Shareholders' Equity

9 Months Ended

Sep. 30, 2020

Shareholders’ Equity

During the nine months ended September 30, 2020, Polaris paid $49.5 million to repurchase approximately 0.6 million shares of its common stock. As of September 30, 2020, the Board of Directors has authorized the Company to repurchase up to an additional 2.6 million 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 and subject to the restrictions on share repurchases set forth in the incremental amendment.

Polaris paid a regular cash dividend of $0.62 per share on September 15, 2020 to holders of record at the close of business on September 1, 2020.

Cash dividends declared and paid per common share for the three and nine months ended September 30, 2020 and 2019, were as follows:


	Three months ended September 30,						Nine months ended September 30,
	2020		2019		2020		2019
Cash dividends declared and paid per common share	$	0.62	$	0.61	$	1.86	$	1.83

Net income (loss) per share

Basic income (loss) 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 income (loss) per share is computed under the treasury stock method and is calculated to compute the dilutive effect of outstanding stock options and certain share-based awards issued under the Omnibus Plan. A reconciliation of these amounts is as follows (in millions):


	Three months ended September 30,			Nine months ended September 30,
	2020	2019	2020	2019
Weighted average number of common shares outstanding	61.5	61.2	61.4	61.1
Director Plan and deferred stock units	0.2	0.2	0.2	0.2
ESOP	0.2	0.1	0.2	0.1
Common shares outstanding—basic	61.9	61.5	61.8	61.4
Dilutive effect of Omnibus Plan	0.9	0.8	—	0.8
Common and potential common shares outstanding—diluted	62.8	62.3	61.8	62.2

During the three and nine months ended September 30, 2020, the number of options that were not included in the computation of diluted income (loss) per share because the option exercise price was greater than the market price, and therefore, the effect would have been anti-dilutive, was 2.2 million and 5.0 million, respectively, compared to 4.3 million and 4.2 million for the same periods in 2019. As a result of the Company’s net loss during the nine month period ended September 30, 2020, an additional 0.7 million of outstanding stock options and certain share-based awards under the Omnibus Plan were not included in the computation of diluted income (loss) per share because the effect would have been anti-dilutive.

Accumulated other comprehensive loss

Changes in the accumulated other comprehensive loss balance are as follows (in millions):


	Foreign Currency Translation		Cash Flow Hedging Derivatives		Retirement Plan and Other Activity		Accumulated Other Comprehensive Loss
Balance as of December 31, 2019	$	(63.3)	$	(6.1)	$	(3.3)	$	(72.7)
Reclassification to the statement of income	—		1.0		0.2		1.2

Change in fair value	(1.8)		(11.6)		—		(13.4)
Balance as of September 30, 2020	$	(65.1)	$	(16.7)	$	(3.1)	$	(84.9)

The table below provides data about the amount of gains and losses, net of tax, reclassified from accumulated other comprehensive loss into the statements of income (loss) for cash flow derivatives designated as hedging instruments and retirement plan activity for the three and nine months ended September 30, 2020 and 2019 (in millions):


Derivatives in Cash Flow Hedging Relationships and Other Activity	Location of Gain (Loss) Reclassified from Accumulated Other Comprehensive Loss into Income	Three months ended September 30,						Nine months ended September 30,
				2020		2019		2020		2019
Foreign currency contracts	Other expense, net	$	1.0	$	0.5	$	4.5	$	2.6
Foreign currency contracts	Cost of sales	(0.7)		0.2		(1.4)		0.5
Interest rate contracts	Interest expense	(2.0)		(0.3)		(4.1)		(0.4)
Retirement plan activity	Operating expenses	(0.1)		(0.1)		(0.2)		(0.2)
Total		$	(1.8)	$	0.3	$	(1.2)	$	2.5

The net amount of the existing gains or losses at September 30, 2020 that is expected to be reclassified into the statements of income (loss) within the next 12 months is not expected to be material. See Note 9 for further information regarding derivative activities.