Derivative Instruments and Hedging Activities (Tables)

6 Months Ended

Jun. 30, 2012

Open Foreign Currency Contracts

At June 30, 2012, Polaris had the following open foreign currency contracts (in thousands):

Foreign Currency	Notional Amounts (in US Dollars)		Net Unrealized Gain (Loss)
Australian Dollar	$	5,869	$	78
Canadian Dollar		75,180		884
Swedish Krona		2,409		155
Japanese Yen		20,844		153
Mexican Peso		15,201		484
Euro		16,113		(872	)
Total	$	135,616	$	882

Carrying Values of Derivative Instruments

The table below summarizes the carrying values of derivative instruments as of June 30, 2012 and December 31, 2011 (in thousands):

	Carrying Values of Derivative Instruments as of June 30, 2012
	Fair Value— Assets		Fair Value— (Liabilities)			Derivative Net Carrying Value
Derivatives designated as hedging instruments
Foreign exchange contracts(1)	$	2,766	$	(1,884	)	$	882
Total derivatives designated as hedging instruments	$	2,766	$	(1,884	)	$	882
Commodity contracts(1)	$	30	$	(3,759	)	$	(3,729	)
Total derivatives not designated as hedging instruments	$	30		(3,759	)	$	(3,729	)
Total Derivatives	$	2,796	$	(5,643	)	$	(2,847	)

	Carrying Values of Derivative Instruments as of December 31, 2011
	Fair Value— Assets		Fair Value— (Liabilities)			Derivative Net Carrying Value
Derivatives designated as hedging instruments
Foreign exchange contracts(1)	$	4,738	$	(1,160	)	$	3,578
Total derivatives designated as hedging instruments	$	4,738	$	(1,160	)	$	3,578
Commodity contracts(1)	$	193	$	(1,530	)	$	(1,337	)
Total derivatives not designated as hedging instruments	$	193	$	(1,530	)	$	(1,337	)
Total Derivatives	$	4,931	$	(2,690	)	$	2,241

(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 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 six month periods ended June 30, 2012 and 2011 (in thousands):

Derivatives in Cash Flow Hedging Relationships	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2012			2011			2012			2011
Interest rate contracts	$	(6	)	$	7		$	(12	)	$	75
Foreign currency contracts		1,781			(1,145	)		(1,634	)		(3,363	)
Total	$	1,775		$	(1,138	)	$	(1,646	)	$	(3,288	)

Gains and Losses, Net of Tax, Reclassified from Accumulated Other Comprehensive Income into Income (Loss) 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, 2012 and 2011 (in thousands):

Derivatives in Cash Flow Hedging Relationships	Location of Gain (Loss) Reclassified from Accumulated OCI	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	Into Income	2012			2011			2012			2011
Interest rate contracts	Interest expense	$	—		$	(40	)	$	—		$	(152	)
Foreign currency contracts	Other expense (income), net		(1,609	)		1,646			(3,616	)		2,022
Foreign currency contracts	Cost of Sales		7			—			113			—
Total		$	(1,602	)	$	1,606		$	(3,503	)	$	1,870