Polaris to realign manufacturing operations

    The Company is currently evaluating several possible locations in the Monterrey/Saltillo area ofMexico for the new facility. The realignment will lead to the eventual sale or closure of Polaris’ Osceola,

Wisconsin manufacturing operations over time. The realignment allows the Company to dedicate capital forstrategic investments in painting, welding and assembly operations by outsourcing certain non-strategiccomponent manufacturing processes. The Mexico facility is expected to maintain Polaris’ industry leadingquality while improving the Company’s on-time delivery to customers and provide significant savings inlogistical and production costs.

“While this was a difficult decision for us, given the impact on our employees at the Osceolafacility, we believe the creation of these manufacturing centers of excellence will strengthen our companyover the long-term and enable us to maintain our lead in a competitive market,” said Scott Wine, CEO,

Polaris Industries Inc. “Pursuing opportunities in new markets outside the United States, while concurrentlyevaluating our cost structure to improve our long-term competitive positioning are key components to ourgrowth strategy. This decision was based on a thorough review of our worldwide operations and will allow usto improve our ability to meet the quality, delivery and cost standards desired by our dealers and customers.”

When the manufacturing realignment is completed the Company will have capabilities to manufacture ORVs(both ATVs and side-by-side vehicles), which represents more than two-thirds of the Company’s sales, inmultiple locations depending on customer demand.

Snowmobile assembly will remain in the Roseau facility and Victory motorcycle assembly willremain in the Company’s Spirit Lake facility. As part of the manufacturing realignment, certain Osceolamanufacturing processes will be moved into the Roseau, Spirit Lake and Mexico facilities to more effectivelyutilize Company resources. In addition, certain manufacturing processes and equipment are intended to besold to suppliers whom will continue to supply components to Polaris. Other non-strategic component

Polaris is currently in negotiations with several suppliers to sell certain non-strategic componentmanufacturing processes and equipment in the Osceola facility. If successful, Polaris’ intent is that thesuppliers will continue to manufacture these components in the current Osceola location. Polaris will operatethe Osceola manufacturing facilities during the transition period. Upon completion of the transition, Polariswill provide the affected employees severance benefits and work closely with the Wisconsin Department ofLabor and other state and local agencies to offer employment assistance and other services.

The Company expects to record pretax transition charges to its income statement in the range of$20 million to $25 million and incur capital expenditures up to $35 million over the next few years related tothe implementation of the manufacturing realignment. The Company expects the Osceola facility exit costs,comprising largely of one-time employee termination benefits, to amount to approximately a third of the totaltransition charges, while the start-up costs related to the new Mexico facility and other centers of excellence will comprise the balance.

Transition charges to be incurred in calendar year 2010 are expected to be in therange of $8 to $10 million. The Company’s current earnings guidance of earnings per share of $3.48 to $3.60for the full year 2010 will not change as a result of this announcement.

The realignment is expected togenerate pre-tax costs and expense savings in excess of $30 million on an annual basis when the transition hasbeen completed. The Company expects to begin realizing some of the cost savings as early as 2011.