Share-Based Compensation

9 Months Ended

Sep. 30, 2014

Text Block [Abstract]

Share-Based Compensation

Note 2. Share-Based Compensation

The amount of compensation cost for share-based awards to be recognized during a period is based on the portion of the awards that are ultimately expected to vest. The Company estimates stock option forfeitures at the time of grant and revises those estimates in subsequent periods if actual forfeitures differ from those estimates. The Company analyzes historical data to estimate pre-vesting forfeitures and records share compensation expense for those awards expected to vest.

Total share-based compensation expenses were as follows (in thousands):

	Three months ended September 30,				Nine months ended September 30,
	2014		2013		2014		2013
Option plan	$	6,310	$	5,866	$	18,263	$	16,843
Other share-based awards	8,103		23,810		19,202		41,915
Total share-based compensation before tax	14,413		29,676		37,465		58,758
Tax benefit	5,376		11,073		13,990		21,939
Total share-based compensation expense included in net income	$	9,037	$	18,603	$	23,475	$	36,819

In addition to the above share-based compensation expenses, Polaris sponsors a qualified non-leveraged employee stock ownership plan (ESOP). Shares allocated to eligible participants’ accounts vest at various percentage rates based on years of service and require no cash payments from the recipient.

At September 30, 2014, there was $80,629,000 of total unrecognized share-based compensation expense related to unvested share-based equity awards. Unrecognized share-based compensation expense is expected to be recognized over a weighted-average period of 1.62 years. Included in unrecognized share-based compensation is approximately $40,819,000 related to stock options and $39,810,000 for restricted stock.