Appendix B Specimen Financial Statements: Columbia Sportswear Company Columbia Sportswear Company is a leader in outdoor sportswear. The following are Columbia's financial statements as presented in its 2016 annual report. The complete annual report, including notes to the financial statements, is available at the company's website. 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 1 41,859 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): ........ $ 2.75 $ 2.48 $ 1.97 Diluted. 2.72 1.94 Weighted average shares outstanding (Note 16): Basic... 69,683 70.162 ........................................... Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 70,632 71,064 70,681 D iluted . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.45 Basic.. ........................ See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) Year Ended December 31, 2016 2015 198,439 $ 179,851 $ 2014 141.859 (2) (6) 10 843 (2.908) 7,751 Net income ................................................... S Other comprehensive loss: Unrealized holding gains (losses) on available-for-sale securities (net of tax effects of S. (53), and (55), respectively)................. R Unrealized gains (losses) on derivative transactions (net of tax effects of ($1,922), (5849) and ($1,507), respectively)........... Foreign currency translation adjustments (net of tax effects of ($347), ($760) and $1,023, respectively).................. Other comprehensive loss. Comprehensive income........... Comprehensive income attributable to non-controlling interest... Comprehensive income attributable to Columbia Sportswear Company.... $ (4.485) (3,644) 194.795 4.678 190,117 (34,887) (37,801) 142.050 4.382 137,668 $ (27,789) (20,028) 121.831 4.185 117,646 $ See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED BALANCE SHEETS (In thousands) 2015 December 31, 2016 ASSETS Current Assets: Cash and cash equivalents........... ...... $ 551,389 $ 369.770 Short-term investments ..................... 472 629 Accounts receivable, net (Note 5).......... 333,678 371,953 Inventories.................................. 487.997 473,637 Prepaid expenses and other current assets..... 38,487 33.400 Total current assets....... 1,412.023 1.249.389 Property, plant, and equipment, net (Note 6)......... 279,650 291,687 Intangible assets, net (Note 7). 133.438 138,584 Goodwill (Note 7). ............ 68,594 Deferred income taxes (Note 10)............ 92,494 76,181 Other non-current assets ..................................... 27,695 21,718 Total assets......................... $ 2,013.894 $ 1.846,153 LIABILITIES AND EQUITY Current Liabilities: Short-term borrowings (Note 8)............................. ......... $ - $ 1,940 Accounts payable........................................................ 215,048 217.230 142,158 5,645 362,851 14.053 42.622 12,710 147 432,383 141,862 5,038 366,070 15,030 40,172 8.839 229 430,340 Accrued liabilities (Note 9)...... 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 ............................................ 53,801 34,776 1,529,636 1,385,860 (22,617) (20,836) 1,560,820 1,399,800 20.691 16,013 1,581,5111,415,813 $ 2,013,894 $ 1,846,153 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 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...... 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 (40,419) (103,296) 4,411 (2,524) 11,418 (2,017) (31,478) (62,086) (4,869) 4,291 41,941 35,051 C IUCU HADILICS................................. 4,768 2,468 275,167 (10,994) 4,966 95,105 1,166 6,195 185,783 (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) 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 ....... 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 $ $ > 33,00 70,424 1,049 87,500 1,115 838 2,710 4,698 7,196 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 Shares Retained Comprehensive Outstanding Amount Earnings Income (Loss) 69,190 $ 52,325 $1,157,733 $ 35,360 Non- Controlling Interest $ 7,446 BALANCE, JANUARY 1, 2014 ........ Total $ 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 - - (421) 69,828 19,136 5,119 11,120 (15,000) 72,700 - 19,136 5,119 11,120 (15,000) 1,355,234 179,851 - 1,255,070 174,337 15,833 - 11,631 5,514 (6) - (6) 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 ($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 ........ Net income ............................... Other comprehensive loss: Unrealized holding losses on available-for- sale securities, net........ Unrealized holding losses on derivative transactions, net .. Foreign currency translation adjustment, net.. Cash dividends ($0.62 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 ($0.69 per share).... Issuance of common stock under employee stock plans, net ....... Stock-based compensation expense............ Repurchase of common stock. BALANCE, DECEMBER 31, 2016 ........ (2,908) (33,755) - - (1,132) - (2,908) (34,887) (43,547) (43,547) 835 - - (1,386) 69,277 - 12,547 7.925 11,672 (70,068) 34,776 - 12,547 7,925 11,672 (70,068) 1,415,813 198,439 (20,836) 1,385,860 191,898 16,013 6,541 - - (2) - (2) 686 (2,465) - 157 (2,020) 843 (4,485) (48,122) (48,122) 596 - 8,050 10,986 (11) $ 53,801 8,050 10,986 (11) $ 1,581,511 69,873 $1,529,636 $ (22,617) $ 20,691 Appendix C Specimen Financial Statements: VF Corporation VF Corporation is a leader in outdoor sportswear. The following are VF's financial statements as presented in its 2016 annual report. The complete annual report, including notes to the financial statements, is available at the company's website. VF CORPORATION Consolidated Balance Sheets December 2016 2015 In thousands, except share amounts 1,227,862 $ 944,423 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 9,739,287 S 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 Goodwill 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 $1; shares authorized, 25,000,000; no shares outstanding in 2016 and 2015 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 $ 26,029 253,689 664,644 841,038 449,590 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 3,333,423 106,654 3.192,675 Accumulated other comprehensive loss Retained earnings Total stockholders' equity Total liabilities and stockholders' equity (1,041,463) 2,545,458 4.940,921 9,739,287 (1,043,222) 3,128,731 5,384,838 9,639,542 $ S See notes to consolidated financial statements. VF CORPORATION Consolidated Statements of Income 2015 2014 $ Year Ended December 2016 In thousands, except per share amounts 11,902,314 $ 11.909,635 $ 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 6,911 (86,104) (5,545) 1,713,576 385.827 1,327,749 (280,244) 1.047,505 $ $ $ 3.07 2.82 (0.24) 2.58 3.09 (0.19) 2.90 (0.65) 2.42 $ $ $ $ 3.04 $ 2.78 $ (0.24) 2.54 $ 1.5300 $ 3.02 (0.64) 2.38 2.85 1.3300 $ 1.1075 See notes to consolidated financial statements. VF CORPORATION Consolidated Statements of Comprehensive Income 2016 2014 Year Ended December 2015 In thousands 1 ,231,593 Net income 1,074,106 S $ 1,047,505 (52,028) (24,382) (361,814) 586 (469,663) 6,075 (203.234) 37,518 (5,384) 65.212 2,584 50.922 (43.836) (62,556) 61,966 3,038 4,062 (1,571) 5,445 60,588 Other comprehensive income (loss) Foreign currency translation and other Gains (losses) arising during year Less income tax effect Defined benefit pension plans Current year actuarial gains (losses) and plan amendments Amortization of net deferred actuarial losses Amortization of deferred prior service costs Reclassification of net actuarial loss from settlement charge Less income tax effect Derivative financial instruments Gains (losses) arising during year Less income tax effect Reclassification to net income for (gains) losses realized Less income tax effect Marketable securities Gains (losses) arising during year Less income tax effect Reclassification to net income for (gains) losses realized Less income tax effect Other comprehensive income (loss) Comprehensive income 90,708 (9.672) (107.457) 35,092 89,993 (34,668) (64,976) 25,404 88,387 (34,736) 32,111 (12.619) (698) 274 495 (195) (1.177) 463 (340.950) 890,643 $ 1.759 1,075,865 S (490,552) 556.953 $ See notes to consolidated financial statements, VF CORPORATION Consolidated Statements of Cash Flows 2016 Year Ended December 2015 In thousands 2014 $ 1,074,106 $ 1,231,593 $ 1,047,505 Operating activities Net income Adjustments to reconcile net income to cash provided by operating activities: Impairment of goodwill and intangible assets Depreciation and amortization Stock-based compensation Provision for doubtful accounts Pension expense in excess of (less than) contributions Deferred income taxes Loss on sale of businesses Other, net Changes in operating assets and liabilities: Accounts receivable Inventories 79,644 281,577 67,762 17,283 89,005 (71,625) 104,357 (15,232) 143,562 272,075 73,420 12,006 (208,709) 7,088 396,362 274,883 104,313 (2,198) (9,864) (78,064) (34,784) 4,112 47,102 (37,210) (124,248) (175,098) 854 (130.540) 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) 2,599 22,614 Cash provided by operating activities 1,477,919 1,203,430 1,762,066 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) Other, net (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 debt (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 (W) 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 | | TIT (463,588) (99,683) 73,143 (424) (702,272) ITT | 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) (1,043,222) | | 426,614,274 106,654 3,192,675 3,128,731 1,074,106 (635,994) (996,485) (24,900) (3,983) (15,932,075) 3,330,755 832 140.748 (76,410) 69,498 8,671 (1,041,463) $ 414,012,954 $ 103,503 $ 3,333,423 $ 2,545,458 See notes to consolidated financial statements. View Policies Current Attempt in Progress Columbia Sportswear Company's financial statements are presented in Appendix B. Click here to view Appendix B. Financial statements of VF Corporation are presented in Appendix C. Click here to view Appendix C. (a) Based on the information contained in these financial statements, compute free cash flow for each company. (Show a negative free cash flow with either a - sign e.g.-15,000 or in parenthesis e.g. (15,000). Enter amounts in thousands.) Columbia Sportswear Company VF Corporation Free cash flow (in thousands) Appendix B Specimen Financial Statements: Columbia Sportswear Company Columbia Sportswear Company is a leader in outdoor sportswear. The following are Columbia's financial statements as presented in its 2016 annual report. The complete annual report, including notes to the financial statements, is available at the company's website. 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 1 41,859 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): ........ $ 2.75 $ 2.48 $ 1.97 Diluted. 2.72 1.94 Weighted average shares outstanding (Note 16): Basic... 69,683 70.162 ........................................... Diluted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ....... 70,632 71,064 70,681 D iluted . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.45 Basic.. ........................ See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) Year Ended December 31, 2016 2015 198,439 $ 179,851 $ 2014 141.859 (2) (6) 10 843 (2.908) 7,751 Net income ................................................... S Other comprehensive loss: Unrealized holding gains (losses) on available-for-sale securities (net of tax effects of S. (53), and (55), respectively)................. R Unrealized gains (losses) on derivative transactions (net of tax effects of ($1,922), (5849) and ($1,507), respectively)........... Foreign currency translation adjustments (net of tax effects of ($347), ($760) and $1,023, respectively).................. Other comprehensive loss. Comprehensive income........... Comprehensive income attributable to non-controlling interest... Comprehensive income attributable to Columbia Sportswear Company.... $ (4.485) (3,644) 194.795 4.678 190,117 (34,887) (37,801) 142.050 4.382 137,668 $ (27,789) (20,028) 121.831 4.185 117,646 $ See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED BALANCE SHEETS (In thousands) 2015 December 31, 2016 ASSETS Current Assets: Cash and cash equivalents........... ...... $ 551,389 $ 369.770 Short-term investments ..................... 472 629 Accounts receivable, net (Note 5).......... 333,678 371,953 Inventories.................................. 487.997 473,637 Prepaid expenses and other current assets..... 38,487 33.400 Total current assets....... 1,412.023 1.249.389 Property, plant, and equipment, net (Note 6)......... 279,650 291,687 Intangible assets, net (Note 7). 133.438 138,584 Goodwill (Note 7). ............ 68,594 Deferred income taxes (Note 10)............ 92,494 76,181 Other non-current assets ..................................... 27,695 21,718 Total assets......................... $ 2,013.894 $ 1.846,153 LIABILITIES AND EQUITY Current Liabilities: Short-term borrowings (Note 8)............................. ......... $ - $ 1,940 Accounts payable........................................................ 215,048 217.230 142,158 5,645 362,851 14.053 42.622 12,710 147 432,383 141,862 5,038 366,070 15,030 40,172 8.839 229 430,340 Accrued liabilities (Note 9)...... 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 ............................................ 53,801 34,776 1,529,636 1,385,860 (22,617) (20,836) 1,560,820 1,399,800 20.691 16,013 1,581,5111,415,813 $ 2,013,894 $ 1,846,153 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 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...... 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 (40,419) (103,296) 4,411 (2,524) 11,418 (2,017) (31,478) (62,086) (4,869) 4,291 41,941 35,051 C IUCU HADILICS................................. 4,768 2,468 275,167 (10,994) 4,966 95,105 1,166 6,195 185,783 (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) 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 ....... 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 $ $ > 33,00 70,424 1,049 87,500 1,115 838 2,710 4,698 7,196 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 Shares Retained Comprehensive Outstanding Amount Earnings Income (Loss) 69,190 $ 52,325 $1,157,733 $ 35,360 Non- Controlling Interest $ 7,446 BALANCE, JANUARY 1, 2014 ........ Total $ 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 - - (421) 69,828 19,136 5,119 11,120 (15,000) 72,700 - 19,136 5,119 11,120 (15,000) 1,355,234 179,851 - 1,255,070 174,337 15,833 - 11,631 5,514 (6) - (6) 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 ($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 ........ Net income ............................... Other comprehensive loss: Unrealized holding losses on available-for- sale securities, net........ Unrealized holding losses on derivative transactions, net .. Foreign currency translation adjustment, net.. Cash dividends ($0.62 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 ($0.69 per share).... Issuance of common stock under employee stock plans, net ....... Stock-based compensation expense............ Repurchase of common stock. BALANCE, DECEMBER 31, 2016 ........ (2,908) (33,755) - - (1,132) - (2,908) (34,887) (43,547) (43,547) 835 - - (1,386) 69,277 - 12,547 7.925 11,672 (70,068) 34,776 - 12,547 7,925 11,672 (70,068) 1,415,813 198,439 (20,836) 1,385,860 191,898 16,013 6,541 - - (2) - (2) 686 (2,465) - 157 (2,020) 843 (4,485) (48,122) (48,122) 596 - 8,050 10,986 (11) $ 53,801 8,050 10,986 (11) $ 1,581,511 69,873 $1,529,636 $ (22,617) $ 20,691 Appendix C Specimen Financial Statements: VF Corporation VF Corporation is a leader in outdoor sportswear. The following are VF's financial statements as presented in its 2016 annual report. The complete annual report, including notes to the financial statements, is available at the company's website. VF CORPORATION Consolidated Balance Sheets December 2016 2015 In thousands, except share amounts 1,227,862 $ 944,423 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 9,739,287 S 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 Goodwill 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 $1; shares authorized, 25,000,000; no shares outstanding in 2016 and 2015 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 $ 26,029 253,689 664,644 841,038 449,590 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 3,333,423 106,654 3.192,675 Accumulated other comprehensive loss Retained earnings Total stockholders' equity Total liabilities and stockholders' equity (1,041,463) 2,545,458 4.940,921 9,739,287 (1,043,222) 3,128,731 5,384,838 9,639,542 $ S See notes to consolidated financial statements. VF CORPORATION Consolidated Statements of Income 2015 2014 $ Year Ended December 2016 In thousands, except per share amounts 11,902,314 $ 11.909,635 $ 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 6,911 (86,104) (5,545) 1,713,576 385.827 1,327,749 (280,244) 1.047,505 $ $ $ 3.07 2.82 (0.24) 2.58 3.09 (0.19) 2.90 (0.65) 2.42 $ $ $ $ 3.04 $ 2.78 $ (0.24) 2.54 $ 1.5300 $ 3.02 (0.64) 2.38 2.85 1.3300 $ 1.1075 See notes to consolidated financial statements. VF CORPORATION Consolidated Statements of Comprehensive Income 2016 2014 Year Ended December 2015 In thousands 1 ,231,593 Net income 1,074,106 S $ 1,047,505 (52,028) (24,382) (361,814) 586 (469,663) 6,075 (203.234) 37,518 (5,384) 65.212 2,584 50.922 (43.836) (62,556) 61,966 3,038 4,062 (1,571) 5,445 60,588 Other comprehensive income (loss) Foreign currency translation and other Gains (losses) arising during year Less income tax effect Defined benefit pension plans Current year actuarial gains (losses) and plan amendments Amortization of net deferred actuarial losses Amortization of deferred prior service costs Reclassification of net actuarial loss from settlement charge Less income tax effect Derivative financial instruments Gains (losses) arising during year Less income tax effect Reclassification to net income for (gains) losses realized Less income tax effect Marketable securities Gains (losses) arising during year Less income tax effect Reclassification to net income for (gains) losses realized Less income tax effect Other comprehensive income (loss) Comprehensive income 90,708 (9.672) (107.457) 35,092 89,993 (34,668) (64,976) 25,404 88,387 (34,736) 32,111 (12.619) (698) 274 495 (195) (1.177) 463 (340.950) 890,643 $ 1.759 1,075,865 S (490,552) 556.953 $ See notes to consolidated financial statements, VF CORPORATION Consolidated Statements of Cash Flows 2016 Year Ended December 2015 In thousands 2014 $ 1,074,106 $ 1,231,593 $ 1,047,505 Operating activities Net income Adjustments to reconcile net income to cash provided by operating activities: Impairment of goodwill and intangible assets Depreciation and amortization Stock-based compensation Provision for doubtful accounts Pension expense in excess of (less than) contributions Deferred income taxes Loss on sale of businesses Other, net Changes in operating assets and liabilities: Accounts receivable Inventories 79,644 281,577 67,762 17,283 89,005 (71,625) 104,357 (15,232) 143,562 272,075 73,420 12,006 (208,709) 7,088 396,362 274,883 104,313 (2,198) (9,864) (78,064) (34,784) 4,112 47,102 (37,210) (124,248) (175,098) 854 (130.540) 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) 2,599 22,614 Cash provided by operating activities 1,477,919 1,203,430 1,762,066 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) Other, net (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 debt (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 (W) 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 | | TIT (463,588) (99,683) 73,143 (424) (702,272) ITT | 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) (1,043,222) | | 426,614,274 106,654 3,192,675 3,128,731 1,074,106 (635,994) (996,485) (24,900) (3,983) (15,932,075) 3,330,755 832 140.748 (76,410) 69,498 8,671 (1,041,463) $ 414,012,954 $ 103,503 $ 3,333,423 $ 2,545,458 See notes to consolidated financial statements. View Policies Current Attempt in Progress Columbia Sportswear Company's financial statements are presented in Appendix B. Click here to view Appendix B. Financial statements of VF Corporation are presented in Appendix C. Click here to view Appendix C. (a) Based on the information contained in these financial statements, compute free cash flow for each company. (Show a negative free cash flow with either a - sign e.g.-15,000 or in parenthesis e.g. (15,000). Enter amounts in thousands.) Columbia Sportswear Company VF Corporation Free cash flow (in thousands)
