Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2012

Open Foreign Currency Contracts

financial contracts for trading purposes. At September 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	$	9,714	$	(14	)
Canadian Dollar		136,211		(2,098	)
Swedish Krona		11,301		(159	)
Japanese Yen		10,986		77
Mexican Peso		10,483		818
Euro		8,243		(479	)
Total	$	186,938	$	(1,855	)

Carrying Values of Derivative Instruments

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

	Carrying Values of Derivative Instruments as of September 30, 2012
	Fair Value— Assets		Fair Value— (Liabilities)			Derivative Net Carrying Value
Derivatives designated as hedging instruments
Foreign exchange contracts(1)	$	1,427	$	(3,282	)	$	(1,855	)
Total derivatives designated as hedging instruments	$	1,427	$	(3,282	)	$	(1,855	)
Commodity contracts(1)	$	1,452	$	(914	)	$	538
Total derivatives not designated as hedging instruments	$	1,452	$	(914	)	$	538
Total Derivatives	$	2,879	$	(4,196	)	$	(1,317	)

	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

assessment of effectiveness are recognized in the current income statement. 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 month periods ended September 30, 2012 and 2011 (in thousands):

Derivatives in Cash Flow Hedging Relationships	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2012			2011			2012			2011
Interest rate contracts	$	(6	)	$	(6	)	$	(18	)	$	68
Foreign currency contracts		(1,744	)		11,884			(3,378	)		8,520
Total	$	(1,750	)	$	11,878		$	(3,396	)	$	8,588

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 nine month periods ended September 30, 2012 and 2011 (in thousands):

Derivatives in Cash	Location of Gain (Loss) Reclassified from Accumulated OCI	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
Flow Hedging Relationships	Into Income	2012			2011		2012			2011
Interest rate contracts	Interest expense	$	—		$	—	$	—		$	(152	)
Foreign currency contracts	Other (income) expense, net		(2,028	)		1,328		(5,644	)		3,350
Foreign currency contracts	Cost of sales		(465	)		—		(352	)		—
Total		$	(2,493	)	$	1,328	$	(5,996	)	$	3,198