Polaris 2011 Annual Report Download - page 29

the adoption of, legislation and local ordinances that restrict the use of ATVs, snowmobiles and off-road
side-by-side vehicles to specified hours and locations. The federal government also has restricted the use of
ATVs, snowmobiles and side-by-side vehicles in some national parks and federal lands. In several instances, this
restriction has been a ban on the recreational use of these vehicles.
We are unable to predict the outcome of such actions or the possible effect on our business. We believe that
our business would be no more adversely affected than those of our competitors by the adoption of any pending
laws or regulations. We continue to monitor these activities in conjunction with industry associations and support
balanced and appropriate programs that educate the product user on safe use of our products and how to protect
the environment.
Emissions. The federal Environmental Protection Agency (“EPA”) and the California Air Resources Board
(“CARB”) have adopted emissions regulations applicable to our products.
The CARB has emission regulations for ATVs and off-road side-by-side vehicles that we already meet. In
2002, the EPA established new corporate average emission standards effective for model years 2006 and later,
for off-road recreational vehicles, including ATVs, off-road side-by-side vehicles and snowmobiles. We have
developed engine and emission technologies along with our existing technology base to meet current and future
requirements, including chassis-based emission requirements that become effective in model year 2014. In 2008
the EPA announced its intention to issue a future rulemaking on snowmobiles in or around 2010 and any new
emission standards under this rule would be effective after model year 2012. No further rulemaking activity has
followed.
Victory and Indian motorcycles are also subject to EPA and CARB emission standards. We believe that our
motorcycles have complied with these standards. The CARB regulations required additional motorcycle emission
reductions in model year 2008, which the Company meets. The EPA adopted the CARB emission limits in a
2004 rulemaking that allowed an additional two model years to meet these new CARB emission requirements on
a nationwide basis. We have developed engine and emission technologies and met these requirements nationwide
in model year 2010.
GEM electric vehicles are subject to CARB emissions certification requirements, which they meet.
Our products are also subject to international laws and regulations related to emissions in places where we
sell our products outside the United States. Europe currently regulates emissions from certain of our ATV-based
products and motorcycles and these products meet such requirements. Canada’s emission regulations for
motorcycles are similar to those in the United States. In December 2006, Canada proposed a new regulation that
would essentially adopt the United States emission standards for ATVs, off-road side-by-side vehicles and
snowmobiles. These regulations have not yet been finalized, but they are not expected to have a material effect
on our business. The European Commission proposed new regulations in 2010 that could apply to certain of the
Company’s motorcycles and ATV-based products as early as 2013. These future EU regulations have not been
finalized.
We believe that our motorcycles, ATVs, off-road side-by-side vehicles and snowmobiles have complied
with applicable emission standards and related regulations in the United States and internationally. We are unable
to predict the ultimate impact of the adopted or proposed regulations on Polaris and our business. We are
currently developing and obtaining engine and emission technologies to meet the requirements of the future
emission standards.
Employees
Due to the seasonality of our business and certain changes in production cycles, total employment levels
vary throughout the year. Despite such variations in employment levels, employee turnover has not been high.
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