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) COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) Sales ... .... .... . ... .... ............................... 1,200, 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 8,1926 ,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): 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 6 9,807 Diluted ..... 70,632 71,064 70,681 D iluted...... ... ..... . .......................... .14 - 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 ......... $ Other comprehensive loss: Unrealized holding gains (losses) on available-for-sale securities (net of tax effects of $0,($3), 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), (S760) 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) December 31, 2016 2015 ASSETS Current Assets: Cash and cash equivalents...... ................ $ 551,389 $ 369,770 Short-term investments ............ 472629 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 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 Accrued liabilities (Note 9). 142,158 141,862 Income taxes payable (Note 10) ........................................... 5,645 5,038 Total current liabilities............................. 362,851 366,070 Note payable to related party (Note 22) 14,053 15.030 Other long-term liabilities (Notes 11, 12)............... 42,622 40,172 Income taxes payable (Note 10) ............... ....... .............. 12,710 8.839 Deferred income taxes (Note 10) ................ 147 229 Total liabilities .............. ........... 432,383 430,340 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)........ 53,801 34,776 Retained earnings ....................................................... 1,529,636 1,385,860 Accumulated other comprehensive loss (Note 17).......... (22,617) (20,836) Total Columbia Sportswear Company shareholders' equity .................. 1.560.820 1,399.800 Non-controlling interest (Note 4).... 20,691 16,013 Total equity............. 1,581,511 1,415,813 Total liabilities and equity .............................. $ 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 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) (40,419) (103,296) 36,710 (18,777) (5,452) (5,948) 1,483 4,847 4,768 2.468 275,167 (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 1,049 87,350 1,115 53,958 838 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 OutstandingA mount Earnings Income (Loss) 69,190 $ 52,325 $1,157,733 $ 35,360 - 137,173 Non- Controlling Interest $ 7,446 4.686 Total $ 1,252,864 141.859 - - 10 10 7,751 (27,288) - - - (501) - - (39,836) 7,751 (27,789) (39,836) - 1,059 19,136 5,119 11,120 (15,000) 72,700 (421) 69,828 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 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 ($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 (S0.62 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 (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 ........... 111 (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 1,385,860 191.898 (20.836) - 16,013 6,541 - - - (2) - (2) 686 (2,465) 157 (2,020) - 843 (4,485) (48,122) (48,122) 596 8,050 - - 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 excepshare amount 1.227.862 S 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 $ $ 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 Accumulated other comprehensive loss Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 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 (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 Tearded the 2014 In theranda, 11.902.314 $ per darem 11.909.635 S 122, 020 12,032.655 11.757.399 124,331 1 1.881.730 1201963 6,235,699 4,009,029 6.112.NO 3.970,536 10,244.728 Net sules Royalty income Total revenues Casts and operating expenses Cost of gods sold Selling, general and administrative expenses Impairment of goodwill and intangible assets Total costs and operating expenses Operating in Interest income Interestepense 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 70,544 10.519.777 1.499.226 9.094 (94.730) 2.001 1,415,591 214064 1.172.527 (98.421) 1,074,106 ROUN 1.416 1.798,314 6,911 (86,104) 1,787,927 7.152 (88.772) 1.028 1,707,335 392.204 1,315,131 (83.538) 1.211.591 1.713.576 385.827 1,127,749 (200,244) 1.047,505 S S 2.82 5 (024) 258S 3,09 0.19) 2.90 3.07 (0.65) $ 2.78 5 3.04 S ( 36) 19) 064 525 5285 S 1.530) S TINS 1075 See notes to consolidated financial statements VF CORPORATION Consolidated Statements of Comprehensive Income Year Ended December $ 1.074.106 $ 1.231.593 $ 1.047.505 (52.028) (24.382) (361.814) 586 (469,663) 6,075 (62.556) 61.966 (203,234) 37.518 (5.384) 65.212 2.584 50.922 (43.836) 5.445 (1.571) 60.588 Net income Other comprehensive income (less) Foreign currency translation and other Gains Cosses) arising during year Less income tax effect Defined benefit pension plans Current year actuarial gains (kisses) 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) kosses realized Less income tax effect Martable securities Gains (losses) ansing during year Less income tax effect Reclassification to net income for (gains) losses realized Less income tax effect Wher comprehensive income (less) Comprehensive income 90708 (9.672) (107.457) 88.387 (34.736) 89.993 (34.668) (64.976) 25,404 35.092 (12.619) 495 (195) (1.177 (608 274 (340.950 390. 63 $ (490.552) 556053 S 1.075.865 $ See notes to solidated financial statements 2014 854 VF CORPORATION Consolidated Statements of Cash Flows Year Ended December 2016 2015 In thousands Operating activities Net income $ 1,074,106 $ 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 281,577 272,075 274,883 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 104,357 Other, net (15.232) (34,784) 4,112 Changes in operating assets and liabilities: Accounts receivable 47.102 (124,248) 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 S 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 S 1 10,078 $ 2.746,590 S (211,720) $ Retained Earnines 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) (1,043,222) 426,614,274 106,654 3,192,675 - 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) $ 414.012,954 S 103,503 $ 3,333,423 S 2,545,458 See notes to consolidated financial statements