Shareholders' Equity

9 Months Ended

Sep. 30, 2015

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

During the nine months ended September 30, 2015, Polaris paid $247,795,000 to repurchase and retire approximately 1,752,000 shares of its common stock. As of September 30, 2015, the Board of Directors has authorized the Company to repurchase up to an additional 3,298,000 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 $0.53 per share on September 15, 2015 to holders of record at the close of business on September 1, 2015. On October 22, 2015, the Polaris Board of Directors declared a regular cash dividend of $0.53 per share payable on December 15, 2015 to holders of record of such shares at the close of business on December 1, 2015. Cash dividends declared per common share for the three and nine months ended September 30, 2015 and 2014, were as follows:

	Three months ended September 30,				Nine months ended September 30,
	2015		2014		2015		2014
Cash dividends declared and paid per common share	$	0.53	$	0.48	$	1.59	$	1.44

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 Deferred Compensation Plan for Directors (“Director Plan”), the ESOP and deferred stock units under the 2007 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):

	Three months ended September 30,		Nine months ended September 30,
	2015	2014	2015	2014
Weighted average number of common shares outstanding	65,592	65,988	65,909	65,771
Director Plan and deferred stock units	212	201	221	204
ESOP	108	72	92	76
Common shares outstanding—basic	65,912	66,261	66,222	66,051
Dilutive effect of Option Plans and Omnibus Plan	1,456	2,067	1,559	2,074
Common and potential common shares outstanding—diluted	67,368	68,328	67,781	68,125

During the three and nine months ended September 30, 2015, 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 1,087,000 and 971,000, respectively, compared to 647,000 and 562,000 for the same periods in 2014.

Accumulated other comprehensive loss

Changes in the accumulated other comprehensive loss balance is as follows (in thousands):

	Foreign Currency Items			Cash Flow Hedging Derivatives			Accumulated Other Comprehensive Loss
Balance as of December 31, 2014	$	(25,789	)	$	(1,452	)	$	(27,241	)
Reclassification to the income statement	—			(392		)	(392		)
Change in fair value	(32,763		)	3,955			(28,808		)
Balance as of September 30, 2015	$	(58,552	)	$	2,111		$	(56,441	)

The table below provides data about the amount of gains and losses, net of tax, reclassified from accumulated other comprehensive loss into the income statement for cash flow derivatives designated as hedging instruments for the three and nine months ended September 30, 2015 and 2014 (in thousands):

Derivatives in Cash Flow Hedging Relationships	Location of (Gain) Loss Reclassified from Accumulated OCI into Income	Three months ended September 30,						Nine months ended September 30,
		2015			2014			2015			2014
Foreign currency contracts	Other expense (income), net	$	1,134		$	206		$	3,536		$	(1,891	)
Foreign currency contracts	Cost of sales	(1,126		)	(208		)	(3,144		)	(148		)
Total		$	8		$	(2	)	$	392		$	(2,039	)

The net amount of the existing gains or losses at September 30, 2015 that is expected to be reclassified into the income statement within the next 12 months is expected to not be material. See Note 9 for further information regarding Polaris' derivative activities.