appendix b

appendix c

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) For each company, calculate the following values for 2016. Assume Columbia's weighted-average common shares outstanding was 69,683,000, and VF's was 416,103,000. (Hint: When calculating free cash flow, do not consider business acquisitions to be part of capital expenditures.) (Round all ratios to 1 decimal places, eg. 15.2:1 or 15.2% and all other answers to thousands. Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses eg. (451) (1) Working capital. Working capital Columbia Sportswear Company $ VF Corporation $ (2) Current ratio. Current ratio Columbia Sportswear Company .1 VF Corporation :1 (3) Debt to assets ratio Debt to assets ratio Columbia Sportswear Company % VF Corporation % (4) Free cash flow. Free cash flow Columbia Sportswear Company $ VF Corporation $ COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Year Ended December 31, 2016 2015 2014 Net sales $ 2,377,045 $ 2,326,180 $2,100,590 Cost of sales 1,266,697 1,252,680 1,145,639 Gross profit... 1,110,348 1,073,500 954.951 Selling, general and administrative expenses 864,084 831,971 763,063 Net licensing income.... 10,244 8,192 6,956 Income from operations 256,508 249,721 198,844 Interest income, net... 2,003 1,531 1,004 Interest expense on note payable to related party (Note 22). (1,041) (1,099) (1,053) Other non-operating expense (572) (2,834) (274) Income before income tax.... 256,898 247,319 198,521 Income tax expense (Note 10) (58,459) (67,468) (56,662) Net income 198,439 179,851 141,859 Net income attributable to non-controlling interest 6,541 5,514 4,686 Net income attributable to Columbia Sportswear Company $ 191,898 $ 174,337 $ 137,173 Earnings per share attributable to Columbia Sportswear Company (Note 16): Basic....... $ 2.75 $ 2.48 $ 1.97 Diluted .. 2.72 2.45 1.94 Weighted average shares outstanding (Note 16): Basic... 69,683 70,162 69,807 Diluted. 70,632 71,064 70,681 See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) Year Ended December 31, 2016 2015 2014 198,4395 179,851 $ 141.859 (2) 10 843 (2.908) 7,751 Net income Other comprehensive loss Unrealized holding gains (losses) on available-for-sale securities (net of tax effects of So, (53), and (55), respectively).... Unrealized gains (losses) on derivative transactions (net of tax effects of ($1.922). ($849) and ($1,507), respectively)........ Foreign currency translation adjustments (net of tax effects of ($347), (5760) and S1,023, respectively) Other comprehensive loss.... Comprehensive income.. Comprehensive income attributable to non-controlling interest Comprehensive income attributable to Columbia Sportswear Company (4.485) (34,887) (27.789) (3.644) (37,801) (20,028) 194,795 142,050 121,831 4,678 4.382 4.185 $ 190,117 $ 137,668 $ 117.646 See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED BALANCE SHEETS (In thousands) December 31, 2016 2015 $ 551,389 S 369,770 472 629 333,678 371,953 487.997 473.637 38,487 33,400 1,412,023 1.249,389 279,650 291.687 133.438 138,584 68,594 68,594 92,494 76,181 27.695 21,718 $2,013,894 S 1,846,153 ASSETS Current Assets: Cash and cash equivalents. Short-term investments. Accounts receivable, net (Note 5). Inventories..... Prepaid expenses and other current assets. Total current assets... Property, plant, and equipment, net (Note 6). Intangible assets, net (Note 7) Goodwill (Note 7)... Deferred income taxes (Note 10). Other non-current assets Total assets.. LIABILITIES AND EQUITY Current Liabilities: Short-term borrowings (Note 8) Accounts payable. Accrued liabilities (Note )... Income taxes payable (Note 10) Total current liabilities... Note payable to related party (Note 22) Other long-term liabilities (Notes 11,12). Income taxes payable (Note 10).. Deferred income taxes (Note 10) Total liabilities.... Commitments and contingencies (Note 13) Shareholders' Equity: Preferred stock: 10,000 shares authorized: none issued and outstanding Common stock (no par value): 250,000 shares authorized; 69,873 and 69,277 issued and outstanding (Note 14) Retained earnings Accumulated other comprehensive loss (Note 17). Total Columbia Sportswear Company shareholders' equity Non-controlling interest (Note 4)... Total equity.... Total liabilities and equity See accompanying notes to consolidated financial statements 215,048 142,158 5.645 362.851 14,053 42.622 12,710 147 432.383 1.940 217,230 141,862 5,038 366,070 15,030 40,172 8,839 229 430,340 53.801 34,776 1.529.636 1.385,860 (22,617) (20,836) 1.560.820 1.399,800 20.691 16,013 1.581.511 1,415.813 $ 2,013,894 S 1,846,153 COLUMBIA SPORTSWEAR COMPANY See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2015 2016 2014 198,439 $ 179,851 $ 141,859 60,016 4.805 (19,178) 10.986 56,521 5,098 (11.709) 11.672 (7,873) 54,017 481 (6,978) 11.120 (4.927) 36,710 (18.777) (5.452) (5.948) 1,483 4.847 4,768 2,468 275,167 (40,419) (103,296) 4,411 (2.524) 11.418 (2.017) (10.994) 4,966 95,105 (31,478) (62,086 (4,869) 4.291 41.941 35,051 1.166 6,195 185,783 Cash flows from operating activities: Net income... Adjustments to reconcile net income to net cash provided by operating activities: 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: Accounts receivable Inventories .... Prepaid expenses and other current assets Other assets. Accounts payable Accrued liabilities. Income taxes payable Other liabilities Net cash provided by operating activities Cash flows from investing activities: 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.. Net cash used in investing activities Cash flows from financing activities: 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 Cash dividends paid.... Proceeds from note payable to related party 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 Supplemental disclosures of cash flow information: Cash paid during the year for income taxes...... Cash paid during the year for interest on note payable to related party .... Supplemental disclosures of non-cash investing activities: Capital expenditures incurred but not yet paid (21,263) 21.263 (49.987) 97 (49,890) (38,208) 64.980 (69.917) 144 (43,001) (188,467) (48,243) 112,895 (60,283) 71 (184,027 62.885 (64,825) 13.167 (5.117) 53,429 (51,479) 17,442 (4.895) 7.873 (70,068) (43,547) (11) (48,122) 52,356 (52,205) 22.277 (3,141) 4,927 (15,000) (39,836) 16,072 (14.550) (11,137) (23.931) 437,489 413.558 (42,023) (1.635) 181,619 369,770 551,389 $ (91.245) (4.647) (43,788) 413.558 369,770 $ 70,424 S 1.049 87,350 $ 1.115 53,958 838 2.710 4,698 7,196 See accompanying notes to consolidated financial statements 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 Retained Comprehensive Controlling Outstanding Amount Earnings Income (Loss) Interest Total 69,190 $ 52,325 $1,157,733 $ 35,360 $ 7,446 $ 1,252,864 137,173 4,686 141,859 10 10 7.751 (27,288) (501) 7,751 (27,789) (39,836) (39.836) 1.059 19,136 5,119 11,120 (421) (15,000) 69,828 72,700 1,255,070 174,337 19,136 5,119 11,120 (15,000) 1,355.234 179,851 15,833 11.631 5.514 (6) (6) BALANCE, JANUARY 1, 2014 .... Net income.... Other comprehensive income (loss): Unrealized holding gains on available-for-sale securities, net Unrealized holding gains on derivative transactions, net Foreign currency translation adjustment, net.. Cash dividends (80.57 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 Net income. Other comprehensive loss: Unrealized holding losses on available-for- sale securities, net... Unrealized holding losses on derivative transactions, nei Foreign currency translation adjustment, net.. Cash dividends (50.62 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, 2015 Net income... Other comprehensive income (loss): Unrealized holding losses on available-for- sale securities, net.... Unrealized holding gains on derivative transactions, net... Foreign currency translation adjustment, net.. Cash dividends (50.69 per share)...... Issuance of common stock under employee stock plans, net Stock-based compensation expense. Repurchase of common stock..... BALANCE, DECEMBER 31, 2016 11 (2.908) (33,755) (1.132) (2,908) (34,887) (43,547) (43.547) I 835 12,547 7,925 11,672 (1,386) (70,068) 69.277 34,776 1,385,860 191.898 12,547 7.925 11,672 (70,068) 1,415,813 198,439 (20,836) 16,013 6.541 (2) (2) 1 1 | 686 (2,465) 157 (2,020) 843 (4.485) (48,122) (48,122) 8,050 10,986 596 8,050 10,986 (11) 69.873 $ 53,801 $1,529,636 $ (11) (22,617) $ 20,691 $ 1,581,511 See accompanying notes to consolidated financial statements VF CORPORATION Consolidated Balance Sheets December 2016 2015 In thousands except share amounts 1.227,862 $ 944.423 ASSETS Current assets Cash and equivalents Accounts receivable, less allowance for doubtful accounts of $21,131 in 2016 and $23,275 in 2015 Inventories Other current assets Current assets of discontinued operations Total current assets Property, plant and equipment Intangible assets 1.197.678 1.569 325 298,233 4.293,098 939,650 1.839.698 1.736,959 929,882 1,289.962 1.555,360 284.215 89,176 4,163,136 945.491 1.948.611 1,788,407 583.866 210,031 9,639,542 Goodwill 9.739,2875 26,029 $ 253,689 664,644 841,038 Other assets Other assets of discontinued operations Total assets LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Short-term borrowings - $ Current portion of long-term debt - Accounts payable Accrued liabilities Current liabilities of discontinued operations Total current liabilities Long-term debt Other liabilities Other liabilities of discontinued operations Commitments and contingencies Total liabilities Stockholders' equity Preferred Stock, par value $l; shares authorized, 25,000,000; no shares outstanding Common Stock, stated value $0.25; shares authorized, 1,200,000,000; 414,012,954 shares outstanding in 2016 and 426,614.274 shares outstanding in 2015 Additional paid-in capital Accumulated other comprehensive loss Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 449,590 3.351 680.606 782,148 26.018 1.941.713 1,401.820 900.256 10,915 1.785.400 2,039,180 973,786 4.798,366 4,254,704 103,503 3.333.423 (1.041.463) 2.545.458 4.940.921 9.739,287 106,654 3,192.675 (1.043.222) 3,128,731 5,384,838 9,639,542 See notes to consolidated financial statements. VF CORPORATION Consolidated Statements of Income 2015 2014 $ Year Ended December 2016 In thousands, except per stare amounts 11,902,314 $ 11.909,6355 116.689 123,020 12.019,003 12.032,655 11.757.399 124,331 11.881.730 6.235,699 4.009.029 6,112.880 3,970-536 Net sales Royalty income Total revenues Costs and operating expenses Cost of goods sold Selling general and administrative expenses Impairment of goodwill and intangible assets Total costs and operating expenses Operating income Interest income Interest expense Other income (expense), net Income from continuing operations before income taxes Income taxes Income from continuing operations Loss from discontinued operations, net of tax Net Income Earnings per common share basic Continuing operations Discontinued operations Total earnings per common share - basic Earnings per common share-diluted Continuing operations Discontinued operations Total earnings per common share-diluted Cash dividends per common share 6,196,335 4.243.798 79,644 10.519,777 1,499.226 9,094 (94.730) 2,001 1.415.591 243,064 1.172.527 (98.421) 1,074,106 $ 10.244,728 1,787,927 7,152 (88,772) 1,028 1,707,335 392,204 1.315,131 (83.538) 1.231,593 $ 10.083.416 1.798,314 6911 (86,104) (5.545) 1.713576 385.827 1.327.749 (280,244) 1,047 SOS $ 2.82 $ (0.24) 2.58 $ 3.09 $ (0.19) 2.90 $ 3.07 (0.65) 2.42 $ $ 2.78 5 (0.24 2.54 $ 1.5300 $ 3.04 $ (0.19) 2.85$ 1.3300 5 3.02 (0.64) 238 1.1075 s See notes to consolidated financial statements. 1,074.106 $ 1.231.593 1947.50 (432) (61814 586 6075 62.556 65.212 2.584 $0.922 20230 37 SIS 3.445 4,162 (1.571 60588 Net income Other comprehensive income Foreign currency tamation and other Gaining during year Les income tax effect Defined benefits om Current year actuarial gains (es) and plan amendments Amortion of defened actuariales Amer of deferred price Rectassification of not actuarial lows from selement charge Les income tax elect Derivative financial instrume Gainering daring year Les inceffort Reclassification to set income for gains) owes med Less income an effect Marketable securities Gains sing during year Less income tax effort Reclassification et income for more realised Less income an effect Other comprehensive income flow Comprehensive income 90705 9.672) ( 8.387 (34.736) (4) (6970 25.400 35.092 (12.6199 274 195 (195) (LT) 463 1.754 5 1.075.865 RE 52 643 556.053 See to considerem VF CORPORATION Consolidated Statements of Cash Flows 2014 281.577 104,357 Year Ended December 2016 2015 In thousands Operating activities Net income 1,074,106 s 1.231.593 $ 1.047,505 Adjustments to reconcile net income to cash provided by operating activities: Impairment of goodwill and intangible assets 79,644 143.562 396,362 Depreciation and amortization 272.075 274.883 Stock-based compensation 67,762 73.420 104,313 Provision for doubtful accounts 17,283 12.006 (2.198) Pension expense in excess of (less than) contributions 89,005 (208,709) ) (9,864 Deferred income taxes (71.625) 7.088 (78,064) Loss on sale of businesses Othernet (15.232) (34,784) 4,112 Changes in operating assets and liabilities Accounts receivable 47.102 (124.248) 854 Inventories (37.210) (175,098) (130.540) Accounts payable (9.553) 14.225 69,807 Income taxes (129,574) 4.206 20.293 Accrued liabilities 28,904 (14,505) 41.989 Other assets and liabilities (48,627) 2.399 22.614 Cash provided by operating activities 1.477,919 1,203,430 1.762.06 Investing activities Capital expenditures (175,840) (254,501) (234,077) Proceeds from sale of businesses, net of cash sold 115,983 Software purchases (44.226) (63.283) (67,943) Othernet (8,331) (5.038) (27.235) Cash used by investing activities (112,414) (322.822) ) (329.255) Financing activities Net (decrease) increase in short-term borrowings () (421,069) 432.262 4,761 Payments on long-term debe (13.276) (3.975) ) (4.760) Payment of debt issuance costs (6.807) (1,475) Proceeds from long-term debt 951,817 Purchases of treasury stock (1,000,468) (732.623) (727.795) Cash dividends paid (635.994) (565.275) (478,933) Proceeds from issuance of Common Stock, net of shares withheld for taxes 48,918 30.871 34.869 Cash used by financing activities (1.076,879) (840.215) (1.171.858) Effect of foreign currency rate changes on cash and equivalents (6,369) (66,683) (65.461 Net change in cash and equivalents 282,257 (26.290) 195,492 Cash and equivalents - beginning of year 945,605 971,895 776,403 Cash and equivalents --- end of year *** 1,227,862 $ 945.605$ 971.895 The cash flows related to discontinued operations have not been segregated and are included in the Consolidated Statements of Cash Flows. The cash and equivalents amount presented at December 2015 differs from cash and equivalents in the Consolidated Balance Sheet due to cash included in "Current assets of discontinued operations." See notes to consolidated financial statements, VF CORPORATION Consolidated Statements of Stockholders' Equity Accumulated Common Stock Additional Other Paid-in Comprehensive Shares Amounts Capital Loss In thousands, except share amounts 440,310,370 $ 110,078 $ 2,746,590 $ (211,720) $ Retained Earnings 3,432.090 1,047,505 (478,933) (724,786) (44,123) (12.037.000) 4,586,521 (3,009) 1,146 246,596 (463,588) (99,683) 73.143 (424) (702.272) 432.859,891 108.215 2,993,186 Balance, December 2013 Net income Dividends on Common Stock Purchase of treasury stock Stock-based compensation, net Foreign currency translation and other Defined benefit pension plans Derivative financial instruments Marketable securities Balance, December 2014 Net income Dividends on Common Stock Purchase of treasury stock Stock-based compensation, net Foreign currency translation and other Defined benefit pension plans Derivative financial instruments Marketable securities Balance, December 2015 Net income Dividends on Common Stock Purchase of treasury stock Stock-based compensation, net Foreign currency translation and other Defined benefit pension plans Derivative financial instruments Balance, December 2016 3.231.753 1,231,593 (565,275) (730.114) (39,226) (10,036,100) 3,790,483 (2.509) 948 199,489 (361,228) 4.939 15,753 (414) 426,614,274 106,654 3,192.675 (1,043,222) 3,128,731 1,074.106 (635,994) (996,485) (24.900) (15,932,075) 3,330,755 (3,983) 832 140.748 (76,410) 69,498 8.671 (1,041,463) S 414,012.954 $ 103,503 3,333,423 2,545,458 See notes to consolidated financial statements