Shareholders' Equity

9 Months Ended

Sep. 30, 2017

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

During the nine months ended September 30, 2017, Polaris paid $88,877,000 to repurchase and retire approximately 1,015,000 shares of its common stock. As of September 30, 2017, the Board of Directors has authorized the Company to repurchase up to an additional 6,448,000 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 $0.58 per share on September 15, 2017 to holders of record at the close of business on September 1, 2017. On October 26, 2017, the Polaris Board of Directors declared a regular cash dividend of $0.58 per share payable on December 15, 2017 to holders of record of such shares at the close of business on December 1, 2017.

Cash dividends declared per common share for the three and nine months ended September 30, 2017 and 2016, were as follows:

	Three months ended September 30,				Nine months ended September 30,
	2017		2016		2017		2016
Cash dividends declared and paid per common share	$	0.58	$	0.55	$	1.74	$	1.65

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”) and 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 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,
	2017	2016	2017	2016
Weighted average number of common shares outstanding	62,398	63,902	62,637	64,263
Director Plan and deferred stock units	161	143	154	168
ESOP	87	106	99	104
Common shares outstanding—basic	62,646	64,151	62,890	64,535
Dilutive effect of Omnibus Plan	1,239	876	1,052	900
Common and potential common shares outstanding—diluted	63,885	65,027	63,942	65,435

During the three and nine months ended September 30, 2017, 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 2,892,000 and 2,816,000, respectively, compared to 1,786,000 and 1,736,000 for the same periods in 2016.

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, 2016	$	(84,133	)	$	296		$	(83,837	)
Reclassification to the statement of income	—			(2,255		)	(2,255		)
Change in fair value	41,042			1,047			42,089
Balance as of September 30, 2017	$	(43,091	)	$	(912	)	$	(44,003	)

The table below provides data about the amount of gains and losses, net of tax, reclassified from accumulated other comprehensive loss into the statement of income for cash flow derivatives designated as hedging instruments for the three and nine months ended September 30, 2017 and 2016 (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,
		2017			2016			2017			2016
Foreign currency contracts	Other expense, net	$	(174	)	$	(3,002	)	$	2,433		$	(579	)
Foreign currency contracts	Cost of sales	258			(838		)	(178		)	(1,687		)
Total		$	84		$	(3,840	)	$	2,255		$	(2,266	)

The net amount of the existing gains or losses at September 30, 2017 that is expected to be reclassified into the statement of income within the next 12 months is not expected to be material. See Note 10 for further information regarding Polaris’ derivative activities.