CT2. The financial statements of Columbia Sportswear Company are presented in Appendix B. Financial statements of Under Armour, Ine are presented in Appendix.C Instructions a. For each company, calculate the following values for 2018. 1. Working capital. 2. Current ratio. 3. Debt to assets ratio. b. Based on your findings above, discuss the relative liquidity and solvency of the two companies. COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) 2018 Year Ended December 31, 2017 2016 $2,377,045 Net sales Cost of sales $2,802,326 $2,466,105 1,415,978 1,306,143 1,266,697 Gross profit Selling, general and administrative expenses 1,386,348 1,159,962 1,110,348 1,051,152 910,894 Net licensing income Income from operations 15,786 13.901 350,982 262,969 Interest income, net 9,876 4.515 Interest expense on note payable to related party (Note 22) (429) 864,084 10.244 256,508 2,003 (1,041) Other non-operating expense (141) (321) (572) Income before income tax 360,717 266,734 256,898 Income tax expense (Note 11) Net income (85,769) (154.419) (58,459) 274.948 112,315 198,439 Net income attributable to non-controlling interest 6,692 7.192 6.541 Diluted Net income attributable to Columbia Sportswear Company Earnings per share attributable to Columbia Sportswear Company (Note 17): Basic Weighted average shares outstanding (Note 17): Basic Diluted $ 268,256 $ 105,123 $ 191,898 $ 3.85 1.51 $ 2.75 3.81 1.49 2.72 69,614 69,759 69,683 70,401 70,453 70,632 COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) Year Ended December 31, 2018 Net income Other comprehensive income (loss): Unrealized holding losses on available-for-sale securities (net of tax effects of $17, So, and So, respectively) Unrealized gains (losses) on derivative transactions (net of tax effects of $(7,782), $8,176, and ($1,922), respectively) Foreign currency translation adjustments (net of tax effects of $1,557, $(4), and $347, respectively) Other comprehensive income (loss) Comprehensive income Comprehensive income attributable to non-controlling interest 24.262 $274.948 2017 $112,315 2016 $198,439 (56) (2) (18,005) 843 (18,079) 34,160 (4-485) 6,127 16.155 (3,644) 281,075 128,470 194.795 7.480 9,617 4.528 Comprehensive income attributable to Columbia Sportswear Company $273.596 $118,853 $190,117 See accompanying notes to consolidated financial statements Current Assets: Cash and cash equivalents (Note 21) Restricted cash (Note 22) Short-term investments (Note 21) Accounts receivable, net (Note 6) Inventories Prepaid expenses and other current assets Total current assets Property, plant, and equipment, net (Note 7) Intangible assets, net (Note 8) Goodwill (Note 8) Deferred income taxes (Note 11) Other non-current assets Total assets Current Liabilities: Accounts payable COLUMBIA SPORTWEAR COMPANY CONSOLIDATED BALANCE SHEETS (In thousands) ASSETS 2018 December 31, 2017 $ 437,825 $ 73,166 13,970 262,802 94,983 449,382 364,862 521,827 457,927 79,500 58.559 1,765,306 1,649,497 291,596 281,394 126,575 129,555 68,594 68,594 78,155 56,804 38,495 27.058 $2,368,721 $2,212,902 LIABILITIES AND EQUITY $274,435 $ 252,301 275,684 22,763 572,882 182,228 19,107 453,636. Accrued liabilities (Note 10) Income taxes payable (Note 11) Total current liabilities Other long-term liabilities (Notes 12, 13) Income taxes payable (Note 11) Deferred income taxes (Note 1) Total liabilities Commitment and contingencies (Note 14) Shareholders' Equity: Preferred stock; 10,000 shares authorized; none issued and outstanding 45.214 50,791 48,735 58,104 9,521 168 678,408 560,643 Common stock (no par value); 250,000 shares authorized; 68,246 and 69,995 issued and outstanding (Note 15) Retained earnings Accumulated other comprehensive loss (Note 18) Total Columbia Sportswear Company shareholders' equity Non-controlling interest (Note 5) 1,677,920 45,829 1,585,009 (4.063) (8,88%) 1,673,857 1,621,951 16.456 30,308 Total equity Total liabilities and equity 1,690,313 1,652,259 $2,368,721 $2,212,902 See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands). Year Ended December 31, 2018 2017 2016 Cash flows from operating activities: Net income $274,948 $112,315 $198,439 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 58,230 59,945 60,016 Loss on disposal or impairment of property, plant, and equipment 4,208 1,927 Deferred income taxes 1,462 44,851 4,805 (19,178) Stock-based compensation 14,291 11,286 10,986 Changes in operating assets and liabilities: Accounts receivable Inventories Prepaid expenses and other current assets Other assets Accounts payable (25,601) (24,197) 36,710 (94,716) 46,662 (18,777) (9,771) (19,241) (5,452) (12,421) 931 (5,948) 19,384 30,568 1,483 Accrued liabilities 86,900 11,581 4,847 Income taxes payable (3,958) 58,702 4,768 Other liabilities (3.387) 5.798 2,468 Net cash provided by operating activities 289,569 341,128 275,167 Cash flows from investing activities: Purchases of short-term investments (518,755) (130,993) (21,263) Sales and maturities of short-term investments 352,127 36,282 21,263 Capital expenditures (65,622) (53,352) (49,987) Proceeds from sale of property, plant, and equipment 19 279 97 Net cash used in investing activities (232,231) (147,784) (49,890) Cash flows from financing activities: Proceeds from credit facilities 70,576 3,374 62,885 Repayments on credit facilities (70,576) (3,374) (64,825) Proceeds from issuance of common stock related to stock-based compensation 18,484 19,946 13,167 Tax payments related to stock-based compensation (4,285) (3,662) (5,117) Repurchase of common stock (201,600) (35,542) (11) Cash dividends paid (62,664) (50,909) (48,122) Cash dividends paid to non-controlling interest (19,949) Payment of related party note payable Net cash used in financing activities (14.236) (270,014) (84,403) (42,023) Net effect of exchange rate changes on cash (8,695) 12,836 (1,635) Net (decrease) increase in cash, cash equivalents and restricted cash (221,371) 121,777 181,619 Cash, cash equivalents and restricted cash, beginning of period 673,166 551.389 369,720 Cash, cash equivalents and restricted cash, end of period Supplemental disclosures of cash flow information: $451.795 $673,166 $551,389 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 $ 77,408 $ 81,045 $ 70,424 685 1,049 11,831 3,188 2,710 BALANCE, JANUARY her comprobetave incom Repurchase of o BALANCE, DECEMBER Cash dividends (0.73 per share BALANCE, DECEM other probere inco Ured balding losses on available de sale Unread balding pea sa dettative treat Cash dividreds Dividends to p shares Adoptios of accounting standards Hock beet p p BALANCE DECEMBER Columbia Sportwear Company Shareholdery Equity Common Stock Outstanding M Q Kase Zoom Out Related Earnings Accumulated Corb New Cantriling S Total kasa 10533 00 A 3318 A W LINY 34,000 H Socrate Mat 00 543 Deato Ka BADO HARL Appendix C Specimen Financial Statements: Under Armour, Inc. Mam Mar ton Net revenues Cost of goods sold Gross profit Selling, general and administrative expenses Restructuring and impairment charges Income (loss) from operations Interest expense, net Other expense, net Income (loss) before income taxes Income tax expense (benefit) Income from equity method investment Net income (loss) Adjustment payment to Class C capital stockholders Net income (loss) available to all stockholders Basic net income (loss) per share of Class A and B common stock Basic net income (loss) per share of Class C common stock Diluted net income (loss) per share of Class A and B common stock Diluted net income (loss) per share of Class C common stock Weighted average common shares outstanding Class A and B common stock Basic Diluted Weighted average common shares outstanding Class C common stock Under Armour, Inc. and Subsidiaries Consolidated Statements of Operations (In thousands, except per share amounts) 2018 $5,193,185 Year Ended December 31, 2017 $4,989,244 3,737,830 2016 $4,833.338 2,852,714 2,584,724 2:340,471 2,251,414 2,248,614 2,182,339 2,099,522 1,831,143 183.149 124,049 (25.017) 27,843 417-471 (33.568) (34,538) (26,434) (9,203) (3,614) (2,755) (67.788) (10,309) 388,282 (20,552) 37.951 131,303 934 (46.302) (48,260) 256.979 59,000 $ (46,302) $ (48,260) $197.979 $ (0.10) $ (0.11) $ 0.45 $ (0.10) $ (0.11) $ 0.72 $ (0.10) $ (0.11) $ 0.45 $ (0.10) S (0.11) $ 0.71 221,001 219,254 217,707 221,001 219,254 221,944 Basic 224,814 221,475 218,623 Diluted 224,814 221,475 222,904 See accompanying notes. Under Armour, Inc. and Sabsidiaries Consolidated Statements of Comprehensive Income (Loss) (In thousands) Year Ended December 31, 2018 Net income (loss) 46) 2017 (4860) 2016 Sayfory Other comprehensive Income (loss) Torsign currency translation adjustment (all) 23-337 D Unrealized gain (loss) on cash flow hedge, net of tax benefit (egen) of $926) 55 668 and 5(3.346) for the years ended December 31, 2018, 20, and aos6, respectively Gale (loss) on intra-entity foreign currency transaction (16,604) sole ) (410) Total other comprehensive income (loss) (775) 393 (vagal Compesbenthe income (lass) Mao See accompanying notes, Depo H Capital Under Armour, Inc. and Subsidiaries Consolidated Statements of Cash Flows (In thousands) Year Ended December 31, 2018 2017 2016 Cash flows from operating activities Net income (loss) $(46,302) $(48,260) $256,979 Adjustments to reconcile net income (loss) to net cash provided by operating activities Depreciation and amortization Unrealized foreign currency exchange rate (gains) losses 181,768 14.023 Impairment charges 9,893 173747 (29.247) 74,378 144770 12,627 Amortization of bond premium 254 254 Loss on disposal of property and equipment 4.256 3313 1,580 Stock-based compensation 41783 39.932 46,149 Excess tax benefit (loss) from stock-based compensation arrangements (75) 44783 Deferred income taxes (38.544) 55.910 (43.004) Changes in reserves and allowances (234.998) 108,757 70,188 Changes in operating assets and liabilities: Accounts receivable 86,834 (79,106) (249.853) Inventories 109,919 (222,391) (148,055) Prepaid expenses and other assets (107.855) (52,106) (23,029) Accounts payable 26,413 145,695 202,446 Accrued expenses and other liabilities Customer refund liability 134594 109.823 671754 305441 Income taxes payable and receivable 41.954 (39.164) (16.712) Net cash provided by operating activities 628.230 337460 366,623 Cash flows from investing activities Purchases of property and equipment (170,385) (28.339) (316458) Sale of property and equipment 11.285 Purchases of property and equipment from related parties (70288) Purchase of equity method investment (39,207) Purchases of available-for-sale securities Sales of available-for-sale securities Purchases of other assets Net cash used in investing activities Cash flows from financing activities Proceeds from long term debt and revolving credit facility (4.597) (202.904) (1.648) (282,987) (24.330) 30,712 (8-5) (384139) 505,000 763,000 1,327,601 Payments on long term debt and revolving credit facility (695,000) (665,000) (1,370,750) Employee taxes paid for shares withheld for income taxes (2.743) (2,781) (15.098) Proceeds from exercise of stock options and other stock issuances 2,580 11.540 15.485 Other financing fees 306 Payments of debt financing costs (11) (6,692) Cash dividends paid (2,927) Contingent consideration payments for acquisitions (1505) Net cash provided by (used in) financing activities (189,868) 106,759 146,114 Effect of exchange rate changes on cash, cash equivalents and restricted cash 12.46 4478 (87) Net increase in cash, cash equivalents and restricted cash 247.925 65410 122,873 Cash, cash equivalents and restricted cash Beginning of period 318x35 253.735 129,852 End of period Non-cash investing and financing activities Change in accrual for property and equipment Non-cash dividends Other supplemental information $566,060 $338.313 $253.735 $(14,611) $10,580 $16.973 (36,073) Cash paid for income taxes, net of refunds (16,738) 36.921 135.959 Cash paid for interest, net of capitalized interest 28,586 29.750 21,412 See accompanying notes