		65.2		9.7		14.9%
Other operating expenses (income)		1.1		(8.5)		9.6		NM[a]
Operating Expenses		$269.9		$225.1		$44.8		19.9%

^[a] NM – Not Meaningful

The increase in operating expenses was mainly attributable to an increase in selling and marketing and R&D expenses to support future growth and from continued product investments and higher G&A expenses mainly for the modernization of the Company’s software infrastructure to support future growth.

BRP Inc. Management’s Discussion and Analysis 12

Normalized EBITDA ^[1]

The normalized EBITDA ^[1] increase was primarily due to higher gross profit partially offset by higher operating expenses.

Net Financing Costs

The increase in net financing costs primarily resulted from higher interest expense on the Term Facility due to a higher average interest rate and a higher interest expense on revolving credit facilities as a result of a higher usage.

Income Taxes

The increase in income tax expense was primarily due to a higher operating income, partially offset by the tax and accounting treatment of the property, plant and equipment from Mexican operations. The effective income tax rate amounted to 35.5% for the three-month period ended October 31, 2022 compared to the 28.9% for the three-month period ended October 31, 2021. The increase resulted primarily from the tax and accounting treatment of the foreign exchange (gain) loss on the Term Facility. The increase was partially offset by the tax and accounting treatment of property, plant and equipment from Mexican operations and by the unrecognized tax benefits related to certain intangibles during the period ended October 31, 2021.

Net Income

The increase in net income was primarily due to a higher operating income, partially offset by an unfavourable foreign exchange rate variation impact on the U.S. denominated long-term debt.

^[1] See “Non-IFRS Measures” section.

BRP Inc. Management’s Discussion and Analysis 13

Analysis of Segment Results for the Third Quarter of Fiscal 2023

The following section provides an overview of the financial performance of the Company’s segments for the three-month period ended October 31, 2022 compared to the same period ended October 31, 2021. The inter-segment transactions are included in the analysis.

Segment results  (in millions of Canadian dollars)	Three-month periods ended				Variance ($)		Variance (%)
	October 31, 2022		October 31, 2021
Revenues [1]
Powersports
Year-Round		$1,279.8		$736.3		$543.5		73.8%
Seasonal		1,020.9		437.3		583.6		133.5%
Powersports PA&A and OEM Engines		298.0		283.9		14.1		5.0%
Marine		118.8		136.3		(17.5)		(12.8%	)
Gross profit
Powersports		648.8		390.0		258.8		66.4%
As a percentage of revenues		25.0%		26.8%		N/A		(180bps	)
Marine		5.9		20.6		(14.7)		(71.4%	)
As a percentage of revenues		5.0%		15.1%		N/A		(1010bps	)

 ^[1] Including inter-segment transactions.

Powersports

Revenues

Year-Round Products

The increase in revenues was due to a higher volume of SSV and 3WV sold. The higher volume of SSV sold was due to added capacity and improved supply chain. The increase in 3WV volume was the result of the late shipments of model year 2022 which are usually delivered during the second quarter. The increase includes a favourable foreign exchange rate variation of $47 million.

Seasonal Products

The increase in revenues was primarily attributable to a higher volume of PWC sold due to late shipments of model year 2022 which are usually delivered during the second quarter. The increase was also attributable to a higher volume of snowmobile sold and the introduction of the Sea-Doo pontoon.

Powersports PA&A and OEM Engines

The increase in revenues was driven by favourable pricing and the introduction of the Sea-Doo pontoon.

Gross Profit

The increase in gross profit was mainly attributable to the favourable volume of SSV and PWC sold and favourable pricing across all product lines. The decrease in the gross profit margin percentage was the result of higher logistics, commodities and labour costs due to inefficiencies relating to supply chain disruptions, as well as idle costs relating to the cybersecurity incident and higher sales programs, resulting from historical low levels in Fiscal 2022. The decrease was partially offset by higher volume and favourable pricing. The increase in gross profit includes a favourable foreign exchange rate variation of $30 million.

BRP Inc. Management’s Discussion and Analysis 14

Marine

Revenues

The decrease in revenues was primarily due to a lower volume of boats sold due to supply chain disruptions and the cybersecurity incident which delayed the new product introductions, partially offset by favourable pricing and a favourable mix of boats sold. The decrease includes a favourable foreign exchange rate variation of $2 million.

Gross Profit

The gross profit decrease was primarily due to higher logistics, commodities and labour costs due to inefficiencies relating to supply chain disruptions, partially offset by favourable pricing.

Geographical Trends for the Third Quarter of Fiscal 2023

Revenues

Revenues by geography  (in millions of Canadian dollars)	Three-month periods ended				Variance ($)		Variance (%)
	October 31, 2022		October 31, 2021
Revenues ($)
United States		$1,683.3		$836.8		846.5		101.2%
Canada		441.9		294.7		147.2		49.9%
International		584.1		456.5		127.6		28.0%
Total Revenues ($)		2,709.3		1,588.0
Revenues (%)
United States		62.1%		52.7%		N/A		940bps
Canada		16.3%		18.6%		N/A		(230bps)
International		21.6%		28.7%		N/A		(710bps)
Total Revenues (%)		100.0%		100.0%

United States

The increase in revenues from the United States was mainly attributable to a higher volume of Year-Round Products and Seasonal Products sold and favourable pricing across all product lines. The increase includes a favourable foreign exchange impact of $51 million.

Canada

The increase in revenues from Canada was mainly attributable to a higher volume of Year-Round Products and Seasonal Products sold.

International

The increase in revenues from International was mainly attributable to a higher volume of Year-Round Products and Seasonal Products sold.

BRP Inc. Management’s Discussion and Analysis 15

Analysis of Results for the nine-month period ended October 31, 2022

The following section provides an overview of the Company’s financial performance for the nine-month period ended October 31, 2022 compared to the same period ended October 31, 2021.

(in millions of Canadian dollars, except margin data)	Nine-month periods ended
	October 31, 2022		October 31, 2021		Variance ($)			Variance (%)
Income Statement
Revenues		$6,957.1		$5,300.4		$1,656.7			31.3%
Gross Profit		1,711.8		1,522.7		189.1			12.4%
Gross Profit margin (%)		24.6%		28.7%		N/A			(410bps)
Operating Expenses		781.6		682.3		99.3			14.6%
Normalized EBITDA[1]		1,178.3		1,045.7		132.6			12.7%
Net Financing Costs		72.8		111.4		(38.6	)		(34.6%)
Income Taxes		208.5		202.9		5.6			2.8%
Net income		500.3		585.0		(84.7	)		(14.5%)

 ^[1] See “Non-IFRS Measures” section

Revenues

The increase in revenue was primarily due to a higher volume of SSV, snowmobile, 3WV and PWC sold, the introduction of Sea-Doo pontoons and favourable pricing across all product lines. The increase includes a favourable foreign exchange rate variation of $34 million.

Gross Profit

The increase in gross profit was the result of a favourable volume of SSV, 3WV, snowmobile and PWC sold and favourable pricing, partially offset by higher logistics, commodities and labour costs due to inefficiencies relating to supply chain disruptions, as well as higher sales programs resulting from historical low levels in Fiscal 2022. The decrease in gross profit margin percentage was mainly attributable to higher logistics, commodities and labour costs, partially offset by favourable pricing. The increase in gross profit includes a favourable foreign exchange rate variation of $27 million.

Operating Expenses

The following table provides a breakdown of the Company’s Operating Expenses for the nine-month period ended October 31, 2022 compared to the nine-month period ended October 31, 2021:

(in millions of Canadian dollars)	Nine-month periods ended
	October 31, 2022		October 31, 2021		Variance ($)		Variance (%)
Selling and marketing		$316.0		$293.3		$22.7		7.7%
Research and development		246.7		204.7		42.0		20.5%
General and administrative		219.3		187.4		31.9		17.0%
Other operating income		(0.4)		(3.1)		2.7		NM[a]
Operating Expenses		$781.6		$682.3		$99.3		14.6%

 ^[a] NM – Not Meaningful

The increase in operating expenses was mainly attributable to an increase in R&D expenses to support future growth, higher G&A expenses mainly related to the modernization of the Company’s software infrastructure to support future growth and higher selling and marketing expenses mainly attributable to continued product investments.

BRP Inc. Management’s Discussion and Analysis 16

Normalized EBITDA ^[1]

The increase in normalized EBITDA ^[1] was primarily due to higher gross profit, partially offset by higher operating expenses.

Net Financing Costs

The decrease in net financing costs was primarily attributable to transaction costs incurred on the Term Facility following the amendment completed during the first quarter of Fiscal 2022, as well as the $21.3 million loss on the NCIB in Fiscal 2022 compared to the $1.8 million gain in the first quarter of Fiscal 2023. The gains and losses on the NCIB represent the difference between the share price used to establish the financial liability and the amount actually paid to repurchase shares during the regulatory restrictions or self-imposed blackout periods. The decrease was partially offset by higher interest expense on the Term Facility due to a higher average interest rate and a higher interest expense on revolving credit facilities due to a higher usage.

Income Taxes

The increase in income tax expense was primarily due to a higher operating income, partially offset by the tax and accounting treatment of the property, plant and equipment from Mexican operations. The effective income tax rate amounted to 29.4% for the nine-month period ended October 31, 2022 compared to the 25.8% for the nine-month period ended October 31, 2021. The increase resulted primarily from the tax and accounting treatment of the foreign exchange (gain) loss on the Term Facility, partially offset by the tax and accounting treatment of property, plant and equipment from Mexican operations.

Net Income

The decrease in net income was primarily due to the unfavourable impact of the foreign exchange rate variation on the U.S. denominated long-term debt, partially offset by a higher operating income and lower net financing costs.

^[1] See “Non-IFRS Measures” section.

BRP Inc. Management’s Discussion and Analysis 17

Analysis of Segment Results for the nine-month period ended October 31, 2022

The following section provides an overview of the financial performance of the Company’s segments for the nine-month period ended October 31, 2022 compared to the same period ended October 31, 2021. The inter-segment transactions are included in the analysis.

Segment results (in millions of Canadian dollars)	Nine-month period ended				Variance ($)			Variance (%)
	October 31, 2022		October 31, 2021
Revenues [1]
Powersports
Year-Round		$3,572.3		$2,614.4		$957.9			36.6%
Seasonal		2,120.8		1,475.2		645.6			43.8%
Powersports PA&A and OEM Engines		899.1		833.2		65.9			7.9%
Marine		390.4		392.7		(2.3	)		(0.6%)
Gross profit
Powersports		1,666.5		1,465.7		200.8			13.7%
As a percentage of revenues		25.3%		29.8%		N/A			(450bps)
Marine		45.3		57.0		(11.7	)		(20.5%)
As a percentage of revenues		11.6%		14.5%		N/A			(290bps)

 ^[1] Including inter-segment transactions.

Powersports

Revenues

Year-Round Products

The increase in revenues from Year-Round Products was primarily attributable to a higher volume of SSV sold due to added capacity, a higher volume of 3WV sold and favourable pricing across all product lines. The increase includes a favourable foreign exchange rate variation of $51 million.

Seasonal Products

The increase in revenues from Seasonal Products is primarily attributable to a higher volume of snowmobiles sold due to late shipments of model year 2022 units completed in the first quarter of Fiscal 2023 caused by supply chain disruptions, the introduction of the Sea-Doo pontoon and a higher volume of PWC sold. The increase was also attributable to a favourable pricing of PWC and snowmobiles sold. The increase includes an unfavourable foreign exchange rate variation of $14 million.

Powersports PA&A and OEM Engines

The increase in revenues from Powersports PA&A and OEM Engines was mainly attributable to favourable pricing and the introduction of the Sea-Doo pontoon. The increase includes an unfavourable foreign exchange rate variation of $6 million.

Gross Profit

The increase in gross profit was the result of a favourable volume of SSV, 3WV, snowmobiles and PWC sold and a favourable pricing, partially offset by higher logistics, commodities and labour costs due to inefficiencies relating to supply chain disruptions, as well as higher sales programs resulting from historical low levels in Fiscal 2022. The decrease in gross profit margin percentage was mainly attributable to higher logistics, commodities and labour costs, partially offset by favourable pricing. The increase in gross profit includes a favourable foreign exchange rate variation of $29 million.

BRP Inc. Management’s Discussion and Analysis 18

Marine

Revenues

The decrease in revenues from the Marine segment was mainly due to a lower volume of boats and PA&A sold in light of supply chain disruptions, partially offset by a favourable product mix of boats sold, as well as favourable pricing.

Gross Profit

The gross profit decrease was primarily due to higher logistics, commodities and labour costs due to inefficiencies relating to supply chain disruptions, partially offset by favourable pricing.

Geographical Trends for the nine-month period ended October 31, 2022

Revenues

Revenues by geography (in millions of Canadian dollars)	Nine-month periods ended				Variance ($)		Variance (%)
	October 31, 2022		October 31, 2021
Revenues ($)
United States		$4,264.8		$2,981.9		$1,282.9		43.0%
Canada		1,077.9		864.8		213.1		24.6%
International		1,614.4		1,453.7		160.7		11.1%
Total Revenues ($)		$6,957.1		$5,300.4
Revenues (%)
United States		61.3%		56.3%		N/A		500bps
Canada		15.5%		16.3%		N/A		(80bps)
International		23.2%		27.4%		N/A		(420bps)
Total Revenues (%)		100.0%		100.0%

United States

The increase in revenues from the United States was primarily due to the favourable volume of Year-Round Products and Seasonal Products sold, as well as favourable pricing across all product lines. The increase includes a favourable foreign exchange impact of $110 million.

Canada

The increase in revenues from Canada was primarily due to a higher volume of Year-Round Products and Seasonal Products and a favourable pricing across all product lines, partially offset by higher sales programs.

International

The increase in revenues from International was primarily due to a higher volume of Year-Round Products and Seasonal Products, as well as a favourable pricing across all product lines. The increase includes an unfavourable foreign exchange impact of $76 million.

BRP Inc. Management’s Discussion and Analysis 19

Foreign Exchange

The key average exchange rates used to translate foreign-denominated revenues and expenses, excluding any effect of the Company’s hedging program for the three- and nine-month periods ended October 31, 2022 were as follows:

	Three-month periods ended				Nine-month periods ended
	October 31, 2022		October 31, 2021		October 31, 2022		October 31, 2021
U.S. dollars (CA$/US$)		1.3314		1.2569		1.2950		1.2480
Euro (CA$/€)		1.3255		1.4719		1.3562		1.4855

The key period-end exchange rates used to translate foreign-denominated assets and liabilities were as follows:

	October 31, 2022		January 31, 2022
U.S. dollars (CA$/US$)		1.3641		1.2696
Euro (CA$/€)		1.3482		1.4234

When comparing the operating income and the income before income tax for the three- and nine-month periods ended October 31, 2022 and 2021, the impact of foreign exchange fluctuations were as follows:

	Foreign exchange (gain) loss
(in millions of Canadian dollars)	Three-month period		Nine-month period
Revenues		$(51.0)		$(34.0)
Cost of sales		22.0		7.0
Impact of foreign exchange fluctuations on gross profit		(29.0)		(27.0)
Operating expenses		6.6		(0.6)
Impact of foreign exchange fluctuations on operating income		(22.4)		(27.6)
Long-term debt		142.5		207.5
Net financing costs		3.0		2.3
Impact of foreign exchange fluctuations on income before income taxes		$123.1		$182.2

BRP Inc. Management’s Discussion and Analysis 20

Liquidity and Capital Resources

Liquidity

The Company’s primary sources of cash consist of existing cash balances, operating activities and available borrowings under the Revolving Credit Facilities and Term Facility.

The Company’s primary use of cash is to fund operations, working capital requirements and capital expenditures in connection with product development and manufacturing infrastructure. The fluctuation of working capital requirements is primarily due to the seasonality of the Company’s production schedule and product shipments.

A summary of net cash flows by activity for the nine-month periods ended October 31, 2022 and 2021 is presented below:

	Nine-month periods ended
(millions of Canadian dollars)	October 31, 2022		October 31, 2021
Net cash flows generated from operating activities		$342.3		$61.2
Net cash flows used in investing activities		(599.5)		(358.8)
Net cash flows generated from (used in) financing activities		80.6		(1,004.2)
Effect of exchange rate changes on cash and cash equivalents		(29.3)		10.4
Net decrease in cash and cash equivalents		(205.9)		(1,291.4)
Cash and cash equivalents at beginning of period		265.8		1,325.7
Cash and cash equivalents at end of period		$59.9		$34.3
Free cash flow [1]		$(54.2)		$(303.5)

Net Cash Flows Generated from Operating Activities

A summary of cash flows from operating activities for the nine-month periods ended October 31, 2022 and 2021 is presented below:

	Nine-month periods ended
(millions of Canadian dollars)	October 31, 2022		October 31, 2021
Net income		$500.3		$585.0
Non-cash and non-operating items		650.3		469.9
Changes in working capital		(528.3)		(854.4)
Income taxes paid, net of refunds		(280.0)		(139.3)
Net cash flows generated from operating activities		$342.3		$61.2

Net cash flows generated from operating activities totalled $342.3 million for the nine-month period ended October 31, 2022 compared to $61.2 million for the nine-month period ended October 31, 2021. The $281.1 million increase in net cash flows generated was mainly due to favourable changes in working capital. The favourable changes in working capital were primarily driven by higher provisions. These are attributable to higher sales programs resulting from historical low levels in Fiscal 2022. The increase was partially offset by higher income taxes paid, mainly due to a higher income taxes expense for Fiscal 2022.

^[1] See “Non-IFRS Measures” section.

BRP Inc. Management’s Discussion and Analysis 21

Net Cash Flows Used in Investing Activities

A summary of cash flows from investing activities for the nine-month periods ended October 31, 2022 and 2021 is presented below:

	Nine-month periods ended
(millions of Canadian dollars)	October 31, 2022		October 31, 2021
Additions to property, plant and equipment		$(353.1)		$(319.9)
Additions to intangible assets		(43.4)		(44.8)
Business combinations, net of acquired cash		(208.8)		—
Other		5.8		5.9
Net cash flows used in investing activities		$(599.5)		$(358.8)

Net cash flows used in investing activities totalled $599.5 million for the nine-month period ended October 31, 2022 compared to $358.8 million for the nine-month period ended October 31, 2021. The $240.7 million increase was mainly attributable to the acquisition of Pinion and KA Shawinigan.

Net Cash Flows Generated from (Used in) Financing Activities

A summary of cash flows from financing activities for the nine-month periods ended October 31, 2022 and 2021 is presented below:

	Nine-month periods ended
(millions of Canadian dollars)	October 31, 2022		October 31, 2021
Increase in revolving credit facilities and bank overdraft		$365.1		$58.5
Repurchase of subordinate voting shares		(305.5)		(638.2)
Dividends paid		(38.2)		(32.4)
Issuance of long-term debt		244.5		410.0
Repayment of long-term debt		(94.8)		(774.1)
Other		(90.5)		(28.0)
Net cash flows generated from (used in) financing activities		$80.6		$(1,004.2)

Net cash flows generated from financing activities totalled $80.6 million for the nine-month period ended October 31, 2022 compared to net cash flows used in financing activities in the amount of $1,004.2 million for the nine-month period ended October 31, 2021. The $1,084.8 million increase in net cash flows generated was mainly attributable to a lower net repayment of debt, an increase in revolving credit facilities used and a lower amount invested to repurchase shares for cancelation under the Company’s NCIB in the nine-month period ended October 31, 2022.

BRP Inc. Management’s Discussion and Analysis 22

Contractual Obligations

The following table summarizes the Company’s significant contractual obligations as at October 31, 2022:

(millions of Canadian dollars)	Less than 1 year		1-3 years		4-5 years		More than 5 years		Total amount
Trade payables and accruals		$1,858.4		$—		$—		$—		$1,858.4
Long-term debt (including interest)		179.5		485.6		2,175.1		56.4		2,896.6
Lease liabilities (including interest)		39.9		59.2		31.7		45.8		176.6
Derivative financial instruments		70.0		11.2		—		—		81.2
Other financial liabilities		65.5		25.5		0.5		26.9		118.4
Total		$2,213.3		$581.5		$2,207.3		$129.1		$5,131.2

The Company enters into purchasing agreements with suppliers related to material used in production. These agreements are usually entered into before production begins and may specify a fixed or variable quantity of material to be purchased. Due to the uncertainty as to the amount and pricing of material that may be purchased, the Company is not able to determine with precision its commitments in connection with these supply agreements.

Management believes that the Company’s operating activities and available financing capacity will provide adequate sources of liquidity to meet its short-term and long-term needs.

BRP Inc. Management’s Discussion and Analysis 23

Capital Resources

Revolving Credit Facilities

On February 16, 2022, the Company amended its $800.0 million revolving credit facilities to increase the availability to $1,100.0 million and replace LIBOR with the Secured Overnight Financing Rate (‘‘SOFR’’) as the benchmark interest rate. Subsequently, on June 10, 2022, the Company added an additional $400 million to its available commitment under its revolving credit facilities, increasing the total availability to $1,500.0 million. The pricing grid and other conditions remained unchanged for both increases.

The applicable interest rates vary depending on a leverage ratio. The leverage ratio is defined in the Revolving Credit Facilities agreement by the ratio of net debt to consolidated cash flows of the Company (the “Leverage ratio”). The applicable interest rates are as follows:

Currency	Applicable Interest Rates
U.S. dollars at either	◾   Term SOFR plus 1.45% to 3.00% per annum; or ◾   U.S. Base Rate plus 0.45% to 2.00% per annum; or ◾   U.S. Prime Rate plus 0.45% to 2.00% per annum;
Canadian dollars at either	◾   Bankers’ Acceptance plus 1.45% to 3.00% per annum; or ◾   Canadian Prime Rate plus 0.45% to 2.00% per annum
Euros	◾   EURIBOR plus 1.45% to 3.00% per annum

In addition, the Company incurs commitment fees of 0.25% to 0.40% per annum on the undrawn amount of the Revolving Credit Facilities.

As at October 31, 2022, the cost of borrowing under the Revolving Credit Facilities was as follows:

Currency	Cost of Borrowing
U.S. dollars at either	◾   Term SOFR plus 1.70% per annum; or ◾   U.S. Base Rate plus 0.70% per annum; or ◾   U.S. Prime Rate plus 0.70% per annum;
Canadian dollars at either	◾   Bankers’ Acceptance plus 1.70% per annum; or ◾   Canadian Prime Rate plus 0.70% per annum
Euros	◾   EURIBOR plus 1.70% per annum

As at October 31, 2022, the commitment fees on the undrawn amount of the Revolving Credit Facilities were 0.25% per annum.

Under certain conditions, the Company is required to maintain a minimum fixed charge coverage ratio in order to have full access to its Revolving Credit Facilities. Additionally, the total available borrowing under the Revolving Credit Facilities is subject to a borrowing base calculation representing 75% of the carrying amount of trade and other receivables plus 50% of the carrying amount of inventories.

As at October 31, 2022 and January 31, 2022, the Company had contracted the following indebtedness:

(millions of Canadian dollars)	October 31, 2022		January 31, 2022
Revolving credit facilities and bank overdraft		$363.1		$—
Issued letters of credit		30.8		20.6
Outstanding letters of credit under other bank agreements		5.5		4.5

BRP Inc. Management’s Discussion and Analysis 24

Term Facility

On June 14, 2022, the Company entered into an incremental U.S. $100.0 million tranche under its Term Facility. This new tranche matures in June 2024 and, consistent with the existing tranche of the Term Facility, is exempt of financial covenants. The Company incurred transaction costs of $1.1 million, which have been incorporated in the carrying amount of this new tranche of the Term Facility and are amortized over its expected life using the effective interest rate method.

As at October 31, 2022, the cost of borrowing under the Term Loan was as follows:

Loan	Cost of Borrowing
Term Loan B-1	◾   2.00% per annum, with a LIBOR floor of 0.00%; or ◾   U.S. Base Rate plus 1.00%; or ◾   U.S. Prime Rate plus 1.00%
Term Loan B-2	◾   Term SOFR plus 3.00% per annum, with a Term SOFR floor of 0.5%; or ◾   U.S. Base Rate plus 2.00%

Under the Term Facility, the cost of borrowing in U.S. Base Rate or U.S. Prime Rate cannot be lower than the cost of borrowing in LIBOR.

The Company is required to repay a minimum of 0.25% of the nominal amount each quarter. Consequently, the Company repaid an amount of U.S. $11.4 million ($14.9 million) during the nine-month period ended October 31, 2022. Also, the Company may be required to repay a portion of the Term Facility in the event that it has an excess cash position at the end of the fiscal year and its leverage ratio is above a certain threshold level. As at October 31, 2022, the Company was not required to repay any portion of the Term Facility under this requirement.

Austrian Term Loans

On May 5, 2022, the Company fully repaid the balance of its €55.0 million ($74.2 million) unsecured loan contracted under an Austrian government COVID-19 program in Fiscal 2021.

During the nine-month period ended October 31, 2022, the Company entered into unsecured loan agreements at favourable interest rates under an Austrian government program. This program supports research and development projects based on the Company’s incurred expenses in Austria. The term loans have a nominal amount of €86.8 million ($116.7 million) with an interest rate varying between 0.50% and 0.84% with maturity dates varying from June 2025 to June 2029

As at October 31, 2022, the Company had €138.8 million ($187.1 million) outstanding under its Austrian term loans bearing interest at a range between 0.80% and 2.70% and maturing between December 2022 and December 2030.

Lease Liabilities

As at October 31, 2022, the contractual obligations in relation to assets acquired under lease agreements amounted to $176.6 million.

Normal Course Issuer Bid Program

During the nine-month period ended October 31, 2022, the Company continued its repurchases under the NCIB that was announced and started during the fiscal year ended January 31, 2022 and repurchased for cancellation 463,950 subordinate voting shares for a total consideration of $47.2 million.

BRP Inc. Management’s Discussion and Analysis 25

Substantial issuer bid offer

During the nine-month period ended October 31, 2022, the Company repurchased for cancellation 2,427,184 subordinate voting shares following the completion of its SIB for a total consideration of $250.0 million. Prior to the completion of the SIB, 570,779 multiple voting shares were converted into an equivalent number of subordinate voting shares. These converted shares were repurchased in the SIB. The Company incurred $1.0 million of fees and expenses related to the SIB, which were recorded in capital stock.

Dividend

On November 29, 2022, the Company’s Board of Directors declared a quarterly dividend of $0.16 per share for holders of its multiple voting shares and subordinate voting shares. The dividend will be paid on January 13, 2023 to shareholders of record at the close of business on December 30, 2022.

The Board of Directors has determined that this quarterly dividend is appropriate based on several relevant factors, including, without limitation, the Company’s results of operations, current and anticipated cash requirements and surplus, financial condition, contractual restrictions and financing agreement covenants (including restrictions in the Term Facility and the Revolving Credit Facilities or other material agreements) and solvency tests imposed by corporate law.

The payment of each quarterly dividend remains subject to the declaration of that dividend by the Board of Directors. The actual amount, the declaration date, the record date and the payment date of each quarterly dividend are subject to the discretion of the Board of Directors.

BRP Inc. Management’s Discussion and Analysis 26

Consolidated Financial Position

The following table reflects the main variances that have occurred in the Company’s unaudited condensed consolidated interim statements of financial position between October 31, 2022 and January 31, 2022, the impact of the fluctuation of exchange rates on such variances, the related net variance (excluding the impact of the fluctuation of exchange rates on such variances) as well as explanations for the net variance:

(millions of Canadian  dollars)	October 31, 2022		January 31, 2022		Variance		Exchange Rate Impact		Net Variance		Explanation of Net Variance
Trade and other  receivables		$523.7		$465.7		$58.0		$8.6		$66.6	Mostly explained by an increase of sales not financed by third-party financing service providers
Inventories		2,474.8		1,691.3		783.5		(32.7)		750.8	Mostly explained by higher work in progress inventory due to supply chain disruptions, by higher raw material inventory for upcoming production and by higher finished product inventory for upcoming deliveries
Property, plant  and equipment		1,614.0		1,441.9		172.1		8.9		181.0	Mostly explained by continued capacity investments in property, plant and equipment
Trade payables and  accruals		1,858.4		1,622.9		235.5		(16.9)		218.6	Mostly explained by higher purchases for upcoming production, partially offset by adjusted payment terms to suppliers as part of a sourcing strategy amid the global supply chain disruptions
Provisions		600.6		414.3		186.3		(21.5)		164.8	Mostly explained by higher sales programs resulting from historic low levels in Fiscal 2022
Deferred revenues		249.3		355.2		(105.9)		(15.5)		(121.4)	Mostly explained by the lower value of substantially completed units at dealers
Long-term debt,  including current portion		2,332.0		2,040.5		291.5		(141.7)		149.8	Mostly explained by the new U.S. $100.0 million Term B-2 tranche.
Employee future benefit  liabilities		84.8		220.2		(135.4)		5.7		(129.7)	Mostly explained by the 190bps increase in discount rate for the Canadian defined benefit obligations and 265bps for the foreign plans.

BRP Inc. Management’s Discussion and Analysis 27

Off-Balance Sheet Arrangements

Dealer and Distributor Financing Arrangements

The Company, most of its independent dealers and some of its independent distributors are parties to agreements with third-party financing service providers. These agreements provide financing to facilitate the purchase of the Company’s products and improve the Company’s working capital by allowing an earlier collection of accounts receivable from dealers and distributors. Approximately three-quarters of the Company’s sales are made under such agreements. The parties listed above have agreements with Huntington Distribution Finance, Inc., Huntington Commercial Finance Canada Inc., Huntington Commercial Finance LLC and Huntington Commercial Finance New Zealand Ltd (collectively, “Huntington”), to provide financing facilities in North America, Australia and New Zealand, and with Wells Fargo Commercial Distribution Finance, Wells Fargo Bank International, Wells Fargo International Finance LLC and Wells Fargo International Finance (New Zealand) Limited (collectively “Wells Fargo”) for financing facilities in North America, Europe and Australia. The agreement between the Company and Huntington will expire on January 31, 2023. For most of the contracts with Wells Fargo, the maximum commitment period is up to November 29, 2023.

The total amount of financing provided to the Company’s independent dealers and distributors totalled $2,097.7 million and $5,862.9 million for the three- and nine-month periods ended October 31, 2022, compared to $1,042.1 million and $4,108.1 million for the three- and nine-month periods ended October 31, 2021. The outstanding financing between the Company’s independent dealers and distributors and third-party finance companies amounted to $2,262.4 million and $1,319.4 million as at October 31, 2022, and January 31, 2022, respectively.

The breakdown of outstanding amounts by country and local currency between the Company’s independent dealers and distributors with third-party finance companies were as follows, as at:

(in millions)	Currency	October  31, 2022	January  31, 2022
Total outstanding