8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 16, 2009

POLARIS INDUSTRIES INC.

(Exact name of Registrant as specified in its charter)

Minnesota	1-11411	41-1790959
(State of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

2100 Highway 55
Medina, Minnesota 55340
(Address of principal executive offices)
(Zip Code)

(763) 542-0500
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o   Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))

o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

     On July 16, 2009, Polaris Industries Inc. (the “Company”) issued a news release announcing the Company’s second quarter financial results for the reporting period ended June 30, 2009. On July 16, 2009, the Company also hosted its quarterly earnings conference call, which was accessible to the public. A recording of the conference call will be available through the end of the business day on July 23, 2009 by dialing 800-642-1687 in the U.S. and Canada or 706-645-9291 for international calls and entering passcode 93141102, and on the Company’s website, www.polarisindustries.com. A copy of the Company’s news release is furnished as Exhibit 99.1 attached hereto and a copy of the presentation materials discussed during the conference call is being furnished as Exhibit 99.2 to this Current Report on Form 8-K.

Item 7.01 Regulation FD Disclosure.

     The disclosures set forth in Item 2.02 above are hereby incorporated by reference into this Item 7.01.

     The information contained in this Current Report is furnished and not deemed to be filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section. The information in this Current Report shall not be incorporated by reference into any filing or other document pursuant to the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing or document.

SIGNATURE

          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.

Date: July 16, 2009

POLARIS INDUSTRIES INC.
 

/s/ Michael W. Malone  

Michael W. Malone 

Vice President — Finance, Chief Financial Officer and Secretary of Polaris Industries Inc. 

EXHIBIT INDEX

Exhibit Number	Description
99.1	News Release dated July 16, 2009 of Polaris Industries Inc.
99.2	Presentation materials dated July 16, 2009 of Polaris Industries Inc.

4

EX-99.1

Exhibit 99.1

News Release

2100 Highway 55
Medina, MN 55340-9770

Contact: Richard Edwards
Polaris Industries Inc.
763-542-0500

POLARIS REPORTS SECOND QUARTER 2009 RESULTS

Second Quarter Highlights:

• Net income of $0.53 per diluted share for the second quarter 2009 exceeded Company expectations

• Sales declined 24% in the second quarter 2009 as expected

• Gross profit margin percentage for the second quarter of 2009 improved by 40 basis points to 24.1% due primarily to lower commodity costs and lower promotional expense

• Increased retail market share in ORV during the second quarter 2009

• Factory inventory decreased 21% and dealer inventories declined 8% compared to second quarter 2008

• Continued focus on flexible manufacturing and leveraging variable cost structure to drive costs down to help offset the lower sales

• Narrowing full year 2009 earnings guidance to a range of $2.70 to $2.90 per diluted share; compared to previous EPS guidance of $2.50 to $3.00 per diluted share

• Announced entry into the emerging low-emissions vehicle market with a new on-road electric powered Neighborhood Vehicle

     MINNEAPOLIS (July 16, 2009) — Polaris Industries Inc. (NYSE: PII) today reported net income of $17.5 million, or $0.53 per diluted share, for the second quarter ended June 30, 2009 helped by a 40 basis point increase in its gross profit margin percentage. By comparison, 2008 second quarter net income was $24.4 million, or $0.72 per diluted share. Sales for the second quarter 2009 totaled $345.9 million, a decrease of 24 percent from second quarter 2008 sales of $455.7 million.

     “While the challenging economic environment continued to be a headwind in the quarter, we remained on strategy and effectively executed our business plans delivering results that exceeded our expectations,” noted Scott Wine, Chief Executive Officer. “We once again expanded our gross margins when compared to last year, primarily through lower commodity costs and our flexible manufacturing and highly variable cost structure. We gained market share in our ORV business during the second quarter 2009 resulting in further decreases in ATV dealer inventories. The accelerating weakness in the motorcycle industry retail sales put additional pressure on our Victory business, which performed below expectations for the second quarter in a row. We are taking important steps to improve our Victory business and also announced the newest addition to our On-Road business today with the introduction of Polaris’ first low emission vehicle. This is an important step in both broadening our product and new technology offerings.”

     Wine continued, “Next week we will be unveiling our model year 2010 products to our dealers at our annual dealer meeting. While many of our competitors appear to be pulling back on new product introductions for the upcoming model year, we continue to invest in our future and have exciting new off-

1

road vehicles and motorcycles that will be announced. Today’s announcement of the low emission Polaris Breeze™ represents our first entry into the emerging Neighborhood Vehicle category. This electric powered vehicle is a low-speed vehicle designed for multiple uses such as golfing, neighborhood riding, or carrying cargo primarily for consumers living in master planned communities. We believe we can leverage our innovation and engineering expertise to take advantage of this exciting new market opportunity. While we recognize the current economic environment remains challenging, we believe these new product introductions will provide Polaris and our dealers with a definite competitive advantage as the macro-economic environment eventually recovers.”

2009 Business Outlook

     Guidance for full year 2009 has been narrowed to reflect actual results during the first half of the year and the Company’s current outlook for the remainder of 2009. Full year 2009 earnings are now expected to be in the range of $2.70 to $2.90 per diluted share. Full year 2009 sales are expected to decrease from 2008 in the range of 20 percent to 25 percent. During the third quarter of 2009, the Company expects total sales to decrease in the range of 25 percent to 30 percent from third quarter 2008 sales. Third quarter 2009 earnings are expected to be in the range of $0.76 to $0.86 per diluted share compared to earnings of $1.13 per diluted share for the third quarter of 2008.

     Wine explained, “Our outlook for the North American economy remains weak, and most of the global economy for that matter. Our expectations for 2009 remain unchanged and we expect our core markets to remain very challenging, particularly in the motorcycle business. We have made and will continue to make adjustments to assist our Victory dealers through these difficult economic times. Shipments have been significantly reduced through the first half of the year, and although dealer inventories of Victory motorcycles are down 24 percent year to date as compared to last year, they remain higher than the current market conditions warrant. Therefore, we have made further adjustments in our production plans and throughout our Victory organization to focus more on the front end of the business and are allocating additional resources to assist our dealers in further lowering their inventory levels. The strategy for our other product lines is working well and remains unchanged -— drive innovation, accelerate speed to market and utilize our flexible manufacturing capabilities and variable cost structure to gain market share and improve margins. In fact our regional test of the new Max Velocity Program (“MVP”), designed to accelerate market share and reduce inventory, has performed well; therefore, we will be expanding the MVP program to dealers representing approximately 50 percent of our North American ORV unit sales volume in the second half of 2009. We expect these innovative, strategic efforts will position us for long-term growth and shareholder value creation.”

Retail credit financing availability for Polaris consumers

     The Company reported that availability of retail credit financing sources remains at acceptable levels given the continued uncertain credit markets. Polaris has relationships with HSBC Bank (“HSBC”), GE Money Bank (“GE”) and Sheffield Financial (“Sheffield”) to provide retail revolving and installment financing credit to United States consumers. During the second quarter 2009, 48 percent of consumer retail credit loan applications from Polaris customers were approved by HSBC, GE or Sheffield, improved from the first quarter 2009 approval rate of 44 percent. Additionally, 33 percent of Polaris’ retail customers

2

in the United States financed their Polaris product purchases through HSBC, GE or Sheffield, which is slightly better than the first quarter 2009 penetration rate. Although the availability of retail credit alternatives to consumers remains challenging, the Company believes that retail credit will continue to be accessible for Polaris consumers with an acceptable credit history.

	Second Quarter ended							Six Months ended
Product line Information	June 30,							June 30,
(in thousands)	2009		2008		Change			2009		2008		Change
Off-Road Vehicles	$	261,743	$	350,280		-25	%	$	477,204	$	614,806		-22	%
Snowmobiles		7,413		6,006		23	%		15,579		15,441		1	%
Victory Motorcycles		10,492		23,409		-55	%		24,328		50,755		-52	%
Parts, Garments & Accessories		66,248		75,991		-13	%		140,809		163,368		-14	%
Total Sales	$	345,896	$	455,686		-24	%	$	657,920	$	844,370		-22	%

     ORV (off-road vehicles) sales, which included sales of both core ATV (all-terrain vehicles) and RANGER™ side-by-side vehicles, during the second quarter 2009 decreased 25 percent from the second quarter 2008. This decrease reflects the continued weakness in the consumer retail environment, as dealers continued to reduce core ATV orders in an effort to reduce inventory levels. As a result, ATV dealer inventory levels in North America finished 18 percent lower at the end of the second quarter 2009 than at the end of the second quarter 2008. Although side-by-side retail sales, as expected, were also lower during the second quarter 2009 compared to the second quarter 2008, resulting in lower shipments of side-by-side vehicles, the decline was less than the core ATV retail declines. Dealer inventories for side-by-side vehicles are higher than a year ago, but lower than at the end of the first quarter 2009, and remain at acceptable levels. International ORV sales also declined in the second quarter 2009, down 33 percent when compared to the second quarter 2008, as the weakening economic environment and currency rates negatively impacted Polaris sales in markets outside of North America.

     Sales of Victory motorcycles to dealers decreased 55 percent during the second quarter of 2009 when compared to the same period in 2008. The decrease reflects the planned reduction in shipments of Victory motorcycles to dealers in North America during the quarter in response to dealers’ efforts to further reduce their inventory levels as well as the weakening motorcycle industry retail sales environment. Industry wide North American retail sales of heavyweight cruiser and touring motorcycles over 1400cc deteriorated further during the second quarter 2009, declining in the mid thirty percent range compared to the same period last year. Victory retail sales to consumers declined in line with industry wide sales during the 2009 second quarter. Although dealer inventory levels are 24 percent lower at the end of the second quarter 2009 than at the end of the second quarter 2008, further reductions are needed given the weak motorcycle industry retail sales environment.

     Parts, Garments, and Accessories sales decreased 13 percent during the second quarter 2009 compared to the same period of last year. The decrease was driven primarily by the lower retail sales of Polaris vehicles during the second quarter 2009. The gross margin percentage continues to expand in our highest margin business.

3

     Snowmobile sales totaled $7.4 million for the 2009 second quarter compared to $6.0 million for the second quarter of 2008. The second quarter is historically a seasonally low quarter for snowmobile shipments, as deliveries to dealers ramp up in the second half of the calendar year.

     Gross profit as a percentage of sales was 24.1 percent for the second quarter of 2009, an increase of 40 basis points from 23.7 percent for the second quarter of 2008. Gross profit dollars decreased to $83.3 million for the second quarter 2009, compared to $108.0 million for the second quarter of 2008 due to lower sales. The increase in the gross profit margin percentage during the 2009 second quarter resulted primarily from lower commodity costs, a favorable product mix change given the relatively lower declines in shipments of the higher-margin side-by-side vehicles, and lower core ATV promotional costs. The gross profit margin percentage increase was partially offset by an unfavorable movement in currency rates as well as higher warranty expenses during the second quarter 2009 compared to the second quarter 2008.

     Operating expenses for the second quarter 2009 decreased 17 percent to $60.2 million compared to $72.5 million for the second quarter of 2008. Operating expenses in absolute dollars for the second quarter 2009 decreased primarily due to operating cost control measures and the reduction in incentive compensation plan expenses resulting from the Company’s lower stock price and the expected lower profitability in 2009. Operating expenses as a percentage of sales were 17.4 percent for the second quarter 2009, an increase from 15.9 percent in the second quarter of 2008 due primarily to lower sales volume during the second quarter 2009, partially offset by the implementation of operating expense control measures.

     Income from financial services decreased 24 percent to $4.0 million during second quarter 2009 from $5.2 million in the second quarter of 2008. The decrease was primarily due to lower income generated from retail credit activity resulting from lower penetration levels in 2009.

     Interest expense decreased to $1.1 million for the second quarter 2009 compared to $2.5 million for the second quarter 2008 due to lower interest rates on the Company’s bank borrowings during the 2009 period.

     The Income tax provision for the second quarter 2009 was recorded at a rate of 34.4 percent of pretax income compared to 36.0 percent of pretax income for the second quarter 2008. The lower income tax rate for the second quarter 2009 resulted from the federal research and development tax credit which had not been extended by the U.S. Congress in the second quarter 2008.

Financial position and cash flow

     Borrowings under the credit agreement were $250.0 million at June 30, 2009 compared to $261.0 million at June 30, 2008, which leaves $200.0 million available for borrowing under the Company’s $450.0 million credit agreement. The Company’s debt-to-total capital ratio was 63 percent at June 30, 2009 compared to 65 percent at June 30, 2008. Cash and cash equivalents were $30.0 million at June 30, 2009 compared to $21.9 million at June 30, 2008. Factory inventory declined 21 percent to $219.6 million in the second quarter 2009 compared to the second quarter 2008 and declined eleven percent sequentially compared to the first quarter 2009, as the Company continues to make adjustments to its production and operations in response to the weak retail demand trends.

4

     Net cash provided by operating activities for the second quarter of 2009 totaled $24.4 million compared to $53.3 million in the second quarter of 2008. During the six months ended June 30, 2009, $8.7 million in net cash was used for operating activities compared to $21.8 million in net cash provided by operating activities during the first half of 2008. The decrease in net income and accrued expenses for the 2009 second quarter and year-to-date periods ended June 30, 2009 compared to the same time periods last year are the primary reasons for the decline in cash flow. Net cash used for investing activities decreased to $14.9 million during the 2009 year-to-date period compared to $27.5 million in the 2008 year-to-date period due to reduced capital expenditures. Net cash flow provided by financing activities was $26.5 million during the first six months of 2009 compared to a use of cash for financing activities totaling $35.7 million for the same period in 2008 primarily due to a significant decline in share repurchase activity in 2009. The Company paid dividends during 2009 totaling $25.0 million, compared to $25.2 million in the first six months of 2008, at a rate per share in 2009 that is slightly higher than last year’s per share rate.

Polaris announces entrance into new adjacent market segment

Today, Polaris announced the introduction of its latest category adjacency, an electric powered Neighborhood Vehicle. The Polaris Breeze™ represents the Company’s initial product entry into the emerging low emission vehicle market. This unique, all-electric vehicle features industry leading functionality, with the first 3-in-1 rear seat conversion which can easily be converted in seconds for use as a golf car, a four passenger vehicle or for carrying cargo whenever any of these needs arise. Additional industry leading features include extensive on-board storage capabilities, fully adjustable lighting and a smooth suspension. The vehicle is targeted for consumers living in master planned communities, and will be available in limited quantities for purchase at Polaris Neighborhood Vehicle dealerships in select markets starting in September 2009. For further details see the separate press release issued today.

Conference Call and Webcast Presentation

     Today at 9:00 AM (CST) Polaris Industries Inc. will host a conference call and webcast to discuss Polaris’ second quarter 2009 earnings results released this morning. The call will be hosted by Scott Wine, CEO, Bennett Morgan, President and COO and Mike Malone, Vice President Finance and CFO. A slide presentation and link to the audio webcast will be posted on the Investor Relations page of the Polaris web site at www.polarisindustries.com/irhome prior to the beginning of the conference call. To listen to the conference call by phone, dial 800-374-6475 in the U.S. and Canada, or 973-200-3967 Internationally. The Conference ID is #93141102.

     A replay of the conference call will be available approximately two hours after the call for a one-week period by accessing the same link on our website, or by dialing 800-642-1687 in the U.S. and Canada, or 706-645-9291 Internationally.

About Polaris

     With annual 2008 sales of $1.9 billion, Polaris designs, engineers, manufactures and markets off-road vehicles (ORVs), including all-terrain vehicles (ATVs) and the Polaris RANGER™, snowmobiles and

5

Victory motorcycles for recreational and utility use and has just introduced a new electric powered neighborhood vehicle.

     Polaris is a recognized leader in the snowmobile industry; and one of the largest manufacturers of ORVs in the world. Victory motorcycles, established in 1998 and representing the first all-new American-made motorcycle from a major company in nearly 60 years, are rapidly making impressive in-roads into the cruiser and touring motorcycle marketplace. Polaris also enhances the riding experience with a complete line of Pure Polaris apparel, accessories and parts, available at Polaris dealerships.

     Polaris Industries Inc. trades on the New York Stock Exchange under the symbol “PII,” and the Company is included in the S&P Small-Cap 600 stock price index.

     Information about the complete line of Polaris products, apparel and vehicle accessories is available from authorized Polaris dealers or anytime from the Polaris homepage at www.polarisindustries.com.

Except for historical information contained herein, the matters set forth in this news release, including management’s expectations regarding 2009 sales, shipments, net income and cash flow, are forward-looking statements that involve certain risks and uncertainties that could cause actual results to differ materially from those forward-looking statements. Potential risks and uncertainties include such factors as product offerings, promotional activities and pricing strategies by competitors; warranty expenses; foreign currency exchange rate fluctuations; effects of the KTM relationship; environmental and product safety regulatory activity; effects of weather; commodity costs; uninsured product liability claims; uncertainty in the retail and wholesale credit markets; and overall economic conditions, including inflation, consumer confidence and spending and relationships with dealers and suppliers. Investors are also directed to consider other risks and uncertainties discussed in documents filed by the Company with the Securities and Exchange Commission.

(summarized financial data follows)

6

POLARIS INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands, Except Per Share Data)
(Unaudited)

	For Three Months					For Six Months
	Ended June 30,					Ended June 30,
	2009			2008		2009			2008
Sales	$	345,896		$	455,686	$	657,920		$	844,370
Cost of Sales		262,632			347,643		498,222			648,232
Gross profit		83,264			108,043		159,698			196,138
Operating expenses
Selling and marketing		28,702			35,188		56,030			64,358
Research and development		15,222			20,236		31,822			39,493
General and administrative		16,235			17,108		30,354			33,031
Total operating expenses		60,159			72,532		118,206			136,882
Income from financial services		3,966			5,243		8,370			12,733
Operating Income		27,071			40,754		49,862			71,989
Non-operating Expense (Income):
Interest expense		1,095			2,482		2,146			5,207
Impairment charge on securities held for sale		—			—		8,952			—
Other expense (income), net		(677	)		154		(680	)		(909	)
Income before income taxes		26,653			38,118		39,444			67,691
Provision for Income Taxes		9,175			13,738		13,508			24,228
Net Income	$	17,478		$	24,380	$	25,936		$	43,463
Basic Net Income per share	$	0.54		$	0.74	$	0.80		$	1.31
Diluted Net Income per share	$	0.53		$	0.72	$	0.79		$	1.27
Weighted average shares outstanding:
Basic		32,381			32,882		32,324			33,292
Diluted		32,990			33,785		32,775			34,159

7

POLARIS INDUSTRIES INC.
CONSOLIDATED BALANCE SHEETS

Subject to Reclassification	June 30, 2009		June 30, 2008
(In Thousands)	(Unaudited)		(Unaudited)
Assets
Current Assets:
Cash and cash equivalents	$	30,036	$	21,909
Trade receivables, net		54,027		73,014
Inventories, net		219,645		278,396
Prepaid expenses and other		20,272		18,149
Deferred tax assets		76,042		68,769
Total current assets		400,022		460,237
Property and equipment, net		212,103		215,274
Investments in finance affiliate		43,352		45,987
Investments in manufacturing affiliates		10,656		32,330
Deferred tax assets		—		6,363
Goodwill, net		25,105		26,190
Total Assets	$	691,238	$	786,381
Liabilities and Shareholders’ Equity
Current Liabilities:
Accounts payable	$	57,313	$	102,299
Accrued expenses:
Compensation		30,016		40,821
Warranties		25,372		26,059
Sales promotions and incentives		64,497		80,291
Dealer holdback		53,698		72,633
Other		35,522		32,789
Income taxes payable		15,321		22,673
Current liabilities of discontinued operations		1,850		2,242
Total current liabilities		283,589		379,807
Long term income taxes payable		5,106		7,615
Deferred income taxes		3,102		—
Borrowings under credit agreement		250,000		261,000
Total liabilities	$	541,797	$	648,422
Shareholders’ Equity:
Preferred stock $0.01 par value, 20,000 shares authorized, no shares issued and outstanding		—		—
Common stock $0.01 par value, 80,000 shares authorized, 32,617 and 32,667 shares issued and outstanding	$	326	$	327
Additional paid-in capital		—		—
Retained earnings		147,751		103,459
Accumulated other comprehensive income, net		1,364		34,173
Total shareholders’ equity	$	149,441	$	137,959
Total Liabilities and Shareholders’ Equity	$	691,238	$	786,381

8

POLARIS INDUSTRIES INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

Subject to Reclassification	For Six Months
(In Thousands)	Ended June 30,
(Unaudited)	2009			2008
Operating Activities:
Net income	$	25,936		$	43,463
Adjustments to reconcile net income to net cash provided by operating activities:
Noncash impairment charge on securities held for sale		8,952			—
Depreciation and amortization		28,658			27,098
Noncash compensation		4,753			9,880
Noncash income from financial services		(2,071	)		(2,303	)
Noncash (income)/loss from manufacturing affiliates		196			(33	)
Deferred income taxes		(997	)		(4,153	)
Changes in current operating items:
Trade receivables		44,571			9,870
Inventories		2,667			(60,054	)
Accounts payable		(58,673	)		12,254
Accrued expenses		(74,519	)		(38,501	)
Income taxes payable		16,472			16,829
Prepaid expenses and others, net		(4,642	)		7,454
Net cash (used for) provided by continuing operations		(8,697	)		21,804
Net cash flow (used for) discontinued operations		—			(60	)
Net cash (used for) provided by operating activities		(8,697	)		21,744
Investing Activities:
Purchase of property and equipment		(25,183	)		(37,570	)
Investments in finance affiliate, net		10,284			10,116
Net cash (used for) investing activities		(14,899	)		(27,454	)
Financing Activities:
Borrowings under credit agreement		268,000			334,000
Repayments under credit agreement		(218,000	)		(273,000	)
Repurchase and retirement of common shares		(282	)		(85,854	)
Cash dividends to shareholders		(24,993	)		(25,221	)
Tax effect of proceeds from stock based compensation exercises		(427	)		2,776
Proceeds from stock issuances under employee plans		2,207			11,637
Net cash provided by (used for) financing activities		26,505			(35,662	)
Net increase (decrease) in cash and cash equivalents		2,909			(41,372	)
Cash and cash equivalents at beginning of period		27,127			63,281
Cash and cash equivalents at end of period	$	30,036		$	21,909

9

EX-99.2

Exhibit 99.2

Polaris Industries Inc. Second Quarter 2009 Earnings Results July 16, 2009

Safe Harbor Today's presentation includes statements which should be considered forward-looking for the purposes of the private securities reform act of 1995. Additional information concerning these factors that may influence results can be found in our 2008 annual report and 2008 Form 10-K, which are on file with the SEC. The data source for retail sales figures included in this presentation is registration information provided by Polaris dealers in North America and compiled by the Company. The Company must rely on information that its dealers supply concerning retail sales, and this information is subject to revision.

2008 2009 Sales 0.55 0.26 0 Second Quarter 2009 Results Challenging economic environment continued in Q2 Results exceeded Company expectations Balance sheet remains strong 2008 2009 Sales 388.7 312 0 Diluted EPS $0.72 $0.53 - -26% $455.7 $345.9 - -24% Total Company Sales ($ in millions)

Neighborhood Vehicle Market Neig other Q2 2009 0.1 0.9 Neighborhood Vehicles People Transport, Light Duty, Golf Cars Off-Road Technical Applications On-Road Product Innovation New & growing customer base Expanding migration to warmer weather Growing demand for low emission vehicles Underserved Market - few purpose built vehicles Fragmented market Attractiveness Low Emission Vehicles 300,000+ units annually LEV's Evolution Polaris Innovation Polaris Today

Best Electric Vehicle for Golfing, Riding & Carrying Light Cargo MyChoice(tm) rear seat easily converts in 60 seconds NEW! Polaris Breeze(tm) Driver and Passenger Seat Belts Low and High Beams Turn Signals Adjustable Drivers Seat Premium Wheels Comfort Ride Suspension Technology

ORV Snow Victory PG&A Sales 455.7 366.5 367.9 355 345.9 345.9 89.2 1.4 12.9 9.1 Total Company Sales ($ in millions) $455.7 $-88.6 $1.4 $-12.9 $-9.7 $345.9 Q2 2008 Total Company Q2 2009 Total Company Second Quarter 2009 Sales % Change in Total Company Sales Geographic Sales United States Canada Other Foreign Countries Sales 232.6 54.6 58.7 0 Canada - -8% $54.6 United States - -26% $232.6 Int'l - -30% $58.7 NOTE: ORV (Off-Road Vehicles) = ATV & SxS Combined Sales by Product line ORV Snowmobiles Victory PG&A Sales 261.7 7.4 10.5 66.3 0 ORV $261.7 - -25% Snow $7.4 23% PG&A $66.3 - -13% Victory $10.5 - -55% Product mix and price 14% Volume -34% Currency -4% -24%

Second Quarter 2009 Earnings Gross profit margin percentage improved 40 basis points Operating expenses (in dollars) decreased 17% from Q2 2008 Income tax provision rate of 34.4% favorable to Q2 2008 Net Income as a Percent of Sales Net Income 2008 2009 Sales 19.1 8.5 0 $24.4 $17.5 - -28% 2008 Gross Margin Op Expense Financial Services Interest Expense Income Taxes 2009 Sales 0.054 0.054 0.043 0.042 0.042 0.044 0.051 0.004 0.015 0 0.002 0.006 Gross Margin Operating Expense Financial Services Interest Expense Income Taxes/ Other 5.4% 2008 2009

North American Retail Sales 0% Polaris N.A. retail sales decreased in line with expectations Approximately flat with Q1 2009; it appears we have reached the bottom Core ATV decline is greater than side-by-sides International retail sales decline similar to N.A.

North American Dealer Inventory Levels Receivable Balance - U.S. Dealers ($ in millions) North American Dealer Count Dealer Health Down 8% from Q2 2008 Down 10% from Q1 2009 Victory ? 24% from Q2 2008 Expect further declines by 2009 year end Down 5% from Q2 2008 Down 12% from Q1 2009 Losses remain well less than 1% Dealer count reduction expected to be ~5% in '09 (unchanged) U.S. Dealer repossessions are stable: Q4 2008 20 dealers Q1 2009 13 dealers Q2 2009 12 dealers

Operational Excellence Full Year 2009 gross margin guidance = increase up to 130 bpts - (unchanged) Factory Inventory down 21% to Q2 2008 - expect to be lower year-over-year throughout 2009 Cost reduction/avoidance initiatives producing results Supply chain lead times reduced by another 13%+ Expanding MVP to 50% of North American ORV dealer volume in 2H 2009 New product development speed to market 22% further improved since 2008 MY'10 product news expected to be industry-leading again Q2 2008 Q2 2009 East 22.7 24.5 West North 23.7% 24.1% Gross Profit Margin Percentage Expansion Q1 2008 Q2 2008 Q3 2008 Q4 2008 Q1 2009 Q2 2009 Factory Inventory 279.3 278.4 268.3 222 245.6 220 Factory Inventory ($ in millions) +40 Bpts

Off-Road Vehicle Division Q2 2008 Q2 2009 Side-by-Sides 0.54 0.58 ATVs 0.46 0.42 Full Year 2009 Sales Guidance: -21% to -25% (Narrowed range) North American ORV industry retail declined in Q2, as expected ATVs down 30 percent range Side-by-sides down mid-teens percent (estimate) Gained ORV share again in Q2 2009 International ORV sales down significantly, but gaining market share $350.3 - -25% $261.7 Polaris Revenue ($000's) ORV Revenue by Product Line SxS ATV SxS ATV

Snowmobile Division $6.0 +23% $7.4 Polaris Revenue ($000's) Full Year 2009 Sales Guidance: -15% to -20% (Narrowed range) Second quarter is off season for snowmobile retail sales and riding Dealer inventory at appropriate levels The new progressive rate rear suspension RUSH(tm) to begin shipping in Q3 Q2 2005 Q2 2006 Q2 2007 Q2 2008 Q2 2009 Factory Inventory 25.9 22.3 15.9 9.7 10.4 Snowmobile Dealer Inventory levels

On-Road Division - Victory Motorcycles Full Year 2009 Sales Guidance: -40% to -50% Victory retail sales weaker along with Industry Production cuts made to reflect slower sales reality Additional resources allocated to assist the Victory business and dealers New On-Road Division established Includes Victory, new low emission vehicles and potential new adjacencies Dealer inventory down 24% at Q2 2009 More progress needed with weak industry $23.4 Polaris Revenue ($000's) N.A. Motorcycle Industry 1400cc+ - -55% $10.5 Retail sales decline accelerated in Q2. Down mid thirty percent range. 0%

PG&A Division $76.0 - -13% $66.3 Polaris Revenue ($000's) Full Year 2009 Sales Guidance: -13% to -17% (lowered) Revenue impacted by decline in wholegood retail sales Remains highest gross margin business - expect gross margin expansion in 2009 Expect to outperform wholegood sales in 2009 Q2 2009 PG&A Revenue by Business Unit

Europe ME/Africa Latin America Asia Aus/NZ East 0.73 0.07 0.07 0.01 0.12 International Division ORV Victory Snow PGA East 0.76 0.04 0.03 0.17 Polaris Revenue ($000's) Q2 2009 Revenue by Geography Q2 2009 Revenue by Business Unit $83.8 - -30% $58.7 Full Year 2009 Sales Guidance: -15% to -20% (narrowed range) Gained share in ORV in the EMEA region EMEA ORV markets down low 20% range in Q2 2009 Victory global expansion on track Australia, Germany, UK, Sweden 12% of Q2 2009 sales decline resulted from unfavorable currency movements

Financial Services Income Q2 2008 Q2 2009 Retail Financing 1.2 0.3 Wholesale Credit 3.3 3.1 Other Activities 0.7 0.6 Q4 2008 Q4 2008 Q1 2009 Q1 2009 Q2 2009 Q2 2009 Sales 0.53 0 0.44 0 0.48 0.31 0.31 0.33 Financial Services Income by Category Retail Portfolio HSBC, GE and Sheffield Combined Penetration Rate Approval Rate 44% 31% 5.2 $4.0 $ in millions 48% 33% - -24% 53% 31% FY 2009 Income Guidance: down 20% to 30% from 2008 (improved) better due to increase in interest rates paid to Polaris Acceptance by both Polaris and dealers in 2H 2009 Sheffield continues to increase retail installment credit volume Approval and penetration rates slightly improved from Q1 2009

Gross Profit Margin Percentage Trends Flexible variable cost structure and timely execution drives gross margin expansion

Balance Sheet and Liquidity Profile $ In millions (except per share data) YTD June 2009 +/- YTD June 2008 Full Year / Year End 2009 Guidance Total Debt - ending $250.0 -$11.0 Similar to 2008 Net Debt - ending (debt less cash balances) $220.0 -$19.1 Improved from 2008 Credit Facility (expires December 2011) $450.0 - $450 Average debt outstanding $295.6 +$21.5 Similar to 2008 Debt Interest Rate - ending 0.79% -2.16% Lower average rate than 2008 Capital Expenditures $25.2 -$12.4 $50 to $55 (narrowed) Depreciation and amortization $28.7 +$1.6 $60 to $65 (unchanged) Operating cash flow -$8.7 -$30.4 % decline in line with net income Factory Inventory $219.6 -$58.8 Lower than 2008 Stock buyback $0.3 -$85.6 Minimal repurchases in 2009 Dividend $0.78 per share +$0.02 per share $1.56 per share (+3%)

2009 Full Year Guidance Product Line Sales Off-Road Vehicles Down 21% to 25% Snowmobiles Down 15% to 20% Victory Motorcycles Down 40% to 50% PG&A Down 13% to 17% Total Company Sales Down 20% to 25% Gross Margins Up to 130 bpts improvement Operating expenses Down significantly in dollars but up as a percent of sales Income Taxes In the range of 34.0% to 34.5% of pretax income EPS, Diluted $2.70 - $2.90 (-23% to -17%) Guidance Narrowed for Full Year 2009

Third Quarter 2009 Guidance Weak Industry retail sales expected to continue in Q3 2009 Adjustments made to production for Victory MY 2010 Commodity cost and expense reduction will continue to help offset weak demand Total Company Sales (in millions) Diluted EPS 2008 2009 Sales 580.3 404.7 75 $580.3 Down 25% to 30% Q3 Actual Q3 Guidance 2008 2009 Sales 1.13 0.76 0.12 $1.13 $0.76 to $0.86 Down 33% to 24% Q3 Actual Q3 Guidance

Priorities for 2nd Half 2009 Great Dealer Show - New Product Introductions Execute Order Solicitation Expand MVP Drive Victory Improvements Stay on Strategy Polaris: Unmatched Innovation & Execution

Polaris Industries Inc. Thank you. Q & A