Columbia Sportswear 2013 Annual Report Download - page 58

COLUMBIA SPORTSWEAR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
54
In March 2013, the FASB issued ASU No. 2013-05, Foreign Currency Matters (Topic 830): Parent's Accounting for
the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign
Entity or of an Investment in a Foreign Entity. This ASU provides clarification regarding the release of any cumulative
translation adjustment when the parent ceases to have controlling financial interest in a business or group of assets held
within a foreign entity. The amendment is effective on a prospective basis for interim and annual periods beginning after
December 15, 2013. The Company does not expect the adoption of this standard to have a material effect on the Company's
financial position, results of operations or cash flows.
NOTE 3—CONCENTRATIONS
Trade Receivables
The Company had one customer in its Canada segment that accounted for approximately 10.5% of consolidated
accounts receivable at December 31, 2013. No single customer accounted for 10% or more of consolidated accounts
receivable at December 31, 2012. No single customer accounted for 10% or more of consolidated revenues for any of the
years ended December 31, 2013, 2012 or 2011.
Derivatives
The Company uses derivative instruments to hedge the currency exchange rate risk of anticipated transactions
denominated in non-functional currencies that are designated and qualify as cash flow hedges. The Company also uses
derivative instruments to economically hedge the currency exchange rate risk of certain investment positions, to hedge
balance sheet re-measurement risk and to hedge other anticipated transactions that do not qualify as cash flow hedges. At
December 31, 2013, the Company’s derivative contracts had a remaining maturity of approximately two years or less. The
maximum net exposure to any single counterparty, which is generally limited to the aggregate unrealized gain of all contracts
with that counterparty, was less than $2,000,000 at December 31, 2013. All of the Company’s derivative counterparties
have investment grade credit ratings and as a result, the Company does not require collateral to facilitate transactions. See
Note 20 for further disclosures concerning derivatives.
Country and supplier concentrations
The Company’s products are produced by independent factories located outside the United States, principally in
Southeast Asia. Apparel is manufactured in approximately 20 countries, with Vietnam and China accounting for
approximately 67% of 2013 global apparel production. Footwear is manufactured in four countries, with China and Vietnam
accounting for approximately 99% of 2013 global footwear production. The five largest apparel factory groups accounted
for approximately 30% of 2013 global apparel production, with the largest factory group accounting for 13% of 2013 global
apparel production. The five largest footwear factory groups accounted for approximately 79% of 2013 global footwear
production, with the largest factory group accounting for 36% of 2013 global footwear production. These companies,
however, have multiple factory locations, many of which are in different countries, thus reducing the risk that unfavorable
conditions at a single factory or location will have a material adverse effect on the Company.
NOTE 4—NON-CONTROLLING INTEREST
The Company owns a 60% controlling interest in a joint venture formed with Swire Resources, Limited ("Swire") to
support the development of the Company's business in China. The joint venture was in a formation and start-up phase
during 2013 and began operations on January 1, 2014. In 2013, Swire made an initial capital contribution of $8,000,000
in cash, and the Company made an initial capital contribution of $12,000,000 in cash. The accounts and operations of the
joint venture are included in the Consolidated Financial Statements as of December 31, 2013. Swire's share of the net loss
of the joint venture is included in net loss attributable to non-controlling interest in the Consolidated Statements of Operations
for the year ended December 31, 2013. The 40% non-controlling equity interest in the joint venture is presented separately
in the Consolidated Balance Sheet and Consolidated Statement of Equity for the year ended December 31, 2013.
NOTE 5—ACCOUNTS RECEIVABLE, NET