Shareholders' Equity

9 Months Ended

Sep. 30, 2016

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

During the nine months ended September 30, 2016, Polaris paid $154,381,000 to repurchase and retire approximately 1,803,000 shares of its common stock. As of September 30, 2016, the Board of Directors has authorized the Company to repurchase up to an additional 8,568,000 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 $0.55 per share on September 15, 2016 to holders of record at the close of business on September 1, 2016. On October 27, 2016, the Polaris Board of Directors declared a regular cash dividend of $0.55 per share payable on December 15, 2016 to holders of record of such shares at the close of business on December 1, 2016. Cash dividends declared per common share for the three and nine months ended September 30, 2016 and 2015, were as follows:

	Three months ended September 30,				Nine months ended September 30,
	2016		2015		2016		2015
Cash dividends declared and paid per common share	$	0.55	$	0.53	$	1.65	$	1.59

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 (the “Option Plan”) 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,
	2016	2015	2016	2015
Weighted average number of common shares outstanding	63,902	65,592	64,263	65,909
Director Plan and deferred stock units	143	212	168	221
ESOP	106	108	104	92
Common shares outstanding—basic	64,151	65,912	64,535	66,222
Dilutive effect of Option Plans and Omnibus Plan	876	1,456	900	1,559
Common and potential common shares outstanding—diluted	65,027	67,368	65,435	67,781

During the three and nine months ended September 30, 2016, 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 1,786,000 and 1,736,000, respectively, compared to 1,087,000 and 971,000 for the same periods in 2015.

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, 2015	$	(64,360	)	$	1,868		$	(62,492	)
Reclassification to the income statement	—			2,266			2,266
Change in fair value	490			(6,887		)	(6,397		)
Balance as of September 30, 2016	$	(63,870	)	$	(2,753	)	$	(66,623	)

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, 2016 and 2015 (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,
		2016			2015			2016			2015
Foreign currency contracts	Other expense (income), net	$	(3,002	)	$	1,134		$	(579	)	$	3,536
Foreign currency contracts	Cost of sales	(838		)	(1,126		)	(1,687		)	(3,144		)
Total		$	(3,840	)	$	8		$	(2,266	)	$	392

The net amount of the existing gains or losses at September 30, 2016 that is expected to be reclassified into the income statement within the next 12 months is not expected to be material. See Note 9 for further information regarding Polaris’ derivative activities.