Shareholders' Equity

6 Months Ended

Jun. 30, 2017

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

During the six months ended June 30, 2017, Polaris paid $65,622,000 to repurchase and retire approximately 758,000 shares of its common stock. As of June 30, 2017, the Board of Directors has authorized the Company to repurchase up to an additional 6,705,000 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 June 15, 2017 to holders of record at the close of business on June 1, 2017. Cash dividends declared per common share for the three and six months ended June 30, 2017 and 2016, were as follows:

	Three months ended June 30,				Six months ended June 30,
	2017		2016		2017		2016
Cash dividends declared and paid per common share	$	0.58	$	0.55	$	1.16	$	1.10

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 and certain shares issued under the Omnibus Plan. A reconciliation of these amounts is as follows (in thousands):

	Three months ended June 30,		Six months ended June 30,
	2017	2016	2017	2016
Weighted average number of common shares outstanding	62,638	64,130	62,756	64,444
Director Plan and deferred stock units	157	166	151	181
ESOP	100	110	105	101
Common shares outstanding—basic	62,895	64,406	63,012	64,726
Dilutive effect of Omnibus Plan	912	891	958	913
Common and potential common shares outstanding—diluted	63,807	65,297	63,970	65,639

During the three and six months ended June 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 3,626,000 and 3,398,000, respectively, compared to 1,809,000 and 1,672,000 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 income statement	—			(2,171		)	(2,171		)
Change in fair value	30,436			1,130			31,566
Balance as of June 30, 2017	$	(53,697	)	$	(745	)	$	(54,442	)

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 six months ended June 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 June 30,						Six months ended June 30,
		2017			2016			2017			2016
Foreign currency contracts	Other expense, net	$	1,380		$	493		$	2,607		$	2,423
Foreign currency contracts	Cost of sales	(32		)	(278		)	(436		)	(849		)
Total		$	1,348		$	215		$	2,171		$	1,574

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