Polaris 2010 Annual Report Download - page 72

liabilities given the provisions of enacted tax laws. The net deferred income taxes consist of the following (in
thousands):
2010 2009
December 31,
Current deferred income taxes:
Inventories ................................................ $ 6,618 $ 7,920
Accrued expenses ........................................... 60,100 52,588
Derivative instruments........................................ 651 394
Total current ............................................... 67,369 60,902
Noncurrent net deferred income taxes:
Cost in excess of net assets of business acquired .................... (1,973) 2,456
Property and equipment ...................................... (20,786) (24,801)
Compensation payable in common stock .......................... 30,119 19,815
Net unrealized gains in other comprehensive income ................. (8,297) (8,520)
Total noncurrent ............................................ (937) (11,050)
Total .................................................... $ 66,432 $ 49,852
Polaris had liabilities recorded related to unrecognized tax benefits totaling $5,509,000 and $4,988,000 at
December 31, 2010 and 2009, respectively. The liabilities were classified as Long-term income taxes payable in the
accompanying consolidated balance sheets in accordance with ASC Topic 740. Polaris recognizes potential interest
and penalties related to income tax positions as a component of the Provision for income taxes on the consolidated
statements of income. Polaris had reserves related to potential interest of $331,000 and $612,000 recorded as a
component of the liabilities at December 31, 2010 and 2009, respectively. The entire balance of unrecognized tax
benefits at December 31, 2010, if recognized, would affect the Company’s effective tax rate. The Company does not
anticipate that total unrecognized tax benefits will materially change in the next twelve months. Tax years 2006
through 2009 remain open to examination by certain tax jurisdictions to which the Company is subject. A
reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
(In thousands): 2010 2009
For the Years Ended
December 31,
Balance at January 1, ............................................ $ 4,988 $5,103
Gross increases for tax positions of prior years .......................... 1,259 94
Gross decreases for tax positions of prior years ......................... —(275)
Gross increases for tax positions of current year ......................... 1,345 985
Decreases due to settlements ....................................... —(171)
Decreases for lapse of statute of limitations ............................ (2,083) (748)
Balance at December 31, .......................................... $ 5,509 $4,988
Note 5: Shareholders’ Equity
Stock repurchase program: The Polaris Board of Directors authorized the cumulative repurchase of up to
37,500,000 shares of the Company’s common stock. As of December 31, 2010, 3,119,000 shares remain available
for repurchases under the Board’s authorization. During 2010 Polaris paid $27,486,000 to repurchase and retire
approximately 601,000 shares. During 2009 Polaris paid $4,556,000 to repurchase and retire approximately
111,000 shares and in 2008 Polaris paid $107,167,000 to repurchase and retire approximately 2,545,000 shares.
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POLARIS INDUSTRIES INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)