Derivative Instruments and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2011

Open Contracts

At June 30, 2011, Polaris had the following open contracts (in thousands):

Foreign Currency	Notional Amounts (in US Dollars)		Unrealized Loss
Australian Dollar	$	9,599	$	(625	)
Canadian Dollar		262,653		(6,526	)
Swedish Krona		5,958		(233	)
Total	$	278,210	$	(7,384	)

Carrying Values of Derivative Instruments

The table below summarizes the carrying values of derivative instruments as of June 30, 2011 and 2010 (in thousands):

	Carrying Values of Derivative Instruments as of June 30, 2011
	Fair  Value— Assets		Fair  Value— (Liabilities)			Derivative Net Carrying  Value
Derivatives designated as hedging instruments
Foreign exchange contracts(1)		—	$	(7,384	)	$	(7,384	)
Total derivatives designated as hedging instruments		—	$	(7,384	)	$	(7,384	)
Commodity contracts(1)	$	180		(43	)	$	137
Total derivatives not designated as hedging instruments	$	180		(43	)	$	137
Total Derivatives	$	180	$	(7,427	)	$	(7,247	)

	Carrying Values of Derivative Instruments as of June 30, 2010
	Fair  Value— Assets		Fair  Value— (Liabilities)			Derivative Net Carrying  Value
Derivatives designated as hedging instruments
Interest rate contracts(1)		—	$	(414	)	$	(414	)
Foreign exchange contracts(1)	$	5,391		—			5,391
Total derivatives designated as hedging instruments	$	5,391	$	(414	)	$	4,977
Commodity contracts(1)	$	1,353	$	(306	)	$	1,047
Total derivatives not designated as hedging instruments	$	1,353	$	(306	)	$	1,047
Total Derivatives	$	6,744	$	(720	)	$	6,024

(1) Assets are included in Prepaid expenses and other and liabilities are included in Other accrued expenses on the accompanying consolidated balance sheet.

Gains and Losses, Net of Tax, Related to Derivative Instruments Designated as Cash Flow Hedges Included in the Accumulated Other Comprehensive Income, Net

The table below provides data about the amount of gains and losses, net of tax, related to derivative instruments designated as cash flow hedges included in Accumulated other comprehensive income for the three months ended June 30 (in thousands):

Derivatives in Cash Flow Hedging Relationships	For the Three  Months Ended June 30,					For the Six Months Ended June 30,
	2011			2010		2011			2010
Interest rate contracts	$	7		$	179	$	75		$	178
Foreign currency contracts		(1,145	)		4,293		(3,363	)		3,583
Total	$	(1,138	)	$	4,472	$	(3,288	)	$	3,761

Gains and Losses, Net of Tax, Reclassified from Accumulated Other Comprehensive Income into Income on Derivative Instruments Designated as Hedging Instruments

The table below provides data about the amount of gains and losses, net of tax, reclassified from Accumulated other comprehensive income into income (loss) on derivative instruments designated as hedging instruments for the three and six month periods ended June 30, 2011 and 2010 (in thousands):

Derivatives in Cash Flow Hedging Relationships	Location of Gain (Loss) Reclassified from Accumulated OCI Into Income	For the Three  Months Ended June 30,						For the Six Months Ended June 30,
		2011			2010			2011			2010
Interest rate contracts	Interest expense	$	(40	)	$	(291	)	$	(152	)	$	(588	)
Foreign currency contracts	Other expense (income) net		1,646			623			2,022			557
Foreign currency contracts	Cost of Sales		—			49			—			24
Total		$	1,606		$	381		$	1,870		$	(7	)