What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2022-02-24 compared with 2021-02-25 · 224 added, 271 removed, 923 unchanged (35% of the section changed)

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The audit committee is responsible for appointing the independent registered public accounting firm and reviews with the independent registered public accounting firm and management the scope and the results of the annual examination, the effectiveness of the accounting control system and other matters relating to our financial affairs as they deem appropriate.

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Deloitte & Touche LLP

Bancorp Tower

111 Southwest Fifth Avenue

Portland, OR 97204-3642

Tel:+1 503 222 1341

+1 503 224 2172

www.deloitte.com

Report of Independent Registered Public Accounting Firm

To the Shareholders and the Board of Directors of Columbia Sportswear Company

To the Shareholders and Board of Directors of Columbia Sportswear Company

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Columbia Sportswear Company and subsidiaries (the "Company") as of December 31, 2020 and 2019, the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2020, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

We have audited the accompanying consolidated balance sheets of Columbia Sportswear Company and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2021, the related notes, and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

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The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Goodwill – prAna Reporting Unit – Refer to Notes 2 and 6 to the Consolidated Financial Statements

Critical Audit Matter Description

The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value.

The Company uses a combination of discounted cash flow analysis and market-based valuation methods, which requires management to make significant estimates and assumptions related to projected cash flow, discount rates, market-based multiples, and other operating performance measures.

Changes in these assumptions could have a significant impact on either the fair value, the amount of any goodwill impairment charge, if any, or both.

The goodwill balance was $68.6 million as of December 31, 2020, of which $54.2 million was allocated to the prAna Reporting Unit (“prAna”).

The fair value of prAna exceeded its carrying value as of the measurement date and, therefore, no impairment was recognized.

Auditing management’s estimates and assumptions related to projected cash flow, discount rates, market-based multiples, and other operating performance measures for prAna involved especially subjective judgment.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s estimates and assumptions related to projected cash flow, discount rates, market-based multiples, and other operating performance measures for the prAna goodwill impairment analysis included the following, among others:

• We tested the effectiveness of internal controls over the prAna goodwill impairment analysis, including those over the forecasts for cash flow and other operating performance measures, and the selection of the discount rate and market-based multiples.

• We evaluated management’s ability to accurately forecast cash flow and other operating performance measures by comparing actual results to management’s historical forecasts.

• We evaluated the reasonableness of management’s cash flow forecasts by comparing the forecasts to:

◦ Historical cash flow.

◦ Forecasted information included in Company press releases as well as in analyst and industry reports for the Company and certain of its peer companies.

• We evaluated the impact of changes in management’s cash flow forecasts from the October 31, 2020 annual measurement date to December 31, 2020.

• To evaluate the reasonableness of the discount rate, with the assistance of our fair value specialists, we:

◦ Developed a range of independent estimates of the discount rate and compared those to the discount rate selected by management to assess the appropriateness of the discount rate assumption.

◦ Tested the inputs and source information underlying the determination of the discount rate by comparing to reputable third-party data or industry information and tested the mathematical accuracy of the calculation.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the selection and application of valuation multiples management applied in i market-based valuation method through comparison to valuation multiples for guideline public companies.

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Intangible Assets, Net – prAna Trademark– Refer to Notes 2 and 6 to the Consolidated Financial Statements

Critical Audit Matter Description

The Company has trademarks and trade names (“trademarks”) that are indefinite-lived intangible assets.

As of December 31, 2020, the carrying value of the intangible assets was $103.6 million, of which $70.5 million was attributed to prAna’s trademark, after recognizing $17.5 million of impairment loss in the year ended December 31, 2020.

The Company used the relief from royalty method to estimate fair value, which requires management to make significant estimates and assumptions related to projected sales, royalty rates and discount rates to estimate the net present value of future cash flows relating to the prAna trademark.

Auditing management’s estimates and assumptions related to projected sales, royalty rates, and discount rates for prAna involved especially subjective judgment.

The Company has intangible assets, including trademarks and trade names (“trademarks”).

As of December 31, 2021, the carrying value of the intangible assets was $101.9 million, of which $70.5 million was attributed to prAna’s trademark.

The Company used the relief from royalty method to estimate fair value, which requires management to make significant estimates and assumptions related to projected revenues.

Auditing management’s estimates and assumptions related to projected revenues for prAna involved especially subjective judgement.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to management’s estimates and assumptions related to projected sales, royalty rates, and discount rates for the prAna trademark valuation included the following, among others:

• We tested the effectiveness of controls over intangible assets, including those over the forecasts of future sales, and the selection of the discount rate and royalty rate.

• We evaluated management’s ability to accurately forecast future sales by comparing actual results to management’s historical forecasts.

• We evaluated the reasonableness of management’s sales forecasts by comparing the forecasts to:

◦ Historical sales.

Our audit procedures related to management’s estimates and assumptions related to projected revenues for the prAna trademark valuation included the following, among others:

• We tested the effectiveness of controls over intangible assets, including those over the forecasts of future revenues.

• We evaluated management’s ability to accurately forecast future revenues by comparing actual results to management’s historical forecasts.

• We evaluated the reasonableness of management’s revenues forecasts by comparing the forecasts to:

◦ Historical revenues.

◦ Forecasted information included in Company press releases as well as in analyst and industry reports for the Company and certain of its peer companies.

• We evaluated the inputs used in the forecast and the basis for the assumptions made by management.

• We evaluated the impact of changes in management’s forecasts from the October 31, 2021 annual measurement date to December 31, 2021.

• To evaluate the reasonableness of the (1) discount rate and (2) royalty rate, with the assistance of our fair value specialists, we:

◦ Developed a range of independent estimates of the discount rate and compared those to the discount rate selected by management to assess the appropriateness of the discount rate assumption.

◦ Compared the royalty rate selected by management to rates from royalty agreements in the outdoor apparel industry for comparable companies and the Company’s own contract royalty rates.

Long-lived Asset Valuation – Refer to Notes 2, 5 and 9 to the Consolidated Financial Statements

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Events that result in an impairment review include plans to close a retail location or a significant decrease in the operating results of the retail location.

When such an indicator occurs, the Company evaluates its retail location long-lived assets for impairment by comparing the undiscounted future cash flow expected to be generated by the location to the retail location long-lived asset’s carrying amount.

If the carrying amount of an asset exceeds the estimated undiscounted future cash flow, an analysis is performed to estimate the fair value of the asset.

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Changes in these assumptions could have a significant impact on the retail location long-lived assets identified for further analysis.

For the year ended December 31, 2020, impairment charges from underperforming retail location long-lived assets were $7.0 million for lease right-of-use assets and $4.5 million for property, plant, and equipment.

For the year ended December 31, 2021, impairment charges from underperforming retail location long-lived assets were immaterial.

Given the Company’s evaluation of possible indications of impairment of retail location long-lived assets requires management to make significant assumptions, performing audit procedures to evaluate whether management appropriately identified events or changes in circumstances indicating that the carrying amounts of retail location long-lived assets may not be recoverable involved especially subjective judgment.

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Our audit procedures related to the evaluation of retail location long-lived assets for possible indications of impairment included the following, among others:

• We tested the effectiveness of controls over management's identification of possible circumstances that may indicate that the carrying amounts of retail location long-lived assets are no longer recoverable.

• We evaluated management's analysis of long-lived assets for indications of impairment analysis by:

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• We tested the effectiveness of the controls over management's identification of possible circumstances that may indicate that the carrying amounts of retail location long-lived assets are no longer recoverable.

• We evaluated management's impairment analysis by:

◦ Testing retail location long-lived assets for possible indications of impairment, including searching for locations with a history of losses, current period loss, or projected losses.

5 unchanged sentences

however, an earlier year could not be reliably determined.

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Deloitte & Touche LLP

Bancorp Tower

111 Southwest Fifth Avenue

Portland, OR 97204-3642

Tel:+1 503 222 1341

+1 503 224 2172

www.deloitte.com

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and the Board of Directors of Columbia Sportswear Company

To the Shareholders and Board of Directors of Columbia Sportswear Company

Opinion on Internal Control over Financial Reporting

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February 24, 2022

COLUMBIA SPORTSWEAR COMPANY

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I ndex to Notes to Consolidated Financial State ments

CONSOLIDATED BALANCE SHEETS

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See accompanying notes to consolidated financial statements.

COLUMBIA SPORTSWEAR COMPANY

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I ndex to Notes to Consolidated Financial State ments

CONSOLIDATED STATEMENTS OF OPERATIONS

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Net licensing income 18,372 12,108 15,487

Income from operations 137,049 394,971 350,982

Operating income 450,504 137,049 394,971

Interest income, net 1,380 435 8,302

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Net income 354,108 108,013 330,489

Net income attributable to non-controlling interest — — 6,692

Net income attributable to Columbia Sportswear Company $ 108,013 $ 330,489 $ 268,256

Earnings per share attributable to Columbia Sportswear Company:

Earnings per share:

Basic $ 5.37 $ 1.63 $ 4.87

4 unchanged sentences

See accompanying notes to consolidated financial statements.

COLUMBIA SPORTSWEAR COMPANY

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I ndex to Notes to Consolidated Financial State ments

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

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Other comprehensive income (loss):

Unrealized holding gains (losses) on available-for-sale securities, net 4 56 ( 56 )

Unrealized holding gains on available-for-sale securities, net — 4 56

Unrealized holding gains (losses) on derivative transactions (net of tax effects of $( 7,138 ), $ 6,271 , and $ 830 , respectively)

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Comprehensive income 348,926 113,244 330,226

Comprehensive income attributable to non-controlling interest — — 7,480

Comprehensive income attributable to Columbia Sportswear Company $ 113,244 $ 330,226 $ 273,595

See accompanying notes to consolidated financial statements.

COLUMBIA SPORTSWEAR COMPANY

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I ndex to Notes to Consolidated Financial State ments

CONSOLIDATED STATEMENTS OF CASH FLOWS

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Capital expenditures ( 34,744 ) ( 28,758 ) ( 123,516 )

Proceeds from sale of property, plant and equipment — — 19

Net cash provided by (used in) investing activities ( 163,751 ) ( 27,171 ) 140,728

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Cash dividends paid ( 68,623 ) ( 17,195 ) ( 65,127 )

Cash dividends paid to non-controlling interest — — ( 19,949 )

Net cash used in financing activities ( 210,889 ) ( 151,700 ) ( 190,722 )

8 unchanged sentences

See accompanying notes to consolidated financial statements.

COLUMBIA SPORTSWEAR COMPANY

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I ndex to Notes to Consolidated Financial State ments

CONSOLIDATED STATEMENTS OF EQUITY

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Net income — — 330,489 — — 330,489

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

Other comprehensive income (loss):

Unrealized holding losses on available-for-sale securities, net — — — ( 56 ) — ( 56 )

Unrealized holding gains on derivative transactions, net — — — 23,195 1,067 24,262

Unrealized holding gains on available-for-sale securities, net — — — 56 — 56

Unrealized holding losses on derivative transactions, net — — — ( 2,383 ) — ( 2,383 )

Foreign currency translation adjustment, net — — — 2,064 — 2,064

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— — ( 65,127 ) — — ( 65,127 )

Dividends to non-controlling interest — — — — ( 21,332 ) ( 21,332 )

Adoption of new accounting standards — — 14,600 ( 515 ) — 14,085

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

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Balance, December 31, 2019

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

Net income — — 108,013 — — 108,013

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

Other comprehensive income (loss):

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Other comprehensive income (loss):

Unrealized holding gains on available-for-sale securities, net — — — 4 — 4

Unrealized holding losses on derivative transactions, net — — — ( 18,851 ) — ( 18,851 )

Unrealized holding gains on derivative transactions, net — — — 19,283 — 19,283

Foreign currency translation adjustment, net — — — ( 24,465 ) — ( 24,465 )

8 unchanged sentences

See accompanying notes to consolidated financial statements.

COLUMBIA SPORTSWEAR COMPANY

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I ndex to Notes to Consolidated Financial State ments

INDEX TO NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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Note 19 Fair Value Measures 66

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

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I ndex to Notes to Consolidated Financial State ments

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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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, impairment of long-lived assets, intangible assets and goodwill, and income taxes.

The Company's significant estimates relate to sales reserves;

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 Financial Accounting Standards Board ("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 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 requires the use of an "expected loss" model for instruments measured at amortized cost.

Under this model, entities are 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.

2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes issued by the Financial Accounting Standards Board (“FASB”) in December 2019, 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.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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Cash and cash equivalents are stated at fair value or at cost, which approximates fair value, and include investments with original maturities of 90 days or less at the date of acquisition.

At December 31, 2020, Cash and cash equivalents consisted of cash, money

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

market funds, and United States government treasury bills.

At December 31, 2019, Cash and cash equivalents consisted of cash, money market funds, United States government treasury bills, and commercial paper.

At December 31, 2021, Cash and cash equivalents consisted of cash and money market funds.

At December 31, 2020, Cash and cash equivalents consisted of cash, money market funds, and United States government treasury bills.

At December 31, 2021, Short-term investments consisted of United States government treasury bills as well as money market funds and mutual fund shares held as part of the Company's deferred compensation plan expected to be distributed in the next twelve months.

At December 31, 2020 , Short-term investments consisted of money market funds and mutual fund shares held as part of the Company's deferred compensation plan expected to be distributed in the next twelve months.

At December 31, 2019, Short-term investments consisted of mutual fund shares held as part of the Company's deferred compensation plan expected to be distributed in the next twelve months.

Investments held as part of the Company's deferred compensation plan are classified as trading securities and are recorded at fair value with any unrealized gains and losses included in SG&A expense .

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At December 31, 2021 and 2020 , long-term investments included in Other non-current assets consisted of money market funds and mutual fund shares held to offset liabilities to participants in the Company's deferred compensation plan.

The investments are classified as long-term because the related deferred compensation liabilities are not expected to be paid within the next year.

The investments are classified as long-term

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I ndex to Notes to Consolidated Financial State ments

because the related deferred compensation liabilities are not expected to be paid within the next year.

These investments are classified as trading securities and are recorded at fair value with unrealized gains and losses reported as a component of operating income.

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Internal and external costs directly related to the development of internal-use software during the application development stage, including costs incurred for third party contractors and employee compensation, are capitalized and depreciated over a 3 - 10 year estimated useful life.

I ntangible assets and goodwill

Intangible assets with indefinite useful lives and goodwill are not amortized but are periodically evaluated for impairment.

INTANGIBLE ASSETS AND GOODWILL

Intangible assets with indefinite lives and goodwill are not amortized but are periodically evaluated for impairment.

Intangible assets that are determined to have finite lives are amortized using the straight-line method over their estimated useful lives and are measured for impairment only when events or circumstances indicate the carrying value may be impaired.

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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 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.

The Company’s cloud computing arrangements ("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 Consolidated Balance Sheets and amortized 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 December 31, 2021, CCAs in-service have useful lives which range from approximately ten months to five years.

As of December 31, 2020, CCA assets consisted of capitalized implementation costs of $ 24.3 million and associated accumulated amortization of $ 1.9

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

At December 31, 2021, and 2020 CCA assets consisted of capitalized implementation costs of $ 26.6 million and $ 24.3 million, respectively and associated accumulated amortization of $ 6.8 million and $ 1.9 million, respectively.

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

The Company leases, among other things, retail space, office space, warehouse facilities, storage space, vehicles, and equipment.

Generally, the base lease terms are between five and 10 years.

Generally, the base lease terms are between 5 and 10 years.

Certain lease agreements contain scheduled rent escalation clauses and others include rental payments adjusted periodically depending on an index or rate.

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Certain lease agreements require the Company to pay real estate taxes, insurance, common area maintenance, and other costs, collectively referred to as operating costs, in addition to base rent.

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I ndex to Notes to Consolidated Financial State ments

Certain lease agreements also contain lease incentives, such as tenant improvement allowances and rent holidays.

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The Company determines if an arrangement is or contains a lease at contract inception.

The Company recognizes a ROU asset and a lease liability at the lease commencement date.

The Company recognizes a right-of-use ("ROU") asset and a lease liability at the lease commencement date.

The lease liability is initially measured at the present value of the unpaid lease payments at the lease commencement date.

Key estimates and judgments include how the Company determines (1) the discount rate it uses to discount the unpaid lease payments to present value, (2) the lease term and (3) lease payments.

ASC 842 requires a lessee to discount its unpaid lease payments using the interest rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate.

Unpaid lease payments are discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate.

Generally, the Company cannot determine the interest rate implicit in the lease because it does not have access to the lessor's estimated residual value or the amount of the lessor's deferred initial direct costs.

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At the renewal of an expiring lease, the Company reassesses options in the contract that it is reasonably certain to exercise in its measurement of lease term.

For lease agreements entered into or reassessed after the adoption of ASC 842, the Company has elected the practical expedient to account for the lease and non-lease components as a single lease component.

For lease agreements entered into or reassessed after the adoption of Accounting Standards Codification ("ASC") 842, the Company has elected the practical expedient to account for the lease and non-lease components as a single lease component.

Therefore, for those leases, the lease payments used to measure the lease liability include all of the fixed consideration in the contract.

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

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

IMPAIRMENT OF LONG-LIVED ASSETS, INTANGIBLE ASSETS AND GOODWILL

Long-lived assets, which include property, plant and equipment, lease right-of-use assets, capitalized implementation costs for cloud computing arrangements, and intangible assets with finite lives, are measured for impairment only when events or circumstances indicate the carrying value may be impaired.

Long-lived assets, which include property, plant and equipment, lease ROU assets, capitalized implementation costs for cloud computing arrangements, and intangible assets with finite lives, are measured for impairment only when events or circumstances indicate the carrying value may be impaired.

In these cases, the Company estimates the future undiscounted cash flows to be derived from the asset or asset group to determine whether a potential impairment exists.

If the sum of the estimated undiscounted cash flows is less than the carrying value of the asset, the Company recognizes an impairment loss, measured as the amount by which the carrying value exceeds the estimated fair value of the asset.

The Company reviews and tests its intangible assets with indefinite useful lives and goodwill for impairment in the fourth quarter of each year and when events or changes in circumstances indicate that the carrying amount of such assets may be impaired.

The Company's intangible assets with indefinite lives consist of trademarks and trade names.

The Company reviews and tests its intangible assets with indefinite lives and goodwill for impairment in the fourth quarter of each year and when events or changes in circumstances indicate that the carrying amount of such assets may be impaired.

The Company's intangible

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assets with indefinite lives consist of trademarks and trade names.

In the impairment test for goodwill, the estimated fair value of the reporting unit is compared with the carrying amount of that reporting unit.

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Valuation allowances are used to reduce deferred tax assets to amounts considered likely to be realized.

Accrued income taxes in the Consolidated Balance Sheets include unrecognized income tax benefits relating to uncertain tax positions, including related interest and penalties, appropriately classified as current or noncurrent.

The Company recognizes the tax benefit from an uncertain tax position if it is more likely than not that the tax position will be sustained on examination by the relevant taxing authority based on the technical merits of the position.

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In making this determination, the Company assumes that the taxing authority will examine the position and that it will have full knowledge of all relevant information.

The provision for income taxes also includes estimates of interest and penalties related to uncertain tax positions.

Changes in the Company's assessment may result in the recognition of a tax benefit or an additional charge to the tax provision in the period our assessment changes.

The effective portion of changes in fair values of outstanding cash flow hedges is recorded in Other comprehensive income (loss) until earnings are affected by the hedged transaction, and any ineffective portion is included in current income.

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FOREIGN CURRENCY TRANSLATION

The assets and liabilities of the Company's foreign subsidiaries have been translated into United States dollars using the exchange rates in effect at period end, and the sales and expenses have been translated into United States dollars using average exchange rates in effect during the period.

For the Company's subsidiaries whose functional currency is not the United States dollar, assets and liabilities have been translated into United States dollars using the exchange rates in effect at period end, and the sales and expenses have been translated into United States dollars using average exchange rates in effect during the period.

The foreign currency translation adjustments are included as a separate component of Accumulated other comprehensive income (loss) in the Consolidated Balance Sheets.

REVENUE RECOGNITION

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Revenues are recognized when the Company's performance obligations are satisfied as evidenced by transfer of control of promised goods to customers or consumers, in an amount that reflects the consideration the Company expects to be entitled to receive in exchange for those goods or services.

Within the Company's wholesale channel, control generally transfers to the customer upon shipment to, or upon receipt by, the customer depending on the terms of sale with the customer.

Within the Company's direct-to-consumer ("DTC") channel, control generally transfers to the consumer at the time of sale within retail stores and concession-based arrangements and upon shipment to the consumer with respect to e-commerce transactions.

Within the Company's direct-to-consumer ("DTC") channel, control generally transfers to the consumer at the time of sale within retail stores and concession-based arrangements and generally upon shipment to the consumer with respect to e-commerce transactions.

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The amount of consideration the Company expects to be entitled to receive and recognize as Net sales across both wholesale and DTC channels varies with changes in sales returns and other accommodations and incentives offered.

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The Company treats shipping and handling activities as fulfillment costs, and as such recognize the costs for these activities at the time related revenue is recognized.

The majority of these costs are recorded as SG&A expenses , and the direct costs associated with shipping goods to customers and consumers are recorded as Costs of sales .

The majority of these costs, typically associated with warehousing and handling of inventory, are generally recorded as SG&A expenses , while the direct costs associated with shipping goods to customers and consumers are recorded as Costs of sales .

Shipping and handling fees billed to customers are recorded as Net sales .

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Advertising costs, including marketing and demand creation spending, are expensed in the period incurred and are included in SG&A expenses .

Total advertising expense, including cooperative advertising costs, were $ 141.3 million, $ 166.4 million and $ 150.4 million for the years ended December 31, 2020, 2019 and 2018, respectively.

Cooperative advertising costs are expensed when the related revenues are recognized and included in SG&A expenses when the Company receives an identifiable benefit in exchange for the

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

cost, the advertising may be obtained from a party other than the customer, and the fair value of the advertising benefit can be reasonably estimated.

Total advertising expense, including cooperative advertising costs, was $ 184.8 million, $ 141.3 million and $ 166.4 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Cooperative advertising costs are expensed when the related revenues are recognized and included in SG&A expenses .

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RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Effective January 1, 2021, the Company adopted ASU No.

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.

In November 2021, the FASB issued ASU No.

2021-10 (“ASU 2021-10”), Government Assistance (Topic 832):

Disclosures by Business Entities about Government Assistance, to increase transparency of government assistance including the disclosure of (1) the types of assistance, (2) an entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements.

ASU 2021-10 is effective for annual periods beginning after December 15, 2021.

Early adoption is permitted.

The impact of this new standard will depend on the amount of future government assistance received, if any.

NOTE 3 — REVENUES

25 unchanged sentences

Total $ 1,603,783 $ 424,489 $ 298,907 $ 174,375 $ 2,501,554

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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Year Ended December 31, 2019

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PERFORMANCE OBLIGATIONS

For the years ended December 31, 2020 and 2019, Net sales recognized from performance obligations related to prior periods were not material.

For the years December 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 is not material.

18 unchanged sentences

Depreciation expense for Property, plant and equipment, net was $ 54.2 million, $ 60.9 million, and $ 59.8 million for the years ended December 31, 2021, 2020 and 2019, respectively.

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Impairment charges for property, plant and equipment are included in SG&A expense and were $ 0.5 million, $ 5.0 million, and $ 0.4 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Charges during the years ended December 31, 2021, 2020 and 2019 were recorded primarily for certain underperforming retail stores in the U.S., EMEA and LAAP regions.

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 6 — INTANGIBLE ASSETS, NET AND GOODWILL

1 unchanged sentence

(in thousands)

Intangible assets subject to amortization:

Intangible assets with definite lives:

Patents and purchased technology $ 14,198 $ 14,198

6 unchanged sentences

Net carrying amount 3,987 5,637

Intangible assets not subject to amortization 97,921 115,421

Intangible assets with indefinite lives 97,921 97,921

Intangible assets, net $ 101,908 $ 103,558

Amortization expense for intangible assets subject to amortization was $ 2.5 million for the year ended December 31, 2020, and $ 3.0 million for the years ended December 31, 2020 and 2019.

Impairment charges for the intangible assets not subject to amortization are included in SG&A expense and were $ 17.5 million for the year ended December 31, 2020.

Amortization expense for intangible assets subject to amortization was $ 1.7 million, $ 2.5 million and $ 3.0 million for the years ended December 31, 2021, 2020 and 2019 respectively.

Impairment charges for intangible assets with indefinite lives are included in SG&A expense.

For the year ended December 31, 2021 and 2019, there were no impairments recorded for intangible assets with indefinite lives.

For the year ended December 31, 2020, an impairment charge of $ 17.5 million was recorded.

The impairment of the prAna trademark and trade name intangible asset was determined as part of the annual impairment test.

1 unchanged sentence

Cash flow projections were developed in part from the Company's annual planning process.

The discount rate is the estimated weighted-average costs of capital of the reporting unit from a market-participant perspective.

The decline in estimated fair value from the fourth-quarter 2019 impairment test reflects a lower estimated royalty rate and a decline in forecasted revenues.

There was no impairment recorded for intangible assets not subject to amortization for the years ended December 31, 2019 and 2018.

The discount rate was the estimated weighted-average costs of capital of the reporting unit from a market-participant perspective.

The decline in estimated fair value from the fourth-quarter 2020 impairment test compared to the fourth-quarter 2019 impairment test reflected a lower estimated royalty rate and a decline in forecasted revenues.

Substantially all of the Company's goodwill is recorded in the U.S.

The Company determined that goodwill was no t impaired for the years ended December 31, 2020, 2019, and 2018.

The Company determined that goodwill was not impaired for the years ended December 31, 2021, 2020, and 2019.

The following table presents the estimated annual amortization expense for the years 2022 through 2026:

(in thousands)

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NOTE 7 — SHORT-TERM BORROWINGS AND CREDIT LINES

Columbia Sportswear Company Credit Lines

In 2020, the Company entered into a credit agreement, maturing on December 30, 2025, which provides an unsecured, committed revolving credit facility that provides for funding up to $ 500.0 million.

DOMESTIC CREDIT FACILITY

The Company has an unsecured, committed revolving credit facility that provides for funding up to $ 500.0 million.

This credit agreement matures on December 30, 2025.

Interest, payable monthly, is based on the Company's option of either LIBOR plus an applicable margin or a base rate.

3 unchanged sentences

• the one-month LIBOR plus 1.00%.

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

This credit agreement requires the Company to comply with certain financial covenants covering the Company's funded debt ratio and asset coverage ratio.

The credit agreement also includes customary covenants that, among other things, limit or restrict the ability of the Company and its subsidiaries to incur additional indebtedness and liens, engage in mergers, acquisitions and dispositions, and engage in transactions with affiliates, as well as restrict certain payments, including dividends and share buybacks.

At December 31, 2020, the Company was in compliance with all associated covenants and there was no balance outstanding.

At December 31, 2019, there was no balance outstanding under the credit agreement in effect for such period.

Columbia Sportswear Company's Subsidiary Credit Lines

At December 21, 2020 and 2019, there was no balance outstanding under the Company's subsidiary credit lines.

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 borrowing up to a maximum of CAD$ 30.0 million (approximately US$ 23.5 million) at December 31, 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.

The Company's European subsidiary has available two separate unsecured and uncommitted lines of credit, and an unsecured, committed line of credit, which are guaranteed by the Company, and provide for borrowing up to a maximum of € 25.8 million, € 0.6 million, and € 4.4 million, respectively (combined approximately US$ 37.9 million), at December 31, 2020.

Borrowings under the € 25.8 million line accrue interest at a base rate of 185 basis points plus 175 basis points.

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

The Company's Japanese subsidiary has available two separate unsecured and uncommitted overdraft facilities guaranteed by the Company providing for borrowing up to a maximum of ¥ 1.5 billion and US$ 7.0 million, respectively (combined approximately US$ 21.5 million) at December 31, 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 175 basis points.

The Company's Korean 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 December 31, 2020.

Borrowings under the overdraft facility accrue interest at the Korea three month CD rate plus 175 basis points.

The Company's Chinese subsidiary has available an unsecured and uncommitted line of credit providing for borrowings up to a maximum of RMB 140.0 million at December 31, 2020.

The Company's Chinese subsidiary also has an unsecured and uncommitted overdraft and clean advance facility, guaranteed by the Company that provides for borrowings of advances or overdrafts up to a maximum of US$ 20.0 million at December 31, 2020.

Borrowings under the RMB 140.0 million line of credit accrue interest at the one year loan prime rate less 10 basis points.

Borrowings under the US$ 20.0 million facility accrue interest on advances of RMB at 4.15%, advances of USD based on LIBOR plus 1.75% per annum or overdrafts of RMB based on 110% of the People's Bank of China rate.

The combined available borrowings of the two facilities were approximately US$ 41.5 million at December 31, 2020.

At December 31, 2021 and 2020, the Company was in compliance with all associated covenants and there was no balance outstanding.

INTERNATIONAL CREDIT FACILITY

The Company's European subsidiary has available an unsecured, committed line of credit, which are guaranteed by the Company, and provides for borrowing up to a maximum of € 4.4 million (approximately US$ 5.0 million) at December 31, 2021, with borrowings to accrue interest at a base rate plus 75 basis points.

At December 31, 2021 and 2020, there was no balance outstanding.

NOTE 8 — ACCRUED LIABILITIES

8 unchanged sentences

$ 316,485 $ 257,278

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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A reconciliation of product warranties is as follows:

11 unchanged sentences

Operating lease cost $ 71,996 $ 104,906 $ 78,609

$ 104,906 $ 78,609

Variable lease cost 67,745 58,391 60,085

58,391 60,085

Short term lease cost 5,612 9,600 9,013

$ 145,353 $ 172,897 $ 147,707

(1) For the year ended December 31, 2018, prior to the adoption of ASC 842 on January 1, 2019, rent expenses of $ 143.9 million and $ 1.6 million was included in SG&A expense and Cost of sales, respectively .

For the year ended December 31, 2020, operating lease cost included $ 16.5 million of accelerated amortization for retail locations that permanently closed during 2020 for which the related lease liabilities have not been extinguished as of December 31, 2020 due to ongoing negotiations with the landlords.

In addition, for the year ended December 31, 2020, operating lease cost included $ 7.0 million of right-of-use asset impairment charges related to underperforming retail locations primarily in the U.S.

For the year ended December 31, 2021, operating lease costs included $ 0.5 million of ROU impairment charges related to underperforming retail locations, as well as a gain of $ 8.6 million from the completion of lease termination negotiations and settlements related to certain prior year retail store closures.

For the year ended December 31, 2020, operating lease cost included $ 16.5 million of accelerated amortization for retail locations that permanently closed during 2020 for which the related lease liabilities had not been extinguished as of December 31, 2020 due to ongoing negotiations with the landlords.

In addition, for the year ended December 31, 2020, operating lease cost included $ 7.0 million of ROU asset impairment charges related to underperforming retail locations primarily in the U.S.

segment for the year ended December 31, 2020.

11 unchanged sentences

The following table presents supplemental balance sheet information related to leases:

Year Ended December 31,

Weighted average remaining lease term 5.72 years 6.16 years

Weighted average discount rate 3.25 % 3.72 %

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents the future maturities of liabilities as of December 31, 2020:

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The following table presents the future maturities of lease liabilities as of December 31, 2021:

(in thousands)

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As of December 31, 2021, the Company has additional operating lease commitments that have not yet commenced of $ 16.2 million.

These leases will commence in 2021 with lease terms of approximately two to 10 years.

These leases will commence in 2022 with lease terms of approximately one to 10 years.

NOTE 10 — INCOME TAXES

20 unchanged sentences

Income tax expense $ 97,403 $ 31,510 $ 74,940

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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The following is a reconciliation of the statutory federal income tax rate to the effective rate reported in the financial statements:

10 unchanged sentences

Excess tax benefits from stock plans ( 0.9 ) ( 0.8 ) ( 1.6 )

Provision for income taxes related to tax reform — — 1.4

Other 0.4 1.7 ( 0.1 )

5 unchanged sentences

Accruals and allowances $ 40,518 $ 29,950

Lease liability 81,012 84,346

Capitalized inventory costs 23,950 24,222

Sales reserves 13,881 14,610

Stock compensation 6,329 6,078

10 unchanged sentences

Prepaid expenses ( 3,447 ) ( 2,085 )

ROU lease asset ( 68,148 ) ( 66,629 )

Deferred tax liability associated with future repatriations ( 13,069 ) ( 19,008 )

2 unchanged sentences

Total net deferred taxes $ 92,121 $ 90,921

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Subsequent to the issuance of the Company’s December 31, 2020 consolidated financial statements, the Company identified that the Lease liability and corresponding ROU lease asset shown in the table above had been presented net with accruals and allowances, rather than gross.

As a result, 2020 amounts in the table above have been revised from balances previously reported.

The Company has assessed the qualitative and quantitative impact of the misstatement and determined it is not material to the 2020 financial statements.

Further, the Company had previously recorded Sales reserves within Capitalized inventory costs, rather than presenting them separately and has reclassified such amounts to conform to the current year presentation.

The Company has foreign net operating loss carryforwards of $ 87.5 million as of December 31, 2021, of which $ 68.4 million have an unlimited carryforward period and $ 19.1 million expire between 2025 and 2040.

The net operating losses result in deferred tax assets of $ 22.8 million and $ 24.3 million and were subject to a valuation allowance of $ 20.2 million and $ 21.2 million at December 31, 2021 and 2020, respectively.

At December 31, 2020, the Company has accumulated undistributed earnings generated by the Company's foreign subsidiaries of

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

$ 320.8 million.

As $ 100.0 million of such earnings have previously been subject to the one-time transition tax on foreign earnings by the Tax Cuts and Jobs Act, any additional taxes due with respect to such earnings would generally be limited to foreign and state taxes and have been recorded as a deferred tax liability.

However, the Company intends to indefinitely reinvest the earnings generated after January 1, 2018 and expects future domestic cash generation to be sufficient to meet future domestic cash needs.

At December 31, 2021, the Company had accumulated undistributed earnings generated by the Company's foreign subsidiaries of $333.9 million.

As a result of the Tax Cuts and Jobs Act, these earnings have been subject to U.S.

tax, so any further taxes associated with such earnings would generally be limited to foreign withholding and state taxes.

The Company has recorded a deferred tax liability for these, except in the jurisdictions where we intend to indefinitely reinvest the earnings.

UNRECOGNIZED TAX BENEFITS

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The Company does not anticipate that adjustments relative to these findings, or any other ongoing tax audits, will result in material changes to its financial condition, results of operations or cash flows.

Other than the findings previously noted, the Company is not currently under examination in any major jurisdiction.

As of December 31, 2021, the Company was under audit in the United States for tax years 2017 and 2018, Canada for tax years 2017 and 2018, and Korea for tax years 2016 through 2020.

Other than the findings and audits previously noted, the Company is not currently under examination in any other major jurisdiction.

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:

Year Ended December 31,

(in thousands)

8 unchanged sentences

Due to the potential for resolution of income tax audits currently in progress, and the expiration of various statutes of limitation, it is reasonably possible that the unrecognized tax benefits balance may change within the twelve months following December 31, 2021 by a range of zero to $ 6.5 million.

Open tax years, including those previously mentioned, contain matters that could be subject to differing interpretations of applicable tax laws and regulations as they relate to the amount, timing, or inclusion of revenue and expenses or the sustainability of income tax credits for a given examination cycle.

Open tax years, including those previously mentioned, contain matters that could be subject to differing

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interpretations of applicable tax laws and regulations as they relate to the amount, timing, or inclusion of revenue and expenses or the sustainability of income tax credits for a given examination cycle.

Unrecognized tax benefits of $ 12.9 million, $ 13.6 million and $ 11.5 million would affect the effective tax rate if recognized at December 31, 2021, 2020 and 2019, respectively.

The Company recognizes interest expense and penalties related to income tax matters in Income tax expense .

The Company recognized a net increase of accrued interest and penalties of $ 0.8 million in 2020, and a net reversal of accrued interest and penalties of $ 0.5 million in 2019 and a net increase of accrued interest and penalties of $ 0.4 million in 2018, all of which related to uncertain tax positions.

The Company recognized a net increase of accrued interest and penalties of $ 0.3 million in 2021, and a net increase of accrued interest and penalties of $ 0.8 million in 2020 and a net reversal of accrued interest and penalties of $ 0.5 million in 2019, all of which related to uncertain tax positions.

The Company had $ 2.6 million and $ 2.3 million of accrued interest and penalties related to uncertain tax positions at December 31, 2021 and 2020, respectively.

5 unchanged sentences

Costs recognized for Company contributions to the plan were $ 10.7 million, $ 10.1 million and $ 9.4 million for the years ended December 31, 2021, 2020 and 2019, respectively.

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

DEFERRED COMPENSATION PLAN

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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.

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INDEMNITIES AND GUARANTEES

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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.

Under this program as of December 31, 2020, the Company had repurchased 26.8 million shares at an aggregate purchase price of $ 1,017.8 million and have $ 82.2 million remaining available.

Under this program as of December 31, 2021, the Company had repurchased 28.5 million shares at an aggregate purchase price of $ 1,183.7 million and had $ 316.3 million remaining available.

During the year ended December 31, 2021, the Company purchased an aggregate of $ 165.9 million of common stock under this program.

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

In January 2021, the Company's Board of Directors approved a $ 400.0 million increase in share repurchase authorization.

NOTE 14 — STOCK-BASED COMPENSATION

4 unchanged sentences

At December 31, 2021, 3,643,701 shares were available for future grants under the 2020 Plan and up to 94,528 additional shares that were previously authorized and available for issuance under the Prior Plan may become available for future grants under the 2020 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.

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.

The Company uses original issuance shares to satisfy share-based payments.

Stock Compensation

STOCK-BASED COMPENSATION EXPENSE

Stock-based compensation expense consisted of the following:

7 unchanged sentences

The Company realized a tax benefit for the deduction from stock-based award transactions of $ 8.3 million, $ 4.1 million and $ 9.9 million for the years ended December 31, 2021, 2020 and 2019, respectively.

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STOCK OPTIONS

14 unchanged sentences

Expected annual dividend yield 1.09 % 1.13 % 1.03 %

Weighted average grant date fair value per share $ 14.67 $ 22.51 $ 18.86

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Weighted average grant date fair value per stock option granted $ 17.95 $ 14.67 $ 22.51

The following table summarizes stock option activity under the Plan:

3 unchanged sentences

Options outstanding at January 1, 2019

1,604,621 $ 53.86 6.95 $ 48,703

Granted 395,653 93.98

2 unchanged sentences

Options outstanding at December 31, 2019

1,479,674 66.74 7.11 49,930

Granted 660,071 87.25

2 unchanged sentences

Options outstanding at December 31, 2020

1,919,163 74.45 7.19 29,489

Granted 687,772 95.90

2 unchanged sentences

Options outstanding at December 31, 2021

1,933,534 $ 83.19 7.26 $ 29,889

Options vested and expected to vest at December 31, 2021

1,844,333 $ 82.67 7.18 $ 29,397

Options exercisable at December 31, 2021

773,731 $ 69.79 5.40 $ 21,744

(1) The aggregate intrinsic value above represents pre-tax intrinsic value that would have been realized if all options had been exercised on the last business day of the period indicated, based on the Company's closing stock price on that day.

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Stock option compensation expense for the years ended December 31, 2021, 2020 and 2019 was $ 6.9 million, $ 7.0 million and $ 6.2 million, respectively.

9 unchanged sentences

Restricted stock units vest in accordance with the terms and conditions established by the Compensation Committee of the Board of Directors, and are based on continued service and, in some instances, on individual performance or Company performance or both.

The fair value of service-based and performance-based restricted stock units is determined using the Black-Scholes model.

Key inputs and assumptions used in the model include the vesting period, the Company's expected annual dividend yield and the closing price of the Company's common stock on the date of grant.

The fair value of service-based and performance-based restricted stock units that are not eligible for dividends are valued at the closing price of the Company’s common stock on the date of grant, reduced by the present value of dividends not received during the vesting period.

Other assumptions incorporated into the grant date fair value include the vesting period and the Company's expected annual dividend yield.

The weighted average assumptions for restricted stock units granted and resulting fair value are as follows:

4 unchanged sentences

Weighted average grant date fair value per restricted stock unit granted $ 96.07 $ 78.90 $ 94.58

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes the restricted stock unit activity under the Plan:

2 unchanged sentences

Restricted stock units outstanding at January 1, 2019

424,001 $ 62.38

Granted 177,618 94.58

2 unchanged sentences

Restricted stock units outstanding at December 31, 2019

405,104 76.45

Granted 216,318 78.90

7 unchanged sentences

Restricted stock units outstanding at December 31, 2021

369,592 $ 88.88

(1) The number of vested units includes shares withheld by the Company to pay up to maximum statutory requirements to taxing authorities on behalf of the employee.

For the years ended December 31, 2021, 2020 and 2019, the Company withheld 56,792 , 54,543 and 56,843 shares, respectively, to satisfy $ 5.8 million, $ 4.5 million and $ 5.8 million of employees' tax obligations, respectively.

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Restricted stock unit compensation expense for the years ended December 31, 2021, 2020 and 2019 was $ 12.2 million, $ 10.8 million and $ 11.6 million, respectively.

16 unchanged sentences

66,415 66,772 68,493

Earnings per share of common stock attributable to Columbia Sportswear Company:

Earnings per share:

Basic $ 5.37 $ 1.63 $ 4.87

1 unchanged sentence

Stock options and service-based restricted stock units, and performance-based restricted stock representing 843,578 , 1,122,935 and 405,928 shares of common stock for the years ended December 31, 2021, 2020 and 2019, respectively, were outstanding but were excluded from the computation of diluted EPS because their effect would be anti-dilutive under the treasury stock method or because the shares were subject to performance conditions that had not been met.

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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NOTE 16 — ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

8 unchanged sentences

Balance at January 1, 2019

Other comprehensive income (loss) before reclassifications ( 56 ) 23,065 ( 17,800 ) 5,209

$ ( 60 ) $ 11,964 $ ( 15,967 ) $ ( 4,063 )

Other comprehensive income before reclassifications 56 6,669 2,064 8,789

Amounts reclassified from accumulated other comprehensive loss (1)

— ( 9,052 ) — ( 9,052 )

Net other comprehensive income (loss) during the year 56 ( 2,383 ) 2,064 ( 263 )

Adoption of ASU 2017-12 — ( 515 ) — ( 515 )

Purchase of non-controlling interest — ( 99 ) — ( 99 )

Balance at December 31, 2019

Other comprehensive income before reclassifications 56 6,669 2,064 8,789

( 4 ) 9,482 ( 13,903 ) ( 4,425 )

Other comprehensive income (loss) before reclassifications 4 ( 7,218 ) 24,078 16,864

Amounts reclassified from accumulated other comprehensive loss (1)

1 unchanged sentence

Net other comprehensive income (loss) during the year 4 ( 18,851 ) 24,078 5,231

Purchase of non-controlling interest — ( 99 ) — ( 99 )

Balance at December 31, 2020

— ( 9,369 ) 10,175 806

Other comprehensive income (loss) before reclassifications — 16,113 ( 24,465 ) ( 8,352 )

3 unchanged sentences

Balance at December 31, 2021

$ — $ 9,914 $ ( 14,290 ) $ ( 4,376 )

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

7 unchanged sentences

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, trademark impairment charges, and other miscellaneous costs.

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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

8 unchanged sentences

$ 3,126,402 $ 2,501,554 $ 3,042,478

Segment income from operations:

Segment operating income:

$ 536,475 $ 250,485 $ 456,656

2 unchanged sentences

Canada 52,731 37,620 39,576

Total segment income from operations 355,215 621,789 556,335

Total segment operating income 696,727 355,215 621,789

Unallocated corporate expenses ( 246,223 ) ( 218,166 ) ( 226,818 )

26 unchanged sentences

$ 291,088 $ 309,792

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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NOTE 18 — FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

20 unchanged sentences

Currency forward contracts 267,982 326,820

At December 31, 2020, $ 4.3 million of deferred net loss on both outstanding and matured derivatives recorded in Other comprehensive income (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 Consolidated Statements of Operations.

Actual amounts ultimately reclassified to Net sa les or Cost of sales in the 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 December 31, 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 less than $ 1.4 million at December 31, 2020.

At December 31, 2021, $ 4.2 million of deferred net loss on both outstanding and matured derivatives recorded in Accumulated other comprehensive income (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 Consolidated Statements of Operations.

When outstanding derivative contracts mature, actual amounts ultimately reclassified to Net sa les or Cost of sales in the 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 as well as the euro exchange rate in effect against the pound sterling.

At December 31, 2021, the Company's derivative contracts had a remaining maturity of less than three 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 $ 4.1 million at December 31, 2021.

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

1 unchanged sentence

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 CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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I ndex to Notes to Consolidated Financial State ments

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

13 unchanged sentences

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

Year Ended December 31,

(in thousands) Statement Of Operations Classification 2020 2019 2018

Statement Of Operations Classification Year Ended December 31,

(in thousands) 2021 2020 2019

Currency Forward Contracts:

2 unchanged sentences

— $ 16,113 $ ( 7,218 ) $ 6,669

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

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

Net sales ( 448 ) 191 338

3 unchanged sentences

Other non-operating income (expense), net 451 817 —

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

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

Net sales — — ( 43 )

4 unchanged sentences

Other non-operating income (expense), net ( 608 ) ( 2,865 ) 411

( 2,865 ) 411 3,334

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

NOTE 19 — FAIR VALUE MEASURES

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Fair value is defined as an exit price, representing the amount that the Company would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants, under a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

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I ndex to Notes to Consolidated Financial State ments

Level 1 — observable inputs such as quoted prices for identical assets or liabilities in active liquid markets;

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Money market funds $ 2,677 $ — $ — $ 2,677

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

Short-term investments:

Available-for-sale short-term investments:

Government treasury bills — 130,168 — 130,168

Other short-term investments:

Money market funds 73 — — 73

12 unchanged sentences

Total liabilities measured at fair value $ — $ 3,890 $ — $ 3,890

Index to Notes to Consolidated Financial Statements

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(1) Available-for-sale short-term investments have remaining maturities of less than one year.

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I ndex to Notes to Consolidated Financial State ments

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

3 unchanged sentences

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

Commercial paper — 33,587 — 33,587

Short-term investments:

Money market funds 105 — 0 — 105

Mutual fund shares 1,119 — — 1,119

12 unchanged sentences

NON-RECURRING FAIR VALUE MEASUREMENTS

The Company measured the fair value of certain trademark and trade name intangible assets and certain retail store long-lived assets consisting of property, plant and equipment, and lease right-of-use assets as part of impairment testing for the year ending December 31, 2020.

The Company measured the fair value of certain trademark and trade name intangible assets and certain retail store long-lived assets consisting of property, plant and equipment, and lease ROU assets as part of impairment testing for the year ended December 31, 2021.

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 Notes 5, 6 and 9 for discussion of impairment charges.

SUPPLEMENTARY DATA—QUARTERLY FINANCIAL DATA

The following table summarizes the Company's quarterly financial data for the past two years ended December 31:

(in thousands, except per share amounts) First

Net sales $ 568,228 $ 316,611 $ 701,092 $ 915,623

Gross profit 271,714 146,230 342,908 463,037

Net income (loss)

213 ( 50,707 ) 62,751 95,756

Earnings (loss) per share:

Basic $ 0.00 $ ( 0.77 ) $ 0.95 $ 1.45

Diluted 0.00 ( 0.77 ) 0.94 1.44

(in thousands, except per share amounts) First

Quarter Second

Quarter Third

Quarter Fourth

Net sales $ 654,608 $ 526,210 $ 906,793 $ 954,867

Gross profit 336,729 253,591 446,695 478,655

74,177 23,029 119,258 114,025

Earnings per share:

Basic $ 1.09 $ 0.34 $ 1.76 $ 1.69

Diluted 1.07 0.34 1.75 1.67

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I ndex to Notes to Consolidated Financial State ments

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data