1. EMBA Team 3ZAlexandra BrooksRuben PedrozaSharon SingletonPolaris Industries, Inc.Poland Investment Proposal

2. Polaris ProductsManufacturer of Off-RoadVehicles (ORVs)Motorcycles, ATVsSnow mobilesImages from Polaris Investor Presentation May 7, 2013 3. Polaris International MarketInternational unit sales upEuropean (EU) Sales70% of international14% of total company1100 Dealers in EUOff-Road Vehicles areleading product line65 distributors inapproximately 130countries outside of NorthAmericaImages from Polaris Investor Presentation May 7, 2013 4. Investment Typical Projects Two typical projects: Development of new manufacturing facilities Acquire firms that build adjacent products 5. Poland Proposal 6. Poland Proposal SummaryInternational InvestmentWhere: PolandWhat: State-of-the-Art Manufacturing FacilityEstimated Cost: $30mProduct Focus: Off-Road Vehicles 7. Whats Happening in Poland 8. Poland- Geographic LocationMajor AutomotiveManufacturing CentersWroclawKrakow 9. Poland- Country StatisticsCapital: WarsawOfficial Language: Polish25% English SpeakingPopulation: 38.5mGDP per Capita: $21,000Currency: Polish Zloty (PLN)Government: Parliamentary RepublicReligion: 90% Roman CatholicUnemployment Rate: 13% 10. Poland- Business CultureFormal to informal social etiquetteCommon GreetingsFirm hand shake and eye contactBusiness cards are exchangedUse Surnames and Refer to Honorary TitlesMove to first name basis when invited toHigh trust society where relationships are keyCommon Relationship Building ActivitiesSmall talk at start of meetingsBusiness lunches and dinnersHierarchical decision making 11. Why Poland?Create operational efficiency to support existingcustomer base in EUAlignment with strategic ObjectivesLocal market-ORV sales to farms is growing marketMinimal competition with key competitorsFirst to market in PolandEstablishing brand of choice 12. Polaris Strategic Objectives 13. Strategic ObjectivesPillar 1: Global Market LeadershipGreater than 33% of company revenuePillar 2: Operations as a Competitive AdvantagePillar 3: Strong Financial Net Income Margin10% or greater 14. Polands Alignment- Global Market Leadership Geographic Location Located in Heart of Europe- Between Russia andEurope Existing Distribution Channels for Automotive Industry Strongest Emerging Economy in Europe GDP is 514.5 Bn USD in 2011 GDP growth is 4.3% 15. Polands Alignment- Operations CompetitiveAdvantage Infrastructure for heavy manufacturing Sea and cargo shipping ports Rail and Highways runningEast/West and North/South Highly skilled labor force Pre-communist education focusedon training for Heavy Industry Labor Costs have been flat- High unemployment 16. Polands Alignment- Strong FinancialPerformance Regional subsidies offset building costs and labor costsNational subsides to procure tax exemption:Up to 50% of two years gross labor costs of newlycreated jobsNational tax benefits in special economic zones:No corporate income taxFinancial Arbitrage using Exchange RatesLabor: $1.0 = 3.3 PLNSales: $1.3 = 1 17. Risk Factors 18. Risk FactorsEmployment contracts are required in Poland. Poland hasa strong labor union presencePolaris is non-unionTax benefits will expire in 2020Exchange rate benefit will expire once Poland fully joins theEU and adopts euroLaws are not quite up to US and EU standards, but they areimproving 19. Conclusion 20. ConclusionPoland aligns well with Polaris strategic pillarsNew factory will support future growth in EMEAcountriesBusiness Culture aligns with USBenefits of Investing in Poland:Financial arbitrageTax and local subsidiesKnowledgeable and inexpensive workforceGeographically connects European countries