Shareholders' Equity

6 Months Ended

Jun. 30, 2012

Shareholders' Equity

NOTE 8. Shareholders’ Equity

During the first six months of 2012, Polaris paid $48,634,000 to repurchase and retire approximately 688,000 shares of its common stock related to employee stock plan exercises. As of June 30, 2012, the Company has authorization from its Board of Directors to repurchase up to an additional 2,941,000 shares of Polaris stock. The repurchase of any or all such shares authorized for repurchase will be governed by applicable SEC rules and dependent on management’s assessment of market conditions. Polaris paid a regular cash dividend of $0.37 per share on June 15, 2012 to holders of record on June 1, 2012. On July 25, 2012, the Polaris Board of Directors declared a regular cash dividend of $0.37 per share payable on September 17, 2012 to holders of record of such shares at the close of business on August 31, 2012. Cash dividends declared per common share for the three and six months ended June 30, 2012 and 2011, were as follows (split-adjusted for 2011 amount):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2012		2011		2012		2011
Cash Dividends Declared And Paid Per Common Share	$	0.37	$	0.225	$	0.74	$	0.45

Net Income per Share

Basic earnings per share is computed by dividing net income available to common shareholders by the weighted average number of common shares outstanding during each period, including shares earned under the nonqualified deferred compensation plan (“Director Plan”), the ESOP and deferred stock units under the Omnibus Incentive Plan (“Omnibus Plan”). Diluted earnings per share is computed under the treasury stock method and is calculated to compute the dilutive effect of outstanding stock options issued under the 1995 Stock Option Plan and the 2003 Non-Employee Director Stock Option Plan (collectively, the “Option Plans”) and certain shares issued under the Omnibus Plan. A reconciliation of these amounts is as follows (in thousands):

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2012		2011		2012		2011
Weighted average number of common shares outstanding		68,507		68,349		68,342		68,203
Director plan and deferred stock units		338		341		348		333
ESOP		109		121		105		138
Common shares outstanding — basic		68,954		68,811		68,795		68,674
Dilutive effect of Option Plans and Omnibus Plan		2,207		2,404		2,198		2,265
Common and potential common shares outstanding — diluted		71,161		71,215		70,993		70,939

During the second quarter and year-to-date periods ended June 30, 2012, the number of options that could potentially dilute earnings per share on a fully diluted basis that were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive were approximately 916,000 and 1,117,000, respectively, compared to 60,000 and 500,000 for the same periods in 2011, respectively.

Accumulated Other Comprehensive Income

Accumulated other comprehensive income balances were as follows (in thousands):

	Foreign Currency Items			Cash Flow Hedging Derivatives			Accumulated Other Comprehensive Income
Balance at December 31, 2011	$	9,545		$	2,478		$	12,023
Reclassification to the income statement		—			(3,503	)		(3,503	)
Change in fair value		(2,070	)		1,857			(213	)
Balance at June 30, 2012	$	7,475		$	832		$	8,307