Shareholders' Equity

12 Months Ended

Dec. 31, 2013

Text Block [Abstract]

Shareholders' Equity

Note 7. Shareholders’ Equity

Stock repurchase program. The Polaris Board of Directors has authorized the cumulative repurchase of up to 75,000,000 shares of the Company’s common stock. In addition, in 2013 the Polaris Board of Directors authorized the one-time repurchase of all the shares of Polaris stock owned by Fuji Heavy Industries Ltd. ("Fuji"). On November 12, 2013, Polaris entered into and executed a Share Repurchase Agreement with Fuji pursuant to which Polaris purchased 3,960,000 shares of Polaris stock held by Fuji for an aggregate purchase price of $497,474,000.

As of December 31, 2013, 1,604,000 shares remain available for repurchases under the Board’s authorization. During 2013, Polaris paid $530,033,000 to repurchase and retire approximately 4,337,000 shares. During 2012, Polaris paid $127,525,000 to repurchase and retire approximately 1,649,000 shares, and in 2011 Polaris paid $132,372,000 to repurchase and retire approximately 2,608,000 shares.

Shareholder rights plan. During 2000, the Polaris Board of Directors adopted a shareholder rights plan. Under the plan, a dividend of preferred stock purchase rights will become exercisable if a person or group should acquire 15 percent or more of the Company’s stock. The dividend will consist of one purchase right for each outstanding share of the Company’s common stock held by shareholders of record on June 1, 2000. The shareholder rights plan was amended and restated in April 2010. The amended and restated rights agreement extended the final expiration date of the rights from May 2010 to April 2020, expanded the definition of “Beneficial Owner” to include certain derivative securities relating to the common stock of the Company and increased the purchase price for the rights from $75 to $125 per share. The Board of Directors may redeem the rights earlier for $0.01 per right.

Stock purchase plan. Polaris maintains an employee stock purchase plan (“Purchase Plan”). A total of 3,000,000 shares of common stock are reserved for this plan. The Purchase Plan permits eligible employees to purchase common stock monthly at 95 percent of the average of the beginning and end of month stock prices. As of December 31, 2013, approximately 1,241,000 shares had been purchased under the Purchase Plan.

Dividends. Quarterly and total year cash dividends declared per common share for the year ended December 31, 2013 and 2012 were as follows:

	For the Years Ended December 31,
	2013		2012
Quarterly dividend declared and paid per common share	$	0.42	$	0.37
Total dividends declared and paid per common share	$	1.68	$	1.48

On January 30, 2014, the Polaris Board of Directors declared a regular cash dividend of $0.48 per share payable on March 17, 2014 to holders of record of such shares at the close of business on March 3, 2014.

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):

	For the Years Ended December 31,
	2013	2012	2011
Weighted average number of common shares outstanding	68,209	68,409	68,315
Director Plan and deferred stock units	242	341	342
ESOP	84	99	135
Common shares outstanding—basic	68,535	68,849	68,792
Dilutive effect of restricted stock awards	228	181	165
Dilutive effect of stock option awards	1,783	1,975	2,100
Common and potential common shares outstanding—diluted	70,546	71,005	71,057

During the 2013, 2012 and 2011 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 23,000, 872,000 and 131,000, respectively.

Accumulated other comprehensive income. Changes in the accumulated other comprehensive income balance is as follows (in thousands):

	Foreign Currency Items		Cash Flow Hedging Derivatives			Accumulated Other Comprehensive Income
Balance as of December 31, 2012	$	13,669	$	(1,431	)	$	12,238
Reclassification to the income statement	—		(694		)	(694		)
Change in fair value	4,913		2,304			7,217
Balance as of December 31, 2013	$	18,582	$	179		$	18,761

The table below provides data about the amount of gains and losses, net of tax, reclassified from accumulated other comprehensive income into the income statement for cash flow derivatives designated as hedging instruments for the year ended December 31, 2013 and 2012 (in thousands):

Derivatives in Cash Flow Hedging Relationships	Location of Gain (Loss) Reclassified from Accumulated OCI into Income	For the Years Ended December 31,
		2013			2012
Foreign currency contracts	Other (income), net	$	(1,671	)	$	(5,681	)
Foreign currency contracts	Cost of sales	977			(404		)
Total		$	(694	)	$	(6,085	)

The net amount of the existing gains or losses at December 31, 2013 that is expected to be reclassified into the income statement within the next 12 months is expected to not be material. See Note 11 for further information regarding Polaris' derivative activities.