Columbia Sportswear 2010 Annual Report Download - page 67

COLUMBIA SPORTSWEAR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
December 31, 2010 and 2009, inventory purchase obligations were $323,327,000 and $258,069,000,
respectively. To support certain inventory purchase obligations, the Company maintains unsecured and
uncommitted lines of credit available for issuing import letters of credit. At December 31, 2010 and 2009, the
Company had letters of credit of $439,000 and $7,771,000, respectively, outstanding for inventory purchase
obligations.
Litigation
The Company is a party to various legal claims, actions and complaints from time to time. Although the
ultimate resolution of legal proceedings cannot be predicted with certainty, management believes that disposition
of these matters will not have a material adverse effect on the Company’s consolidated financial statements.
Indemnities and Guarantees
During its normal course of business, the Company has made certain indemnities, commitments and
guarantees under which it may be required to make payments in relation to certain transactions. These include
(i) intellectual property indemnities to the Company’s customers and licensees in connection with the use, sale
and/or license of Company products, (ii) indemnities to various lessors in connection with facility leases for
certain claims arising from such facility or lease, (iii) indemnities to customers, vendors and service providers
pertaining to claims based on the negligence or willful misconduct of the Company, (iv) executive severance
arrangements and (v) indemnities involving the accuracy of representations and warranties in certain contracts.
The duration of these indemnities, commitments and guarantees varies, and in certain cases, may be indefinite.
The majority of these indemnities, commitments and guarantees do not provide for any limitation of the
maximum potential for future payments the Company could be obligated to make. The Company has not
recorded any liability for these indemnities, commitments and guarantees in the accompanying Consolidated
Balance Sheets.
NOTE 14—SHAREHOLDERS’ EQUITY
Since the inception of the Company’s stock repurchase plan in 2004 through December 31, 2010, the
Company’s Board of Directors has authorized the repurchase of $500,000,000 of the Company’s common stock.
As of December 31, 2010, the Company had repurchased 9,190,890 shares under this program at an aggregate
purchase price of approximately $421,237,000. During the year ended December 31, 2010, the Company
repurchased an aggregate of $13,838,000 of common stock under the stock repurchase plan, of which $4,339,000
was recorded as a reduction to retained earnings; otherwise, the aggregate purchase price would have resulted in
a negative common stock carrying amount. Shares of the Company’s common stock may be purchased in the
open market or through privately negotiated transactions, subject to market conditions. 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.
NOTE 15—STOCK-BASED COMPENSATION
1997 Stock Incentive Plan
The Company’s 1997 Stock Incentive Plan (the “Plan”) provides for issuance of up to 8,900,000 shares of
the Company’s Common Stock, of which 1,711,768 shares were available for future grants under the Plan at
December 31, 2010. The Plan allows for grants of incentive stock options, non-statutory stock options, restricted
stock awards, restricted stock units and other stock-based awards. The Company uses original issuance shares to
satisfy share-based payments.
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