Columbia Sportswear Company Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Fair Value Measures

Fair Value Measures

12 Months Ended

Dec. 31, 2013

FAIR VALUE MEASURES

Certain assets and liabilities are reported at fair value on either a recurring or nonrecurring basis. Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants, under a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:


Level 1	– observable inputs such as quoted prices for identical assets or liabilities in active liquid markets;


Level 2	– inputs, other than the quoted market prices in active markets, that are observable, either directly or indirectly; or observable market prices in markets with insufficient volume and/or infrequent transactions; and


Level 3	– unobservable inputs for which there is little or no market data available, that require the reporting entity to develop its own assumptions.

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2013 are as follows (in thousands):



	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents
Money market funds	$	175,624	$	—	$	—	$	175,624
Time deposits	25,111		9,526		—		34,637
Certificates of deposit	—		735		—		735
Reverse repurchase agreements	—		45,000		—		45,000
U.S. Government-backed municipal bonds	—		9,898		—		9,898
Available-for-sale short-term investments
Short-term municipal bond fund	15,004		—		—		15,004
Certificates of deposit	—		9,546		—		9,546
Variable-rate demand notes	—		52,105		—		52,105
U.S. Government-backed municipal bonds	—		14,764		—		14,764
Other short-term investments
Mutual fund shares	336		—		—		336
Other current assets
Derivative financial instruments (Note 20)	—		4,892		—		4,892
Non-current assets
Derivative financial instruments (Note 20)	—		24		—		24
Mutual fund shares	4,855		—		—		4,855
Total assets measured at fair value	$	220,930	$	146,490	$	—	$	367,420
Liabilities:
Accrued liabilities
Derivative financial instruments (Note 20)	$	—	$	1,152	$	—	$	1,152
Other long-term liabilities
Derivative financial instruments (Note 20)	—		95		—		95
Total liabilities measured at fair value	$	—	$	1,247	$	—	$	1,247

Assets and liabilities measured at fair value on a recurring basis at December 31, 2012 are as follows (in thousands):



	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents
Money market funds	$	70,857	$	—	$	—	$	70,857
Time deposits	25,035		—		—		25,035
Certificates of deposit	—		2,450		—		2,450
U.S. Government-backed repurchase agreements	—		25,000		—		25,000
U.S. Government-backed municipal bonds	—		5,348		—		5,348
Available-for-sale short-term investments
Certificates of deposit	—		7,596		—		7,596
Variable-rate demand notes	—		22,640		—		22,640
U.S. Government-backed municipal bonds	—		14,425		—		14,425
Other current assets
Derivative financial instruments (Note 20)	—		6,219		—		6,219
Non-current assets
Derivative financial instruments (Note 20)	—		489		—		489
Mutual fund shares	4,080		—		—		4,080
Total assets measured at fair value	$	99,972	$	84,167	$	—	$	184,139
Liabilities:
Accrued liabilities
Derivative financial instruments (Note 20)	$	—	$	1,322	$	—	$	1,322
Total liabilities measured at fair value	$	—	$	1,322	$	—	$	1,322

Level 1 instrument valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 instrument valuations are obtained from inputs, other than quoted market prices in active markets, that are directly or indirectly observable in the marketplace and quoted prices in markets with limited volume or infrequent transactions.

Non-recurring fair value measurements:

During the fourth quarter of 2013, the Company recorded an impairment in its EMEA segment of $8,995,000 for its European distribution center in Cambrai, France, writing the assets down to their estimated fair value of $19,300,000. This impairment charge is included in selling, general and administrative expense on the Consolidated Statement of Operations. The Company determined that events and circumstances, including the ongoing weak macro-economic environment in Europe and history of declining sales and profitability in the EMEA direct business, indicated that the carrying value may be impaired. Significant factors and estimates used in the evaluation and fair value determination include management's plans for future operations, recent operating results, projected cash flows and third-party valuation estimates. This nonrecurring fair value measurement was developed using significant unobservable inputs (Level 3). Third-party valuation estimates were developed using local market data for sales transactions of similar facilities.

There were no material assets and liabilities measured at fair value on a nonrecurring basis at December 31, 2012.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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