Polaris is the undisputed leader in power sports. For the first half of 2012, Polaris has sold more than a billion dollars in all-terrain vehicles and side-by-sides, and our overall off-road vehicle sales are up 25% vs. the first half of 2011.

We see the most significant growth in the UTV market in the recreation segment. Here's why: Consumers have an increasing desire to get outdoors, but want to do it in a comfortable way. They are seeking weekend getaways where the whole family can participate. The family that owns an ATV now also owns a UTV because they want the ability to haul passengers and gear. We also are seeing "baby boomers" acquiring property and using this one vehicle, the UTV, to maintain their properties and then hunt, fish or hit the trails. Also, instead of spending money on a distant vacation, a UTV is an alternative, enjoyable investment.

Polaris' extensive line offers dealers a way to capture all of these segments. We invest a tremendous amount in product development - to keep innovations coming year-round.

As our core business remains strong, we're expanding into other growth areas, such as electric vehicles with work attachments and ultra-light tactical vehicles for the military.

UTV Advantages

The Polaris lineup offers models for consumers seeking value; premium options (amenities like power steering, removable cabs, and custom paint); multi-passenger capabilities; and specialty uses (military, work-specific).

The new Polaris Ranger XP 900 features a removable cab and fits both the rural lifestyle and recreational markets.

Our pure recreational consumers turn to our RZR line. The RZR series has high performance and multiple passenger models. And the RZR 800 series, at just 50 inches wide, is the only UTV on the market narrow enough for riding trails, where allowed.

Our newest vehicle is the Ranger XP 900, with a new 60 horsepower ProStar engine, a new drivetrain and a chassis with a wheelbase that is 5 inches longer. It even offers a removable cab. We want to remain the undisputed leader in side-by-sides and the Ranger line is heads and tails above any other vehicle in its category. This hard-working, smooth-riding UTV fits both the rural lifestyle and recreational markets.

Dealer Support

We have a strong and stable network of about 1,500 independent dealers. Our independent dealers are the best model to deliver the best service. I defy you to go back to a Big Box retailer and get service seven years after the purchase. In fact, we reward our dealers who have completed master dealer certification training though gold and silver designations. These designations are displayed on our website's dealer locator page, and dealers can also promote it in their own materials.

Our wide range of products gives us opportunities across the segments. For instance, in urban areas, we may seek out a power sports dealer. In rural areas, we may establish the Polaris line with a traditional agricultural dealer.

Regardless of the segment, our best-performing dealers focus on four profit centers:

• New sales
• Used sales
• Service
• Finance and insurance

Many have dedicated staff and develop business plans for each of these areas. Our district managers act as a coach and our dealer meetings offer training on these topics.

The retail experience is also key to our dealers' success and Polaris supports this aspect with our Max Velocity Program (MVP). The program lets dealers order more frequently than with other manufacturers, and they can also customize an order in-process based on consumer demand. This ability to order the right products at the right time helps dealers deliver the products consumers want.

MVP also provides direction regarding retail showroom displays; coordinates national advertising with dealership advertising through co-op dollars; and makes sure dealers are trained on the latest models. To sell our wide range of products, dealers need training.

We are extremely proud of our dealers. Their effort and tenacity have helped drive the growth in power sports and their partnership has helped the Polaris brand lead the industry.

Polaris promises to continue investing in product development and offering innovative products to dealers and consumers.