Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2011

Open Contracts

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

Foreign Currency	Notional Amounts (in US Dollars)		Unrealized Gain (Loss)
Australian Dollar	$	11,136	$	738
Canadian Dollar		246,403		10,786
Swedish Krona		2,327		80
Euro		1,439		(34	)
Total	$	261,305	$	11,570

Carrying Values of Derivative Instruments

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

	Carrying Values of Derivative Instruments as of September 30, 2011
	Fair Value— Assets		Fair Value— (Liabilities)			Derivative Net Carrying Value
Derivatives designated as hedging instruments
Foreign exchange contracts(1)		11,707	$	(137	)	$	11,570
Total derivatives designated as hedging instruments		11,707	$	(137	)	$	11,570
Commodity contracts(1)	$	—		(1,159	)	$	(1,159	)
Total derivatives not designated as hedging instruments	$	—		(1,159	)	$	(1,159	)
Total Derivatives	$	11,707	$	(1,296	)	$	10,411

	Carrying Values of Derivative Instruments as of September 30, 2010
	Fair Value— Assets		Fair Value— (Liabilities)			Derivative Net Carrying Value
Derivatives designated as hedging instruments
Interest rate contracts(1)		—	$	(253	)	$	(253	)
Foreign exchange contracts(1)	$	671		(785	)		(114	)
Total derivatives designated as hedging instruments	$	671	$	(1,038	)	$	(367	)
Commodity contracts(1)	$	2,144	$	(26	)	$	2,118
Total derivatives not designated as hedging instruments	$	2,144	$	(26	)	$	2,118
Total Derivatives	$	2,815	$	(1,064	)	$	1,751

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

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 and nine months ended September 30 (in thousands):

Derivatives in Cash Flow Hedging Relationships	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2011			2010			2011		2010
Interest rate contracts	$	(6	)	$	101		$	68	$	279
Foreign currency contracts		11,884			(3,436	)		8,520		147
Total	$	11,878		$	(3,335	)	$	8,588	$	426

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 nine month periods ended September 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 September 30,					For the Nine Months Ended September 30,
		2011		2010			2011			2010
Interest rate contracts	Interest expense	$	—	$	(278	)	$	(152	)	$	(866	)
Foreign currency contracts	Other expense (income) net		1,328		(1,695	)		3,350			(1,138	)
Foreign currency contracts	Cost of Sales		—		—			—			24
Total		$	1,328	$	(1,973	)	$	3,198		$	(1,980	)