COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Year Ended December 31 2014 2013 2012 Net sales Cost of sales Gross profit Selling, general and administrative expenses Net licensing income Income from operations Interest income, net Interest expense on note payable to related party (Note 22) Other non-operating expense Income before income tax Income tax expense (Note 11) Net income Net income (loss) attributable to non-controlling interest Net income attributable to Columbia Sportswear Company Earnings per share attributable to Columbia Sportswear Company (Note 17) $ 2,100,590 1,145,639 954,951 763,063 6,956 198,844 1,004 (1,053) (274) 198,521 (56,662) 141,859 4,686 1,684,996 $1,669,563 953,169 716,394 596,635 13,769 133,528 379 941,341 743,655 625,656 13,795 131,794 503 (871) 131,426 (37,823) 93,603 (738) 133,907 (34,048) 99,859 $ 137.173 S 94.341$ 99.859 Basic Diluted 1.97 S 1.94 1.37 $ 1.36 1.48 1.46 Weighted average shares outstanding (Note 17): Basic Diluted 69.807 70,681 68.756 69,434 67,680 68,264 See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED BALANCE SHEETS (In thousands) December 31 2014 2013 ASSETS Current Assets: Cash and cash equivalents Short-term investments Accounts receivable, net (Note 6) Inventories Deferred income taxes (Note 11) Prepaid expenses and other current assets 437,489 91,755 306,878 329,228 52,041 33,081 1,250.472 279,373 36,288 14.438 25,017 $1,792.209 1.605,588 413,558 27,267 344.390 384,650 57,001 39,175 1,266,041 291,563 143,731 68,594 22,280 Total current assets Property, plant, and equipment, net (Note 7) Intangible assets, net (Notes 3, 8) Goodwill (Notes 3, 8) Other non-current assets Total assets LIABILITIES AND EQUITY Current Liabilities: Accounts payable Accrued liabilities (Note 10) Income taxes payable (Note 11) Deferred income taxes (Note 11) $ 214,275 $ 173,557 120,397 7,251 49 301,254 144.288 14,388 169 373,120 15,728 35.435 9.388 3,304 436,975 Total curent liabilities Note payable to related party (Note 22) Other long-term liabilities (Notes 12, 13) Income taxes payable (Note 11) Deferred income taxes (Note 11) 29,527 13,984 7,959 352,724 Total liabilities Commitments and contingencies (Note 14) Shareholders' Equity: Preferred stock; 10,000 shares authorized; none issued and outstanding Common stock (no par value); 250,000 shares authorized; 69,828 and 69,190 issued and outstanding 1,255,070 15,833 1,343,603 11,631 1,355,234 Retained earnings Accumulated other comprehensive income (Note 18) 1,157,733 35,360 124541 8 7,446 1,252,864 $1,792,209 1,605,588 Total Columbia Sportswear Company shareholders' equity Non-controlling interest (Note 5) Total equity Tota iabilities and equity See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) Year Ended December 31 2013 $ 141,859 $ 93,603 $ 99,859 2014 2012 Net income Other comprehensive loss: Unrealized holding gains (losses) on available-for-sale securities (net of tax (expense) benefit of ($5), ($2), and $4, respectively) Unrealized gains (losses) on derivative transactions (net of tax (expense) benefit of (1,507), $9 10 and ($171), respectively) 7,751 (1,261) (4,745) Foreign currency translation adjustments (net of tax benefit (expense) of $1,023, ($191) and (27,789) (20,028) 121,831 4,185 9,861) 11,119) 82,484 (554) 4,518 (234) 99.625 ($59), respectively) Other comprehensive loss Comprehensive income Comprehensive income (loss) attributable to non-controlling interest Comprehensive income attributable to Columbia Sportswear Company S 117,646 83,038 99.625 See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31 2014 2013 2012 Cash flows from operating activities: Net income $ 141,859 93,603 99,859 Adjustments to reconcile net income to net c ash provided by operating activities 40,871 40,892 1,582 Depreciation and amortization Loss on disposal or impairment of property, plant, and equipment Deferred income taxes Stock-based compensation Excess tax benefit from employee stock plans Changes in operating assets and liabilities 54,017 (6,978) 8,878 7,833 (1,016) (4,927) (1,532) (31,478) 62,086) 27,442 34,089 Accounts receivable Inventories Prepaid expenses and other current assets Other assets Accounts payable Accrued liabilities Income taxes payable Other liabilities (4,215) 31,711 (2,025) (1,259) (12,330) 41,941 35,051 5,534 2.356 274,275 (11,052) Net cash provided by operating activities 185,783 148,668 Cash flows from investing activities: (188.467) Acquisition of business, net of cash acquired Purchases of short-term investments Sales of short-term investments Capital expenditures Proceeds from sale of property, plant, and equipment (48,243) 125,390) (83,969) 112.895 (60,283 (69,443)(50,491) 78,636 7,099 (85,042) Net cash used in investing activities 7) (116,086) Cash flows from financing activities: 100,654 69,292 100,498) 14.600 (1.486) Proceeds from credit facilities Repayments on credit facilities Proceeds from issuance of common stock under employee stock plans Tax payments related to restricted stock unit issuances Excess tax benefit from employee stock plans Repurchase of common stock Proceeds from note payable to related party Capital contribution from non-controlling interest Cash dividends paid 52,356 (52,205) 22,277 69,136 19,537 (2,291) (15,000) 16,072 (206) 8,000 (31,298) (4,676) (6.805) 146,708 (29.780) (15,700) (39,836) (14,550) (11,137) (23,931) 437,489 Net cash used in financing activities Net effect of exchange rate changes on cash Net increase (decrease) in cash and cash equivalents Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year 49,747 241,034 $ 413.558 437,489 290,781 290,781 290,781 241,034 Cash and cash equivalents, beginning of year Cash and cash equivalents, end of year 437,489 $ 413,558 437.489 290,781 Supplemental disclosures of cash flow information: Cash paid during the year for income taxes $ 53,958 22,771 43,696 Supplemental disclosures of non-cash investing activities: Capital expenditures incurred but not yet paid 7,196 5,195 5,313 See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF EQUITY (In thousands) Columbia Sportswear Company Shareholders Equity Common Stock Accumulated Other Non- Shares Outstanding Retained Earnings Comprehensive Income Controlli ng Amount Interest Total BALANCE, JANUARY 1, 2012 Net income Other comprehensive income (loss): 67.276 3,037 1,024.611 S 46,897S $1,074,545 99,859 99.859 Unrealized holding losses on available-for-sale securities, net Unrealized holding losses on derivative transactions, (4,745) (4.745) 4.518 (29,780) 13.114 1,036 7,833 net Foreign currency translation adjustment, net Cash dividends ($0.44 per share) Issuance of common stock under employee stock plans, net Tax adjustment from stock plans Stock-based compensation expense Repurchase of common stock BALANCE, DECEMBER 31, 2012 Net income (loss) Other comprehensive income (loss): 4.518 (29,780) 882 13.114 1,036 7.833 (206 24,814 1,094,690 94,341 (206) 1,166,167 93,603 68,150 46,663 (738) Unrealized holding gains on available-for-sale securities, net Unrealized holding losses on derivative transactions, (1,261) 1,261) (9.861) (31.298) net Foreign currency translation adjustment, net (10,045) 184 Cash dividends ($0.46 per share (31,298) Issuance of common Capital contribution from non-controlling interest Tax adjustment from stock plans Stock-based compensation expense BALANCE, DECEMBER 31, 2013 Net income Other comprehensive income (loss): 17,246 17.246 8,000 1,387 8,878 1,252,864 141,859 stock under employee stock plans, net 1040 8,000 1,387 8,878 52,325 7,446 4.686 69,190 1,157,733 137,173 35,360 Unrealized holding gains on available-for-sale 10 7.751 (27.288) 10 7.751 (27.789) (39,836) 19,136 5,119 11,120 15,000) 15,833 $ 11,631 1,355,234 securities, net Unrealized holding gains on derivative transactions, net Foreign currency translation adjustment, net Cash dividends ($0.57 per share) Issuance of common stock under employee stock plans, net Tax adjustment from stock plans Stock-based compensation expense Repurchase of common stock BALANCE, DECEMBER 31, 2014 (501) (39,836) 1.059 19,136 5,119 11,120 15,000) (421) 69,828 72,700 1,255,070 $ VF CORPORATION Consolidated Statements of Income Year Ended December 2013 In thousands, except per share amounts 2014 2012 Net sales Royalty income Total revenues Costs and operating expenses $12,154,784 11,302,350 127,377298 11,419,648 10,766,020 113,835 10,879,855 5,931,469 3,841,032 Cost of goods sold 6,288,190 4,159,885 396,362 10,844,437 1,437,724 6,911 5,817,880 3,596,708 Selling, general and administrative expenses Impairment of goodwill and intangible assets 9,772,501 1,647,147 4,141 9,414,588 1,465,267 3,353 Operating incom Interest income Interest expense (86,725) (84,773) (93,605) Other income (expense), net Income before income taxes Income taxes Net income Net income attributable to noncontrolling interests Net income attributable to VF Corporation common stockholders Earnings per common share attributable to VF Corporation common stockholders 5.544 1,352,366 304,861 1,047,505 4,025 1,562,490 352,371 1,210,119 46,860 1,421,875 335,737 1,086,138 139 $.1,047,505 $.210119 $ 1,085,999 Basic Diluted 2.47 2.43 $ 1.1075 $ 0.9150 0.7575 2.42 $ 2.38 2.76 S 2.71 Cash dividends per common share Scc notes to consolidated financial statements. VF CORPORATION Consolidated Statements of Cash Flows Year Ended December 2014 2012 In thousands Operating activities 1,047,505 $1,210,119 $1,086,138 Net income Adjustments to reconcile net income to cash provided by operating activities: Impairment of goodwill and intangible assets 396,362 172,443 42,061 60,379 104,313 148,969 47,929 41,058 92,81 19,264 reciation 45,787 49,676 Amortization of intangible assets Other amortization Stock-based compensation Provision for doubtful accounts Pension expense less than contributions Deferred income taxes Gain on sale of businesses Other, net 198) 9,864) (78,064) 15,756 (28,102) (12,370) (40,931) Changes in operating assets and liabilities, net of purchases and sales of businesses: 111,571) 87,620 Accounts receivable Inventories Accounts payable Income taxes Accrued liabilities Other assets and liabilities 5,053) 130,540) 75,073 16,628 84,472 22,614(7.939) (44,144) 41,989 26,213 (35,912) 73,183 1,506,0411,275,000 Cash provided by operating activities 1,697,629 Investing activities Capital expenditures Business acquisitions, net of cash acquired Proceeds from sale ofbusinesses Software purchases (234,077) (271,153) (251,940) (1,750) 72,519 (67,943) (53,989) 7235) (25,131) (8,230) (220,291) net Cash used by investing activities (329,255) (350,273) Financing activities Net increase (decrease) in short-term borrowings Payments on long-term debt Purchases of treasury stock Cash dividends paid Proceeds from issuance of Common Stock, net of shares withheld for taxes Tax benefits of stock-based compensation Other, net 4,761 (4,760) (727,795) (269,010) (2,776) 7,282) (333,229) ,032 (404,872) (282,024) (402,136) 48,029 (478,933) 34,869 64,437 62,770 47,213 201 Cash used by financing activities (1,107,421) (983,831) 7,005 (802,515) Effect of foreign currency rate changes on cash and equivalents Net change in cash and equivalents Cash and equivalents-beginning of year Cash and equivalents-end of year 65,461 195,492 776403 4,039 256,233 597 461 341,228 S 597,461 S 971.395 S 776403 597461 See notes to consolidated financial statements. VF CORPORATION Consolidated Statements of Stockholders' Equity VF on Stock holders Accumulated Other Comprchensive In come (Loss) Commorn Stock Additional Paid-in Retained Earnin Non- controlling Interests Sharcs Amounts ital In thousands, except share amounts 442,227,924 $110,557 $2,316,107 (421,477)$2,520,804 S(816) Balance, December 2011 Net income Dividends on Common Stock Purchase of treasury stock Stock-based compensation, net Disposition of noncontrolling interests Foreign currency translation Defined benefit pension plans Derivative financial instruments Marketable securities 1,085,999 8,072,920) (2,018) 6,663,932 333,229) (297,692) (34,435) 1,666 211,761 677 47,091 (63,845) (15,263) 401 Balance, December 2012 440,818,936 S110,205 $2,527,868 (453,895) $2,941,447 S Net income Dividends on Common Stock Purchase of treasury stock Stock-based compensation, net Foreign currency translation Defined benefit pension plans Derivative financial instruments Marketable securities 1,210,119 (402,136) (280,408) (36,932) (6,849,160) 6,340,594 (1,712) 1,585 218,722 110,715 143,087 (12,324) 697 Balance, December 2013 440,310,370 $110,078 $2,746,590 (211,720) $3,432,090 S Net income Dividends on Common Stock Purchase of treasury stock Stock-based compensation, net Foreign currency translation Defined benefit pension plans Derivative financial instruments Marketable securities 1,047,505 (12,037,000) 4,586,521 (3,009) 1,146 (478,933) (724,786) (44,123) (463,588) 99,683) 73,143 424 Balance, December 2014 432,859,891 $108,215 $2,993,186 (702,272) $3,231,753 S See notes to consolidated financial statements. Question 5 Columbia Sportswear Company's financial statements are presented in Appendix B. Click here to view Appendix B. The financial statements of VF Corporation are presented in Appendix C Click here to view Appendix C (a) Based on the information in these financial statements, determine the following for each company. (Enter amounts in thousands.) Columbia Sportswear Company VF Corporation Total liabilities at December 31, 2014. Net property, plant and equipment at December 31, 2014. Net cash provided (used) by investing activities for 2014 Net income for 2014 Click if you would like to Show Work for this question: Open Show Work