Presentation materials

Strategic Objectives

Best in Powersports PLUS

5-8% annual organic growth

Growth through Adjacencies

$200 -

500M growth

Global Market Leadership

>25% of Polaris revenue

Operations is Competitive Advantage

Op Ex drives > 200 bps operating margin improvement

Strong Financial Performance

Sustainable, profitable growth

Net Income Margin >9.5%

$1.6

Billion

>$5.0

Billion

>$3.0

Billion

2009 2014 2018

6.5%

10.0%

>9.5%

>8.0%

Clear, Consistent Strategy

Grow Sales

$5 Billion by 2018

Expand Net Income Margins

10% of Sales by 2018

TOP LEVEL

GDP GOALS

MAJOR

TRANSFORMATION

INITIATIVES

ESSENTIAL

ENABLERS:

Building Blocks

for Success

Developing the Next Generation Capabilities for People, Processes, Partners & Systems:

1.The Polaris Way –

Lean Business & Production System (Includes Safety)

2.Polaris Quality Management System (PQMS)

3.Global Supply Chain Management

4.Global Talent Management

5.Common Processes, Tools & Systems ( Includes Innovative manufacturing technology)

LRP June 2011; Operations; S. Krishna

COSTS

QUALITY

SPEED

INVENTORY

SAFETY

OPERATIONS AS A COMPETITIVE ADVANTAGE

Polaris Operations Strategy

Global Growth Continues

Assumptions

EMEA

growth

justifies

local

production

Brazil/S.A.

supplied

from

Monterrey

Strategies

Leverage

Monterrey

best

practices

Brownfield or

Greenfield

China

Product

LCC capacity

India

Significant organic and acquired growth

expected 2012-2016

Asian acquisition and partnership

opportunities

Utilize FTO chassis/finish structure to

meet growing market demands

Focus on assembly, pursue low capital

investment strategy

Why Mexico?

Goals

1. Dramatically reduce cost of logistics

and labor with footprint redesign

Labor savings in Monterrey

NA logistics optimized

2. Move closer to customer for speed

and flexibility

Texas, CA & Arizona largest SxS markets

1-2 day speed improvement to southern

U.S. dealers

Competition is already in Mexico and Mid /

SE USA

Operations as a Competitive Advantage

Kawasaki

Mexico

Monterrey

Capital

Mexico City

Monterrey

Population

107 Million

4.4 Million

(4%

of Mexico´s population)

Government

Federal Republic

31 States, 1 Federal District

State Government

GDP

$1,086 Billion USD

$86.5 Billion USD

(8.0% of the country’s

GDP)

Exports

$280 Billion USD

$22 billion USD

FDI

$15 Billion USD

$1.4 Billion USD

Income per

capita

$10,181 USD

$19,693 USD

Twin Cities GDP

~$200B

Why Monterrey?

•

93 colleges and universities with 150,000+ students

•

More than 60 bilingual schools

•

213 technical careers with 52,000 students

•

5,000 engineers graduated per year (avg.)

•

Workforce: 1.9 million: 45% of the total population

12 years without any strike

Stable, productive, highly qualified labor force

Monterrey Education and Labor Force

Why Monterrey?

Combination of high-tech manufacturing

in a low cost region

Manage Risk & Deliver Long Term Goals

Focus on Strategic Competencies

Create Center of Excellence for weld, paint, assembly

Outsource non-strategic processes

Create sustainable Mexico plant with Polaris Culture

Enhanced Process Designs

Quality must be better at new location

Lean design from start

Best Project Management Principles

Gated, phased approach with performance milestones

Duplicate production lines

Work stream teams

Project Guiding Principles

Monterrey Operations

Flexible

Plan,

Effective

Logistics,

Strong

Labor

Pool

Facility

425,000 Square Feet

200,000 Square Feet Expansion

37 Dock Doors, 4 Ramps

Two Story Office

28ft Clear Height

Air Conditioned Facility

Processes

Vehicle Assembly (3 lines)

Chassis Welding

Metal Paint (Powder/E-coat)

Tube Fabrication

(Lasers/Benders/Formers)

Exhaust Welding

HT Exhaust Paint

Engine Assembly (2 lines)

Monterrey Production Ramp Up

Great Start in 2011, Continued Growth

Vehicle Assembly

Engine Assembly

Headcount

2011

Actual

2012

2013

2011

Actual

2012

2013

2011

Actual

2012

2013

22,500

20,000

850

Units

Employees

NA Realignment: Financials

Estimated

total project

costs

FY 2011

actual

FY 2012

guidance

Project

to-date

Q4 2011

actual

$27 -

$28

$15

$1-

Anticipated

annualized

savings upon

completion

2011

realized

savings in

half

FY 2012

anticipated

savings

guidance

$12 -

$15

Manufacturing Realignment –

Monterrey

Cost Charged to P&L (in millions)

$30+

Savings (in millions)

Opportunity for Future Margin Expansion

$26

Polaris North American

Manufacturing Operations

Roseau

745,500 Square feet

Products: Snow, ATV, SxS

Recent Initiatives:

-ATV’s consolidated to one assembly line

-SxS’s transitioned to high volume assembly

-Metal fabrication processes added

Osceola

285,800 Square feet

Products: Engines

Recent Initiatives:

-Producing Indian Engines

-Transitioned Metal Fab Processes

-Outsourced Seats and Stamping

-Transitioned portion of ORV Engines

Spirit Lake

565,00 Square feet

Products: Motorcycles, SxS, Electric, Bobcat

Recent Initiatives:

-Indian production transferred

-GEM Production Transferred

Monterrey

425,000 Square feet

Products: SxS, Engines, Exhausts

Current Initiatives:

-Adding 3

Assembly Line

-Adding 2

Engine Line

-Creating additional back shop capacity

Operations is Competitive Advantage

Lean Enterprise for world class quality, cost, lead times

Manufacturing realignment: excellent execution

29% Volume decrease / 56% volume increase

2+ Acquisition integrations completed

Manufacturing productivity up >7% for each of last 3 years

Inventory turns increased 18%

Operating Margins up +380 bps

3-5 Year Objective:

3 Year Results:

Excellent Progress, Significant Potential

ORV Business Breakdown

Bobcat

#1 business

for revenue

and profits

Large business

with significant

profits

Incremental

Growth

Opportunity

RANGER & RZR

#1 PRIORITY; SPORTSMAN REMAINS SIGNIFICANT

RANGER

& RZR

All

Other

ATV

All

Other

Bobcat

Defense

ATV

SxS

Farming/Ranching

Recreation/Trail

Property

Dunes

Farm

Hunt

Desert

Hunt

Rec/Trail

Hunt

Property

70%

80%

48%

Incremental to

Polaris

(Did not consider any

other Polaris products)

RANGER = MOSTLY WORK; RZR

= MOSTLY PLAY; SPORTSMAN = BOTH

ORV Customer Profiles

Primary

Usage

ORV Share Results

TWO TIMES SHARE OF NEXT COMPETITOR

Best Overall Share Performance In Polaris History

Upper 20’s Share In ATV; SxS Estimated 40 Share

Overall ORV Share Estimated at mid 30’s

Source: Crocker Data

Honda

John Deere

Kawasaki

Can-Am

Arctic Cat

John Deere

Kubota

Innovation Drives Share Gains

Winning the Competitive Battle

Yamaha

RANGER –

Consistent incremental growth

RZR

–

Consistent

incremental

high

growth

Sportsman

–

Consistent

growth

Military

Bobcat

–

Adjacent

high

growth

ORV Overall Results

2009

2010

2011

2012

Guidance

ORV N.A. Dealer Inventory

Dealer

Inventor

Support

Retail

Sales

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2006 Actual

2007 Actual

2008 Actual

2009 Actual

2010 Actual

2011 Actual

N.A. dealer inventory up 2% from 2010

ATV dealer inventory down 8% from 2010

Side-by-side inventory up due to continued strong retail demand

Some ORV product availability remains tight

MVP focus right product to the right market at the right time

RZR

570

Trail Value

Sportsman 850 H.O.

Xtreme Performance

RANGER

Crew Diesel

Multi-Passenger Diesel

Even Stronger

MY13

Product News

MY’12

MY’13

MY’12.5

RZR

XP 4 900

Xtreme Performance For 4

STRONG PORTFOLIO, INTEGRATED ARCHITECTURES, SHORT LEAD TIMES

Leverage New Products

BEST 500 CLASS

WINNER

BEST 500 CLASS

RUNNER UP

BEST 2 UP

BEST HARDCORE SXS

BEST HARDCORE

RUNNER UP

BEST BIG BORE

RUNNER UP

BEST 400 CLASS SPORT

UTILITY RUNNER UP

BEST DUAL PURPOSE

UTV RUNNER UP

Sportsman 550 EPS

Sportsman 500 H.O.

Sportsman Touring 850 H.O.

Sportsman 400 H.O.

RANGER

500 EFI

Sportsman 850 H.O.

RZR

XP 900

BEST 500 CLASS UTILITY

OFF-ROAD VEHICLE OF THE YEAR

BEST HIGH-PERFORMANCE SXS

BEST RECREATION CLASS SXS

Sportsman 550

RZR

570

RZR

XP 900

RANGER

XP 800

2012 OUTDOOR LIFE EDITORS CHOICE ATV

2012 CONSUMER DIGEST BEST BUY ATV & UTV

All RANGER

segments growing

Share growth has been very strong

RANGER

(no RZR) #1 in SxS by over 2X next closest competitor

MY’12 RANGER

product and marketing plan positioned well

ORV RANGER

Retail Results

STRONG RETAIL RESULTS –

POSITIONED WELL TO CONTINUE

2009

2010

2011

Full-Size

Multi-Passenger

Mid-Size

HARDEST WORKING

SMOOTHEST RIDING

HARDEST WORKING

SMOOTHEST RIDING

MARKET/BRAND POSITION

2009

2010

2011

2012

WILL CONTINUE TO WIN!

XP 700

XP 800

400 Mid

Diesel

500 EFI Mid

Crew 500

Crew

Diesel

RANGER

Family

Branding/Positioning

NEW SEGMENTS & DOMINANT PRODUCTS DRIVING GROWTH

ATV

SxS

Bobcat

RANGER

Top Customer

Improvements

Diesel Crew =

Incremental

Opportunity

Limited Editions =

Drive Retail

Improved Consumer

Comfort

Hills = HD Engine Braking

Incremental Customer

International/Military

Opportunity

First

Walker Evans RANGER

First Mid-Size LEs

RANGER MY’12

New Products Are Selling

CONSUMER INSIGHTS DRIVE GROWTH

TRAIL

HIGH

4-SEAT

PERFORMANCE

Strong incremental RZR

growth as new segments launched

Clear leader in all recreation segment

RZR

(no RANGER) is #2 in SxS market share (behind RANGER)

ORV RZR

Retail Results

INCREMENTAL NEW PLAYS WORKING

2009

2010

2011

RZR

Trail

RZR

Sport

RZR

4 Seat

RZR

Extreme

POSITIONING + CUSTOMER SOLUTIONS

MARKET / BRAND POSITION

RZR

is the ONLY

Line of Recreational / Sport SXS’s with

2008

2009

2012

2010

2011

NEW

11/11

WHY WE CONTINUE TO WIN!

NEW

1/12

CUSTOMERS

1.High Performance & Recreational Enthusiasts

2.Wishes to Involve More People in Experience

3.Not Willing to Compromise Performance for Experience

RZR

Family Branding / Positioning

INDUSTRY LEADING MARKET SEGMENTATION DRIVING GROWTH

ATV

SxS

Military

Bobcat

RZR

MY’12 Xtreme Performance For 4

Unmatched Performance & Ride Quality For 4

NEW! RZR

XP 4 900

Power –

ProStar 900 EFI Engine

88HP twin-cylinder, 4 valve, high revving DOHC

Lightweight, compact, durable transmission

Suspension –

Long Travel

3-Link Trailing Arm Independent Rear Suspension

Independent Front A-Arm Suspension

Agility

Low Center of Gravity, Optimized Mass Placement

Wide 64”

Stance

Ultimate Ride

Extended Wheelbase –

Pitch Control

Premium Suspension –

2.5”

Walker Evans Shocks

Significant share gains across Sportsman segments

Sportsman leads in both “value”

and “premium”

segments

Sportsman 500 H.O. and Sportsman 850 XP

HARDEST WORKING

SMOOTHEST RIDING

ORV ATV Market Share Results

SPORTSMAN STRATEGY IS WORKING

2009

2010

2011

Polaris

Honda

Yamaha

ATV

SxS

Military

Bobcat

NEW! MY’12

Sportsman 850 H.0.

NEW! MY’12

Sportsman 400, 500, 800

77HP –

For the Same Money

20% More Acceleration

#1 Customer Request

21% More Capacity

New Kenda Tires

#2 Customer Request

Sportsman MY’12 New Products

LISTEN TO OUR CUSTOMERS

International Growth

EMEA –

Continued strong growth,

Developing unique market models

SxS market hyper growth opportunity

APLA –

Developing market segments

Brazil, China & India building market & establishing partners

2009

2010

2011

Military Results

Gaining momentum –

support Special Operations Force demand

Over 4,000 vehicles in theater

Industry leader in the ultra light vehicle market

Global growth opportunity

2009

2010

2011

POSITIONED FOR GLOBAL GROWTH

Compact Construction Manufacturer

Off-Road Vehicles Manufacturer

Bobcat Partnership Results

BOBCAT PARTNERSHIP STRATEGY = GROWTH OPPORTUNITY

2009

2010

2011

Bobcat Partnership Results

BOBCAT DELIVERING RESULTS –

POTENTIAL REMAINS

$300M market opportunity –

Kubota market leader

Bobcat retail –

gaining momentum

CY12 Revenue stable

Next level of growth –

Bobcat co-developed products on schedule for MY13 impact

Cost down –

engineering and purchasing

Pricing –

leveraged targeted opportunities (remain competitive)

Monterrey –

impact just beginning

ORV = STRONG MARGIN EXPANSION RESULTS

ORV Margin Expansion

2008

2009

2010

2011

ATV

SxS

Military

Bobcat

Incremental

SxS Growth

Profitable

ATV Share

Expand

Margins

Military

Bobcat & Int’l

Strong RANGER

product plan

Strong RZR

product plan

SxS market

has upside

Sportsman strong

Still room

to innovate

Margin plan strong

Monterrey

just starting

Proven track record

Dealer inventory

healthy

Gaining

momentum

Market specific

products

Next generation

platforms

ORV Future Strategy Summary

THE FUTURE LOOKS BRIGHT FOR OFF-ROAD VEHICLES

RANGER

MILITARY & BOBCAT

RZR

SPORTSMAN

Positioned well for continued growth

Adjacent market growth opportunity

Strong product portfolio continued high growth

Entry value to high performance multi-passenger

Continuing to win

INTERNATIONAL

Expanding SxS sales, new market opportunities