Based on the financial statements of each company, do the following.
a. Calculate the percentage change in (1) net sales, (2) net income, (3) cash flow from operating activities, and (4) total assets from 2016 to 2017.
b. What conclusions can you draw from this analysis?
CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2016 2015 Cash news from operating activities: 112,315 S 198.439 $ 179,851 59.945 1,927 44.851 11,286 60,016 4,805 (19,178) 10.986 56,521 5,098 (11.709) 11,672 (7.873) 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: (24,197) 46,662 (19,241) 931 30,568 11,581 58,702 5,798 341,128 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 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: (130,993) 36,282 (53.352) 279 (147,784) (21,263) 21,263 (49,987) 97 (49,890) (38,208) 64,980 (69.917) 144 (43,001) 3,374 (3,374) 19.946 (3,662) 62.885 (64,825) 13,167 (5,117) 53.429 (51,479) 17,442 (4,895) 7,873 (70,068) (43,547) (48,122) 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 Payment of related party note payable 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 (35,542) (50,909) (14,236) (84,403) 12,836 121,777 551,389 673,166 (42,023) (1,635) 181,619 369,770 551,389 (91.245) (4,647) (43,788) 413,558 369,770 $ S S $ 81,045 685 70,424 1,049 87,350 1,115 3,188 2,710 4,698 CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share amounts) Year Ended December 31 2017 2016 2,466,105 $ 2,377,045 $ 1,306,143 143 1,266,697 1,159,962 1,110,348 910,894 864,084 13,901 10,244 262,969 256,508 4,515 2,003 (429 (1,041) (321) 266,734 256,898 (154,419) (58.459) 112,315 198,439 7,192 6,541 105,123 $ 191,898 $ 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 21) Other non-operating expense Income before income tax Income tax expense (Note 10) Net income Net income attributable to non-controlling interest Net income attributable to Columbia Sportswear Company Earnings per share attributable to Columbia Sportswear Company (Note 16): Basic Diluted Weighted average shares outstanding (Note 16): Basic Diluted 2015 2326 1.252.680 1,073,500 831,971 8.192 249,721 1,531 (1,099) (2,834) 247,319 (67,468) 179,851 5,514 174,337 (572) $ $ s 1.51 1.49 2.75 2.72 2.48 2.45 69,759 70,453 69,683 70,632 70,162 71,064 CONSOLIDATED BALANCE SHEETS (In thousands) December 31. 2017 2016 ASSETS S Current Assets: Cash and cash equivalents (Note 20) Short-term investments (Note 20) Accounts receivable, net (Note 5) Inventories Prepaid expenses and other current assets Total current assets Property, plant, and equipment, net (Note 5) Intangible assets, net (Note 7) Goodwill (Note 7) Deferred income taxes (Note 10) Other non-current assets 673,166 94,983 364,862 457,927 58,559 1,649,497 281,394 129.555 58.594 56,804 27,058 2,212,902 551,389 472 333,678 487,997 38,487 1,412,023 279,650 133,438 68,594 92,494 27,695 2,013,894 Total assets $ $ $ 252,301 182.228 19,107 453,636 LIABILITIES AND EQUITY Current Liabilities: Accounts payable Accrued liabilities (Note 9) Income taxes payable (Note 10) Total current liabilities Note payable to related party (Note 21) Other long-term liabilities (Notes 11. 121 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): 125,000 shares authorized: 69.995 and 69.873 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 215.048 142,158 5,645 362,851 14,053 42,622 12,710 147 432.383 48,735 58,104 168 560,643 45.829 1,585,009 (8,887) 1,621,951 30,308 1,652,259 2.212,902 53,801 1,529,636 (22,617) 1.560,820 20.691 1,581,511 2,013,894 $ CONSOLIDATED STATEMENTS OF EQUITY (In thousands) Columbia Sportswear Company Shareholders' Equity Common Stock Shares Outstanding Amount Accumulated Other Comprehensive Income Non-Controlling (Loss) Interest 15,833 5 11,631 5.514 BALANCE, JANUARY 1, 2015 69.828 72,700 Retained Earnings 1,255,070 174,337 $ 5 Total 1,355,234 179.851 1 (6) (6) (2,908) (33,755) 1 (2.908) (1.132) 1 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 (43,547) 1 12,547 7,925 11,672 (70,068) 34,776 (34,887) (43,347) 12,547 7925 11,672 (70,068) 1,415,813 198,439 (1,386) 69,277 (20,836) 1,385,860 191,898 16,013 6,541 (2) 686 (2,465) 843 157 (2,020) 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 (S0.69 per share) Issuance of common stock under employee stock plans, net Stock-based compensation expense Repurchase of common stock BALANCE, DECEMBER 31, 2016 (48,122) (48,122) 8,050 8,050 10,986 10,986 (11) 53,801 69,873 1,529,636 (22,617) 20.691 7.192 1,581,511 112.315 105,123 1.159 (17,489) 31,219 (516 2,941 (16.845) 34,160 Net income Other comprehensive income (loss): Unrealized holding losses on derivative transactions, net Foreign currency translation adjustment, net Cash dividends ($0.73 per share) Issuance of common stock under employee stock plans, net Stock-based compensation expense Repurchase of common stock BALANCE, DECEMBER 31, 2017 (50,909) (50,909 16,284 787 16,284 11,286 (35,542) 45,829 (665) 69,995 1,652250 $ S 1,585,009 (8,887) $ 30,308 B-2 Appendix B Financial Statements for Under Armour Under Armour, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands, except share data) December 31, December 31 2017 2016 $ 250,470 $ 312,483 609,670 1,158,548 256,978 2,337,679 885,774 555,674 46,995 82,801 97,444 $4,006,367 622,685 917,491 174,507 1,965,153 804,211 563,591 64,310 136,862 110,204 $3,644,331 Assets Current assets Cash and cash equivalents Accounts receivable, net Inventories Prepaid expenses and other current assets Total current assets Property and equipment, net Goodwill Intangible assets, net Deferred income taxes Other long term assets Total assets Liabilities and Stockholders' Equity Current liabilities Revolving credit facility, current Accounts payable Accrued expenses Current maturities of long term debt Other current liabilities Total current liabilities Long term debt, net of current maturities Other long term liabilities Total liabilities Commitments and contingencies (see Note 6) Stockholders' equity Class A Common Stock, $0.0003 1/3 par value: 400,000,000 shares authorized as of December 31, 2017, and 2016; 185,257,423 shares issued and outstanding as of December 31, 2017, and 183,814,911 shares issued and outstanding as of December 31. 2016. Class B Convertible Common Stock, $0.0003 1/3 par value; 34,450,000 shares authorized, issued and outstanding as of December 31, 2017, and December 31, 2016. Class C Common Stock, $0.0003 1/3 par value: 400,000,000 shares authorized as of December 31, 2017, and 2016: 222,375,079 shares issued and outstanding as of December 31, 2017, and 220,174,048 shares issued and outstanding as of December 31, 2016. Additional paid-in capital Retained earnings Accumulated other comprehensive loss Total stockholders' equity Total liabilities and stockholders' equity $ 125,000 561,108 296,841 27,000 50,426 1,060,375 765,046 162,304 1,987,725 $ 409,679 208.750 27,000 40,387 685,816 790,388 137,227 1,613,431 74 872,266 1,184,441 (38,211) 2,018,642 $4,006,367 73 823,484 1.259,414 52.143) 2,030,900 $3,644,331 B-3 Appendix B Financial Statements for Under Armour Under Armour, Inc. and Subsidiaries Consolidated Statements of Operations (In thousands, except per share amounts) Year Ended December 31, 2017 2016 2016 2015 Net revenues $4,976,553 $4,825,335 $3,963,313 Cost of goods sold 2,737,830 2,584,724 2,057,766 Gross profit 2,238,723 2,240,611 1,905,547 Selling, general and administrative expenses 2,086,831 1,823,140 1,497,000 Restructuring and impairment charges 124,049 Income from operations 27,843 417,471 408,547 Interest expense, net (34,538) (26,434) (14,628) Other expense, net (3,614) (2,755) (7,234) Income (loss) before income taxes (10,309) 388,282 386,685 Income tax expense 37,951 131,303 154,112 Net income (loss) (48,260) 256,979 232,573 Adjustment payment to Class C capital stockholders 59,000 Net income (loss) available to all stockholders (48,260) 197,979 232,573 Basic net income (loss) per share of Class A and B common 0.45 (0.11) $ $ 0.54 stock $ Basic net income (loss) per share of Class C common stock (0.11) $ 0.72 0.54 $ Diluted net income (loss) per share of Class A and B common (0.11 S 0.45 $ 0.53 stock $ (0.11) $ 0.71 $ 0.53 Diluted net income (loss) per share of Class C common stock Weighted average common shares outstanding Class A and B common stock 219,254 217,707 215,498 Basic 219,254 221,944 220,868 Diluted Weighted average common shares outstanding Class C common stock 221,475 218,623 215,498 Basic 221,475 222,904 220,868 Diluted B-4 Appendix B Financial Statements for Under Armour Under Armour, Inc. and Subsidiaries Consolidated Statements of Stockholders' Equity (In thousands) Accumulated Class B Class A Convertible Class C Additional Common Stock Common Stock Common Stock Paid-in Shares Amount Shares Amount Shares Amount Capital Retained Comprehe Earnings Income Other Comprehensive Income (loss) Total Equity $(14 RC $(14,808) 71 - $508,279 $ 856,687 2,852 $1,350,300 2,852 (12,727) (172) - 1,996 1 -! - 19,134 (12,727 19,136 (172) - - - 1,996 1 - - 2,150 1 (2,150) (1) - - - - - - - - 60,376 60,376 45,917 III 232,573 (30,205) I II FL 45,917 202,368 1,076,533 (45,013) 636,558 6,203 72 - 16 1,668,222 6,203 I (15,098) Balance as of December 31, 2014 177,296 $ 5936,600 $ 12 213,896 Exercise of stock options 360 360 - Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements Issuance of Class A Common Stock, net of forfeitures 1,996 Class B Convertible Common Stock converted to Class A Common Stock Stock-based compensation expense Net excess tax benefits from stock-based compensation arrangements Comprehensive income Balance as of December 31, 2015 181,630 61 34.450 11 216,080 Exercise of stock options 792 - 971 Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements (199) Issuance of Class A Common Stock, net of forfeitures 1,592 Issuance of Class C Common Stock, net of forfeitures 1,852 Issuance of Class C dividend Stock-based compensation expense Net excess tax benefits from stock-based compensation arrangements Comprehensive income Balance as of December 31, 2016 183,815 61 34,450 11 220,174 Exercise of stock options 609 - Shares withheld in consideration of employee tax obligations relative to stock-based compensation arrangements Issuance of Class A Common Stock, net of forfeitures Issuance of Class C Common Stock, net of forfeitures Impact of adoption of accounting standard updates Stock-based compensation expense Comprehensive income (loss) (15,098) 7,884 7,884 III 25,834 56,073 (59,000) 25,835 (2,927) 46,149 46,149 II !!! | FL 44,783 III 256,979 (7130) 44,783 249,849 73 1,259,414 52,143) 823,484 3,664 2,030.900 3,664 III - (2,781) (2,781) 1,723 7,852 7,853 III !!! (23,932) (26,598) III (2,666) 39,932 - 39,932 (34,328) (48,260) 13,932 PPP Under Armour, Inc. and Subsidiaries Consolidated Statements of Cash Flows (In thousands) 2017 2016 Net income (loss) Adjustments to re 549 Year Ended December 31, h flows from operating activities 2015 ents to reconcile net income (loss) to net cash used in $ (48,260) $ 256,979 $ 232,573 operating activities Depreciation and amortization Unrealized foreign currency exchange rate loss (gains) 173,747 144,770 100,940 Impairment charges (29,247) 12,627 33,359 Amortization of bond premium 71,378 Loss on disposal of property and equipment 254 1.580 2,313 Stock-based compensation 39,932 Excess tax benefit (loss) from stock-based compensation 60,376 46,149 arrangements (75) 44,783 45,917 Deferred income taxes 55,910 (43,004) (4.426) Changes in reserves and allowances 108,757 70.188 40.391 Changes in operating assets and liabilities (net of acquisitions): Accounts receivable (79.106) (249,853) (191,876) Inventories (222,391) 148,055) (278,524) Prepaid expenses and other assets (55,503) (25,284) (76,476) Accounts payable 145,695 202,446 (22,583) Accrued expenses and other liabilities 109.823 67,754 76,854 Income taxes payable and receivable (39,164) (16,712) (2,533) Net cash provided by operating activities 234,063 364,368 14,541 Cash flows from investing activities (316,458) (281,339) (298,928) Purchases of property and equipment (70,288) Purchases of property and equipment from related parties (539,460) Purchase of businesses, net of cash acquired (24,230) (103,144) Purchases of available-for-sale securities 30,712 96,610 Sales of available-for-sale securities (1,648) (875) (2,553) Purchases of other assets (282.987) (381,139) (847,475) Net cash used in investing activities Cash flows from financing activities 763,000 1,327,601 650.000 Proceeds from long term debt and revolving credit facility (665,000) (1,170.750) (265,202) Payments on long term debt and revolving credit facility (2,781) (5,098) 12,728) Employee taxes paid for shares withheld for income taxes 15,485 10.310 Proceeds from exercise of stock options and other stock issuances (6,692) (947) Payments of debt financing costs Cash dividends paid (1,505) Contingent consideration payments for acquisitions 106,759 146,114 381,433 Net cash provided by financing activities 4,178 (8,725) (11,822) Effect of exchange rate changes on cash and cash equivalents 120,618 (463,323) Net increase (decrease) in cash and cash equivalents Cash and cash equivalents 250,470 129,852 593,175 Beginning of period $ 312,483 $ 250,470 $ 129,852 End of period Non-cash investing and financing activities $ 10,580 $ 16,973 $ 17,758 Change in accrual for property and equipment (56,073) Non-cash dividends Property and equipment acquired under build-to-suit leases Other supplemental information 36,921 135,959 99,708 Cash paid for income taxes 29,750 21,412 11,176 Cash paid for interest, net of capitalized interest See accompanying notes. 11,540 12,927) 62,013 5,631
