Shareholders' Equity

9 Months Ended

Sep. 30, 2012

Shareholders' Equity

NOTE 8. Shareholders’ Equity

During the first nine months of 2012, Polaris paid $58,978,000 to repurchase and retire approximately 813,000 shares of its common stock related to employee stock plan exercises. As of September 30, 2012, the Company has authorization from its Board of Directors to repurchase up to an additional 2,816,000 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 September 17, 2012 to holders of record at the close of business on August 31, 2012. On October 25, 2012, the Polaris Board of Directors declared a regular cash dividend of $0.37 per share payable on December 17, 2012 to holders of record of such shares at the close of business on November 30, 2012. Cash dividends declared per common share for the three and nine months ended September 30, 2012 and 2011, were as follows (split-adjusted for 2011 amount):

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
	2012		2011		2012		2011
Cash Dividends Declared And Paid Per Common Share	$	0.37	$	0.225	$	1.11	$	0.675

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 September 30,				For the Nine Months Ended September 30,
	2012		2011		2012		2011
Weighted average number of common shares outstanding		68,261		68,449		68,315		68,284
Director plan and deferred stock units		332		349		343		339
ESOP		99		139		103		138
Common shares outstanding — basic		68,692		68,937		68,761		68,761
Dilutive effect of Option Plans and Omnibus Plan		2,191		2,352		2,195		2,295
Common and potential common shares outstanding — diluted		70,883		71,289		70,956		71,056

During the third quarter and year-to-date periods ended September 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 917,000 and 1,148,000, respectively, compared to 44,000 and 530,000 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		—		(5,996	)		(5,996	)
Change in fair value		2,927		2,600			5,527
Balance at September 30, 2012	$	12,472	$	(918	)	$	11,554