What changed in this filing

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Item 1. Financial Statements

2022-11-03 compared with 2022-08-04 · 106 added, 94 removed, 522 unchanged (28% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(in thousands) June 30,

(in thousands) September 30,

2022 December 31,

2021 June 30,

2021 September 30,

Current Assets:

16 unchanged sentences

Current Liabilities:

Short-term borrowings $ 4,441 $ — $ —

Accounts payable 336,782 283,349 241,119

20 unchanged sentences

Total liabilities and shareholders' equity $ 2,890,152 $ 3,067,128 $ 2,889,359

See accompanying notes to condensed consolidated financial statements.

See accompanying notes to unaudited condensed consolidated financial statements.

COLUMBIA SPORTSWEAR COMPANY | 2022 FORM 10-Q | 1

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands, except per share amounts) 2022 2021 2022 2021

6 unchanged sentences

Interest income, net 765 196 1,659 1,072

Other non-operating expense, net ( 1,435 ) ( 294 ) ( 1,391 ) ( 598 )

Other non-operating income (expense), net ( 269 ) 201 ( 1,660 ) ( 397 )

Income before income tax 145,757 133,858 237,699 239,611

Income tax benefit (expense) ( 674 ) 5,385 ( 17,942 ) ( 9,169 )

Income tax expense ( 34,007 ) ( 33,295 ) ( 51,949 ) ( 42,464 )

Net income $ 111,750 $ 100,563 $ 185,750 $ 197,147

5 unchanged sentences

Diluted 62,210 66,266 63,178 66,673

See accompanying notes to condensed consolidated financial statements.

See accompanying notes to unaudited condensed consolidated financial statements.

COLUMBIA SPORTSWEAR COMPANY | 2022 FORM 10-Q | 2

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands) 2022 2021 2022 2021

1 unchanged sentence

Other comprehensive income (loss):

Unrealized gains on available-for-sale securities (net of tax effects of $( 146 ))

Unrealized gains (losses) on derivative transactions (net of tax effects of $( 5,744 ), $ 1,183 , $( 5,088 ) and $( 2,185 ), respectively)

Unrealized gains on derivative transactions (net of tax effects of $( 4,856 ), $( 3,602 ), $( 9,944 ) and $( 5,787 ), respectively)

14,221 10,552 27,938 15,564

2 unchanged sentences

Other comprehensive income (loss) ( 15,837 ) ( 870 ) ( 33,194 ) ( 3,832 )

Comprehensive income (loss) $ ( 5,396 ) $ 42,363 $ 56,643 $ 93,622

See accompanying notes to condensed consolidated financial statements.

Comprehensive income $ 95,913 $ 99,693 $ 152,556 $ 193,315

See accompanying notes to unaudited condensed consolidated financial statements.

COLUMBIA SPORTSWEAR COMPANY | 2022 FORM 10-Q | 3

1 unchanged sentence

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

Six Months Ended June 30,

Nine Months Ended September 30,

(in thousands) 2022 2021

1 unchanged sentence

Net income $ 185,750 $ 197,147

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

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

Depreciation, amortization, and non-cash lease expense 86,569 84,509

13 unchanged sentences

Other liabilities ( 3,182 ) 1,359

Net cash provided by (used in) operating activities ( 112,668 ) 117,162

Net cash used in operating activities ( 328,089 ) ( 15,638 )

Cash flows from investing activities:

6 unchanged sentences

Repayments on credit facilities ( 8,133 ) ( 29,313 )

Payment of line of credit issuance fees ( 604 ) —

Proceeds from issuance of common stock related to stock-based compensation 4,598 24,329

4 unchanged sentences

Net effect of exchange rate changes on cash ( 24,900 ) ( 4,946 )

Net increase (decrease) in cash and cash equivalents ( 350,294 ) 29,081

Net decrease in cash and cash equivalents ( 604,183 ) ( 191,246 )

Cash and cash equivalents, beginning of period 763,404 790,725

4 unchanged sentences

Property, plant and equipment acquired through increase in liabilities $ 7,502 $ 8,277

See accompanying notes to condensed consolidated financial statements.

Repurchases of common stock not settled $ — $ 8,628

See accompanying notes to unaudited condensed consolidated financial statements.

COLUMBIA SPORTSWEAR COMPANY | 2022 FORM 10-Q | 4

3 unchanged sentences

Outstanding Amount

Balance, March 31, 2022

Balance, June 30, 2022

62,091 $ — $ 1,753,450 $ ( 21,733 ) $ 1,731,717

1 unchanged sentence

Other comprehensive income (loss):

Unrealized gains on available-for-sale securities, net — — — 451 451

Unrealized gains on derivative transactions, net — — — 14,221 14,221

5 unchanged sentences

Stock-based compensation expense — 5,435 — — 5,435

Repurchase of common stock ( 906 ) ( 6,631 ) ( 63,012 ) — ( 69,643 )

Balance, June 30, 2022

Balance, September 30, 2022

62,105 $ 5,803 $ 1,846,570 $ ( 37,570 ) $ 1,814,803

1 unchanged sentence

Outstanding Amount

Balance, March 31, 2021

Balance, June 30, 2021

66,148 $ — $ 1,863,813 $ ( 2,156 ) $ 1,861,657

1 unchanged sentence

Other comprehensive income (loss):

Unrealized losses on derivative transactions, net — — — ( 3,551 ) ( 3,551 )

Unrealized gains on derivative transactions, net — — — 10,552 10,552

Foreign currency translation adjustment, net — — — ( 11,422 ) ( 11,422 )

5 unchanged sentences

Repurchase of common stock ( 726 ) ( 8,431 ) ( 63,911 ) — ( 72,342 )

Balance, June 30, 2021

Balance, September 30, 2021

65,501 $ — $ 1,883,343 $ ( 3,026 ) $ 1,880,317

14 unchanged sentences

Repurchase of common stock ( 3,235 ) ( 10,688 ) ( 276,252 ) — ( 286,940 )

Balance, June 30, 2022

Balance, September 30, 2022

62,105 $ 5,803 $ 1,846,570 $ ( 37,570 ) $ 1,814,803

15 unchanged sentences

Repurchase of common stock ( 1,254 ) ( 53,266 ) ( 73,942 ) — ( 127,208 )

Balance, June 30, 2021

Balance, September 30, 2021

65,501 $ — $ 1,883,343 $ ( 3,026 ) $ 1,880,317

See accompanying notes to condensed consolidated financial statements.

See accompanying notes to unaudited condensed consolidated financial statements.

COLUMBIA SPORTSWEAR COMPANY | 2022 FORM 10-Q | 6

16 unchanged sentences

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 June 30, 2022, December 31, 2021 and June 30, 2021, the results of operations for the three and six months ended June 30, 2022 and 2021, and cash flows for the six months ended June 30, 2022 and 2021.

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, 2022 , December 31, 2021 and September 30, 2021, the results of operations for the three and nine months ended September 30, 2022 and 2021, and cash flows for the nine months ended September 30, 2022 and 2021.

The December 31, 2021 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, 2021.

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

therefore, results of operations for the three and six months ended June 30, 2022 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 and nine months ended September 30, 2022 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.

23 unchanged sentences

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 June 30, 2022

Three Months Ended September 30, 2022

(in thousands)

8 unchanged sentences

Total $ 607,074 $ 115,328 $ 153,530 $ 79,127 $ 955,059

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

(in thousands)

8 unchanged sentences

Total $ 510,486 $ 102,754 $ 109,150 $ 82,316 $ 804,706

Six Months Ended June 30, 2022

Nine Months Ended September 30, 2022

(in thousands)

10 unchanged sentences

Notes to Condensed Consolidated Financial Statements (Unaudited)

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

(in thousands)

9 unchanged sentences

PERFORMANCE OBLIGATIONS

For the three and six months ended June 30, 2022 and 2021, Net sales recognized from performance obligations related to prior periods were not material.

For the three and nine months ended September 30, 2022 and 2021, 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.

CONTRACT BALANCES

As of June 30, 2022, December 31, 2021 and June 30, 2021, contract liabilities included in Accrued liabilities on the unaudited Condensed Consolidated Balance Sheets, which consisted of obligations associated with the Company's gift card and customer loyalty programs, were not material.

As of September 30, 2022, December 31, 2021 and September 30, 2021, the Company did not have contract assets and had an immaterial amount of contract liabilities included in Accrued liabilities on the unaudited Condensed Consolidated Balance Sheets.

NOTE 3 — INTANGIBLE ASSETS, NET AND GOODWILL

1 unchanged sentence

(in thousands)

June 30, 2022 December 31, 2021 June 30, 2021

September 30, 2022 December 31, 2021 September 30, 2021

Intangible assets with definite lives:

9 unchanged sentences

Intangible assets, net $ 100,672 $ 101,908 $ 102,321

Amortization expense for intangible assets subject to amortization was $ 0.4 million for the three months ended June 30, 2022 and 2021, and was $ 0.8 million for the six months ended June 30, 2022 and 2021.

Amortization expense for intangible assets subject to amortization was $ 0.4 million for the three months ended September 30, 2022 and 2021, and was $ 1.2 million for the nine months ended September 30, 2022 and 2021.

COLUMBIA SPORTSWEAR COMPANY | 2022 FORM 10-Q | 10

5 unchanged sentences

DOMESTIC CREDIT FACILITY

As of June 30, 2022, the Company had an unsecured, committed revolving credit agreement, maturing on December 30, 2025, which provided for funding up to $ 500.0 million (the "Prior Domestic Credit Agreement").

As of June 30, 2022, the Company was in compliance with all associated covenants and there was no balance outstanding under the facility.

In July 2022, the Company terminated the Prior Domestic Credit Agreement and, simultaneously, entered into a new credit agreement (the “Domestic Credit Agreement”).

In July 2022, the Company terminated its unsecured, committed revolving credit agreement, maturing on December 30, 2025, which provided for funding up to $ 500.0 million (the "Prior Domestic Credit Agreement") and, simultaneously, entered into a new credit agreement (the “Domestic Credit Agreement”).

The Domestic Credit Agreement provides for up to $500.0 million of borrowings pursuant to an unsecured, committed revolving credit facility (the “Credit Facility”), which is available for working capital and general corporate purposes, including a sublimit for the issuance of letters of credit.

This Credit Facility matures on July 12, 2027.

Interest, payable monthly, is based on the Company's option of either the secured overnight financing rate (“SOFR”) plus an applicable margin or a base rate.

Interest, generally payable monthly, is based on the Company's option of either the secured overnight financing rate (“SOFR”) plus an applicable margin or a base rate.

Base rate is defined as the highest of the following, plus an applicable margin:

4 unchanged sentences

The applicable margin for base rate loans will range from 0.00% to 0.50% based on the Company’s funded debt ratio.

A commitment fee ranging from 0.10% to 0.20% based on the Company's funded debt ratio is paid quarterly on the average daily unused commitment amount of the Credit Facility.

The Domestic Credit Agreement requires the Company to comply with a financial covenant to maintain a certain funded debt ratio.

In addition, the Domestic Credit Agreement 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 the amount of certain payments, including dividends and share buybacks in the event the Company's funded debt ratio is greater than a set amount.

As of September 30, 2022 , the Company was in compliance with all associated covenants and there was no balance outstanding under the Credit Facility.

In October 2022, the Company borrowed $25.0 million from the Credit Facility.

These borrowings accrue interest at a rate of 4.14% per annum.

OTHER SHORT-TERM BORROWINGS AND CREDIT LINES

As of September 30, 2022 , there was €4.5 million (approximately US$4.4 million) of borrowings outstanding under an overdraft facility utilized by the Company's European subsidiary, which was guaranteed by the Company.

These borrowings accrued interest at a rate of 3.75% per annum and were repaid in October 2022.

In October 2022, the Company borrowed €15.0 million (approximately US$15.0 million) from an unsecured, uncommitted credit facility utilized by the Company's European subsidiary, which is guaranteed by the Company.

These borrowings accrue interest at a rate of 2.10% per annum .

COLUMBIA SPORTSWEAR COMPANY | 2022 FORM 10-Q | 11

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 5 — COMMITMENTS AND CONTINGENCIES

1 unchanged sentence

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.

COLUMBIA SPORTSWEAR COMPANY | 2022 FORM 10-Q | 11

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 6 — SHAREHOLDERS' EQUITY

Since the inception of the Company's stock repurchase plan in 2004 through June 30, 2022, the Company's Board of Directors has authorized the repurchase of $ 2.0 billion of the Company's common stock, including an additional $500 million approved by the Company’s Board of Directors at its regular board meeting in April 2022.

Since the inception of the Company's stock repurchase plan in 2004 through September 30, 2022 , the Company's Board of Directors has authorized the repurchase of $ 2.0 billion of the Company's common stock, including an additional $500 million approved by the Company’s Board of Directors at its regular board meeting in April 2022.

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.

Under this program as of June 30, 2022, the Company had repurchased 31.7 million shares at an aggregate purchase price of $ 1,470.6 million and had $ 529.4 million remaining available.

During the three and six months ended June 30, 2022, the Company repurchased an aggregate of $69.6 million and $ 286.9 million, respectively, of the Company's common stock under this program.

Under this program as of September 30, 2022 , the Company had repurchased 31.7 million shares at an aggregate purchase price of $1,470.6 million and had $529.4 million remaining available.

During the nine months ended September 30, 2022 , the Company repurchased an aggregate of $ 286.9 million of the Company's common stock under this program.

The Company did not repurchase common stock during the three months ended September 30, 2022 .

NOTE 7 — STOCK-BASED COMPENSATION

3 unchanged sentences

Stock-based compensation expense consisted of the following:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands) 2022 2021 2022 2021

3 unchanged sentences

STOCK OPTIONS

During the six months ended June 30, 2022, the Company granted a total of 546,681 stock options at a weighted average grant date fair value of $ 18.33 per option.

As of June 30, 2022, unrecognized costs related to outstanding stock options totaled $ 16.9 million, before any related tax benefit.

During the nine months ended September 30, 2022 , the Company granted a total of 551,134 stock options at a weighted average grant date fair value of $ 18.29 per option.

As of September 30, 2022 , unrecognized costs related to outstanding stock options totaled $ 14.9 million, before any related tax benefit.

These unrecognized costs related to stock options are expected to be recognized over a weighted average remaining period of 2.42 years.

RESTRICTED STOCK UNITS

During the six months ended June 30, 2022, the Company granted 239,309 restricted stock units at a weighted average grant date fair value of $ 85.82 per restricted stock unit.

As of June 30, 2022, unrecognized costs related to outstanding restricted stock units totaled $ 28.6 million, before any related tax benefit.

During the nine months ended September 30, 2022 , the Company granted 246,031 restricted stock units at a weighted average grant date fair value of $ 85.29 per restricted stock unit.

As of September 30, 2022 , unrecognized costs related to outstanding restricted stock units totaled $ 25.3 million, before any related tax benefit.

These unrecognized costs related to restricted stock units are expected to be recognized over a weighted average remaining period of 2.49 years.

6 unchanged sentences

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands, except per share amounts)

8 unchanged sentences

Diluted $ 1.80 $ 1.52 $ 2.94 $ 2.96

Stock options, service-based restricted stock units, and performance-based restricted stock units representing 2,060,703 and 611,143 shares of common stock for the three months ended June 30, 2022 and 2021, respectively, and 1,709,085 and 793,051 shares of common stock for the six months ended June 30, 2022 and 2021, 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.

Stock options, service-based restricted stock units, and performance-based restricted stock units representing 2,174,505 and 652,317 shares of common stock for the three months ended September 30, 2022 and 2021, respectively, and 1,738,354 and 810,092 shares of common stock for the nine months ended September 30, 2022 and 2021, 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.

NOTE 9 — ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

1 unchanged sentence

The following tables set forth the changes in Accumulated other comprehensive income (loss) :

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

(in thousands) Unrealized gains (losses) on derivative transactions Foreign currency

adjustments Total

Balance as of March 31, 2022

Balance as of June 30, 2022

$ 23,631 $ ( 45,364 ) $ ( 21,733 )

3 unchanged sentences

Net other comprehensive income (loss) during the year 14,221 ( 30,058 ) ( 15,837 )

Balance as of June 30, 2022

Balance as of September 30, 2022

$ 37,852 $ ( 75,422 ) $ ( 37,570 )

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

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

Refer to Note 11 for further information regarding reclassifications.

3 unchanged sentences

adjustments Total

Balance as of March 31, 2021

Balance as of June 30, 2021

$ ( 4,357 ) $ 2,201 $ ( 2,156 )

1 unchanged sentence

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

2,382 — 2,382

Net other comprehensive income (loss) during the year 10,552 ( 11,422 ) ( 870 )

Balance as of June 30, 2021

Balance as of September 30, 2021

$ 6,195 $ ( 9,221 ) $ ( 3,026 )

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

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

Refer to Note 11 for further information regarding reclassifications.

7 unchanged sentences

Net other comprehensive income (loss) during the year — 27,938 ( 61,132 ) ( 33,194 )

Balance as of June 30, 2022

Balance as of September 30, 2022

$ — $ 37,852 $ ( 75,422 ) $ ( 37,570 )

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

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

Refer to Note 11 for further information regarding reclassifications.

7 unchanged sentences

Net other comprehensive income (loss) during the year 15,564 ( 19,396 ) ( 3,832 )

Balance as of June 30, 2021

Balance as of September 30, 2021

$ 6,195 $ ( 9,221 ) $ ( 3,026 )

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

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

Refer to Note 11 for further information regarding reclassifications.

9 unchanged sentences

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

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands)

6 unchanged sentences

$ 955,059 $ 804,706 $ 2,294,632 $ 1,996,682

Segment operating income (loss)

Segment operating income

$ 145,268 $ 139,101 $ 325,790 $ 320,819

5 unchanged sentences

Interest income, net 765 196 1,659 1,072

Other non-operating expense, net ( 1,435 ) ( 294 ) ( 1,391 ) ( 598 )

Other non-operating income (expense), net ( 269 ) 201 ( 1,660 ) ( 397 )

Income before income tax $ 145,757 $ 133,858 $ 237,699 $ 239,611

CONCENTRATIONS

The Company had one customer that accounted for approximately 12.3 %, 14.3 % and 12.5 % of Accounts receivable, net as of June 30, 2022, December 31, 2021, and June 30, 2021, respectively.

The Company did not have a customer that accounted for 10% or more of Net sales for the three and six months ended June 30, 2022 and June 30, 2021.

The Company did not have any customer that accounted for 10% or more of Accounts receivable, net as of September 30, 2022 .

The Company had one customer that accounted for approximately 14.3 % and 10.4 % of Accounts receivable, net as of December 31, 2021 and September 30, 2021, respectively.

The Company did not have any customer that accounted for 10% or more of Net sales for the three and nine months ended September 30, 2022 and September 30, 2021.

NOTE 11 — 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 European euros as their functional currency also have non-functional currency denominated sales for which the Company hedges the Canadian dollar and British pound.

The Company seeks

Subsidiaries that use United States dollars and European euros as their functional currency also

COLUMBIA SPORTSWEAR COMPANY | 2022 FORM 10-Q | 15

Notes to Condensed Consolidated Financial Statements (Unaudited)

to manage these risks by using currency forward contracts formally designated and effective as cash flow hedges.

have non-functional currency denominated sales for which the Company hedges the Canadian dollar and British pound.

The Company seeks to manage 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.

3 unchanged sentences

Non-functional currency denominated monetary assets and liabilities consist primarily of cash and cash equivalents, short-term investments, receivables, payables, deferred income taxes, and intercompany loans.

The gains and losses generated on these currency forward contracts not formally designated as hedges are expected to be largely offset in Other non-operating expense, net by the gains and losses generated from the remeasurement of the non-functional currency denominated monetary assets and liabilities.

The gains and losses generated on these currency forward contracts not formally designated as hedges are expected to be largely offset in Other non-operating income (expense), net by the gains and losses generated from the remeasurement of the non-functional currency denominated monetary assets and liabilities.

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

(in thousands) June 30, 2022 December 31, 2021 June 30, 2021

(in thousands) September 30, 2022 December 31, 2021 September 30, 2021

Derivative instruments designated as cash flow hedges:

2 unchanged sentences

Currency forward contracts 287,825 267,982 247,134

As of June 30, 2022, $ 17.4 million of deferred net gains 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, Cost of sales, or Other non-operating expense in the unaudited Condensed Consolidated Statements of Operations.

When outstanding derivative contracts mature, actual amounts ultimately reclassified to Net sa les, Cost of sales, or Other non-operating expense in the unaudited Condensed Consolidated Statements of Operations 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.

As of June 30, 2022, 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 $ 9.4 million as of June 30, 2022.

As of September 30, 2022 , $ 30.4 million of deferred net gains 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, Cost of sales, or Other non-operating income (expense), net in the unaudited Condensed Consolidated Statements of Operations.

When outstanding derivative contracts mature, actual amounts ultimately reclassified to Net sa les, Cost of sales, or Other non-operating income (expense), net in the unaudited Condensed Consolidated Statements of Operations 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.

As of September 30, 2022 , 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 $ 13.1 million as of September 30, 2022 .

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

5 unchanged sentences

(in thousands) Balance Sheet

Classification June 30, 2022 December 31, 2021 June 30, 2021

Classification September 30, 2022 December 31, 2021 September 30, 2021

Derivative instruments designated as cash flow hedges:

8 unchanged sentences

Currency forward contracts Prepaid expenses and other current assets 2,912 1,470 1,633

Currency forward contracts Other non-current assets — — 109

Derivative instruments in liability positions:

Currency forward contracts Accrued liabilities 1,514 1,027 251

Currency forward contracts Other long-term liabilities — — 17

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

Classification Three Months Ended June 30,

Six Months Ended June 30,

Classification Three Months Ended September 30,

Nine Months Ended September 30,

(in thousands) 2022 2021 2022 2021

1 unchanged sentence

Derivative instruments designated as cash flow hedges:

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

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

— $ 17,191 $ 8,170 $ 31,780 $ 13,547

4 unchanged sentences

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

Other non-operating expense, net — — 222 106

Other non-operating income (expense), net

— 345 222 451

Derivative instruments not designated as cash flow hedges:

Gain (loss) recognized in income

Other non-operating expense, net 707 ( 1,619 ) 1,297 ( 722 )

Gain recognized in income

Other non-operating income (expense), net

1,341 1,077 2,638 355

COLUMBIA SPORTSWEAR COMPANY | 2022 FORM 10-Q | 17

10 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 June 30, 2022 are as follows:

Assets and liabilities measured at fair value on a recurring basis as of September 30, 2022 are as follows:

(in thousands) Level 1 Level 2 Level 3 Total

Cash equivalents:

Money market funds $ 30,141 $ — $ — $ 30,141

Short-term investments:

39 unchanged sentences

Notes to Condensed Consolidated Financial Statements (Unaudited)

Assets and liabilities measured at fair value on a recurring basis as of June 30, 2021 are as follows:

Assets and liabilities measured at fair value on a recurring basis as of September 30, 2021 are as follows:

(in thousands) Level 1 Level 2 Level 3 Total

18 unchanged sentences

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