Polaris 2010 Annual Report Download - page 79

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The table below provides data about the amount of gains and losses, net of tax, reclassified from Accumulated
other comprehensive income into income on derivative instruments designated as hedging instruments for the
twelve month periods ended December 31, (in thousands):
Derivatives in Cash Flow
Hedging Relationships
Location of Gain (Loss)
Reclassified from
Accumulated OCI
Into Income
Twelve Months Ended
December 31,
2010
Twelve Months Ended
December 31,
2009
Amount of Gain (Loss)
Reclassified from
Accumulated OCI
into Income
Amount of Gain (Loss)
Reclassified from
Accumulated OCI
into Income
Interest rate contracts ........ Interest Expense $(1,039) $(1,683)
Foreign currency contracts .... Other income, net (1,133) (1,668)
Foreign currency contracts .... Cost of Sales 24 27
Total..................... $(2,148) $(3,324)
The net amount of the existing gains or losses at December 31, 2010 that is expected to be reclassified into the
statement of income within the next 12 months is not expected to be material. The ineffective portion of foreign
currency contracts was not material for the twelve months ended December 31, 2010 and 2009.
The Company recognized a gain of $643,000 and a gain of $4,039,000 in Cost of sales on commodity contracts
not designated as hedging instruments for the twelve month period ended December 31, 2010 and 2009,
respectively.
Note 10. Manufacturing Realignment
In May 2010, the Company announced that it was realigning its manufacturing operations. The realignment
will consolidate operations into existing operations in Roseau, MN and Spirit Lake, IA as well as establish a new
facility in Monterrey, Mexico. The realignment is expected to lead to the sale or closure of the Osceola, WI
manufacturing operations by 2012. The Company expects to record transition charges, including both exit costs and
startup costs, over the next few years. The exit costs pertaining to the manufacturing realignment are expected to
total approximately $10,000,000 over that time period. The exit costs are classified within Cost of sales in the
consolidated statements of income. A summary of these exit costs follows:
(In thousands)
Total Amount
Expected to be
Incurred
Amount Incurred
During the Twelve
Months Ended
December 31, 2010
Cumulative Amounts
Incurred through
December 31, 2010
Termination benefits .................. $ 7,500 $4,843 $4,843
Other associated costs ................. 2,500 621 621
Total Exit Costs .................... $10,000 $5,464 $5,464
Utilization of components of the accrued exit costs during the year ended December 31, 2010 is as follows:
(In thousands)
Balance
December 31, 2009
Amount provided for
During 2010
Amount Paid
During 2010
Balance
December 31, 2010
Termination benefits..... — $4,843 — $4,843
Other associated costs . . . — 621 $ (2) 619
Total Exit Costs ...... — $5,464 $ (2) $5,462
Note 11: Discontinued Operations
On September 2, 2004, the Company announced its decision to discontinue the manufacture of marine
products effective immediately. In 2007 the Company substantially completed the exit of the Marine Products
64
POLARIS INDUSTRIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)