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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