Columbia Sportswear 2000 Annual Report Download - page 28

December 31, 1999. Changes in fair value, resulting from foreign exchange rate Öuctuations, would be
substantially oÅset by the change in value of the underlying hedged transactions.
The Company's exposure to market risk for changes in interest rates relate primarily to the company's
debt obligations. The Company has no cash Öow exposure due to rate changes on its $26.0 million and
$26.7 million of long-term debt as of December 31, 2000 and 1999, respectively. However, the company does
have cash Öow exposure on its committed and uncommitted bank lines of credit as interest is based on LIBOR
and other interest rate indices.
Euro Currency Conversion
On January 1, 1999, the Euro was adopted as the national currency of the participating countries Ì
Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, Netherlands, Portugal and Spain.
Greece adopted the Euro on January 1, 2001. Initially, the Euro will be used for non-cash transactions. Legacy
currencies of the participating member states will remain legal tender until January 1, 2002. On this date,
Euro-denominated bills and coins will be issued for use in cash transactions.
The introduction of the Euro is a signiÑcant event with potential implications for our existing operations
within the participating countries. As such, we have committed resources to conduct risk assessments and to
take corrective actions, where required, to ensure that we are prepared for the introduction of the Euro.
Progress regarding Euro implementation is reported periodically to management.
We have not experienced any signiÑcant operational disruptions to date and do not expect the continued
implementation of the Euro to cause any signiÑcant operational disruptions. In addition, we have not incurred
and do not expect to incur any signiÑcant costs from the continued implementation of the Euro, including any
additional currency risk, which could materially aÅect our liquidity or capital resources.
Recent Accounting Pronouncements
In December 1999, the Securities and Exchange Commission issued StaÅ Accounting Bulletin
(SAB) No. 101, ""Revenue Recognition in Financial Statements.'' The eÅective date of the bulletin was
delayed by the issuance of SAB No. 101A and SAB No. 101B and was eÅective for the Company's fourth
quarter of Ñscal year 2000. The adoption of this bulletin did not have a material eÅect on the Company's
consolidated Ñnancial statements.
Forward-Looking Statements
Item 1 of Part 1 and Items 7 and 7(a) of Part II of this Annual Report (as well as statements made from
time to time by management) contain forward-looking statements that are subject to many risks and
uncertainties. Forward-looking statements include any related to our expectations regarding future perform-
ance or conditions, including but not limited to potential growth in domestic and international markets, growth
in merchandise categories, increased sales to department stores and footwear specialty shops, implementation
and performance of new management information systems and distribution facilities, access to raw materials
and factory capacity, Euro currency conversion, Ñnancing and working capital requirements and resources, and
expected expenses as a percentage of net sales. Many factors could have an adverse impact on our business
and may cause actual results to diÅer materially from information included in such forward-looking
statements. Some of the risk factors that could cause actual results to diÅer from those projected in forward-
looking statements are described below, under the heading ""Factors That May AÅect Our Business''. We do
not undertake any duty to update any forward-looking statements after the date they are made, to conform
them to actual results or to changes in our expectations.
Factors That May AÅect Our Business
Our Sales May be Adversely AÅected by an Economic Downturn or Economic Uncertainty
Sales of our products, particularly skiwear, are subject to substantial cyclical Öuctuation. Consumer
demand for our apparel and footwear, or our licensed products, may not reach our growth targets, or may
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