COLUMBIA SPORTSWEAR CO MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF OPERATIONS (Form 10-K)

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with "Special Note Regarding Forward
Looking Statements", Item 1, Item 1A, and Item 8 of this Annual Report on Form
10-K. In addition, refer to Item 7 in our Annual Report on Form 10-K for the
year ended December 31, 2020 for our discussion and analysis comparing financial
condition and results of operations from 2020 to 2019.

PREVIEW

We connect active people with their passions. We are a global leader in
designing, developing, marketing, and distributing outdoor, active and everyday
lifestyle products. We manage these products in two categories: apparel,
accessories, and equipment products and footwear products. We provide our
products through our four well-known brands, Columbia, SOREL, Mountain Hardwear,
and prAna. Apparel, accessories, and equipment products are provided by our
Columbia, Mountain Hardwear and prAna brands. Footwear products are provided by
our Columbia and SOREL brands. We sell our products in approximately 90
countries and operate in four geographic segments: U.S., LAAP, EMEA, and Canada.

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We are committed to generating long-term sustainable and profitable growth and investing in our strategic priorities to:

•Drive brand awareness and sales growth through increased and targeted investment in demand creation;

•enhancing customer experience and digital capabilities across all our channels and geographies;

•expand and improve DTC’s global operations with supporting processes and systems; and

•invest in our employees and optimize our organization through our brand portfolio.

Ultimately, we expect our investments to enable market share capture across our
brand portfolio, expand gross margin, improve selling, general and
administrative expense efficiency, and drive improved operating margin over the
long-term.

Business environment and trends

Increased Outdoor Participation by Consumers | The COVID-19 pandemic drew a
record number of individuals in the United States to spend an increased amount
of time outside, including participating in outdoor recreational activities.
While outdoor participation rates may not be maintained, we believe that our
addressable consumer base worldwide has been expanded and expect outdoor
participation to remain elevated in comparison to pre-pandemic levels.

Casualization of the Apparel and Footwear Market | During the COVID-19 pandemic,
we saw a move to casualization by consumers. Our products provide comfort and
function in diverse environments. We believe we have benefited from this trend
and expect it to continue to be a tailwind moving forward.

Decreased Promotional Environment | In 2021, we operated in an extremely low
promotional environment and experienced fewer order cancellations, sales returns
and customer accommodations than historically experienced. We expect these
trends to remain favorable in early 2022 and expect a gradual return to a more
normalized promotional environment and a potential transition towards more
normalized trading terms. For 2022, we do not expect these metrics to return to
levels experienced in 2019 and prior years.

Lean Inventory Across the Marketplace | Consumer demand accelerated in 2021
resulting in lower inventory in the marketplace. Lower marketplace inventories
contributed to a full price selling environment resulting in lower promotional
activity and higher gross margins for our business in 2021. Given ongoing supply
chain disruptions and the imbalance between global supply and demand, we expect
marketplace inventories to remain low until supply chain constraints ease and
retailers are able to replenish diminished inventory levels.

Changes in Consumer Spending Ability and Preferences | We believe government
stimulus and unemployment benefits increased consumers' discretionary spending
ability in 2021 and 2020. In addition, we believe the limited ability to travel,
attend entertainment-based experiences or purchase certain services increased
consumers' savings levels. As we move into 2022, we expect these tailwinds to
diminish. However, we expect growth in wages will enable consumer spending, to
the extent it more than offsets inflationary pressures.

Decreased Direct-to-Consumer Store Traffic | During 2021, the majority of our
stores remained open. At varying times during the year, government efforts to
control the spread of COVID-19 impacted our stores in various regions. Our
stores in Europe and Canada were impacted by these government efforts for most
of the first quarter and at varying times in the second quarter of 2021.
Declared states of emergency impacted our stores in Japan in the first, second
and third quarters. Our stores in China were also impacted by these government
efforts at varying times during 2021. Overall, our store retail traffic trends
improved during 2021, but remained below pre-pandemic levels. Certain stores in
tourist-dependent locations continue to be impacted by limited international
tourism. While store traffic is improving, we expect it to continue to remain
uneven across our store fleet by region, depending on regional impacts of the
virus and government efforts.

Increased Ocean Freight Charges | In 2021, we experienced elevated ocean freight
charges as a result of an imbalance of supply and demand for steamship and ocean
container capacity and changes in our ocean freight sourcing practices. We
expect our ocean freight charges to be reduced in the latter part of 2022.
However, the imbalance in the marketplace persists and ocean freight costs will
remain elevated compared to historical norms.

Later Inventory Receipts | During the third quarter of 2021, government mandated
factory closures in Vietnam disrupted our manufacturing partners' operations and
impacted production of Fall 2021 and Spring 2022 product. Factories in Vietnam
began to reopen as of October 1, 2021 at less than full capacity. In addition,
port congestion and shortages in transportation and labor further slowed the
transportation of our inventory. As a result of these supply chain disruptions,
we received Fall 2021 inventory later than expected and anticipate similar
delays for Spring 2022 inventory. We do not expect the supply chain to normalize
in 2022 and continue to anticipate later than expected inventory receipts and
shipments to our wholesale customers and inventory available for our DTC
businesses in 2022, resulting in impacts to future net sales and gross margin.

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Manufacturing Capacity Constraints | In 2021, we experienced footwear
manufacturing capacity constraints which prevented us from securing footwear
product to meet demand. Although we are growing footwear manufacturing capacity
in 2022, we again expect demand to outstrip capacity due to anticipated footwear
sales growth rates. We anticipate being able to meet footwear demand with
appropriate supply in 2023.

Continued Labor Shortages | We have and continue to experience U.S. labor
shortages, affecting our ability to staff and operate our U.S. distribution
centers, retail stores and consumer call centers, as well as find qualified
employees for our corporate offices and regional subsidiaries. In addition,
labor costs have risen recently as a result of competition to attract and retain
qualified talent in an environment in which there is low unemployment and strong
demand for employees. We anticipate these rising costs and labor shortages to
continue in 2022.

Increased Inflationary Pressures | Inflationary pressures, including increased
inbound freight costs, impacted our results in 2021. In addition to increased
inbound freight costs, we expect increased product input costs, including higher
wages and raw materials costs, to impact our results in 2022. We are
implementing product price increases beginning with our Spring 2022 season and,
to a greater extent, our Fall 2022 season to mitigate these higher costs, to the
extent possible, while attempting to minimize potential risks of dampening
consumer demand. Price increases varied by market and product category. In the
U.S., on average, we increased pricing by a mid-single digit percent for our
Spring 2022 product line and a high-single to low-double-digit percent for our
Fall 2022 product line. We do not expect planned price increases will fully
offset gross margin pressure, particularly the effect of increased ocean freight
costs. Looking beyond 2022, we anticipate ocean freight and raw material cost
inflation will be transitory, while wage inflation will be more permanent.

Changing Consumer Expectations | Consumer behavior continues to fluctuate.
Consumer expectations and the related competitive pressures have increased and
continue to increase related to various aspects of our e-commerce business,
including speed of product delivery, shipping charges, return privileges and
other evolving expectations. We maintain and continue to make substantial
investments in information systems, processes and personnel to support our
ongoing demand planning efforts to provide forecasting of optimal inventory to
meet customer and consumer demands.

Seasonality | Our business is affected by the general seasonal trends common to
the industry, including seasonal weather and discretionary consumer shopping and
spending patterns. Our products are marketed on a seasonal basis, and our sales
are weighted substantially toward the third and fourth quarters, while our
operating costs are more equally distributed throughout the year. In 2021, over
60% of our net sales and over 75% of our operating income were realized in the
second half of the year.

RESULTS OF OPERATIONS

The following discussion of our results of operations and liquidity and capital
resources should be read in conjunction with Item 8 of this Annual Report on
Form 10-K. All references to years relate to the fiscal year ended December 31.

Non-GAAP Financial Measure

To supplement financial information reported in accordance with accounting
principles generally accepted in the United States ("GAAP"), we disclose
constant-currency net sales information, which is a non-GAAP financial measure,
to provide a framework to assess how the business performed excluding the
effects of changes in foreign currency exchange rates against the United States
dollar between comparable reporting periods. We calculate constant-currency net
sales by translating net sales in foreign currencies for the current period into
United States dollars at the exchange rates that were in effect during the
comparable period of the prior year. Management believes that this non-GAAP
financial measure reflects an additional and useful way of viewing an aspect of
our operations that, when viewed in conjunction with our GAAP results, provides
a more comprehensive understanding of our business and operations. In
particular, investors may find the non-GAAP measure useful by reviewing our net
sales results without the volatility in foreign currency exchange rates. This
non-GAAP financial measure also facilitates management's internal comparisons to
our historical net sales results and comparisons to competitors' net sales
results. Constant-currency financial measures should be viewed in addition to,
and not in lieu of or superior to, our financial measures calculated in
accordance with GAAP.

The following discussion includes references to constant currency net sales, and we provide a reconciliation of this non-GAAP measure to the most directly comparable financial measure calculated in accordance with GAAP below.

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Results of Operations - Consolidated
Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

The following table shows the items in our Consolidated Statements of Income, in dollars and as a percentage of net sales:

                                                                           Year Ended December 31,
(in millions, except for percentage of net
sales and per share amounts)                                     2021                                     2020
Net sales                                        $    3,126.4                100.0  %       $ 2,501.6                100.0  %
Cost of sales                                         1,513.9                 48.4  %         1,277.7                 51.1  %
Gross profit                                          1,612.5                 51.6  %         1,223.9                 48.9  %
Selling, general and administrative
expenses                                              1,180.3                 37.8  %         1,098.9                 43.9  %
Net licensing income                                     18.3                  0.6  %            12.0                  0.5  %
Operating income                                        450.5                 14.4  %           137.0                  5.5  %
Interest income, net                                      1.4                    -  %             0.4                    -  %
Other non-operating income (expense), net                (0.4)                   -  %             2.1                  0.1  %
Income before income tax                                451.5                 14.4  %           139.5                  5.6  %
Income tax expense                                      (97.4)                (3.1) %           (31.5)                (1.3) %
Net income                                       $      354.1                 11.3  %       $   108.0                  4.3  %

Diluted earnings per share                       $       5.33                               $    1.62


Net sales. Net sales by brand, product category and channel are summarized in the following table:

                                                                                            Year Ended December 31,
                                      Reported         Adjust for Foreign          Constant-currency           Reported            Reported             Constant-currency
(in millions, except for             Net Sales              Currency                   Net Sales              Net Sales            Net Sales                Net Sales
percentages)                            2021               Translation                 2021 (1)                  2020              % Change                % Change(1)
Brand Net Sales:
Columbia                            $ 2,557.4          $          (26.4)         $          2,531.0          $ 1,996.9                28%                      27%
SOREL                                   320.9                      (2.4)                      318.5              293.5                9%                       9%
prAna                                   141.9                         -                       141.9              131.6                8%                       8%
Mountain Hardwear                       106.2                      (0.5)                      105.7               79.6                33%                      33%
Total                               $ 3,126.4          $          (29.3)         $          3,097.1          $ 2,501.6                25%                      24%

Product Category Net Sales:
Apparel, Accessories and
Equipment                           $ 2,389.2          $          (20.3)         $          2,368.9          $ 1,867.6                28%                      27%
Footwear                                737.2                      (9.0)                      728.2              634.0                16%                      15%
Total                               $ 3,126.4          $          (29.3)         $          3,097.1          $ 2,501.6                25%                      24%

Channel Net Sales:
Wholesale                           $ 1,660.4          $          (19.5)         $          1,640.9          $ 1,403.3                18%                      17%
DTC                                   1,466.0                      (9.8)                    1,456.2            1,098.3                33%                      33%
Total                               $ 3,126.4          $          (29.3)         $          3,097.1          $ 2,501.6                25%                      24%

(1) Net sales at constant currency is a non-GAAP financial measure. See “Non-GAAP Financial Measure” above for more information.

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Overall, the increase in our global net sales reflects increased consumer demand and economic recovery from the ongoing COVID-19 pandemic. This increase was limited by supply chain disruptions which limited capacity at footwear product factories and resulted in later inventory receipts and lower than expected wholesale shipments.

Net sales increased across all regions, primarily driven by increased Columbia
brand net sales which benefited from robust consumer demand, lapping of 2020 DTC
store closures, and increased orders from wholesale customers following lower
sales volumes in 2020 due to order cancellations in response to the COVID-19
pandemic. During 2021, our global DTC e-commerce business grew 20% and
represented 18% of our global net sales, including fourth quarter 2021 growth of
25% year-over-year and represented 23% of our global net sales. In 2020, our
global DTC e-commerce business grew 39% and represented 19% of global net sales.

Gross Profit. Our gross profit may not be comparable to other companies in our
industry as some companies may include all costs related to their distribution
network in Cost of sales, while we include these expenses in SG&A expense. Gross
profit is summarized in the following table:

                                                                  Year Ended December 31,
(in millions, except for percentages and basis
points)                                            2021               2020                    Change
Gross profit                                   $ 1,612.5          $ 1,223.9          $  388.6           32  %
Gross margin                                        51.6  %            48.9  %           270 bps


Gross margin as a percentage of net sales increased primarily due to:

•an approximate 230 bps increase in channel profitability substantially due to
higher DTC product margins reflecting lower promotional levels and, to a lesser
extent, higher wholesale product margin driven by strong retail sell-through
performance resulting in a higher proportion of full price vs off price sales
mix and lower customer accommodations, partially offset by unfavorable impacts
from higher inbound freight costs due to supply chain constraints; and

•the favorable impact of the fall in provisions for inventories from one year to the next.

Selling, general and administrative expenses. SG&A expenses include all costs associated with our design, merchandising, marketing, distribution and corporate functions, including related depreciation and amortization.

SG&A expenses are summarized in the following table:


                                                                   Year Ended December 31,
(in millions, except for percentages and basis
points)                                             2021               2020                    Change

Selling, general and administrative expenses $1,180.3 $1,098.9 $81.4

           7  %
Selling, general and administrative expenses as
percent of net sales                                 37.8  %            43.9  %           -610 bps



The SG&A expenses increase was primarily due to expenses incurred to support the
growth of our business and its recovery from the COVID-19 impacts from 2020.
During 2021, we spent approximately 5.9% of our net sales for demand creation,
compared to 5.7% in 2020. In addition, depreciation and amortization included in
SG&A expenses totaled $55.5 million, compared to $63.0 million in 2020.

Factors contributing to the increase in SG&A expenses include:

• higher global retail spending of $51.8 million compared to the temporary store closures of the previous year;

•increased spending on creating demand for $43.6 million;

• higher payroll costs of $37.6 million to support business growth as well as annual merit increases and other salary rates;

•higher incentive compensation of $31.1 million; and

•higher professional and insurance fees; partially offset by

•decreased retail impairments and store closures charges of $37.4 million,
reflecting the non-recurrence of prior year retail impairments and store closure
charges of $28.8 million and the 2021 benefit of $8.6 million from the
completion of lease terminations and settlements related to certain of those
closures;

•decreased bad debt expenses of $29.7 million, which primarily reflected the
non-recurrence of a 2020 bad debt expense increase of $19.7 million resulting
from the COVID-19 pandemic;

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•the non-recurrence of expenses from the previous year of $18.9 million related to the COVID-19 pandemic; and

• the non-recurrence of the prAna brand impairment charge for the previous year of
$17.5 million.

income tax expense. The income tax expense and the related effective tax rate are summarized in the following table:

                                                     Year Ended December 

31,

(in millions, except for percentages)        2021          2020            Change
Income tax expense                        $ (97.4)      $ (31.5)      $ (65.9)   209  %
Effective income tax rate                    21.6  %       22.6  %



Our effective income tax rates for the years ended December 31, 2021 and 2020
were impacted by discrete tax items, which lowered the effective tax rate each
year. Our effective income tax rate for the year ended December 31, 2021
decreased, compared to 2020, primarily due to the non-recurring benefit of a
decrease in accrued foreign withholding taxes as well as the change in mix of
book income or loss among jurisdictions.

Results of Operations - Segment
Year Ended December 31, 2021 Compared to Year Ended December 31, 2020

Segment income from operations includes net sales, cost of sales, SG&A expense,
and net licensing income for each of our four reportable geographic segments.
Income from operations as a percentage of net sales in the U.S. is typically
higher than the other segments primarily due to scale efficiencies associated
with the larger base of net sales in the U.S. and, to a lesser extent,
incremental licensing income.

We expect this trend to continue until other segments realize economies of scale through higher levels of net sales volume relative to the fixed cost structure necessary to operate the business. .

Net sales by geographical segment are summarized in the following table:

                                                                                              Year Ended December 31,
                                        Reported         Adjust for Foreign          Constant-currency           Reported            Reported             Constant-currency
(in millions, except for               Net Sales              Currency                   Net Sales              Net Sales            Net Sales                Net Sales
percentage changes)                       2021               Translation                 2021 (1)                  2020              % Change                % Change(1)
U.S.                                  $ 2,060.3          $              -          $          2,060.3          $ 1,603.8                28%                      28%
LAAP                                      465.5                      (7.5)                      458.0              424.5                10%                      8%
EMEA                                      382.1                      (9.0)                      373.1              298.9                28%                      25%
Canada                                    218.5                     (12.8)                      205.7              174.4                25%                      18%
                                      $ 3,126.4          $          (29.3)         $          3,097.1          $ 2,501.6                25%                      24%

(1) Net sales at constant currency is a non-GAAP financial measure. See “Non-GAAP Financial Measure” above for more information.

The operating income of each reportable segment and unallocated head office expenses are summarized in the following table:

                                           Year Ended December 31,
(in millions)                          2021          2020        Change
U.S.                                $   536.5      $ 250.5      $ 286.0
LAAP                                     42.0         35.9          6.1
EMEA                                     65.5         31.2         34.3
Canada                                   52.7         37.6         15.1

Total segment operating income 696.7 355.2 341.5 Unallocated corporate expenses (246.2) (218.2) (28.0) Operating income

                    $   450.5      $ 137.0      $ 313.5



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Unless otherwise noted below, segment net sales and operating income within all
regions increased due to higher consumer demand and the recovery from the
COVID-19 pandemic impacts from 2020. In 2020, unfavorable COVID-19 pandemic
impacts led to economic lockdowns, including temporary store closures and lower
consumer demand.

U.S. U.S. income from operations increased $286.0 million to $536.5 million, or
26.0% of net sales, in 2021 from $250.5 million, or 15.6% of net sales, in 2020.
The increase was driven primarily by increased net sales, increased gross
margins, and the non-recurrence of prior year retail impairments and store
closure charges of $28.8 million and the 2021 benefit of $8.6 million from
settlements related to those closures. U.S. net sales increased $456.5 million,
or 28% in 2021 compared to $1,603.8 million in 2020. U.S. net sales increased in
our DTC and wholesale businesses. U.S DTC net sales increased largely from net
sales growth generated from retail stores, and to a lesser extent, our
e-commerce business. At December 31, 2021, our U.S. business operated 142 retail
stores, compared to 132 stores at December 31, 2020. SG&A expenses decreased as
a percentage of net sales to 26.7% in 2021 compared to 33.8% in 2020 largely due
to the impact of net sales increases, and the non-recurrence of prior year
retail impairments, other store closure charges and COVID-19 related expenses.

LAAP. LAAP income from operations increased $6.1 million to $42.0 million, or
9.0% of net sales, in 2021 from $35.9 million, or 8.5% of net sales, in 2020.
The increase was driven primarily by increased net sales combined with increased
gross margin. LAAP net sales increased $41.0 million, or 10% (8%
constant-currency) in 2021 compared to $424.5 million in 2020, driven largely by
increased net sales in our China business, and to a lesser extent, our Korea
business, partially offset by decreased net sales in our LAAP distributors and
Japan businesses. LAAP SG&A expense increased as a percentage of net sales to
48.3% in 2021 compared to 45.7% in 2020 largely due to incremental demand
creation expense, partially offset by the impact of net sales increases.


EMEA. EMEA income from operations increased $34.3 million to $65.5 million, or
17.1% of net sales, in 2021 from $31.2 million, or 10.4% of net sales, in 2020.
The increase was driven primarily by increased net sales combined with increased
gross margin. EMEA net sales increased $83.2 million, or 28% (25%
constant-currency) in 2021 compared to $298.9 million in 2020. EMEA net sales
increased primarily in our Europe-direct business, followed by our EMEA
distributor business. EMEA SG&A expense decreased as a percentage of net sales
to 28.0% in 2021 compared to 33.4% in 2020 largely due to the impact of net
sales increases and the non-recurrence of prior year COVID-19 related expenses.


Canada. Canada income from operations increased $15.1 million to $52.7 million,
or 24.1% of net sales, in 2021 from $37.6 million, or 21.6% of net sales, in
2020. The increase primarily resulted from increased net sales combined with
increased gross margin. Canada net sales increased $44.1 million, or 25% (18%
constant-currency) in 2021 compared to $174.4 million in 2020, primarily driven
by increased net sales in our Canada wholesale business, followed by our Canada
DTC businesses. Canada SG&A expense decreased as a percentage of net sales to
24.0% in 2021 compared to 25.6% for 2020 largely due to the impact of net sales
increases and the non-recurrence of prior year COVID-19 related expenses.

Unallocated corporate expenses increased by $28.0 million to $246.2 million in
2021, from $218.2 million in 2020, largely driven by higher incentive
compensation and personnel expenses, partially offset by the non-recurrence of
the 2020 prAna brand trademark impairment charge of $17.5 million.

CASH AND CAPITAL RESOURCES

Including cash, cash equivalents, short-term investments and available committed
and uncommitted credit lines, we had more than $1.5 billion in total liquidity
at December 31, 2021. Our liquidity may be affected by the general seasonal
trends common to the industry. Our products are marketed on a seasonal basis and
our sales are weighted substantially toward the third and fourth quarters, while
our operating costs are more equally distributed throughout the year. Our cash
and cash equivalents and short-term investments balances generally are at their
lowest level at the end of the third quarter and increase during the fourth
quarter from collection of wholesale business receivables and fourth quarter DTC
sales.

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Cash Flow Activities

Cash flows from continuing operations are summarized in the following table:

                                                                Year Ended December 31,
(in millions)                                               2021         2020         Change
Cash and cash equivalents                                $  763.4      $ 790.7      $  (27.3)

Net cash provided by (used in):
Operating activities                                     $  354.4      $ 276.1      $   78.3
Investing activities                                       (163.8)       (27.2)       (136.6)
Financing activities                                       (210.9)      (151.7)        (59.2)
Net effect of exchange rate changes on cash                  (7.0)         

7.5 (14.5) Net increase (decrease) in cash and cash equivalents $(27.3) $104.7 $(132.0)



The change in cash flows provided by operating activities was driven by a
$157.8 million increase in net income and non-cash adjustments, partially offset
by a $79.5 million increase in cash used in changes in assets and liabilities.
The most significant comparative changes included Inventories, net, Accounts
payable, Accrued liabilities, Prepaid expenses and other current assets,
Accounts receivable, and Operating lease assets and liabilities. The
$165.1 million increase in cash used in Inventories, net was mainly driven by an
increase in inventory purchases reflecting strong consumer demand. The
$124.8 million increase in cash provided by Accounts payable primarily reflects
the effects of higher receipts of inventory in the fourth quarter of 2021
compared to the fourth quarter of 2020 due to stronger customer demand and
increased in-transit inventory. The $118.6 million increase in cash provided by
Accrued liabilities was primarily driven by changes in accruals for incentive
compensation as well as DTC return liabilities. The $58.6 million increase in
cash used in Prepaid expenses and other assets was primarily driven by changes
in inventory prepayments and U.S. prepaid income taxes. The $54.5 million
increase in cash used in Accounts receivable was driven by higher wholesale net
sales, partially offset by higher collections in 2021. The $33.1 million
increase in cash used in Operating lease assets and liabilities was primarily
due to payment of deferred rents and lease termination fees.

Net cash used in investing activities was $163.8 million for 2021 compared to
$27.2 million for 2020. For 2021, net cash used in investing activities
consisted of $129.1 million in net purchases of short-term investments and
$34.7 million for capital expenditures. For 2020, net cash used in investing
activities primarily consisted of $28.8 million for capital expenditures.

Net cash used in financing activities was $210.9 million for the 2021 compared
to $151.7 million for 2020. For 2021, net cash used in financing activities
primarily consisted of repurchases of common stock of $165.4 million and
dividend payments to our shareholders of $68.6 million, partially offset by net
proceeds from the issuance of common stock related to stock-based compensation
of $23.0 million. For 2020, net cash used in financing activities primarily
consisted of repurchases of common stock of $132.9 million and dividend payments
to our shareholders of $17.2 million.

Sources of liquidity

Cash and cash equivalents and short-term investments

At December 31, 2021, we had cash and cash equivalents of $763.4 million and
short-term investments of $131.1 million, compared to $790.7 million and $1.2
million, respectively, at December 31, 2020.

Domestic credit facility

We have available an unsecured, committed revolving credit facility that
provides for funding up to $500.0 million. This credit agreement matures on
December 30, 2025. Interest, payable monthly, is based on the Company's option
of either LIBOR plus an applicable margin or a base rate. Base rate is defined
as the highest of the following, plus an applicable margin:

•the preferential rate of the administrative agent;

• the higher of the federal funds rate or the overnight bank financing rate set by the Federal Reserve Bank of New York, plus 0.50%; Where

•the one-month LIBOR plus 1.00%.

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This credit agreement requires the Company to comply with certain financial
covenants covering the Company's funded debt ratio and asset coverage ratio. The
credit agreement also includes customary covenants that, among other things,
limit or restrict the ability of the Company and its subsidiaries to incur
additional indebtedness and liens, engage in mergers, acquisitions and
dispositions, and engage in transactions with affiliates, as well as restrict
certain payments, including dividends and share buybacks.

At December 31, 2021, there was no balance outstanding under our credit
facility. At the time of this filing, we are in compliance with all financial
covenants necessary as a condition for borrowing under the Columbia Sportswear
Company credit agreement.

International credit facilities

Our European subsidiary has available an unsecured, committed line of credit,
which is guaranteed by the Company and provides for borrowing up to €4.4 million
(approximately US$5.0 million). Borrowings accrue interest at a base rate plus
75 basis points.

In addition, collectively, our international subsidiaries have approximately $111.7 million in unsecured and uncommitted lines of credit and overdraft facilities.

AT December 31, 2021there were no outstanding balances on the lines of credit and overdraft facilities of our international subsidiaries.

Capital requirements

Our anticipated short and long term cash requirements are primarily for working capital and capital expenditures. We expect to meet these short and long-term cash requirements primarily with cash flow from operations and, if necessary, by borrowing against our existing domestic credit facility.

Our working capital management goals include maintaining an optimal level of
inventory necessary to deliver goods on time to our customers and our retail
stores to satisfy end consumer demand, alleviating manufacturing capacity
constraints, and driving efficiencies to minimize the cycle time from the
purchase of inventory from our suppliers to the collections of accounts
receivable balances from our customers. We maintain and continue to make
substantial investments in information systems, processes and personnel to
support our ongoing demand planning efforts to meet our working capital
management goals.

We have planned 2022 capital expenditures of approximately $80 to $100 million.
This includes investments in our digital and supply chain capabilities to
support our strategic priorities and our DTC operations, including new stores.
Our actual planned capital expenditures may differ from the planned amounts
depending on factors such as the timing of system implementations and new store
openings and related construction as well as the availability of capital assets
from suppliers.

Our long-term objective is to maintain a strong balance sheet and a disciplined approach to capital allocation. Depending on market conditions and our strategic priorities, our capital allocation approach includes:

•invest in organic growth opportunities to generate long-term profitable growth;

•return 40% of free cash flow to shareholders through dividends and share buybacks; and

•Consider opportunistic mergers and acquisitions.

Free cash flow is a non-GAAP financial measure. Free cash flow is calculated by
reducing net cash flow from operating activities by capital expenditures.
Management believes free cash flow provides investors with an important
perspective on the cash available for shareholders and acquisitions after making
the capital investments required to support ongoing business operations and
long-term value creation. Free cash flow does not represent the residual cash
flow available for discretionary expenditures as it excludes certain mandatory
expenditures. Management uses free cash flow as a measure to assess both
business performance and overall liquidity.

Other cash commitments

Our non-current Income taxes payable on the Consolidated Balance Sheet at
December 31, 2021 includes approximately $13.7 million of net unrecognized tax
benefits. We are uncertain about whether or when these amounts may be settled.
Refer to Note 10 in Item 8 of this Annual Report on Form 10-K for additional
information.

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The following table outlines our estimated significant contractual commitments that will require the use of funds:

                                                                             Year ended December 31,
(in millions)                   2022             2023              2024              2025              2026             Thereafter           Total
Inventory purchase
obligations                  $ 656.5          $      -          $      -          $      -          $      -          $         -          $ 656.5
Operating lease obligations
(1)                             78.2              72.5              65.7              55.8              49.1                106.3            427.6
TCJA transition tax
obligations (2)                  4.2               8.0              10.6              13.3                 -                    -             36.1


(1) Refer to Operating Leases in Note 9 in Item 8 of this Annual Report on Form
10-K.
(2) Refer to Income Taxes in Note 10 in Item 8 of this Annual Report on Form
10-K.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

Management's discussion and analysis of our financial condition and results of
operations are based on our consolidated financial statements, which have been
prepared in accordance with GAAP. The preparation of these financial statements
requires us to make various estimates and judgments that affect reported amounts
of assets, liabilities, sales, cost of sales, and expenses and related
disclosure of contingent assets and liabilities. Refer to Note 2 in Item 8 of
this Annual Report on Form 10-K for additional information regarding the
significant accounting policies and methods used in the preparation of our
consolidated financial statements.

We believe that the estimates, assumptions and judgments involved in the
accounting policies described below have the greatest potential effect on our
financial statements, so we consider these to be our critical accounting
policies and estimates. Because of the uncertainty inherent in these matters,
actual results may differ from the estimates we use in applying these critical
accounting policies and estimates. We base our ongoing estimates on historical
experience and other assumptions that we believe to be reasonable in the
circumstances. Our critical accounting policies and estimates relate to sales
reserves, allowance for uncollectible accounts receivable, excess, close-out and
slow-moving inventory, impairment of long-lived assets, intangible assets and
goodwill, and income taxes.

Management regularly discusses with our audit committee each of our critical
accounting estimates, the development and selection of these accounting
estimates, and the disclosure about each estimate in this annual report. These
discussions typically occur at our quarterly audit committee meetings and
include the basis and methodology used in developing and selecting these
estimates, the trends in and amounts of these estimates, specific matters
affecting the amount of and changes in these estimates, and any other relevant
matters related to these estimates, including significant issues concerning
accounting principles and financial statement presentation.

Sales reservations

The amount of consideration we receive and recognize as Net sales across both
wholesale and DTC channels varies with changes in sales returns and other
accommodations and incentives we offer to our customers. When we give our
customers the right to return products or provide other accommodations such as
chargebacks and markdowns, we estimate the expected sales returns and
miscellaneous claims from customers and record sales reserves to reduce Net
sales. At December 31, 2021, our sales related reserves were $99.0 million
compared to $83.2 million at December 31, 2020. The most significant variable
affecting these reserve balances is net sales levels. As a percent of Net sales,
the sales reserves balances were 3.2% at December 31, 2021 compared to 3.3% at
December 31, 2020. The reserve for returns from customers or consumers is the
most susceptible to estimation uncertainty. These estimates are based on 1)
historical rates of product returns and claims; and 2) events and circumstances
that indicate changes to such historical rates, such as our customers' net
inventory positions and their anticipated sell-through rates. However, actual
returns and claims in any future period are inherently uncertain and thus may
differ from the estimates. As a result, we adjust our estimates of revenue at
the earlier of when the most likely amount of consideration we expect to receive
changes or when the amount of consideration becomes fixed. If actual or expected
future returns and claims are significantly different than the sales reserve
established, we record an adjustment to Net sales in the period in which such
determination was made.

Provision for bad debts

We make ongoing estimates of the collectability of our accounts receivable and
maintain an allowance for estimated credit losses resulting from the inability
of our customers to make required payments. The allowance represents the current
estimate of lifetime expected credit losses over the remaining duration of
existing accounts receivable considering current market conditions and
supportable forecasts when appropriate. In determining the amount of the
allowance, we consider our historical level of credit losses, as well as our
judgments about the creditworthiness of customers based on ongoing credit
evaluations. We analyze specific customer accounts, including aged receivables,

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customer concentrations, credit insurance coverage, standby letters of credit,
and other forms of collateral, current economic trends, and changes in customer
payment terms.

Our allowance for uncollectible accounts receivable decreased to $8.9 million at
December 31, 2021 compared to $21.8 million at December 31, 2020. The balance at
December 31, 2021 compared to the prior year reflects an improving credit
environment with wholesale customers during 2021 and economic recovery of the
retail sector through the ongoing COVID-19 pandemic. Continued uncertainty in
credit and market conditions may slow our collection efforts if customers
experience difficulty accessing credit and paying their obligations, leading to
higher than normal accounts receivable and increased bad debt risk. Because
future changes in the financial stability of our customers is difficult to
estimate, actual future losses from uncollectible accounts may differ from our
estimates and may have a material effect on our financial position, results of
operations or cash flows. If the financial condition of our customers
deteriorates and results in their inability to make payments, a larger allowance
may be required. If we determine that a smaller or larger allowance is
appropriate, we will record an adjustment to SG&A expense in the period in which
we make such a determination.

Excess, Clearance and Slow Moving Inventory

We make ongoing estimates of potential excess, close-out or slow-moving
inventory. We evaluate our inventory on hand to identify excess, close-out or
slow-moving inventory by contemplating our 1) purchase commitments; 2), sales
forecasts; 3) historical liquidation experience; and 4) the level of inventory
from current and prior seasons that remains unsold and establish provisions as
necessary to properly reflect inventory value at the lower of cost or net
realizable value. Provisions are established when necessary in the period in
which we make such a determination. At December 31, 2021, our inventory reserve
offset gross inventory by $19.9 million compared to $29.5 million at December
31, 2020. Although Inventories, net increased 16% from December 31, 2020 to
December 31, 2021, the level of estimated excess inventory at December 31, 2021
declined reflecting strong consumer demand resulting in a lower inventory
reserve.

Impairment of long-lived assets, intangible assets and Good will

Long-lived assets, which include property, plant and equipment, lease
right-of-use ("ROU") assets, capitalized implementation costs for cloud
computing arrangements, and intangible assets with finite lives are measured for
impairment only when events or circumstances indicate the carrying value may not
be recoverable. Our retail fleet long­lived assets are evaluated at the retail
location level. Events that result in an impairment review of a retail location
include plans to close a retail location or a significant decrease in the
operating results of the retail location. When such an indicator occurs, we
evaluate retail location long­lived assets for impairment by comparing the
undiscounted future cash flow expected to be generated by the location to the
location long­lived asset's carrying amount. If the carrying amount of an asset
exceeds the estimated undiscounted future cash flow, an analysis is performed to
estimate the fair value of the asset. An impairment is recorded if the fair
value of the retail location long­lived asset is less than the carrying amount.

During 2021 we tested certain long-lived assets consisting of property, plant,
and equipment and lease ROU assets for impairment at certain underperforming
retail locations. For the year ended December 31, 2021, impairment charges from
underperforming retail stores were not material. Further declines in projected
future performance may adversely affect the recovery of retail locations assets.
For the year ended December 31, 2020, impairment charges from underperforming
retail stores were $7.0 million for lease ROU assets and $5.0 million for
property, plant and equipment.

We review and test our intangible assets with indefinite lives and goodwill for
impairment in the fourth quarter of each year and when events or changes in
circumstances indicate that the carrying amount of such assets may be impaired.
Our intangible assets with indefinite lives consist of trademarks and trade
names. Substantially all of our goodwill is recorded in the U.S. segment and
impairment testing for goodwill is performed at the reporting unit level. Our
2021 impairment tests of intangible assets with indefinite lives and goodwill
indicated the fair value of all reporting units and intangible assets with
indefinite lives exceeded their respective carrying values.

In the impairment tests for trademarks and trade names, we compare the estimated
fair value of each asset to its carrying amount. The fair values of trademarks
and trade names are estimated using a relief from royalty method under the
income approach. If the carrying amount of a trademark or trade name exceeds its
estimated fair value, we calculate impairment as the excess of carrying amount
over the estimate of fair value. At December 31, 2021, the carrying value of
indefinite-lived intangible assets was $97.9 million, of which $70.5 million was
attributed to prAna's trademark. In our 2021 impairment test, the fair value of
prAna's trademark exceeded its carrying value by approximately 26% as of the
measurement date and, therefore, no impairment was recognized. As part of our
evaluation, we performed sensitivity analysis on the trademark impairment model.
A 10% decrease in estimated net sales for each of the next five years did not
cause the fair value of the trademark to decline below its carrying value.
Separately, a 100 basis point increase in the assumed discount rate did not
cause the fair value of the trademark to decline below its carrying value. In
2020, our impairment test of prAna's trademark resulted in a $17.5 million
impairment charge.

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In the impairment test for goodwill, we compare the estimated fair value of the
reporting unit with the carrying amount of that reporting unit. If the carrying
amount of the reporting unit exceeds its estimated fair value, we calculate an
impairment as the excess of carrying amount over the estimate of fair value. We
estimate the fair value of our reporting units using a combination of discounted
cash flow analysis and market-based valuation methods, as appropriate. Key
assumptions used in the discounted cash flow models are cash flow projections
and the discount rate. Cash flow projections are developed in part from our
annual planning process. The discount rate is the estimated weighted-average
costs of capital of the reporting unit from a market-participant perspective.
When we include market-based valuation methods to estimate fair value of our
reporting units, we utilize market multiples for guideline public companies. The
goodwill balance was $68.6 million at December 31, 2021, of which $54.2 million
was allocated to the prAna reporting unit. In our 2021 impairment test, the fair
value of the prAna reporting unit exceeded its carrying value by approximately
39% as of the measurement date and, therefore, no impairment was recognized.

Our impairment tests and related fair value estimates are based on a number of
factors, including assumptions and estimates for projected sales, income, cash
flows, discount rates, market-based multiples, and other operating performance
measures. Changes in estimates or the application of alternative assumptions
could produce significantly different results. These assumptions and estimates
may change in the future due to changes in economic conditions, changes in our
ability to meet sales and profitability objectives or changes in our business
operations or strategic direction.

Income taxes

We make assumptions, judgments and estimates to determine our current provision
for income taxes, our deferred tax assets and liabilities and our uncertain tax
positions. Our judgments, assumptions and estimates relative to the current
provision for income tax take into account current tax laws, our interpretation
of current tax laws and possible outcomes of current and future audits conducted
by foreign and domestic tax authorities. Changes in tax law or our
interpretation of tax laws and the resolution of current and future tax audits
could significantly affect the amounts provided for Income tax expense in our
Consolidated Statements of Operations.

Our assumptions, judgments and estimates relative to the value of a deferred tax
asset take into account predictions of the amount and category of future taxable
income. Actual operating results and the underlying amount and category of
income in future years could cause our current assumptions, judgments and
estimates of recoverable net deferred tax assets to be inaccurate. Changes in
any of the assumptions, judgments and estimates mentioned above could cause our
actual income tax obligations to differ from our estimates, which could
materially affect our financial position, results of operations or cash flows.

Our assumptions, judgement and estimates relative to uncertain tax positions
take into account whether a tax position is more likely than not to be sustained
upon examination by the relevant taxing authority based on the technical merits
of the position and the largest benefit that has a greater than 50% likelihood
of being realized upon ultimate settlement with the relevant taxing authority.
Changes in tax law or our interpretation of tax laws and the resolution of
current and future tax audits could significantly affect the amounts provided
for Income tax expense in our Consolidated Statements of Operations.

Our tax provision for interim periods is determined using an estimate of our
annual effective tax rate, adjusted for discrete items, if any, that are taken
into account in the relevant period. As the calendar year progresses, we
periodically refine our estimate based on actual events and earnings by
jurisdiction. This ongoing estimation process can result in changes to our
expected effective tax rate for the full calendar year. When this occurs, we
adjust the income tax provision during the quarter in which the change in
estimate occurs so that our year-to-date provision equals our expected annual
effective tax rate.

RECENT ACCOUNTING PRONOUNCEMENTS

See Note 2 to Section 8 of this Annual Report on Form 10-K.

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