What changed in this filing

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Item 1. Financial Statements

2021-05-06 compared with 2020-11-05 · 176 added, 405 removed, 356 unchanged (62% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands) September 30,

(in thousands) March 31,

2021 December 31,

2019 September 30,

2020 March 31,

Current Assets:

3 unchanged sentences

338,787 452,945 312,951

Inventories 771,724 605,968 717,396

Inventories, net 525,704 556,530 577,124

Prepaid expenses and other current assets 66,173 54,197 113,726

10 unchanged sentences

Current Liabilities:

Short-term borrowings $ — $ — $ 174,443

Accounts payable 165,555 206,697 150,971

12 unchanged sentences

10,000 shares authorized;

none issued and outstanding

no ne issued and outstanding

Common stock (no par value);

3 unchanged sentences

Retained earnings 1,850,415 1,811,800 1,704,000

Accumulated other comprehensive loss ( 6,370 ) ( 4,425 ) ( 7,273 )

Accumulated other comprehensive income (loss) ( 3,835 ) 806 ( 7,974 )

Total shareholders' equity 1,868,810 1,832,771 1,696,591

3 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands, except per share amounts) 2021 2020

$ 701,092 $ 906,793 $ 1,585,931 $ 2,087,611

Net sales $ 625,606 $ 568,228

Cost of sales 304,204 296,514

358,184 460,098 825,079 1,050,596

342,908 446,695 760,852 1,037,015

Gross profit 321,402 271,714

Selling, general and administrative expenses 254,389 276,820

261,192 299,249 755,664 791,767

Net licensing income 3,467 3,119

3,927 4,569 8,168 11,090

Income from operations

85,643 152,015 13,356 256,338

Interest income (expense), net

( 280 ) 1,399 728 7,370

Income (loss) from operations 70,480 ( 1,987 )

Interest income, net 278 1,813

Other non-operating income (expense), net ( 304 ) 1,738

( 465 ) ( 563 ) 2,208 915

Income before income tax 70,454 1,564

84,898 152,851 16,292 264,623

Income tax expense ( 14,554 ) ( 1,351 )

( 22,147 ) ( 33,593 ) ( 4,035 ) ( 48,159 )

$ 62,751 $ 119,258 $ 12,257 $ 216,464

Net income 55,900 213

Earnings per share:

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COLUMBIA SPORTSWEAR COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended September 30, Nine Months Ended September 30,

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Three Months Ended March 31,

(in thousands) 2021 2020

1 unchanged sentence

Other comprehensive loss:

Unrealized holding gains on available-for-sale securities, net

Unrealized gains (losses) on derivative transactions (net of tax effects of $ 3,995 , $( 801 ), $ 1,371 and $( 369 ), respectively)

( 11,685 ) 2,414 ( 5,022 ) 1,866

Unrealized gains on derivative transactions (net of tax effects of $( 3,368 ) and $( 4,145 ), respectively)

Foreign currency translation adjustments (net of tax effects of $ 414 and $ 497 , respectively)

1 unchanged sentence

Other comprehensive loss ( 4,641 ) ( 3,549 )

Comprehensive income $ 62,241 $ 113,283 $ 10,312 $ 213,353

Comprehensive income (loss) $ 51,259 $ ( 3,336 )

See accompanying notes to condensed consolidated financial statements

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2021 2020

1 unchanged sentence

Net income $ 55,900 $ 213

Adjustments to reconcile net income to net cash used in operating activities:

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation, amortization, and non-cash lease expense 30,459 32,994

Provision for uncollectible accounts receivable ( 7,849 ) 19,229

Loss on disposal or impairment of property, plant and equipment, and right-of-use assets 8,981 4,866

Loss on disposal or impairment of property, plant and equipment 131 2,138

Deferred income taxes 4,577 3,802

2 unchanged sentences

Accounts receivable 117,818 150,687

Inventories ( 160,090 ) ( 198,999 )

Inventories, net 25,117 23,510

Prepaid expenses and other current assets ( 11,150 ) ( 11,922 )

5 unchanged sentences

Other liabilities ( 18 ) ( 1,200 )

Net cash used in operating activities ( 197,960 ) ( 198,159 )

Net cash provided by operating activities 110,899 12,754

Cash flows from investing activities:

2 unchanged sentences

Capital expenditures ( 3,896 ) ( 9,452 )

Net cash provided by (used in) investing activities ( 23,578 ) 159,717

Net cash used in investing activities ( 2,842 ) ( 42,865 )

Cash flows from financing activities:

1 unchanged sentence

Repayments on credit facilities ( 7,532 ) ( 1,054 )

Payment of line of credit issuance fees ( 2,096 ) —

Proceeds from issuance of common stock related to stock-based compensation 13,772 1,096

1 unchanged sentence

Repurchase of common stock ( 11,223 ) ( 132,889 )

Purchase of non-controlling interest — ( 17,880 )

Cash dividends paid ( 17,285 ) ( 17,195 )

Net cash used in financing activities ( 152,314 ) ( 171,088 )

Net cash provided by (used in) financing activities ( 19,873 ) 21,470

Net effect of exchange rate changes on cash ( 5,268 ) ( 6,260 )

Net decrease in cash and cash equivalents ( 372,580 ) ( 212,484 )

Net increase (decrease) in cash and cash equivalents 82,916 ( 14,901 )

Cash and cash equivalents, beginning of period 790,725 686,009

1 unchanged sentence

Supplemental disclosures of cash flow information:

Cash paid during the period for income taxes $ 18,385 $ 73,413

Cash paid during the year for income taxes $ 37,534 $ 19,953

Supplemental disclosures of non-cash investing and financing activities:

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CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Three Months Ended September 30, 2020

(in thousands, except per share amounts) Common Stock Retained Earnings Accumulated Other Comprehensive Loss Total

BALANCE, JUNE 30, 2020 66,148 $ 5,396 $ 1,653,293 $ ( 5,860 ) $ 1,652,829

— — 62,751 — 62,751

Other comprehensive loss:

Unrealized holding losses on derivative transactions, net

— — — ( 11,685 ) ( 11,685 )

Foreign currency translation adjustment, net — — — 11,175 11,175

Issuance of common stock related to stock-based compensation, net

62 2,656 — — 2,656

Stock-based compensation expense — 5,090 — — 5,090

BALANCE, SEPTEMBER 30, 2020 66,210 $ 13,142 $ 1,716,044 $ ( 6,370 ) $ 1,722,816

Three Months Ended September 30, 2019

(in thousands, except per share amounts) Common Stock Retained Earnings Accumulated Other Comprehensive Loss Total

BALANCE, JUNE 30, 2019 67,586 $ 100 $ 1,656,392 $ ( 1,298 ) $ 1,655,194

— — 119,258 — 119,258

Other comprehensive loss:

Unrealized holding gains on derivative transactions, net

— — — 2,414 2,414

Foreign currency translation adjustment, net — — — ( 8,389 ) ( 8,389 )

Cash dividends ($ 0.24 per share)

— — ( 16,231 ) — ( 16,231 )

Issuance of common stock related to stock-based compensation, net

135 6,251 — — 6,251

Stock-based compensation expense — 4,378 — — 4,378

Repurchase of common stock ( 159 ) ( 10,729 ) ( 5,040 ) — ( 15,769 )

BALANCE, SEPTEMBER 30, 2019 67,562 $ — $ 1,754,379 $ ( 7,273 ) $ 1,747,106

See accompanying notes to condensed consolidated financial statements.

COLUMBIA SPORTSWEAR COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

Nine months ended September 30, 2020

Common Stock Retained Earnings Accumulated Other Comprehensive Loss Total

Three Months Ended March 31, 2021

(in thousands, except per share amounts) Common Stock Retained Earnings Accumulated Other Comprehensive Income (Loss) Total

Outstanding Amount

BALANCE, DECEMBER 31, 2020

66,252 $ 20,165 $ 1,811,800 $ 806 $ 1,832,771

Net income — — 55,900 — 55,900

Other comprehensive loss:

Unrealized holding losses on derivative transactions, net

— — — ( 5,022 ) ( 5,022 )

Unrealized gains on derivative transactions, net — — — 8,563 8,563

Foreign currency translation adjustment, net — — — ( 13,204 ) ( 13,204 )

5 unchanged sentences

Repurchase of common stock ( 109 ) ( 11,223 ) — — ( 11,223 )

BALANCE, SEPTEMBER 30, 2020 66,210 $ 13,142 $ 1,716,044 $ ( 6,370 ) $ 1,722,816

Nine Months Ended September 30, 2019

Columbia Sportswear Company Shareholders' Equity

Common Stock Retained Earnings Accumulated Other Comprehensive Loss Non-Controlling Interest Total

BALANCE, MARCH 31, 2021

66,457 $ 22,230 $ 1,850,415 $ ( 3,835 ) $ 1,868,810

Three Months Ended March 31, 2020

(in thousands, except per share amounts) Common Stock Retained Earnings Accumulated Other Comprehensive Income (Loss) Total

Outstanding Amount

BALANCE, DECEMBER 31, 2019

67,561 $ 4,937 $ 1,848,935 $ ( 4,425 ) $ 1,849,447

Purchase of non-controlling interest — — — ( 99 ) ( 16,456 ) ( 16,555 )

Net income — — 213 — 213

Other comprehensive loss:

Unrealized holding gains on available for-sale-securities, net

— — — 56 — 56

Unrealized holding gains on derivative transactions, net

— — — 1,866 — 1,866

Unrealized gains on derivative transactions, net — — — 11,525 11,525

Foreign currency translation adjustment, net — — — ( 15,074 ) ( 15,074 )

— — — ( 5,033 ) — ( 5,033 )

Cash dividends ($ 0.26 per share)

3 unchanged sentences

Stock-based compensation expense — 3,675 — — 3,675

— 13,159 — — — 13,159

Repurchase of common stock ( 1,557 ) ( 4,936 ) ( 127,953 ) — ( 132,889 )

BALANCE, MARCH 31, 2020

66,116 $ 565 $ 1,704,000 $ ( 7,974 ) $ 1,696,591

BALANCE, SEPTEMBER 30, 2019 67,562 $ — $ 1,754,379 $ ( 7,273 ) $ — $ 1,747,106

See accompanying notes to condensed consolidated financial statements

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Note 5 Income Taxes 9

Note 6 Product Warranty 14

Note 6 Commitments and Contingencies 10

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Note 9 Earnings Per Share 10

Note 11 Accumulated Other Comprehensive Loss 15

Note 10 Accumulated Other Comprehensive Income (Loss) 11

Note 11 Segment Information 12

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NOTE 1—BASIS OF PRESENTATION AND ORGANIZATION

The accompanying unaudited condensed consolidated financial statements have been prepared by the management of Columbia Sportswear Company (together with its wholly owned subsidiaries, the "Company") and, in the opinion of management, include all normal recurring material adjustments necessary to present fairly the Company's financial position as of September 30, 2020, December 31, 2019 and September 30, 2019, and the results of operations for the three and nine months ended September 30, 2020 and 2019, and cash flows for the nine months ended September 30, 2020 and 2019.

The accompanying unaudited condensed consolidated financial statements have been prepared by the management of Columbia Sportswear Company (together with its wholly owned subsidiaries, the "Company") and, in the opinion of management, include all normal recurring material adjustments necessary to present fairly the Company's financial position as of March 31, 2021, December 31, 2020 and March 31, 2020, and the results of operations and cash flows for the three months ended March 31, 2021 and 2020.

The December 31, 2020 financial information was derived from the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

A significant part of the Company's business is of a seasonal nature;

therefore, results of operations for the three and nine months ended September 30, 2020 are not necessarily indicative of results to be expected for other quarterly periods or for the full year.

therefore, results of operations for the three months ended March 31, 2021 are not necessarily indicative of results to be expected for other quarterly periods or for the full year.

Certain information and disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission.

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The condensed consolidated financial statements include the accounts of Columbia Sportswear Company and its wholly owned subsidiaries.

All significant intercompany balances and transactions have been eliminated in consolidation.

Intercompany balances and transactions have been eliminated in consolidation.

Estimates and Assumptions

1 unchanged sentence

Actual results may differ from these estimates and assumptions.

Some of the more significant estimates relate to revenue recognition, allowance for uncollectible accounts receivable, excess, close-out and slow moving inventory, product warranty, impairment of long-lived assets, intangible assets and goodwill, income taxes, and stock-based compensation.

A novel strain of coronavirus ("COVID-19") was first identified in China in December 2019 and a global pandemic of respiratory disease caused by COVID-19 was declared by the World Health Organization in March 2020.

The current environment of uncertainty significantly affected the September 30, 2020 estimates for allowance for uncollectible accounts receivable and excess, close-out and slow-moving inventory.

These estimates involve assumptions about future events.

The allowance for uncollectible accounts receivable includes assumptions about the future financial condition of the Company's customers and their ability to make required payments.

The provision for excess, close-out and slow moving inventory includes assumptions about future demand for the Company’s products and the Company's ability to sell them at a profit.

As a result of lower consumer demand related to the COVID-19 pandemic, the Company tested certain retail locations and their respective lease right-of-use assets for impairment.

For the three and nine months ended September 30, 2020, impairment charges for certain underperforming retail stores were $ 0.1 million and $ 6.7 million, respectively.

These charges were recognized in Selling, general and administrative expenses (" SG&A expense ").

Additionally, as a result of the COVID-19 pandemic and a significant decline in projected net sales, the prAna brand's trademark and goodwill were tested for impairment as of March 31, 2020.

While no impairment was indicated during the first quarter 2020 tests, the degree by which the fair value of the prAna reporting unit and trademark exceeded their respective carrying values declined from the Company's 2019 impairment test.

After performing both qualitative and quantitative analysis, including review of future long-term revenue and cash flow assumptions, the Company concluded a triggering event requiring measurement of the prAna brand's trademark and goodwill for impairment during the quarter ended September 30, 2020 did not occur.

As of September 30, 2020, the Company received or negotiated lease concessions related to the effects of the COVID-19 pandemic on a portion of its stores.

In April 2020, the Financial Accounting Standards Board (“FASB”) issued a Staff Q&A, Topic 842 and 840:

Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic.

The FASB staff indicated that it would be acceptable for entities to make an election to account for lease concessions related to the effects of the COVID-19 pandemic consistent with how they would be accounted for as though enforceable rights and obligations for those concessions existed in the original contract.

The Company elected to account for lease concessions related to the effects of the COVID-19 pandemic in accordance with the Staff Q&A.

For concessions that provide a deferral of payments with no substantive changes to the consideration in the original contract, the Company continues to recognize

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

expense during the deferral period.

For concessions in the form of lease abatements, the reduced lease payments are accounted for as reductions to variable lease expense.

In the periods presented, lease concessions reducing variable lease expense were not material.

In response to the COVID-19 pandemic, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law in the United States on March 27, 2020.

The CARES Act provides payroll tax credits for employee retention, deferral of payroll tax payments and several income tax provision modifications.

Additionally, there are other subsidies and incentives provided by foreign governments in the countries where the Company conducts business.

For the three and nine months ended September 30, 2020, $ 2.8 million and $ 7.1 million, respectively, of government subsidies and incentives reduced SG&A expense .

Some of the more significant estimates relate to revenue recognition;

allowance for uncollectible accounts receivable;

obsolescence reserves for excess, close-out and slow moving inventory;

impairment of long-lived assets, intangible assets and goodwill;

and income taxes.

Recently Adopted Accounting Pronouncements

Effective January 1, 2021, the Company adopted Accounting Standards Update ("ASU") No.

2018-15, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40) issued by the FASB in August 2018, which clarifies certain aspects of accounting for implementation costs incurred in a cloud computing arrangement ("CCA") that is a service contract.

Under the ASU, an entity would expense costs incurred in the preliminary-project and post-implementation-operation stages.

The entity would also capitalize certain costs incurred during the application-development stage, as well as certain costs related to enhancements.

The ASU does not change the accounting for the service component of a CCA.

The Company adopted the standard using the prospective method and anticipates an increase in cloud-specific implementation assets as specific cloud initiatives are executed by the Company.

These assets will generally be included in Other non-current assets in the Condensed Consolidated Balance Sheets and will amortize over their assessed useful lives or the term of the underlying cloud computing hosting contract, whichever is shorter.

Upon the adoption of the standard, there was no immediate impact to the Company's financial position, results of operations or cash flows.

Effective January 1, 2020, the Company adopted ASU No.

2017-04, Intangibles - Goodwill and Other (Topic 350):

Simplifying the Test for Goodwill Impairment issued by the FASB in January 2017, which simplifies the accounting for goodwill impairments by eliminating step two from the goodwill impairment test.

Under this guidance, if the carrying amount of a reporting unit exceeds its estimated fair value, an impairment charge shall be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

The impact of the new standard will depend on the specific facts and circumstances of future individual goodwill impairments, if any.

Effective January 1, 2020, the Company adopted ASU No.

2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments issued by the FASB in June 2016, as well as the clarifying amendments subsequently issued.

The pronouncement changes the impairment model for most financial assets and will require the use of an "expected loss" model for instruments measured at amortized cost.

Under this model, entities will be required to estimate the lifetime expected credit loss on such instruments and record an allowance to offset the amortized cost basis of the financial asset, resulting in a net presentation of the amount expected to be collected on the financial asset.

Upon adoption of the standard, there was no immediate impact to the Company's financial position, results of operations or cash flows.

On an ongoing basis, the Company will contemplate forward-looking economic conditions in recording lifetime expected credit losses for the Company’s financial assets measured at cost, such as the Company’s trade receivables and certain short-term investments.

Summary of Significant Accounting Policies

Except as disclosed below, there have been no significant changes to the Company's significant accounting policies as described in Note 2 in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.

The following significant accounting policies have been updated since the Company’s 2019 Annual Report on Form 10-K as a result of the adoption of ASU No.

2016-13 and ASU No.

2018-15, respectively:

Accounts Receivable

Accounts receivable have been reduced by an allowance for doubtful accounts.

The Company maintains the allowance for estimated losses resulting from the inability of the Company's customers to make required payments.

The allowance represents the current estimate of lifetime expected credit losses over the remaining duration of existing accounts receivable considering current market conditions and supportable forecasts when appropriate.

The estimate is a result of the Company’s ongoing evaluation of collectability, customer creditworthiness, historical levels of credit losses, and future expectations.

Write-off activity and recoveries for the periods presented were not material.

Cloud Computing Arrangements

The Company’s CCAs primarily relate to various enterprise resource planning systems, as well as other supporting systems.

These assets are generally included in Other non-current assets in the Condensed Consolidated Balance Sheets and amortize on a straight-line basis over their assessed useful lives or the term of the underlying cloud computing hosting contract, whichever is shorter.

As of September 30, 2020, assets were in-service with useful lives ranging from ten months to five years .

As of September 30, 2020, CCA assets consisted of capitalized implementation costs of $ 24.1 million and associated accumulated amortization of $ 0.7 million.

Changes in these assets are recorded in Other assets within operating activities in the Condensed Consolidated Statements of Cash Flows.

2019-12 , Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes, which, among other things, removes specific exceptions for recognizing deferred taxes for investments, performing intraperiod allocation and calculating income taxes in interim periods, as well as targeted impacts to the accounting for taxes under hybrid tax regimes.

At adoption, there was not a material impact to the Company's financial position, results of operations or cash flows.

Recent Accounting Pronouncements Not Yet Adopted

Index to Notes to Consolidated Financial Statements

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Recent Accounting Pronouncements Not Yet Adopted

In December 2019, the FASB issued ASU No.

2019-12 , Income Taxes (Topic 740):

This standard is effective beginning in the first quarter of 2021 on a prospective basis, with early adoption permitted.

The Company is currently evaluating the impact this accounting standard will have on the Company's financial position, results of operations or cash flows.

NOTE 2—REVENUES

Disaggregated Revenue

As disclosed below in Note 12, the Company has four geographic reportable segments:

As disclosed in Note 11, the Company has four geographic reportable segments:

United States ("U.S."), Latin America and Asia Pacific ("LAAP"), Europe, Middle East and Africa ("EMEA") and Canada.

The following tables disaggregate the Company's operating segment Net sales by product category and sales channel, which the Company believes provide a meaningful depiction of how the nature, timing, and uncertainty of Net sales are affected by economic factors:

Three Months Ended September 30, 2020

(in thousands)

LAAP EMEA Canada Total

Product category net sales

Apparel, Accessories and Equipment $ 332,713 $ 70,026 $ 66,160 $ 41,221 $ 510,120

Footwear 112,907 20,925 32,999 24,141 190,972

Total $ 445,620 $ 90,951 $ 99,159 $ 65,362 $ 701,092

Sales channel net sales

Wholesale $ 282,850 $ 50,723 $ 85,074 $ 52,820 $ 471,467

Direct-to-consumer 162,770 40,228 14,085 12,542 229,625

Total $ 445,620 $ 90,951 $ 99,159 $ 65,362 $ 701,092

Three Months Ended September 30, 2019

(in thousands)

LAAP EMEA Canada Total

Product category net sales

Apparel, Accessories and Equipment $ 459,633 $ 93,486 $ 66,058 $ 65,532 $ 684,709

Footwear 121,630 29,760 38,345 32,349 222,084

Total $ 581,263 $ 123,246 $ 104,403 $ 97,881 $ 906,793

Sales channel net sales

Wholesale $ 396,275 $ 77,934 $ 91,329 $ 86,993 $ 652,531

Direct-to-consumer 184,988 45,312 13,074 10,888 254,262

Total $ 581,263 $ 123,246 $ 104,403 $ 97,881 $ 906,793

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Nine months ended September 30, 2020

The following tables disaggregate the Company's operating segment Net sales by product category and channel, which the Company believes provides a meaningful depiction of how the nature, timing, and uncertainty of Net sales are affected by economic factors:

Three Months Ended March 31, 2021

(in thousands)

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Total $ 408,662 $ 111,977 $ 70,765 $ 34,202 $ 625,606

Sales channel net sales

Channel net sales

Wholesale $ 200,881 $ 55,550 $ 57,764 $ 21,218 $ 335,413

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Total $ 408,662 $ 111,977 $ 70,765 $ 34,202 $ 625,606

Nine Months Ended September 30, 2019

Three Months Ended March 31, 2020

(in thousands)

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Total $ 375,868 $ 102,651 $ 55,848 $ 33,861 $ 568,228

Sales channel net sales

Channel net sales

Wholesale $ 202,868 $ 57,374 $ 42,256 $ 23,462 $ 325,960

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Performance Obligations

For the three and nine months ended September 30, 2020 and 2019, Net sales recognized from performance obligations related to prior periods were not material.

Net sales expected to be recognized in any future period related to remaining performance obligations is not material.

For the three months ended March 31, 2021 and 2020, Net sales recognized from performance obligations related to prior periods were not material.

Net sales expected to be recognized in any future period related to remaining performance obligations are not material.

Contract Balances

As of September 30, 2020, December 31, 2019 and September 30, 2019, contract liabilities included in Accrued liabilities on the Condensed Consolidated Balance Sheets, which consisted of obligations associated with the Company's gift card and customer loyalty programs, were not material.

As of March 31, 2021, December 31, 2020 and March 31, 2020, contract liabilities included in Accrued liabilities on the Condensed Consolidated Balance Sheets, which consisted of obligations associated with the Company's gift card and customer loyalty programs, were not material.

Index to Notes to Consolidated Financial Statements

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Intangible assets, net consisted of the following:

(in thousands) September 30,

2020 December 31,

2019 September 30,

(in thousands)

March 31, 2021 December 31, 2020 March 31, 2020

Intangible assets subject to amortization:

5 unchanged sentences

Customer relationships ( 17,775 ) ( 17,363 ) ( 16,125 )

Total accumulated amortization ( 31,148 ) ( 29,024 ) ( 28,279 )

Accumulated amortization ( 31,973 ) ( 31,561 ) ( 29,769 )

Net carrying amount 5,225 5,637 7,429

1 unchanged sentence

Intangible assets, net $ 103,146 $ 103,558 $ 122,850

Amortization expense for intangible assets subject to amortization was $ 0.6 million and $ 0.7 million for the three months ended September 30, 2020 and 2019, respectively, and was $ 2.1 million and $ 2.2 million for the nine months ended September 30, 2020 and 2019, respectively.

Annual amortization expense is estimated to be as follows for the years 2020 through 2024:

Amortization expense for intangible assets subject to amortization was $ 0.4 million and $ 0.7 million for the three months ended March 31, 2021 and 2020, respectively.

The following table presents the estimated annual amortization expense for the years 2021 through 2025:

(in thousands)

NOTE 4—SHORT-TERM BORROWINGS AND CREDIT LINES

At the beginning of 2020, the Company had an unsecured, committed revolving line of credit agreement, maturing on August 1, 2023 with monthly variable commitments available for funding that averaged $ 50.0 million over the course of a calendar year.

In March 2020, the Company entered into a first amendment to its unsecured, committed revolving line of credit agreement to remove the seasonality within the commitment levels and provide $ 125.0 million in committed borrowing availability through December 31, 2020.

In April 2020, the Company entered into a second amended and restated credit agreement (the “restated credit agreement”) which amended and restated the committed revolving line of credit agreement.

The restated credit agreement provides for (i) a secured, committed revolving line of credit, maturing on August 1, 2023 with a commitment available for funding of $ 125.0 million (the "Revolving A Loan"), (ii) a secured, committed revolving line of credit, maturing April 13, 2021, with a commitment available for funding of $ 400.0 million (the "Revolving B Loan", together with the Revolving A Loan, the "Revolving Loans"), and (iii) an uncommitted $ 100.0 million incremental facility, which may be added to the Revolving B Loan if it is executed on, upon request by the Company to the administrative agent.

Advances under the Revolving Loans can be either LIBOR loans or base rate loans.

LIBOR loans bear interest on the outstanding principal amount thereof for each interest period at a rate per annum equal to LIBOR (subject to a LIBOR floor) plus a margin ranging from 2.00 % to 2.75 % (the "LIBOR Margin").

Base rate loans bear interest on the outstanding principal amount thereof at a rate per annum equal to the LIBOR Margin plus the greater of (i) daily reset one month LIBOR or (ii) in the case of Revolving A Loans, the LIBOR floor;

provided that if the lenders are unable to price loans based on LIBOR, base rate loans will bear interest at an interest rate per annum equal to a margin ranging from 1.00 % to 1.75 % plus the higher of (A) the rate of interest most recently announced by the administrative agent as its prime rate or (B) the federal funds rate plus 1.50 %.

In addition, the restated credit agreement requires the Company to comply with certain financial covenants.

If the Company is in default, it is required to comply with certain restrictions on dividend payments and stock repurchases.

In connection with the restated agreement, the Company entered into a collateral agreement under which the obligations of the Company were secured by all assets of the Company and Columbia Brands USA, LLC, except for intellectual property, real property, equity interests in foreign subsidiaries and certain other exclusions.

Effective July 10, 2020, the Company entered into a first amendment (the "first amendment") to its restated credit agreement.

The first amendment provides for

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

suspensions of and adjustments to the financial covenants beginning on July 1, 2020 through December 31, 2020 (the "covenant suspension period") as follows:

(i) the funded debt ratio no longer needs to be maintained during the covenant suspension period, (ii) the interest coverage ratio no longer needs to be maintained during the covenant suspension period, and (iii) the Company must maintain liquidity (inclusive of unrestricted and unencumbered cash-on-hand of the Company and its subsidiaries and, with certain limitations, availability under the revolving credit facilities provided for in the restated credit agreement) of not less than $ 200.0 million as of each calendar month end during the covenant suspension period.

In addition, the minimum LIBOR floors were revised to be 0.50 % in the case of both Revolving A and Revolving B loans.

The first amendment also provides for a letter of credit facility and contains modifications to certain other negative covenants, including a change to the negative indebtedness covenant to allow for up to $ 350 million in additional unsecured indebtedness.

In connection with the first amendment, the Company amended and restated the collateral agreement, originally dated April 15, 2020 to provide for a pledge by the Company and Columbia Brands USA, LLC of 65% of their equity interests in foreign subsidiaries.

At September 30, 2020, the Company was in compliance with all associated covenants, and there was no balance outstanding under these lines and facility.

The Company’s Canadian subsidiary has available an unsecured and uncommitted line of credit, which is payable on demand, guaranteed by the Company, and provides for borrowings up to a maximum of CAD$ 30.0 million (approximately US$ 22.4 million) at September 30, 2020.

The revolving line accrues interest at the Canadian Prime rate for CAD overdraft borrowings or Bankers' Acceptance rate plus 150 basis points for Bankers' Acceptance loans.

As of September 30, 2020, there was no balance outstanding under this line of credit.

At the beginning of 2020, the Company's European subsidiary had two separate unsecured and uncommitted lines of credit, guaranteed by the Company, and provides for borrowings up to a maximum of € 25.8 million and € 5.0 million.

In June 2020, the Company's European subsidiary entered into an agreement which replaced the € 5.0 million line with a € 4.4 million secured, committed line of credit, and a € 0.6 million unsecured and uncommitted line of credit.

The combined available borrowings of the three lines was approximately US$ 36.2 million at September 30, 2020.

Borrowings under the € 25.8 million line accrue interest at a base rate of 185 basis points plus 200 basis points.

Borrowings under the € 4.4 million and € 0.6 million lines each accrue interest at 75 basis points.

As of September 30, 2020, there was no balance outstanding under these facilities.

At the beginning of the third quarter of 2020, the Company’s Japanese subsidiary had available two separate unsecured and uncommitted overdraft facilities guaranteed by the Company providing for borrowing up to a maximum of US$ 7.0 million and ¥ 300.0 million.

During the third quarter of 2020, the overdraft facility with a maximum borrowing of ¥ 300.0 million was modified to increase the maximum borrowing to ¥ 1.5 billion.

The combined maximum borrowings of the two lines were approximately US$ 21.2 million at September 30, 2020.

Borrowings under the ¥ 1.5 billion overdraft facility accrue interest at the Tokyo Interbank Offered Rate plus 0.50 basis points and borrowings under the US$ 7.0 million overdraft facility accrue interest at 200 basis points.

As of September 30, 2020, there was no balance outstanding under these facilities.

The Company’s Korea subsidiary has available an unsecured and uncommitted overdraft facility guaranteed by the Company providing for borrowing up to a maximum of US$ 20.0 million at September 30, 2020.

Borrowings under the overdraft facility accrue interest at the Korea three month CD rate plus 200 basis points.

As of September 30, 2020, there was no balance outstanding under this overdraft facility.

At the beginning of the third quarter of 2020, the Company’s Chinese subsidiary had available an unsecured and uncommitted overdraft and clean advance facility guaranteed by the Company providing for borrowings of advances or overdrafts up to a maximum of US$ 20.0 million at September 30, 2020.

Borrowings under the facility accrue interest on advances of RMB at 4.15%, advances of USD based on LIBOR plus 2.0 % per annum or overdrafts of RMB based on 110% of the PBOC rate.

In September 2020, the Company's Chinese subsidiary entered into an unsecured and uncommitted line of credit, guaranteed by the Company that provides for borrowings up to a maximum of RMB140.0 million.

Borrowings under the facility accrue interest at the one year loan prime rate less 10 basis points.

The combined available borrowings of the two lines were approximately US$ 40.5 million at September 30, 2020.

As of September 30, 2020, there was no balance outstanding under these facilities.

Except as disclosed below, there have been no significant changes to the Company's short-term borrowings and credit lines as described in Note 7 in the Company's Annual Report on Form 10-K for the year ended December 31, 2020.

At the beginning of 2021 the Company's Japanese subsidiary had two separate unsecured and uncommitted overdraft facilities guaranteed by the Company providing for borrowings up to a maximum of ¥ 1.5 billion and US$ 7.0 million.

In March 2021, the Company's Japanese subsidiary entered into an agreement to establish an unsecured and uncommitted overdraft facility providing for borrowings up to a maximum of ¥ 400.0 million.

The combined available borrowings of the three lines was approximately US$ 24.2 million at March 31, 2021.

Borrowings under the ¥ 1.5 billion and ¥ 400.0 million overdraft facilities accrue interest at the Tokyo Interbank Offered Rate plus 50 basis points and borrowings under the US$ 7.0 million overdraft facility accrue interest at 150 basis points.

As of March 31, 2021, there was no balance outstanding under these facilities.

NOTE 5—INCOME TAXES

For the three months ended September 30, 2020 and 2019, the Company's effective income tax rates were 26.1 % and 22.0 %, respectively.

For the nine months ended September 30, 2020 and 2019, the effective income tax rates were 24.8 % and 18.2 %, respectively.

The increase in the effective income tax rate for the three months ended September 30, 2020 compared to the three months ended September 30, 2019 was primarily driven by the change in mix of book income or loss among jurisdictions.

The increase in the effective income tax rate for the nine months ended September 30, 2020 compared to the nine months ended September 30, 2019 was driven primarily by the change in mix of book income or loss among jurisdictions, and the recognition in 2019 of a one-time tax benefit related to the passage of a Swiss tax reform package.

Income tax expense, deferred tax assets and related liabilities are based on estimates.

In the three months ended March 31, 2020, a $ 1.5 million valuation allowance adjustment was recorded related to the expected portion of tax benefits that would not be realized in certain foreign jurisdictions based on available evidence.

The likelihood of realizing the benefits of the deferred tax assets was assessed as of

For the three months ended March 31, 2021 and 2020, the Company's effective income tax rates were 20.7 % and 86.4 %, respectively.

The decrease in the effective income tax rate for the three months ended March 31, 2021 compared to the three months ended March 31, 2020 was primarily driven by a change in the mix of book income or loss among jurisdictions and the recording of a foreign jurisdiction valuation allowance during the prior year period.

Index to Notes to Consolidated Financial Statements

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

September 30, 2020 and no additional valuation allowance adjustment was recorded.

The Company will continue to monitor the realizability of deferred tax assets, particularly in certain foreign jurisdictions where the economic impacts of the COVID-19 pandemic may result in net operating losses.

The ability to recover these deferred tax assets depends on several factors, including results of operations and the ability to project future taxable income in those jurisdictions.

If it is determined that some additional portion of the tax benefits will not be realized, valuation allowance would be recorded, which would increase income tax expense.

Total deferred tax assets as of September 30, 2020 were approximately $ 77.1 million, of which approximately $ 7.7 million related to foreign jurisdictions where the Company expects to incur significant net operating losses in the near term, although the risks of failing to realize these benefits vary across jurisdictions.

NOTE 6—PRODUCT WARRANTY

Some of the Company's products carry life-time or limited warranty provisions for defects in quality and workmanship.

A warranty reserve is established at the time of sale to cover estimated costs based on the Company's history of warranty repairs and replacements and is recorded in Cost of sales in the Condensed Consolidated Statements of Operations.

The warranty reserve is included in Accrued liabilities in the Condensed Consolidated Balance Sheets.

A reconciliation of product warranties is as follows:

Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2020 2019 2020 2019

Balance at beginning of period $ 13,334 $ 13,186 $ 14,466 $ 13,186

Provision for warranty claims 525 645 1,430 3,140

Warranty claims ( 493 ) ( 440 ) ( 2,378 ) ( 2,899 )

Other 175 ( 180 ) 23 ( 216 )

Balance at end of period $ 13,541 $ 13,211 $ 13,541 $ 13,211

NOTE 6—COMMITMENTS AND CONTINGENCIES

The Company is a party to various legal claims, actions and complaints from time to time.

Although the ultimate resolution of legal proceedings cannot be predicted with certainty, management believes that disposition of these matters will not have a material adverse effect on the Company's condensed consolidated financial statements.

The Company is involved in litigation and various legal matters arising in the normal course of business, including matters related to employment, retail, intellectual property, contractual agreements, lease agreements, and various regulatory compliance activities.

Management has considered facts related to legal and regulatory matters and opinions of counsel handling these matters, and does not believe the ultimate resolution of these proceedings will have a material adverse effect on the Company's financial position, results of operations or cash flows.

NOTE 7—SHAREHOLDERS' EQUITY

Since the inception of the Company's stock repurchase plan in 2004 through September 30, 2020, the Company's Board of Directors has authorized the purchase of $ 1.1 billion of the Company's common stock.

As of September 30, 2020, the Company had repurchased 26.8 million shares under this program at an aggregate purchase price of $ 1,017.8 million.

Shares repurchased generally settle subsequent to the trade date.

Shares of the Company's common stock may be repurchased in the open market or through privately negotiated transactions, subject to market conditions.

Since the inception of the Company's stock repurchase plan in 2004 through March 31, 2021, the Company's Board of Directors has authorized the repurchase of $ 1.5 billion of the Company's common stock.

Shares of the Company's common stock may be purchased in the open market or through privately negotiated transactions, subject to market conditions, and generally settle subsequent to the trade date.

The repurchase program does not obligate the Company to acquire any specific number of shares or to acquire shares over any specified period of time.

During the three months ended March 31, 2020, the Company repurchased an aggregate of $ 132.9 million of common stock under the stock repurchase plan authorized by the Company's Board of Directors and a pre-established written trading plan.

In mid-March 2020, to reduce capital outflows and preserve capital, the Company suspended share repurchases.

The Company did not repurchase common stock during the three months ended September 30, 2020.

Under this program as of March 31, 2021, the Company had repurchased 26.9 million shares at an aggregate purchase price of $ 1,029.0 million and has $ 471.0 million remaining available.

During the three months ended March 31, 2021, the Company purchased an aggregate of $ 11.2 million of the Company's common stock under this program.

NOTE 8—STOCK-BASED COMPENSATION

At its Annual Meeting held on June 3, 2020, the Company’s shareholders approved the Company’s 2020 Stock Incentive Plan (the “2020 Plan”), and the 2020 Plan became effective on that date following such approval.

The 2020 Plan replaced the Company’s 1997 Stock Incentive Plan (the "Prior Plan”) and no new awards will be granted under the Prior Plan.

The terms and conditions of the awards granted under the Prior Plan will remain in effect with respect to awards granted under the Prior Plan.

The Company has reserved 3 million shares of common stock for issuance under the 2020 Plan, plus up to an aggregate of 1.5 million shares of the Company’s common stock that were previously authorized and available for issuance under the Prior Plan.

The 2020 Plan allows for grants of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, and other stock-based or cash-based awards.

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company's Stock Incentive Plan allows for grants of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units, and other stock-based or cash-based awards.

Stock-Based Compensation Expense

Stock-based compensation expense consisted of the following:

Three Months Ended September 30, Nine Months Ended September 30,

Three Months Ended March 31,

(in thousands) 2021 2020

3 unchanged sentences

Stock Options

During the nine months ended September 30, 2020, the Company granted a total of 660,071 stock options at a weighted average grant date fair value of $ 14.67 .

As of September 30, 2020, unrecognized costs related to outstanding stock options totaled $ 13.3 million, before any related tax benefit.

As of September 30, 2020, unrecognized costs related to stock options are expected to be recognized over a weighted average period of 2.59 years.

During the three months ended March 31, 2021, the Company granted a total of 496,609 stock options at a weighted average grant date fair value of $ 17.26 per share.

As of March 31, 2021, unrecognized costs related to outstanding stock options totaled $ 17.0 million, before any related tax benefit.

As of March 31, 2021, unrecognized costs related to stock options are expected to be recognized over a weighted average period of 2.92 years.

Restricted Stock Units

During the nine months ended September 30, 2020, the Company granted 209,972 restricted stock units at an estimated average grant date fair value of $ 79.43 .

As of September 30, 2020, unrecognized costs related to outstanding restricted stock units totaled $ 21.5 million, before any related tax benefit.

As of September 30, 2020, unrecognized costs related to restricted stock units are expected to be recognized over a weighted average period of 2.34 years.

During the three months ended March 31, 2021, the Company granted 150,912 restricted stock units at a weighted average grant date fair value of $ 95.39 per share.

As of March 31, 2021, unrecognized costs related to outstanding restricted stock units totaled $ 27.7 million, before any related tax benefit.

As of March 31, 2021, unrecognized costs related to restricted stock units are expected to be recognized over a weighted average period of 2.74 years.

NOTE 9—EARNINGS PER SHARE

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Diluted EPS reflects the potential dilution that could occur if outstanding securities or other contracts to issue common stock were exercised or converted into common stock.

A reconciliation of common shares used in the denominator for computing basic and diluted EPS is as follows:

Three Months Ended September 30, Nine Months Ended September 30,

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

A reconciliation of the common shares used in the denominator for computing basic and diluted EPS is as follows:

Three Months Ended March 31,

(in thousands, except per share amounts)

Weighted average shares of common stock outstanding, used in computing basic earnings per share

Weighted average common shares outstanding, used in computing basic earnings per share

66,363 66,970

Effect of dilutive stock options and restricted stock units 522 442

Weighted average shares of common stock outstanding, used in computing diluted earnings per share

Weighted average common shares outstanding, used in computing diluted earnings per share

66,885 67,412

2 unchanged sentences

Diluted $ 0.84 $ 0.00

Stock options, service-based restricted stock units, and performance-based restricted stock units representing 1,156,073 and 1,282,086 shares of common stock for the three and nine months ended September 30, 2020, respectively, were outstanding but were excluded from the computation of diluted EPS because their effect would have been anti-dilutive under the treasury stock method or because the shares were subject to performance conditions that had not been met.

Stock options, service-based restricted stock units, and performance-based restricted stock units representing 440,993 and 378,617 shares of common stock for the three and nine months ended September 30, 2019, respectively, were outstanding but were excluded from the computation of diluted EPS because their effect would have been anti-dilutive under the treasury stock method or because the shares were subject to performance conditions that had not been met.

NOTE 11—ACCUMULATED OTHER COMPREHENSIVE LOSS

Accumulated other comprehensive loss on the Company's Condensed Consolidated Balance Sheets is net of applicable taxes, and consists of unrealized holding gains and losses on available-for-sale securities, unrealized gains and losses on certain derivative transactions and foreign currency translation adjustments.

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table sets forth the changes in Accumulated other comprehensive loss for the three months ended September 30, 2020:

(in thousands) Unrealized losses on available-for-sale securities Unrealized holding gains (losses) on derivative transactions Foreign currency translation adjustments Total

Balance at June 30, 2020 $ ( 4 ) $ 16,145 $ ( 22,001 ) $ ( 5,860 )

Stock options, service-based restricted stock units, and performance-based restricted stock representing 693,403 and 937,523 shares of common stock for the three months ended March 31, 2021 and 2020, respectively, were outstanding but were excluded from the computation of diluted EPS because their effect would have been anti-dilutive under the treasury stock method or because the shares were subject to performance conditions that had not been met.

NOTE 10—ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

Accumulated other comprehensive income (loss) on the Condensed Consolidated Balance Sheets is net of applicable taxes, and consists of unrealized holding gains and losses on available-for-sale securities, unrealized gains and losses on certain derivative transactions and foreign currency translation adjustments.

The following table sets forth the changes in Accumulated other comprehensive income (loss) for the three months ended March 31, 2021:

(in thousands) Unrealized holding

gains (losses) on

derivative transactions Foreign currency

adjustments Total

Balance at December 31, 2020 $ ( 9,369 ) $ 10,175 $ 806

Other comprehensive income (loss) before reclassifications 9,279 ( 13,204 ) ( 3,925 )

— ( 6,398 ) 11,175 4,777

Amounts reclassified from accumulated other comprehensive loss (1)

Amounts reclassified from accumulated other comprehensive income (loss) (1)

( 716 ) — ( 716 )

Net other comprehensive income (loss) during the period — ( 11,685 ) 11,175 ( 510 )

Balance at September 30, 2020 $ ( 4 ) $ 4,460 $ ( 10,826 ) $ ( 6,370 )

Net other comprehensive income (loss) during the year 8,563 ( 13,204 ) ( 4,641 )

Balance at March 31, 2021 $ ( 806 ) $ ( 3,029 ) $ ( 3,835 )

(1) Amounts reclassified are recorded in Net sales, Cost of sales, or Other non-operating income (expense), net on the Condensed Consolidated Statements of Operations.

Refer to Note 13 for further information regarding classifications.

The following table sets forth the changes in Accumulated other comprehensive loss for three months ended September 30, 2019:

(in thousands) Unrealized losses on available-for-sale securities Unrealized holding gains (losses) on derivative transactions Foreign currency translation adjustments Total

Balance at June 30, 2019 $ ( 4 ) $ 11,317 $ ( 12,611 ) $ ( 1,298 )

Other comprehensive income (loss) before reclassifications

— 6,315 ( 8,389 ) ( 2,074 )

Amounts reclassified from accumulated other comprehensive loss (1)

— ( 3,901 ) — ( 3,901 )

Net other comprehensive income (loss) during the period — 2,414 ( 8,389 ) ( 5,975 )

Balance at September 30, 2019 $ ( 4 ) $ 13,731 $ ( 21,000 ) $ ( 7,273 )

(1) Amounts reclassified are recorded in Net sales or Cost of sales on the Condensed Consolidated Statements of Operations.

Refer to Note 13 for further information regarding classifications.

The following table sets forth the changes in Accumulated other comprehensive loss for the nine months ended September 30, 2020:

(in thousands) Unrealized losses on available-for-sale securities Unrealized holding gains (losses) on derivative transactions Foreign currency translation adjustments Total

Refer to Note 12 for further information regarding reclassifications.

The following table sets forth the changes in Accumulated other comprehensive income (loss) for the three months ended March 31, 2020:

(in thousands) Unrealized gains (losses)

on available for

sale securities Unrealized holding

gains (losses) on

derivative transactions Foreign currency

adjustments Total

Balance at December 31, 2019 $ ( 4 ) $ 9,482 $ ( 13,903 ) $ ( 4,425 )

Other comprehensive income before reclassifications

— 4,617 3,077 7,694

Amounts reclassified from accumulated other comprehensive loss (1)

Other comprehensive income (loss) before reclassifications — 14,362 ( 15,074 ) ( 712 )

Amounts reclassified from accumulated other comprehensive income (loss) (1)

— ( 2,837 ) — ( 2,837 )

Net other comprehensive income (loss) during the period — ( 5,022 ) 3,077 ( 1,945 )

Balance at September 30, 2020 $ ( 4 ) $ 4,460 $ ( 10,826 ) $ ( 6,370 )

Net other comprehensive income (loss) during the year — 11,525 ( 15,074 ) ( 3,549 )

Balance at March 31, 2020 $ ( 4 ) $ 21,007 $ ( 28,977 ) $ ( 7,974 )

(1) Amounts reclassified are recorded in Net sales, Cost of sales, or Other non-operating income (expense), net on the Condensed Consolidated Statements of Operations.

Refer to Note 13 for further information regarding classifications.

Refer to Note 12 for further information regarding reclassifications.

Index to Notes to Consolidated Financial Statements

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table sets forth the changes in Accumulated other comprehensive loss for the nine months ended September 30, 2019:

(in thousands) Unrealized gains (losses) on available-for-sale securities Unrealized holding gains (losses) on derivative transactions Foreign currency translation adjustments Total

Balance at December 31, 2018 $ ( 60 ) $ 11,964 $ ( 15,967 ) $ ( 4,063 )

Other comprehensive income (loss) before reclassifications

56 9,119 ( 5,033 ) 4,142

Amounts reclassified from accumulated other comprehensive loss (1)

— ( 7,253 ) — ( 7,253 )

Net other comprehensive income (loss) during the period 56 1,866 ( 5,033 ) ( 3,111 )

Purchase of non-controlling interest

— ( 99 ) — ( 99 )

Balance at September 30, 2019 $ ( 4 ) $ 13,731 $ ( 21,000 ) $ ( 7,273 )

(1) Amounts reclassified are recorded in Net sales or Cost of sales on the Condensed Consolidated Statements of Operations.

Refer to Note 13 for further information regarding classifications.

NOTE 11—SEGMENT INFORMATION

4 unchanged sentences

Intersegment net sales and intersegment profits, which are recorded at a negotiated mark-up and eliminated in consolidation, are not material.

Unallocated corporate expenses consist of expenses incurred by centrally-managed departments, including global information systems, finance, human resources and legal, as well as executive compensation, unallocated benefit program expense, and other miscellaneous costs.

The geographic distribution of the Company's Net sales and Income from operations in the Condensed Consolidated Statements of Operations are summarized in the following table for the three and nine months ended September 30, 2020 and 2019.

Three Months Ended September 30, Nine Months Ended September 30,

Unallocated corporate expenses consist of expenses incurred by centrally-managed departments, including global information services, finance, human resources and legal, as well as executive compensation, unallocated benefit program expense, and other miscellaneous costs.

The following table presents financial information for the Company's reportable segments:

Three Months Ended March 31,

(in thousands)

5 unchanged sentences

$ 625,606 $ 568,228

Segment income from operations:

Segment income (loss) from operations

$ 99,661 $ 40,032

4 unchanged sentences

Unallocated corporate expenses ( 55,189 ) ( 52,242 )

Interest income (expense), net ( 280 ) 1,399 728 7,370

Interest income, net

Other non-operating income (expense), net

( 304 ) 1,738

Income before income tax

$ 70,454 $ 1,564

Concentrations

The Company had one customer that accounted for 11.4 % of Accounts receivable, net of allowance on the Condensed Consolidated Balance Sheets as of September 30, 2020.

The Company had one customer that accounted for 13.9 % of Accounts receivable, net of allowance as of December 31, 2019.

No single customer accounted for 10% or more of Accounts receivable, net of allowance as of September 30, 2019.

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

single customer accounted for 10 % or more of Net sales in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2020 or 2019.

The Company had one customer that accounted for 10.2% and 14.3% of Accounts receivable, net on the Condensed Consolidated Balance Sheets as of March 31, 2021, and December 31, 2020, respectively.

No single customer accounted for 10% or more of Accounts receivable, net as of March 31, 2020.

No single customer accounted for 10% or more of Net sales in the Condensed Consolidated Statement of Operations for the three months ended March 31, 2021 or 2020.

NOTE 12—FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

5 unchanged sentences

Subsidiaries that use European euros, Canadian dollars, Japanese yen, Chinese renminbi, or Korean won as their functional currency are primarily exposed to changes in functional currency equivalent cash flows from anticipated United States dollar inventory purchases.

Subsidiaries that use United States dollars and euros as their functional currency also have non-functional currency denominated sales for which the Company hedges the Canadian dollar and Great British pound.

The Company manages these risks by using currency forward contracts formally designated and effective as cash flow hedges.

Hedge effectiveness is generally determined by evaluating the ability of a hedging instrument's cumulative change in fair value to offset the cumulative change in the present value of expected cash flows on the underlying exposures.

For forward contracts, prior to June 2019, the time value components ("forward points") were excluded from the determination of hedge effectiveness and included in current period Cost of sales for hedges of anticipated United States dollar inventory purchases and in Net sales for hedges of anticipated non-functional currency denominated sales on a straight-line basis over the life of the contract.

Effective June 2019, the forward points are included in the fair value of the cash flow hedge on a prospective basis.

These costs or benefits will be included in Accumulated other comprehensive loss until the underlying hedge transaction is recognized in either Net sales or Cost of sales , at which time the forward points will also be recognized as a component of Net income .

For forward contracts, forward points are included in the fair value of the cash flow hedge on a prospective basis.

These costs or benefits are included in

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Accumulated other comprehensive income (loss) until the underlying hedge transaction is recognized in either Net sales or Cost of sales , at which time, the forward points will also be recognized as a component of Net income .

The Company also uses currency forward contracts not formally designated as hedges to manage the consolidated currency exchange rate risk associated with the remeasurement of non-functional currency denominated monetary assets and liabilities by subsidiaries that use United States dollars, euros, Canadian dollars, yen, won, or renminbi as their functional currency.

2 unchanged sentences

The following table presents the gross notional amount of outstanding derivative instruments:

(in thousands) September 30,

2020 December 31,

2019 September 30,

(in thousands) March 31, 2021 December 31, 2020 March 31, 2020

Derivative instruments designated as cash flow hedges:

2 unchanged sentences

Currency forward contracts 219,961 326,280 205,030

At September 30, 2020, $ 5.1 million of deferred net gains on both outstanding and matured derivatives recorded in Other comprehensive loss are expected to be reclassified to Net income during the next twelve months as a result of underlying hedged transactions also being recorded in Net sales or Cost of sales in the Condensed Consolidated Statements of Operations.

Actual amounts ultimately reclassified to Net sales or Cost of sales in the Condensed Consolidated Statements of Comprehensive Income are dependent on United States dollar exchange rates in effect against the euro, pound sterling, renminbi, Canadian dollar, and yen when outstanding derivative contracts mature.

At September 30, 2020, the Company's derivative contracts had a remaining maturity of less than four years.

The maximum net exposure to any single counterparty, which is generally limited to the aggregate unrealized gain of all contracts with that counterparty, was $ 2.9 million at September 30, 2020.

At March 31, 2021, $ 3.2 million of deferred net losses on both outstanding and matured derivatives recorded in Other comprehensive loss are expected to be reclassified to Net income during the next twelve months as a result of underlying hedged transactions also being recorded in Net sa les or Cost of sales in the Condensed Consolidated Statements of Operations.

Actual amounts ultimately reclassified to Net sa les or Cost of sales in the Condensed Consolidated Statements of Comprehensive Income (Loss) are dependent on United States dollar exchange rates in effect against the euro, pound sterling, renminbi, Canadian dollar, and yen when outstanding derivative contracts mature.

At March 31, 2021, the Company's derivative contracts had a remaining maturity of less than four years .

The maximum net exposure to any single counterparty, which is generally limited to the aggregate unrealized gain of all contracts with that counterparty, was $ 2.7 million at March 31, 2021.

All of the Company's derivative counterparties have credit ratings that are investment grade or higher.

The Company is a party to master netting arrangements that contain features that allow counterparties to net settle amounts arising from multiple separate derivative transactions or net settle amounts arising from multiple separate derivative transactions or net settle in the case of certain triggering events such as a bankruptcy or major default of one of the counterparties to the transaction.

The Company is a party to master netting arrangements that contain features that allow counterparties to net settle amounts arising from multiple separate derivative transactions or net settle in the case of certain triggering events such as a bankruptcy or major default of one of the counterparties to the transaction.

The Company has not pledged assets or posted collateral as a requirement for entering into or maintaining derivative positions.

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents the balance sheet classification and fair value of derivative instruments:

(in thousands) Balance Sheet Classification September 30,

2020 December 31,

2019 September 30,

(in thousands) Balance Sheet Classification March 31, 2021 December 31, 2020 March 31, 2020

Derivative instruments designated as cash flow hedges:

10 unchanged sentences

Currency forward contracts Accrued liabilities 1,793 2,268 978

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents the statement of operations effect and classification of derivative instruments:

Classification Three Months Ended September 30, Nine Months Ended September 30,

(in thousands) 2020 2019 2020 2019

Currency Forward and Option Contracts:

Three Months Ended March 31,

(in thousands) Statement Of Operations Classification 2021 2020

Currency Forward Contracts:

Derivative instruments designated as cash flow hedges:

Gain (loss) recognized in other comprehensive loss, net of tax

Gain recognized in other comprehensive loss, net of tax

— $ 9,279 $ 14,362

Gain reclassified from accumulated other comprehensive income or loss to income for the effective portion

Gain (loss) reclassified from accumulated other comprehensive income (loss) to income for the effective portion

Net sales 100 ( 122 )

Gain reclassified from accumulated other comprehensive income or loss to income for the effective portion

Gain reclassified from accumulated other comprehensive income (loss) to income for the effective portion

Cost of sales 772 2,795

Gain reclassified from accumulated other comprehensive income or loss to income as a result of cash flow hedge discontinuance

Gain reclassified from accumulated other comprehensive income (loss) to income as a result of cash flow hedge discontinuance

Other non-operating income (expense), net

Loss recognized in income for amount excluded from effectiveness testing and for the ineffective portion

Net sales — — — ( 31 )

Gain recognized in income for amount excluded from effectiveness testing and for the ineffective portion

Cost of sales — — — 2,380

Derivative instruments not designated as cash flow hedges:

Gain (loss) recognized in income

Gain recognized in income

Other non-operating income (expense), net

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 13—FAIR VALUE MEASURES

8 unchanged sentences

Level 2 instrument valuations are obtained from inputs, other than quoted market prices in active markets, that are directly or indirectly observable in the marketplace and quoted prices in markets with limited volume or infrequent transactions.

Assets and liabilities measured at fair value on a recurring basis as of September 30, 2020 were as follows:

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Assets and liabilities measured at fair value on a recurring basis as of March 31, 2021 are as follows:

(in thousands) Level 1 Level 2 Level 3 Total

1 unchanged sentence

Money market funds $ 344,886 $ — $ — $ 344,886

Other short-term investments:

United States government treasury bills — 45,000 — 45,000

Short-term investments:

Money market funds 99 — — 99

2 unchanged sentences

Derivative financial instruments — 4,197 — 4,197

Other non-current assets:

Non-current assets:

Money market funds 3,667 — — 3,667

10 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2019 were as follows:

Assets and liabilities measured at fair value on a recurring basis at December 31, 2020 are as follows:

(in thousands) Level 1 Level 2 Level 3 Total

2 unchanged sentences

United States government treasury bills — 234,982 — 234,982

Commercial paper — 33,587 — 33,587

Other short-term investments:

Short-term investments:

Money market funds 105 — — 105

Mutual fund shares 1,119 — — 1,119

1 unchanged sentence

Derivative financial instruments — 2,597 — 2,597

Other non-current assets:

Non-current assets:

Money market funds 4,059 — — 4,059

7 unchanged sentences

Total liabilities measured at fair value $ — $ 16,431 $ — $ 16,431

Assets and liabilities measured at fair value on a recurring basis as of September 30, 2019 were as follows:

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Assets and liabilities measured at fair value on a recurring basis at March 31, 2020 are as follows:

(in thousands) Level 1 Level 2 Level 3 Total

1 unchanged sentence

Money market funds $ 128,488 $ — $ — $ 128,488

United States government treasury bills — 44,973 — 44,973

Available-for-sale short-term investments:

United States government treasury bills — 35,032 — 35,032

Other short-term investments:

Mutual funds shares 1,477 — — 1,477

Money market funds 14 — — 14

Mutual fund shares 782 — — 782

Other current assets:

Derivative financial instruments — 23,394 — 23,394

Other non-current assets:

Non-current assets:

Money market funds 3,674 — — 3,674

4 unchanged sentences

Derivative financial instruments $ — $ 1,209 $ — $ 1,209

Other long-term liabilities:

Derivative financial instruments — 109 — 109

Total liabilities measured at fair value $ — $ 1,209 $ — $ 1,209

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Non-recurring Fair Value Measurements

Certain non-financial assets are measured at fair value on a non-recurring basis, primarily long-lived assets, intangible assets, goodwill, and lease right-of-use assets.

In connection with periodic evaluations for potential impairment, the inputs used to measure the fair value of these assets are primarily unobservable inputs and, as such, considered Level 3 fair value measurements.

See Note 1 for discussion of 2020 impairment charges.

(1) Investments have remaining maturities of less than one year.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements