Polaris Settles With CPSC; Company Denies Any Wrongdoing; Agrees to Penalty to Avoid Litigation

MINNEAPOLIS--Jan. 1, 20053, 2005--Polaris Industries Inc. today announced it will pay the Consumer Products Safety Commission (CPSC) $950,000 to settle claims alleging that the company violated the Consumer Product Safety Act (CPSA).

The Commission alleged that Polaris, in the late 1990s, didn't immediately report two potential problems on some models of its all-terrain vehicles (ATVs). The potential problems related to throttle controls and oil lines. Polaris conducted a recall and contacted consumers soon after identifying the potential problems.

Polaris has been working with the CPSC on these two matters for over four years and vigorously disagrees with the CPSC allegations or that it violated the CPSA requirements concerning the timeliness of its reports. Nevertheless, Polaris and the CPSC approved the settlement agreement to avoid continuing legal costs associated with protracted litigation.

"We take the safety of our riders and products very seriously," said Bennett Morgan, Vice President and General Manager of ATVs for Polaris. "That includes addressing potential safety problems immediately and timely reporting of any issues to the CPSC. That has always been and always will be our company's philosophy."

Polaris said it has adequately reserved for the CPSC payment as of September 30, 2004, and the payment will not have an adverse impact on the company's expected financial results for the fourth quarter 2004.

About Polaris

Information about the complete line of Polaris products is available from authorized Polaris dealers or from the Polaris homepage at www.polarisindustries.com.

With annual 2003 sales of $1.6 billion, Polaris designs, engineers, manufactures and markets snowmobiles, all-terrain vehicles (ATVs), Victory motorcycles and the Polaris RANGER for recreational and -utility use.

Polaris is the recognized leader in the snowmobile industry; and one of the largest manufacturers of ATVs 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 motorcycle cruiser marketplace. Polaris also enhances the riding experience with a complete line of Pure Polaris apparel, accessories and parts, available at Polaris dealerships. Consumers can also purchase apparel and vehicle accessories anytime at www.polarisindustries.com.

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