Columbia Sportswear 2012 Annual Report Download - page 38

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• Information technology initiatives, including our ERP implementation; and
• The unfavorable effect of foreign currency translation.
Depreciation and amortization included in SG&A expense totaled $42.9 million in 2011, compared to $37.8 million
in 2010.
Net Licensing Income: Net licensing income increased $7.8 million, or 98%, to $15.8 million in 2011 from $8.0
million in 2010. The increase in net licensing income was primarily due to increased apparel and footwear licensing in the
LAAP region, where a third party distributor is licensed to locally manufacture Columbia brand apparel and footwear for
sale in local markets.
Interest Income, Net: Net interest income was $1.3 million in 2011, compared to $1.6 million in 2010. The decrease
in interest income was primarily driven by lower average cash and investment balances and lower interest rates in 2011
compared to 2010. Interest expense was nominal in both 2011 and 2010.
Income Tax Expense: Income tax expense increased to $34.2 million in 2011 from $27.9 million in 2010. Our
effective income tax rate decreased to 24.8% from 26.6% in 2010, primarily because we earned a higher proportion of our
income from foreign jurisdictions with tax rates that are generally lower than the U.S. tax rate.
Net Income: Net income increased $26.4 million, or 34%, to $103.5 million in 2011 from $77.0 million in 2010.
Diluted earnings per share was $3.03 in 2011 compared to $2.26 in 2010.
Liquidity and Capital Resources
Our primary ongoing funding requirements are for working capital, investing activities associated with the expansion
of our global operations and general corporate needs. At December 31, 2012, we had total cash and cash equivalents of
$290.8 million compared to $241.0 million at December 31, 2011. In addition, we had short-term investments of $44.7
million at December 31, 2012 compared to $2.9 million at December 31, 2011. At December 31, 2012, approximately 30%
of our cash and short-term investments were held by our foreign subsidiaries where a repatriation of those funds to the
United States would likely result in a significant tax expense to the Company. However, based on the capital and liquidity
needs of our foreign operations, as well as the status of current tax law, it is our intent to indefinitely reinvest these funds
outside the United States. In addition, our United States operations do not require the repatriation of these funds to meet
our currently projected liquidity needs.
2012 compared to 2011
Net cash provided by operating activities was $148.7 million in 2012 compared to $63.8 million in 2011. The increase
in cash provided by operating activities was primarily due to decreases in accounts receivable and inventory for the year
ended December 31, 2012, compared to increases in the prior year; partially offset by a decrease in accounts payable and
accrued liabilities for the year ended December 31, 2012 compared to an increase in 2011.
Net cash used in investing activities was $85.0 million in 2012 compared to $12.5 million in 2011. For 2012, net
cash used in investing activities primarily consisted of $50.5 million for capital expenditures and $41.7 million for net
purchases of short-term investments. For 2011, net cash used in investing activities primarily consisted of $78.4 million
for capital expenditures, including the acquisition of a new distribution center and headquarters facility in Canada, partially
offset by $65.7 million for net sales of short-term investments.
Net cash used in financing activities was $15.7 million in 2012 compared to $39.2 million in 2011. For 2012, net
cash used in financing activities primarily consisted of dividend payments of $29.8 million, partially offset by net proceeds
of $13.1 million from the issuance of common stock. For 2011, net cash used in financing activities primarily consisted of
dividend payments of $29.1 million and the repurchase of common stock at an aggregate price of $20.0 million, partially
offset by net proceeds of $8.0 million from the issuance of common stock.
2011 compared to 2010