Columbia Sportswear 2009 Annual Report Download - page 72

COLUMBIA SPORTSWEAR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
2009 2008 2007
Assets:
United States ........................................... $ 916,847 $ 857,228 $ 872,027
EMEA ................................................ 249,838 246,072 239,007
LAAP ................................................ 104,734 93,773 78,308
Canada ................................................ 127,205 89,463 97,815
Total identifiable assets ................................... 1,398,624 1,286,536 1,287,157
Eliminations and reclassifications ........................... (185,741) (138,300) (120,676)
Total assets ........................................ $1,212,883 $1,148,236 $1,166,481
Net sales to unrelated entities:
Sportswear ............................................. $ 472,508 $ 540,903 $ 565,591
Outerwear ............................................. 482,512 491,777 497,551
Footwear .............................................. 214,565 217,237 227,434
Accessories and equipment ................................ 74,438 67,918 65,463
$1,244,023 $1,317,835 $1,356,039
NOTE 16—FINANCIAL INSTRUMENTS AND RISK MANAGEMENT
In the normal course of business, the Company’s financial position and results of operations are routinely
subject to a variety of risks, including market risk associated with interest rate movements on borrowings and
investments and currency rate movements on non-functional currency denominated assets, liabilities and income.
The Company regularly assesses these risks and has established policies and business practices that serve to
mitigate these potential exposures. As part of the Company’s risk management programs, the Company may use
a variety of financial instruments, including foreign currency option and forward contracts. The Company does
not hold or issue derivative financial instruments for trading or speculative purposes.
The Company’s foreign currency risk management objective is to mitigate the uncertainty of anticipated
cash flows attributable to changes in exchange rates. Particular focus is put on cash flows resulting from
anticipated inventory purchases and the related receivables and payables, including third party or intercompany
transactions. The Company manages this risk primarily by using currency forward exchange contracts and
options. Anticipated transactions that are hedged carry a high level of certainty and are expected to be recognized
within one year. In addition, the Company may use cross-currency swaps to hedge foreign currency denominated
payments related to intercompany loan agreements.
The Company hedges against the exchange rate risk associated with anticipated transactions denominated in
non-functional currencies and accounts for these instruments as cash flow hedges. The effective change in fair
value of these financial instruments is initially offset to accumulated other comprehensive income and any
ineffective portion offset to current income. Amounts accumulated in other comprehensive income are
subsequently reclassified to cost of sales when the underlying transaction is included in income. Hedge
effectiveness is determined by evaluating the ability of a hedging instrument’s cumulative change in fair value to
offset the cumulative change in the present value of expected cash flows on the underlying exposures. For
forward contracts and options, the change in fair value attributable to changes in forward points and time value,
respectively, are excluded from the determination of hedge effectiveness and included in current cost of sales.
Hedge ineffectiveness was not material during the years ended December 31, 2009, 2008 and 2007. The
Company did not discontinue any material cash flow hedging relationships during the years ended December 31,
2009, 2008 and 2007 because it remained probable that the forecasted transactions would occur by the end of the
specified period.
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