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 elther a-signes -15,000 or in parenthesis es (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) 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 22). 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 Year Ended December 31, 2016 2015 2014 $ 2.377,045 $ 2,326,180 $2,100,590 1,266,697 1,252,680 1,145,639 1,110,348 1,073,500 954.951 864.084 831.971 763,063 10,244 8,192 6,956 256,508 249,721 198,844 2.003 1,531 1,004 (1.041) (1,099) (1,053) (572) (2,834) (274) 256,898 247,319 198,521 (58.459) (67,468) (56,662) 198.439 179,851 141,859 6,541 5,514 4.686 $ 191.898 $ 174,337 $ 137.173 2.75 $ 2.72 2.48 $ 2.45 1.97 1.94 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 198,439 $179.851 S 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 S. (53), and (55), respectively Unrealized gains classes) on derivative transactions (net of tax effects of ($1.922), (5849) and ($1.507), respectively). Foreign currency translation adjustments (net of tax effects of (5347). (5760) and 51,023, 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) 194,793 142,050 121.831 4.678 4382 4,185 $190,117 5 137,668 $ 117.646 See necompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY CONSOLIDATED BALANCE SHEETS (In thousands) December 31 2015 ASSETS Current Assets Cash and cash equivalents. Short-term investments Accounts receivable, nes Notes S 551,389 $ 369,770 472 629 371933 487,997 473,657 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 $ 1,846,153 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 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 215.048 142,158 5,645 362.851 14.053 42.622 12.710 142 432.383 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 $ 1.846,153 See accompanying notes to consolidated financial statements COLUMBIA SPORTSWEAR COMPANY 2014 141,859 54,017 481 (6,978) 11.120 (4,927) CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) Year Ended December 31, 2016 2015 Cash flows from operating activities: Net income... $ 198,439 $ 179.851 $ Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization... 60,016 56,521 Loss on disposal or impairment of property, plant, and equipment.... 4.805 5,098 Deferred income taxes (19,178) (11.709) Stock-based compensation.. 10,986 11,672 Excess tax benefit from employee stock plans. (7.873) Changes in operating assets and liabilities: Accounts receivable 36.710 (40,419) Inventories (18,777) (103,296) Prepaid expenses and other current assets (5,452) 4,411 Other assets. (5.948) (2,524) Accounts payable 1.483 11.418 Accrued liabilities 4.847 (2.017) Income taxes payable 4.768 (10994) Other liabilities... 2,468 4,966 Net cash provided by operating activities 275.167 95,105 Cash flows from investing activities: Acquisition of business, net of cash acquired Purchases of short-term investments.. (21.263) (38,208) Sales of short-term investments 21.263 64.980 Capital expenditures. (49.987) (69.917) Proceeds from sale of property, plant, and equipment. 97 144 Net cash used in investing activities (49.890) (43.001) (31,478) (62,086) (4.869) 4,291 41.941 35,051 1.166 6,195 185.783 (188,467) (48,243) 112.895 (60,283) 71 (184,027) 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 puid 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 53,429 52,356 (64.825) (51,479) (52,205) 13,167 17,442 22,277 (5,117) (4,895) (3,141) 7.873 4,927 (11) (70,068) (15,000) (48,122) (43,547) (39.836) 16,072 (42,023) (91,245) (14,550) (1.635) (4.647) (11.137) 181.619 (43.788) (23,931) 369.770 413.558 437.489 551,389 $ 369,770 $ 413.558 s 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 Non- Shares Retained Comprehensive Controlling Outstanding Amount Earnings Income Loss) Interest Total 69.190 $ 52.325 $1.157.733 S 35.360 5 7.446 $ 1,252.864 BALANCE, JANUARY 1, 2014 137,173 - 4,686 141.859 - 10 10 T 11 7,751 (27,288) (501) 7.751 (27.789) (39,836) (39,836) 1.059 19,136 5.119 11,120 (15,000) 72,700 19.136 5,119 11.120 (15,000) 1,355,234 179.851 (421) 69.828 15.833 1.255,070 174,337 11,631 5.514 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, nel Unrealized holding losses on derivative transactions, net Foreign currency translation adjustment, net Cash dividends (50.62 per share)... Issuance of common stock under employee stock plans.net Tux 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, nel Unrealized holding gains on derivative (6) (6) 1 (2.908) (33.755) (1,132) (2,9082 (34.887) (43 547) (43,547) 835 12.547 7,925 11.672 (70.068) 34,776 12.547 7.925 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) (2,465) (2,020) (48,122) (4,485) (48,122) 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 596 8.050 10,986 (11) 69,873 $ 53,801 $1.529,636 S 8,050 10.986 (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 1.197.678 1.569,325 298,233 4,293,098 939.650 1,839,698 1.736,959 929,882 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 Accried liabilities Current liabilities of discontinued operations Toul current liabilities Long-term debt Other liabilities Other liabilities of discontinued operations Commitments and contingencies Total liabilities Stockholders 1,289,962 1,555,360 284,215 89.176 4,163,136 945,491 1.948,61 1.788.407 583,866 210,031 9,639,542 9.739.287 $ 26,029 253,689 664.644 841,038 449,500 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 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 103,503 3,333,423 (1,041,463) 2.545,458 4.940,921 9.739,2875 106,654 3,192,675 (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 2014 s Year Ended December 2016 2015 In thousands, except per share 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 Los from discontinued operations, net of tax Net income Earnings per common share-basie Continuing operations Diconic 6.196,335 4.243.798 79,644 10.519.777 1.499.226 9.094 194,730) 2.001 1.415.591 343.064 1.172.527 (98.421) 1.074.106 S 10.244,728 1,787.927 7.152 (88.772) 1.028 1.707.335 392,204 1,315.131 (83.518) 1.231,3935 10.083,416 1.798,314 6,911 (86,104) (5.545) 1,713,576 385,827 1.327.749 (280 344) 1.047.505 $ 3.09 5 3.07 2.825 0 2.58 $ 2.90 $ 2.42 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 2.78 $ (0.24) 2.54 $ 1.5300 $ 3.04 $ (0.19) 2.85 $ 1.3300 S 3.02 (0.64) 2.38 1.1075 $ $ See notes to consolidated financial statements. VF CORPORATION Consolidated Statements of Comprehensive Income 2016 2014 Year Ended Tecember 3015 In thousands 1,231,593 $ $ 1.074.106 1.047,505 (52,028) (24,382) (361.814) 386 (469,663) 6,075 (5,384) 65.212 2.584 50.922 (43.836) (62.556) 61.966 3.038 4.062 (1.571) (203,234 37.518 5.445 60.588 Net income Other comprehensive income (los) 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 Aindriation of deferred prior service costs Roclassification of het actuarial loss from settlement charge Less income tax effect Derivative financial instruments Gains (losses) arising during year Less income tax effect Reclassification to not 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 cualized Less income tax effect Other comprehensive income (los) Comprehensive income 90.708 (9.672) (107457) 35.092 89.993 (34.668) (64.976) 25,404 88,387 (34.736) 32.111 (12.619) (698) TII 495 (195) (1.177) 463 (340,950) 816-35 1.759 1,075,865 (490.552 556.950 VE CORPORATION Consolidated Statements of Cash Flows 2016 Year Ended December 2015 In thousands 2014 1,074,106 $ 1.231,593 $ 1,047,505 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) 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 Accounts payable Income taxes Accrued liabilities Other assets and liabilities Cash provided by operating activities Investing activities Capital expenditures Proceeds from sale of businesses, net of cash sold Software purchases (34.784) 4,112 47,102 (37,210) (9,553) (129,574) 28,904 (48,627) 1,477,919 (124.248) (175,098) 14.225 4,206 (14.505) 2.599 1.203.430 854 (130,540) 69.807 20,293 41.989 22,614 1,762,066 (254,501) (234,077) (175.840) 115,983 44.226) (63,283) (67.943) Retained Earnings 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) $ 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 Forciun 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 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 Foreign currency translation and other Defined benefit pension plans Derivative financial instruments Balance, December 2016 (76,410) 69,498 8.671 3,333,423 $ 1.041.463) $ 414.012954 103,503 $ 2.545.458 See notes to consolidated financial statements