Polaris 2014 Annual Report Download - page 97

Download and view the complete annual report

Please find page 97 of the 2014 Polaris annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 116

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

Carrying Values of Derivative Instruments
as of December 31, 2013
Derivative Net
Fair Value—Assets Fair Value—(Liabilities) Carrying Value
Derivatives designated as hedging instruments
Foreign exchange contracts(1) ............ $1,194 $(1,203) $(9)
Total derivatives designated as hedging
instruments ........................ $1,194 $(1,203) $(9)
Commodity contracts(1) ................. $ 46 $ (16) $30
Total derivatives not designated as hedging
instruments ........................ $ 46 $ (16) $30
Total derivatives ...................... $1,240 $(1,219) $21
(1) Assets are included in prepaid expenses and other and liabilities are included in other accrued expenses
on the accompanying consolidated balance sheets.
For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the
gain or loss on the derivative is reported as a component of accumulated other comprehensive income (loss)
and reclassified into the income statement in the same period or periods during which the hedged transaction
affects the income statement. Gains and losses on the derivative representing either hedge ineffectiveness or
hedge components excluded from the assessment of effectiveness are recognized in the current income
statement.
The table below provides data about the amount of gains and losses, net of tax, related to the effective
portion of derivative instruments designated as cash flow hedges included in accumulated other comprehensive
income (loss) for the years ended December 31, 2014 and 2013 (in thousands):
For the Years
Ended
December 31,
Derivatives in Cash
Flow Hedging Relationships 2014 2013
Interest rate contracts ............................................ —$ (26)
Foreign currency contracts ......................................... $(1,631) 1,636
Total ......................................................... $(1,631) $1,610
See Note 7 for information about the amount of gains and losses, net of tax, reclassified from accumulated
other comprehensive income (loss) into the income statement for derivative instruments designated as hedging
instruments. The ineffective portion of foreign currency contracts was not material for the years ended
December 31, 2014 and 2013.
The Company recognized a loss of $4,820,000 and $878,000 in cost of sales on commodity contracts not
designated as hedging instruments in 2014 and 2013, respectively.
Note 12. Segment Reporting
Polaris has reviewed ASC Topic 280 and determined that the Company meets the aggregation criteria outlined
since the Company’s segments have similar (1) economic characteristics, (2) product and services,
(3) production processes, (4) customers, (5) distribution channels, and (6) regulatory environments. Therefore,
the Company reports as a single reportable business segment.
71