UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

_______________________

FORM 10-Q

____________________________

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2014

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE EXCHANGE ACT OF 1934

For the transition period from_______to_______            

Commission file number 0-23939

 _____________________________

COLUMBIA SPORTSWEAR COMPANY

(Exact name of registrant as specified in its charter)

Oregon	93-0498284
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification Number)
14375 Northwest Science Park Drive Portland, Oregon	97229
(Address of principal executive offices)	(Zip Code)

(503) 985-4000

(Registrant’s telephone number, including area code)

_____________________________________

Indicate by check mark whether registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	o  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ¨    No  x

The number of shares of Common Stock outstanding on April 25, 2014 was 34,878,804.

COLUMBIA SPORTSWEAR COMPANY

MARCH 31, 2014

INDEX TO FORM 10-Q

	PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1 – Financial Statements – Columbia Sportswear Company (Unaudited)	2
Condensed Consolidated Balance Sheets	2
Condensed Consolidated Statements of Operations	3
Condensed Consolidated Statements of Comprehensive Income	4
Condensed Consolidated Statements of Cash Flows	5
Notes to Condensed Consolidated Financial Statements	6
Item  2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3 – Quantitative and Qualitative Disclosures About Market Risk	25
Item 4 – Controls and Procedures	25
PART II. OTHER INFORMATION
Item 1 – Legal Proceedings	26
Item 1A – Risk Factors	26
Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 6 – Exhibits	37
Signatures	38

1

PART I. FINANCIAL INFORMATION

Item 1 –FINANCIAL STATEMENTS

COLUMBIA SPORTSWEAR COMPANY

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	March 31, 2014		December 31, 2013		March 31, 2013
ASSETS
Current Assets:
Cash and cash equivalents	$	528,038	$	437,489	$	303,654
Short-term investments	39,537		91,755		70,988
Accounts receivable, net of allowance of $6,669, $8,282 and $7,829, respectively	249,115		306,878		238,325
Inventories, net (Note 4)	290,196		329,228		325,241
Deferred income taxes	50,496		52,041		48,444
Prepaid expenses and other current assets	34,810		33,081		41,814
Total current assets	1,192,192		1,250,472		1,028,466
Property, plant and equipment, at cost, net of accumulated depreciation of $339,296, $326,380 and $306,637, respectively	282,290		279,373		266,946
Intangible assets, net (Note 5)	35,955		36,288		37,285
Goodwill	14,438		14,438		14,438
Other non-current assets	24,654		25,017		25,346
Total assets	$	1,549,529	$	1,605,588	$	1,372,481
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	104,863	$	173,557	$	75,980
Accrued liabilities (Note 6)	95,119		120,397		88,338
Income taxes payable	6,088		7,251		2,217
Deferred income taxes	65		49		23
Total current liabilities	206,135		301,254		166,558
Note payable to related party (Note 14)	15,699		—		—
Income taxes payable	14,527		13,984		12,096
Deferred income taxes	8,105		7,959		1,755
Other long-term liabilities	30,372		29,527		27,949
Total liabilities	274,838		352,724		208,358
Commitments and contingencies (Note 12)
Columbia Sportswear Company Shareholders’ Equity:
Preferred stock; 10,000 shares authorized; none issued and outstanding	—		—		—
Common stock (no par value); 125,000 shares authorized; 34,872, 34,595 and 34,281 issued and outstanding, respectively (Note 9)	65,887		52,325		31,407
Retained earnings	1,170,226		1,157,733		1,097,271
Accumulated other comprehensive income (Note 8)	30,209		35,360		35,445
Total Columbia Sportswear Company shareholders’ equity	1,266,322		1,245,418		1,164,123
Non-controlling interest (Note 3)	8,369		7,446		—
Total equity	1,274,691		1,252,864		1,164,123
Total liabilities and equity	$	1,549,529	$	1,605,588	$	1,372,481

See accompanying notes to condensed consolidated financial statements.

2

COLUMBIA SPORTSWEAR COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

(Unaudited)

	Three Months Ended March 31,
	2014			2013
Net sales	$	424,084		$	348,307
Cost of sales	226,998			195,003
Gross profit	197,086			153,304
Selling, general and administrative expenses	163,359			142,903
Net licensing income	1,724			2,327
Income from operations	35,451			12,728
Interest income, net	239			132
Interest expense on note payable to related party	(210		)	—
Other non-operating expense	(356		)	(630		)
Income before income tax	35,124			12,230
Income tax expense	(11,448		)	(2,128		)
Net income	23,676			10,102
Net income attributable to non-controlling interest	1,421			—
Net income attributable to Columbia Sportswear Company	$	22,255		$	10,102
Earnings per share attributable to Columbia Sportswear Company (Note 9):
Basic	$	0.64		$	0.30
Diluted	0.63			0.29
Weighted average shares outstanding (Note 9):
Basic	34,709			34,167
Diluted	35,195			34,449

See accompanying notes to condensed consolidated financial statements.

3

COLUMBIA SPORTSWEAR COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2014			2013
Net income	$	23,676		$	10,102
Other comprehensive income (loss):
Unrealized holding gains on available-for-sale securities (net of tax expense of $2 and $3, respectively)	1			9
Unrealized gains on derivative transactions (net of tax benefit (expense) of $103 and ($550), respectively)	228			1,430
Foreign currency translation adjustments (net of tax (expense) benefit of ($7) and $235, respectively)	(5,878		)	(12,657		)
Other comprehensive loss	(5,649		)	(11,218		)
Comprehensive income (loss)	18,027			(1,116		)
Comprehensive income attributable to non-controlling interest	923			—
Comprehensive income (loss) attributable to Columbia Sportswear Company	$	17,104		$	(1,116	)

See accompanying notes to condensed consolidated financial statements.

4

COLUMBIA SPORTSWEAR COMPANY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

	Three Months Ended March 31,
	2014			2013
Cash flows from operating activities:
Net income	$	23,676		$	10,102
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	10,252			9,858
Loss on disposal or impairment of property, plant, and equipment	185			43
Deferred income taxes	4,399			2,624
Stock-based compensation	2,577			1,950
Excess tax benefit from employee stock plans	(2,557		)	(574		)
Changes in operating assets and liabilities:
Accounts receivable	57,763			95,995
Inventories	39,031			38,075
Prepaid expenses and other current assets	(1,921		)	(3,186		)
Other assets	382			(1,752		)
Accounts payable	(64,759		)	(69,839		)
Accrued liabilities	(25,758		)	(16,470		)
Income taxes payable	(621		)	(1,769		)
Other liabilities	847			778
Net cash provided by operating activities	43,496			65,835
Cash flows from investing activities:
Purchases of short-term investments	(2,788		)	(26,947		)
Sales of short-term investments	55,200			630
Capital expenditures	(17,763		)	(14,770		)
Proceeds from sale of property, plant, and equipment	16			41
Net cash provided by (used in) investing activities	34,665			(41,046		)
Cash flows from financing activities:
Proceeds from credit facilities	—			800
Repayments on credit facilities	—			(956		)
Proceeds from issuance of common stock under employee stock plans	11,168			6,005
Tax payments related to restricted stock unit issuances	(2,791		)	(1,891		)
Excess tax benefit from employee stock plans	2,557			574
Proceeds from note payable to related party	16,072			—
Cash dividends paid	(9,762		)	(7,521		)
Net cash provided by (used in) financing activities	17,244			(2,989		)
Net effect of exchange rate changes on cash	(4,856		)	(8,927		)
Net increase in cash and cash equivalents	90,549			12,873
Cash and cash equivalents, beginning of period	437,489			290,781
Cash and cash equivalents, end of period	$	528,038		$	303,654
Supplemental disclosures of cash flow information:
Cash paid during the period for income taxes	$	8,002		$	3,507
Supplemental disclosures of non-cash investing activities:
Capital expenditures incurred but not yet paid	$	1,260		$	3,803

See accompanying notes to condensed consolidated financial statements.

5

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1—BASIS OF PRESENTATION AND ORGANIZATION

The accompanying unaudited condensed consolidated financial statements have been prepared by the management of Columbia Sportswear Company (together with its wholly owned subsidiaries and entities in which it maintains a controlling financial interest, the “Company”) and in the opinion of management include all normal recurring material adjustments necessary to present fairly the Company’s financial position as of March 31, 2014 and 2013, the results of operations for the three months endedMarch 31, 2014 and 2013 and cash flows for the three months endedMarch 31, 2014 and 2013. The December 31, 2013 financial information was derived from the Company’s audited financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2013. A significant part of the Company’s business is of a seasonal nature; therefore, results of operations for the three months endedMarch 31, 2014 are not necessarily indicative of results to be expected for the full year.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles”) have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. The Company, however, believes that the disclosures contained in this report comply with the requirements of Section 13(a) of the Securities Exchange Act of 1934 for a Quarterly Report on Form 10-Q and are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Principles of consolidation:

The condensed consolidated financial statements include the accounts of Columbia Sportswear Company, its wholly owned subsidiaries and entities in which it maintains a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation.

Estimates and assumptions:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results may differ from these estimates and assumptions. Some of these more significant estimates relate to revenue recognition, including sales returns and miscellaneous claims from customers, allowance for doubtful accounts, excess, slow-moving and closeout inventories, product warranty, long-lived and intangible assets, income taxes and stock-based compensation.

NOTE 2—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

There have been no significant changes to the Company’s significant accounting policies as described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2013.

Recent Accounting Pronouncement:

In March 2013, the Financial Accounting Standards Board issued Accounting Standards Update ("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 a 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 adopted the new guidance as of January 1, 2014. The adoption of this standard did not have a material effect on the Company’s financial position, results of operations or cash flows.

NOTE 3—NON-CONTROLLING INTEREST

The Company owns a 60% controlling interest in a joint venture formed with Swire Resources, Limited ("Swire") to support the development and operation 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. The accounts of the joint venture are included in the Condensed Consolidated

6

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Balance Sheets as of March 31, 2014 and December 31, 2013. Swire's share of net income from the joint venture is included in Net income attributable to non-controlling interest in the Condensed Consolidated Statements of Operations for the three months endedMarch 31, 2014. The non-controlling equity interest in this entity is included in total equity as Non-controlling interest on the Condensed Consolidated Balance Sheets as of March 31, 2014 and December 31, 2013.

The following table presents the changes in equity for the three months endedMarch 31, 2014 (in thousands):

	Columbia Sportswear Company			Non-Controlling Interest			Total
BALANCE, DECEMBER 31, 2013	$	1,245,418		$	7,446		$	1,252,864
Net income	22,255			1,421			23,676
Other comprehensive income (loss):
Unrealized holding gains on available-for-sale securities	1			—			1
Derivative holding gains	228			—			228
Foreign currency translation adjustments	(5,380		)	(498		)	(5,878		)
Cash dividends ($0.28 per share)	(9,762		)	—			(9,762		)
Issuance of common stock under employee stock plans, net	8,377			—			8,377
Tax adjustment from stock plans	2,608			—			2,608
Stock-based compensation expense	2,577			—			2,577
BALANCE, MARCH 31, 2014	$	1,266,322		$	8,369		$	1,274,691

NOTE 4—INVENTORIES, NET

Inventories are carried at the lower of cost or market. Cost is determined using the first-in, first-out method. The Company periodically reviews its inventory for excess, closeout and slow moving items and makes provisions as necessary to properly reflect inventory value.

Inventories, net, consisted of the following (in thousands):

	March 31, 2014		December 31, 2013		March 31, 2013
Raw materials	$	574	$	1,130	$	738
Work in process	1,145		1,203		1,579
Finished goods	288,477		326,895		322,924
	$	290,196	$	329,228	$	325,241

NOTE 5—INTANGIBLE ASSETS, NET

Intangible assets that are determined to have finite lives include patents and purchased technology and are amortized over their estimated useful lives, which are approximately 10 years. Intangible assets with indefinite useful lives include trademarks and trade names and are not amortized but are periodically evaluated for impairment.

The following table summarizes the Company’s identifiable intangible assets balance (in thousands):

	March 31, 2014			December 31, 2013			March 31, 2013
Intangible assets subject to amortization:
Gross carrying amount	$	14,198		$	14,198		$	14,198
Accumulated amortization	(5,664		)	(5,331		)	(4,334		)
Net carrying amount	8,534			8,867			9,864
Intangible assets not subject to amortization	27,421			27,421			27,421
Intangible assets, net	$	35,955		$	36,288		$	37,285

7

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Annual amortization expense for intangible assets subject to amortization is estimated to be $1,330,000 in 2014 through 2018.

NOTE 6—PRODUCT WARRANTY

Some of the Company’s products carry limited warranty provisions for defects in quality and workmanship. A warranty reserve is established at the time of sale to cover estimated costs based on the Company’s history of warranty repairs and replacements and is recorded in cost of sales. The warranty reserve is included in Accrued liabilities in the Condensed Consolidated Balance Sheets.

A reconciliation of product warranties is as follows (in thousands):

	Three Months Ended March 31,
	2014			2013
Balance at beginning of period	$	10,768		$	10,209
Provision for warranty claims	1,481			1,515
Warranty claims	(1,529		)	(1,934		)
Other	(68		)	(107		)
Balance at end of period	$	10,652		$	9,683

NOTE 7—STOCK-BASED COMPENSATION

The Company’s Stock Incentive Plan (the “Plan”) allows for grants of incentive stock options, non-statutory stock options, restricted stock awards, restricted stock units and other stock-based or cash-based awards. The majority of all stock option and restricted stock unit grants outstanding under the Plan were granted in the first quarter of each fiscal year.

Stock-based compensation expense consisted of the following (in thousands):

	Three Months Ended March 31,
	2014		2013
Stock options	$	881	$	827
Restricted stock units	1,696		1,123
Total	$	2,577	$	1,950

Stock Options

The Company estimates the fair value of stock options using the Black-Scholes model. Key inputs and assumptions used to estimate the fair value of stock options include the exercise price of the award, the expected option term, the expected volatility of the Company’s stock over the option’s expected term, the risk-free interest rate over the option’s expected term, and the Company’s expected annual dividend yield.

The following table presents the weighted average assumptions for stock options granted in the period:

	Three Months Ended March 31,
	2014	2013
Expected term	4.45 years	4.49 years
Expected stock price volatility	27.59%	31.02%
Risk-free interest rate	1.12%	0.61%
Expected dividend yield	1.33%	1.65%
Weighted average grant date fair value	$16.86	$11.91

8

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

During the three months endedMarch 31, 2014 and 2013, the Company granted a total of 218,274 and 298,805 stock options, respectively. At March 31, 2014, unrecognized costs related to outstanding stock options totaled approximately $7,912,000, before any related tax benefit. The unrecognized costs related to stock options are amortized over the related vesting period using the straight-line attribution method. Unrecognized costs related to stock options at March 31, 2014 are expected to be recognized over a weighted average period of 2.74 years.

Restricted Stock Units

The Company estimates the fair value of service-based and performance-based restricted stock units using the Black-Scholes model. Key inputs and assumptions used to estimate the fair value of restricted stock units include the vesting period, expected annual dividend yield and closing price of the Company’s common stock on the date of grant.

The following table presents the weighted average assumptions for restricted stock units granted in the period:

	Three Months Ended March 31,
	2014	2013
Vesting period	3.91 years	4.00 years
Expected dividend yield	1.32%	1.61%
Estimated average grant date fair value per restricted stock unit	$77.63	$51.22

During the three months endedMarch 31, 2014 and 2013, the Company granted 99,953 and 128,989 restricted stock units, respectively. At March 31, 2014, unrecognized costs related to outstanding restricted stock units totaled approximately $16,117,000, before any related tax benefit. The unrecognized costs related to restricted stock units are being amortized over the related vesting period using the straight-line attribution method. These unrecognized costs at March 31, 2014 are expected to be recognized over a weighted average period of 2.69 years.

NOTE 8—ACCUMULATED OTHER COMPREHENSIVE INCOME

Accumulated other comprehensive income, net of applicable taxes, reported on the Company’s Condensed Consolidated Balance Sheets consists of unrealized holding gains and losses on available-for-sale securities, unrealized gains and losses on certain derivative transactions and foreign currency translation adjustments.

The following table sets forth the changes in accumulated other comprehensive income attributable to Columbia Sportswear Company, net of tax, for the three months ended March 31,2014 (in thousands):

	Unrealized losses on available-for-sale securities			Unrealized holding gains on derivative transactions			Foreign currency translation adjustments			Total
Balance at December 31, 2013	$	(6	)	$	1,244		$	34,122		$	35,360
Other comprehensive income (loss) before reclassifications	1			704			(5,380		)	(4,675		)
Amounts reclassified from other comprehensive income	—			(476		)	—			(476		)
Net other comprehensive income (loss) during the period	1			228			(5,380		)	(5,151		)
Balance at March 31, 2014	$	(5	)	$	1,472		$	28,742		$	30,209

The following table sets forth the changes in accumulated other comprehensive income attributable to Columbia Sportswear Company, net of tax, for the three months endedMarch 31, 2013 (in thousands):

9

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

	Unrealized losses on available-for-sale securities			Unrealized holding gains on derivative transactions			Foreign currency translation adjustments			Total
Balance at December 31, 2012	$	(9	)	$	2,505		$	44,167		$	46,663
Other comprehensive income (loss) before reclassifications	9			2,153			(12,657		)	(10,495		)
Amounts reclassified from other comprehensive income	—			(723		)	—			(723		)
Net other comprehensive income (loss) during the period	9			1,430			(12,657		)	(11,218		)
Balance at March 31, 2013	$	—		$	3,935		$	31,510		$	35,445

All reclassification adjustments related to derivative transactions are recorded in Cost of sales on the Condensed Consolidated Statements of Operations. See Note 11 for further information regarding derivative instrument reclassification adjustments.

NOTE 9—EARNINGS PER SHARE

Earnings per share (“EPS”) is presented on both a basic and diluted basis. Basic EPS is based on the weighted average number of common shares outstanding. Diluted EPS reflects the potential dilution that could occur if outstanding securities or other contracts to issue common stock were exercised or converted into common stock. For the calculation of diluted EPS, the basic weighted average number of shares is increased by the dilutive effect of stock options and restricted stock units determined using the treasury stock method.

A reconciliation of common shares used in the denominator for computing basic and diluted EPS is as follows (in thousands, except per share amounts):

	Three Months Ended March 31,
	2014		2013
Weighted average shares of common stock outstanding, used in computing basic earnings per share	34,709		34,167
Effect of dilutive stock options and restricted stock units	486		282
Weighted average shares of common stock outstanding, used in computing diluted earnings per share	35,195		34,449
Earnings per share of common stock attributable to Columbia Sportswear Company:
Basic	$	0.64	$	0.30
Diluted	0.63		0.29

Stock options and service-based restricted stock units representing 116,606 and 854,755 shares of common stock for the three months ended March 31, 2014 and 2013, respectively, were outstanding but were excluded from the computation of diluted EPS because their effect would be anti-dilutive as a result of applying the treasury stock method. In addition, performance-based restricted stock units representing 30,963 and 13,484 shares of common stock for the three months ended March 31, 2014 and 2013, respectively, were outstanding but were excluded from the computation of diluted EPS because these shares were subject to performance conditions that had not been met.

Since the inception of the Company’s stock repurchase plan in 2004 through March 31, 2014, the Company’s Board of Directors has authorized the repurchase of $500,000,000 of the Company’s common stock. 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. As of March 31, 2014, the Company had repurchased 9,593,278 shares under this program at an aggregate purchase price of approximately $441,443,000. During the three months endedMarch 31, 2014 and 2013, the Company did not repurchase any shares of the Company's common stock.

10

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

NOTE 10—SEGMENT INFORMATION

The Company operates in four geographic segments: (1) United States, (2) Latin America and Asia Pacific ("LAAP"), (3) Europe, Middle East and Africa (“EMEA”) and (4) Canada, which are reflective of the Company’s internal organization, management, and oversight structure. Each geographic segment operates predominantly in one industry: the design, development, marketing and distribution of active outdoor apparel, footwear, accessories and equipment. Intersegment net sales and intersegment profits, which are recorded at a negotiated mark-up and eliminated in consolidation, are not material. Unallocated corporate expenses consist of expenses incurred by centrally-managed departments, including global information systems, finance and legal, executive compensation, unallocated benefit program expense and other miscellaneous costs.

In the first quarter of 2014, the Company reclassified its segment reporting to reflect changes in its internal management and oversight structure. Certain marketing, product creation and administrative costs incurred by the Company’s corporate offices, previously included in the United States segment, have been allocated to other geographic regions based on appropriate operational metrics. Other such costs not directly or indirectly allocable to regional segments are now shown below as unallocated corporate expenses. Prior year amounts have been adjusted to match current year presentation.

The geographic distribution of the Company’s net sales and income (loss) from operations are summarized in the following table (in thousands) for the three months ended March 31, 2014 and 2013.

	Three Months Ended March 31,
	2014			2013
Net sales to unrelated entities:
United States	$	241,189		$	200,498
LAAP	116,813			83,046
EMEA	39,140			40,920
Canada	26,942			23,843
	$	424,084		$	348,307
Segment income (loss) from operations:
United States	$	44,171		$	25,547
LAAP	17,234			11,356
EMEA	(3,526		)	(5,573		)
Canada	3,399			3,503
Total segment income from operations	61,278			34,833
Unallocated corporate expenses	(25,827		)	(22,105		)
Interest income, net	239			132
Interest expense on note payable to related party	(210		)	—
Other non-operating expense	(356		)	(630		)
Income before income taxes	$	35,124		$	12,230

NOTE 11—FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

In the normal course of business, the Company’s financial position and results of operations are routinely subject to a variety of risks. These risks include risks associated with financial markets, primarily currency exchange rate risk and, to a lesser extent, interest rate risk and equity market risk. The Company regularly assesses these risks and has established policies and business practices designed to mitigate them. The Company does not engage in speculative trading in any financial market.

The Company actively manages the risk of changes in functional currency equivalent cash flows resulting from anticipated U.S. dollar denominated inventory purchases by subsidiaries that use European euros, Canadian dollars or Japanese yen as their functional currency. The Company manages this risk by using currency forward contracts formally designated and effective as cash flow hedges. Hedge effectiveness is determined by evaluating the ability of a hedging instrument’s cumulative change in fair value to offset the cumulative change in the present value of expected cash flows on the underlying exposures. For forward contracts, the change in fair value attributable to changes in forward points are excluded from the determination of hedge

11

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

effectiveness and included in current cost of sales. Hedge ineffectiveness was not material during the three months endedMarch 31, 2014 and 2013.

The Company also uses currency forward contracts not formally designated as hedges to manage the consolidated currency exchange rate risk associated with the remeasurement of non-functional currency denominated monetary assets and liabilities by subsidiaries that use European euros, Canadian dollars, Japanese yen, Korean won or Chinese renminbi as their functional currency. Non-functional currency denominated monetary assets and liabilities consist primarily of cash and cash equivalents, short-term investments, payables and intercompany loans. The gains and losses generated on these currency forward contracts not formally designated as hedges are expected to be largely offset in other non-operating income (expense), net by the gains and losses generated from the remeasurement of the non-functional currency denominated monetary assets and liabilities.

The following table presents the gross notional amount of outstanding derivative instruments (in thousands):

	March 31, 2014		December 31, 2013		March 31, 2013
Derivative instruments designated as cash flow hedges:
Currency forward contracts	$	142,500	$	99,000	$	72,500
Derivative instruments not designated as cash flow hedges:
Currency forward contracts	36,000		109,000		78,968

At March 31, 2014, approximately $2,336,000 of deferred net gains on both outstanding and matured derivatives accumulated in other comprehensive income are expected to be reclassified to net income during the next twelve months as a result of underlying hedged transactions also being recorded in net income. Actual amounts ultimately reclassified to net income are dependent on U.S. dollar exchange rates in effect against the European euro, Canadian dollar and Japanese yen when outstanding derivative contracts mature.

At March 31, 2014, the Company’s derivative contracts had a remaining maturity of approximately two years or less. All the counterparties to these transactions had both long-term and short-term investment grade credit ratings and as a result, the Company does not require collateral to facilitate transactions. 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 $1,000,000 at March 31, 2014. The Company does not hold derivatives featuring credit-related contingent terms. In addition, the Company is not a party to any derivative master agreement featuring credit-related contingent terms. Finally, the Company has not pledged assets or posted collateral as a requirement for entering into or maintaining derivative positions.

The following table presents the balance sheet classification and fair value of derivative instruments (in thousands):

12

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

	Balance Sheet Classification	March 31, 2014		December 31, 2013		March 31, 2013
Derivative instruments designated as cash flow hedges:
Derivative instruments in asset positions:
Currency forward contracts	Prepaid expenses and other current assets	$	2,391	$	1,936	$	4,553
Currency forward contracts	Other non-current assets	128		24		—
Derivative instruments in liability positions:
Currency forward contracts	Accrued liabilities	1,017		872		119
Currency forward contracts	Other long-term liabilities	33		95		—
Derivative instruments not designated as cash flow hedges:
Derivative instruments in asset positions:
Currency forward contracts	Prepaid expenses and other current assets	312		2,956		512
Derivative instruments in liability positions:
Currency forward contracts	Accrued liabilities	—		280		684

The following table presents the statement of operations effect and classification of derivative instruments (in thousands):

	Statement of Operations Classification	Three Months Ended March 31,
		2014			2013
Currency Forward Contracts:
Derivative instruments designated as cash flow hedges:
Gain recognized in other comprehensive income or loss	—	$	704		$	2,153
Gain reclassified from accumulated other comprehensive income or loss to income for the effective portion	Cost of sales	809			860
Loss recognized in income for amount excluded from effectiveness testing and for the ineffective portion	Cost of sales	(22		)	(43		)
Derivative instruments not designated as cash flow hedges:
Gain (loss) recognized in income	Other non-operating expense	(1,465		)	3,349

NOTE 12—COMMITMENTS AND CONTINGENCIES

Inventory Purchase Obligations

Inventory purchase obligations consist of open production purchase orders and other commitments for raw materials and sourced apparel, footwear, accessories and equipment. At March 31, 2014, inventory purchase obligations were $541,399,000.

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.

NOTE 13—FAIR VALUE MEASURES

13

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

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 at March 31, 2014 are as follows (in thousands):

	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents
Money market funds	$	269,786	$	—	$	—	$	269,786
Time deposits	25,129		14,088		—		39,217
Reverse repurchase agreements	—		55,000		—		55,000
Available-for-sale short-term investments (1)
Short-term municipal bond fund	15,028		—		—		15,028
Certificates of deposit	—		9,795		—		9,795
U.S. Government-backed municipal bonds	—		14,185		—		14,185
Other short-term investments
Mutual fund shares	529		—		—		529
Other current assets
Derivative financial instruments (Note 11)	—		2,703		—		2,703
Other non-current assets
Derivative financial instruments (Note 11)	—		128		—		128
Mutual fund shares	5,390		—		—		5,390
Total assets measured at fair value	$	315,862	$	95,899	$	—	$	411,761
Liabilities:
Accrued liabilities
Derivative financial instruments (Note 11)	$	—	$	1,017	$	—	$	1,017
Other long-term liabilities
Derivative financial instruments (Note 11)	—		33		—		33
Total liabilities measured at fair value	$	—	$	1,050	$	—	$	1,050

14

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

Assets and liabilities measured at fair value on a recurring basis at 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 (1)
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 11)	—		4,892		—		4,892
Non-current assets
Derivative financial instruments (Note 11)	—		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 11)	$	—	$	1,152	$	—	$	1,152
Other long-term liabilities
Derivative financial instruments (Note 11)	—		95		—		95
Total liabilities measured at fair value	$	—	$	1,247	$	—	$	1,247

15

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

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

	Level 1		Level 2		Level 3		Total
Assets:
Cash equivalents
Money market funds	$	130,794	$	—	$	—	$	130,794
Time deposits	25,054		1,800		—		26,854
U.S. Government-backed repurchase agreements	—		50,000		—		50,000
Available-for-sale short-term investments (1)
Certificates of deposit	—		7,599		—		7,599
Variable-rate demand notes	—		31,500		—		31,500
U.S. Government-backed municipal bonds	—		31,889		—		31,889
Other current assets
Derivative financial instruments (Note 11)	—		5,065		—		5,065
Other non-current assets
Mutual fund shares	4,513		—		—		4,513
Total assets measured at fair value	$	160,361	$	127,853	$	—	$	288,214
Liabilities:
Accrued liabilities
Derivative financial instruments (Note 11)	$	—	$	803	$	—	$	803
Total liabilities measured at fair value	$	—	$	803	$	—	$	803

⁽¹⁾  Investments have remaining maturities greater than three months but less than two years and are available for use in current operations.

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 for its European distribution center in Cambrai, France, writing the assets down to their estimated fair value of $19,300,000. 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 as of March 31, 2014 or March 31, 2013.

NOTE 14—RELATED PARTY TRANSACTIONS

On January 1, 2014, the Company's previously announced majority owned joint venture in mainland China commenced operations. Upon commencement, the joint venture entered into Transition Services Agreements ("TSAs") with Swire, the non-controlling shareholder in the joint venture, under which Swire renders administrative and IT services and operates certain retail stores on behalf of the joint venture. The joint venture incurred service fees, valued under the TSAs at Swire's cost, of $2,707,000 during the three months ended March 31, 2014. These fees are included in Selling, general and administrative expenses on the Condensed Consolidated Statement of Operations for the three months ended March 31, 2014. In addition, the joint venture pays Swire sourcing fees related to the purchase of certain inventory. These sourcing fees are capitalized into Inventories and charged to Cost of sales as the inventories are sold. For the three months ended March 31, 2014, the joint venture incurred sourcing fees of $285,000.

16

COLUMBIA SPORTSWEAR COMPANY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(Unaudited)

During the three months ended March 31,2014, both the Company and Swire funded long-term loans to the joint venture. The Company's loan has been eliminated in consolidation, while the Swire loan is reflected as Note payable to related party on the Condensed Consolidated Balance Sheet as of March 31, 2014. The note with Swire, in the principal amount of 97,600,000 RMB (US$15,699,000), matures on December 31, 2018 and bears interest at a fixed annual rate of 7%. Interest expense related to this note was $210,000 for the three months ended March 31, 2014.

As of March 31, 2014, payables to Swire for service fees and interest expense totaled $2,877,000 and were included in Accounts payable on the Condensed Consolidated Balance Sheets.

In addition to the transactions described above, Swire is also a third-party distributor of the Company's brands in certain regions outside of mainland China and purchases products from the Company under the Company's normal third-party distributor terms and pricing.

NOTE 15—SUBSEQUENT EVENT

On April 29, 2014, the Company announced it has signed a definitive agreement to purchase prAna Living LLC ("prAna") in a cash transaction valued at approximately $190,000,000, which is subject to customary working capital adjustments. PrAna markets lifestyle apparel for women and men, designed and manufactured in sustainable ways and with a focus on healthy, mindful living. The transaction is expected to close during the second quarter of 2014, subject to customary conditions and regulatory approvals.

17

Item 2 –MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This quarterly report contains forward-looking statements. Forward-looking statements include any statements related to our expectations regarding future performance or market position, including any statements regarding anticipated sales, gross margins and operating margins across markets, distribution channels and product categories, profitability, licensing income, expenses, input costs and cost containment measures, effects of unseasonable weather on our results of operations, inventory levels, investments in our business, including funding and operation of our China joint venture, investments in and implementation of our information technology systems, our direct-to-consumer channels and other capital expenditures, access to raw materials and factory capacity, financing and working capital requirements and resources, tax rates and pre-tax income, and our exposure to market risk associated with interest rates and foreign currency exchange rates.

These forward-looking statements, and others we make from time to time, are subject to a number of risks and uncertainties. Many factors may cause actual results to differ materially from those projected in forward-looking statements, including the risks described below in Part II, Item 1A, Risk Factors. We do not undertake any duty to update forward-looking statements after the date they are made or to conform them to actual results or to changes in circumstances or expectations.

Our Business

As one of the largest outdoor apparel and footwear companies in the world, we design, source, market and distribute active outdoor apparel, footwear, accessories and equipment under the Columbia, Mountain Hardwear, Sorel and Montrail brands. Our products are sold through a mix of wholesale distribution channels, independent distributors, and our own direct-to-consumer channels. In addition, we license some of our trademarks across a range of apparel, footwear, accessories and equipment.

The popularity of outdoor activities, weather, changing design trends, consumer adoption of innovative performance technologies and the availability and desirability of competitor alternatives affect consumer desire for our products. Therefore, we seek to drive, anticipate and respond to trends and shifts in consumer preferences by adjusting the mix and price points of available product offerings, developing new products with innovative performance features and designs, and creating persuasive and memorable marketing communications to generate consumer awareness, demand and retention. Failure to anticipate or respond to consumer needs and preferences in a timely and adequate manner could have a material adverse effect on our sales and profitability.

Business Outlook

Our business is affected by the general seasonal trends common to the outdoor industry and is heavily dependent upon weather and discretionary consumer 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. The expansion of our direct-to-consumer operations has increased the proportion of sales and profits that we generate in the fourth calendar quarter. As a result, our sales and profits tend to be highest in the third and fourth calendar quarters. In 2013, approximately 63 percent of our net sales and nearly all of our profitability were realized in the second half of the year, illustrating our dependence upon sales results in the second half of the year, as well as the less seasonal nature of our operating costs.

We generally solicit orders from wholesale customers and independent distributors for the fall and spring seasons based on seasonal ordering deadlines that we establish to aid our efforts to plan manufacturing volumes to meet demand. We typically ship the majority of our advance fall season orders to wholesale customers and independent distributors beginning in July and continuing through December. Similarly, the majority of our advance spring season orders ship to wholesale customers and independent distributors beginning in January and continuing through June. Generally, orders are subject to cancellation prior to the date of shipment.

Results of operations in any period should not be considered indicative of the results to be expected for any future period, particularly in light of persistent volatility in economic conditions. Sales of our products are subject to substantial cyclical fluctuation, the effects of unseasonable weather conditions, the relative popularity of competitors' brands, and the continued popularity of outdoor activities as part of an active lifestyle in key markets. Volatile economic environments in key markets, seasonal weather patterns and inflationary or volatile input costs reduce the predictability of our business.

Factors that could significantly affect our full year 2014 outlook include:

• Unseasonable weather conditions or other unforeseen factors affecting consumer demand and the resulting effect on order cancellations, sales returns, customer accommodations, reorders, direct-to-consumer sales and suppressed demand in subsequent seasons;

• Changes in mix and volume of full price sales in contrast with closeout product sales and promotional sales activity;

18

• Availability of production capacity to meet demand;

• Costs and business interruption risks related to our supply chain and information technology infrastructure investments and projects, including our multi-year global enterprise resource planning ("ERP") system implementation;

• Our ability to effectively manage operating costs;

• Continued political and economic uncertainty, which is creating headwinds in key global markets, particularly Europe as it relates to our EMEA direct business where we have ongoing efforts to revitalize the Columbia brand, and in South America with respect to import restrictions and currency constraints in key distributor markets;

• The rate of new store expansion and performance of our existing stores and e-commerce sites in our global direct-to-consumer operations;

• Changes in consumer spending activity; and

• Fluctuating currency exchange rates.

These factors and others may have a material effect on our financial condition, results of operations, or cash flows, particularly with respect to quarterly comparisons.

We implemented our new ERP system in the United States on schedule in early April 2014 which, when combined with our Canadian operation, brings our North American wholesale business and the majority of our global supply chain operations onto our new platform. The timing of the implementation occurred after the majority of our spring season advance orders shipped and prior to our larger fall wholesale and direct-to-consumer shipping season.

On January 1, 2014 our previously announced joint venture in mainland China with Swire Resources Limited ("Swire") commenced operations. At commencement, the joint venture began operating, either directly or pursuant to Transition Services Agreements, a distribution network of, at January 1, 2014, approximately 70 retail locations and distribution relationships with 51 wholesale dealers that operate approximately 700 retail locations. As a 60% majority-owned entity, the joint venture's operations are included in our consolidated financial results.

We expect 2014 profitability to be affected by the following major factors:

• incremental sales, operating costs and profits from our new China joint venture;

• continued growth and increased investment in our global direct-to-consumer businesses;

• renewed growth in our wholesale businesses;

• increased demand creation costs;

• incremental depreciation expense, training and post go-live support costs related to our United States ERP implementation; and

• anticipated financial effects from our pending acquisition of prAna Living LLC ("prAna"), including one-time transaction costs and incorporation of prAna operating results and purchase accounting adjustments into our financial results following the anticipated second quarter completion of the transaction.

Consistent with the historical seasonality of the business, we anticipate 2014 profitability to be heavily concentrated in the second half of the year.

We remain focused on driving sustainable, profitable sales growth by providing innovative products at accessible prices, transforming our global supply chain, including information technology, managing inventory, and nurturing stronger emotional connections with consumers through compelling marketing communications.

Results of Operations

The following discussion of our results of operations and liquidity and capital resources should be read in conjunction with the Condensed Consolidated Financial Statements and accompanying Notes that appear elsewhere in this quarterly report. All references to quarters relate to the quarter ended March 31 of the particular year.

Highlights of the First Quarter of 2014

• Net sales for the first quarter of 2014increased $75.8 million, or 22%, to $424.1 million from $348.3 million for the first quarter of 2013. Changes in foreign currency exchange rates compared with the first quarter of 2013 negatively affected the consolidated net sales comparison by one percentage point.

19

• Net income attributable to Columbia Sportswear Company for the first quarter of 2014increased 120% to $22.3 million, or $0.63 per diluted share, compared to net income of $10.1 million, or $0.29 per diluted share, which included restructuring charges of approximately $2.0 million, or $0.06 per diluted share, net of tax, for the first quarter of 2013.

• The first quarter 2014 effective tax rate was 32.6%, compared with 17.4% in the first quarter of 2013, which benefited from the reinstatement of the research and development tax credit.

• We paid a quarterly cash dividend of $0.28 per share, or $9.8 million, in the first quarter of 2014.

The following table sets forth, for the periods indicated, the percentage relationship to net sales of specified items in our Condensed Consolidated Statements of Operations:

	Three Months Ended March 31,
	2014		2013
Net sales	100.0	%	100.0	%
Cost of sales	53.5		56.0
Gross profit	46.5		44.0
Selling, general and administrative expenses	38.5		41.0
Net licensing income	0.4		0.7
Income from operations	8.4		3.7
Interest income, net	—		—
Interest expense on note payable to related party	—		—
Other non-operating expense	(0.1	)	(0.2	)
Income before income tax	8.3		3.5
Income tax expense	(2.7	)	(0.6	)
Net income	5.6		2.9
Net income attributable to non-controlling interest	0.4		—
Net income attributable to Columbia Sportswear Company	5.2	%	2.9	%

Quarter Ended March 31, 2014 Compared to Quarter Ended March 31, 2013

Net Sales: Consolidated net sales increased $75.8 million, or 22%, to $424.1 million for the first quarter of 2014 from $348.3 million for the comparable period in 2013. Changes in foreign currency exchange rates compared with the first quarter of 2013 negatively affected the consolidated net sales comparison by one percentage point.

Sales by Geographic Region

Net sales by geographic region are summarized in the following table:

	Three Months Ended March 31,
	2014		2013		% Change
	(In millions, except for percentage changes)
United States	$	241.2	$	200.5	20%
LAAP	116.8		83.1		41%
EMEA	39.2		40.9		(4)%
Canada	26.9		23.8		13%
	$	424.1	$	348.3	22%

Net sales in the United States increased $40.7 million, or 20%, to $241.2 million for the first quarter of 2014 from $200.5 million for the comparable period in 2013. The increase in net sales in the United States was led by a net sales increase in apparel, accessories and equipment, followed by footwear, and was led by an increase in net sales in our direct-to-consumer business, followed by our wholesale business. The net sales increase in our direct-to-consumer business was primarily attributable to a net sales increase in the Columbia brand, and was led by increased net sales within our retail stores, followed by increased e-commerce net sales. At March 31, 2014, we operated 72 retail stores, compared with 63 at March 31, 2013. The net sales increase in our wholesale business was primarily due to increased at-once shipments of fall styles and a shift in timing of shipment of spring advance orders from April to March at the request of certain customers to mitigate risk related to the go-live of our new ERP system in the United States in early April 2014.

20

Net sales in the LAAP region increased $33.7 million, or 41%, to $116.8 million for the first quarter of 2014 from $83.1 million for the comparable period in 2013. Changes in foreign currency exchange rates compared with the first quarter of 2013 negatively affected the LAAP net sales comparison by approximately five percentage points. The net sales increase in the LAAP region was concentrated in the Columbia brand and was led by apparel, accessories and equipment, followed by footwear. The LAAP net sales increase primarily consisted of $42.4 million of incremental net sales by our new joint venture in China, partially offset by net sales decreases in our LAAP distributor business, Japan and Korea. The LAAP distributor net sales decrease was primarily due to geopolitical issues in key South American distributor markets that have severely restricted trade. The decrease in Japan net sales was due to unfavorable changes in currency exchange rates that more than offset a net sales increase in local currency. The decrease in Korea net sales was led by the Columbia brand, followed by the Mountain Hardwear and Montrail brands, and was primarily due to increased promotional sales activity.

Net sales in the EMEA region decreased $1.7 million, or 4%, to $39.2 million for the first quarter of 2014 from $40.9 million for the comparable period in 2013. Changes in foreign currency exchange rates compared with the first quarter of 2013 contributed two percentage points of benefit to the EMEA net sales comparison. The net sales decrease in the EMEA region was led by apparel, accessories and equipment, followed by footwear. The decrease in net sales in the EMEA region was primarily attributable to the Columbia brand, partially offset by a net sales increase in the Mountain Hardwear brand, and consisted of a decrease in net sales to our EMEA distributors, partially offset by a net sales increase in our EMEA direct business. The EMEA distributor net sales decrease was primarily due to a shift in the timing of shipments as a higher percentage of increased spring 2014 advance orders shipped in the fourth quarter of 2013, while a higher percentage of spring 2013 advance orders shipped in the first quarter of 2013. The increase in net sales in our EMEA direct business was primarily due to a benefit from foreign currency exchange rates on flat sales in local currency.

Net sales in Canada increased $3.1 million, or 13%, to $26.9 million for the first quarter of 2014 from $23.8 million for the comparable period in 2013. Changes in foreign currency exchange rates compared with the first quarter of 2013 negatively affected the net sales comparison by approximately eleven percentage points. The increase in net sales in Canada consisted of a net sales increase in the Columbia brand and increases in both wholesale and direct-to-consumer net sales.

Sales by Product Category

Net sales by product category are summarized in the following table:

	Three Months Ended March 31,
	2014		2013		% Change
	(In millions, except for percentage changes)
Apparel, Accessories and Equipment	$	353.7	$	294.3	20%
Footwear	70.4		54.0		30%
	$	424.1	$	348.3	22%

Net sales of apparel, accessories and equipment increased $59.4 million, or 20%, to $353.7 million for the first quarter of 2014 from $294.3 million for the comparable period in 2013. The increase in apparel, accessories and equipment net sales was concentrated in the Columbia brand, and was led by the United States, followed by the LAAP region and Canada, partially offset by a net sales decrease in the EMEA region. The apparel, accessories and equipment net sales increase in the United States was led by our wholesale business, reflecting an increase in at-once fall orders and a shift in timing of spring 2014 advance orders into the first quarter. The increase in apparel, accessories and equipment net sales in the LAAP region primarily consisted of incremental sales by our China joint venture.

Net sales of footwear increased $16.4 million, or 30%, to $70.4 million for the first quarter of 2014 compared to $54.0 million for the comparable period in 2013. The increase in footwear net sales was led by a net sales increase in the Columbia brand, followed by the Sorel brand. The increase in footwear net sales was led by the LAAP region, followed by the United States and Canada, partially offset by a net sales decrease in the EMEA region. The increase in footwear net sales in the LAAP region primarily consisted of incremental sales by our China joint venture.

Sales by Brand

Net sales by brand are summarized in the following table:

21

	Three Months Ended March 31,
	2014		2013		% Change
	(In millions, except for percentage changes)
Columbia	$	376.0	$	301.1	25%
Mountain Hardwear	32.4		32.1		1%
Sorel	12.9		12.4		4%
Other	2.8		2.7		4%
	$	424.1	$	348.3	22%

The net sales increase for the first quarter of 2014 compared to the first quarter of 2013 was led by the Columbia brand, followed by the Sorel and Mountain Hardwear brands. The Columbia brand net sales increase was led by the United States, followed by the LAAP region and Canada.

Gross Profit: Gross profit, as a percentage of net sales, increased to 46.5% for the first quarter of 2014 from 44.0% for the comparable period in 2013. Gross profit expansion was primarily due to:

• A lower proportion of promotional sales activity in our direct-to-consumer channel;

• The effect of including in gross profit amounts related to China joint venture sales in 2014 that were classified as licensing income in 2013 under the distributor business model; and

• A lower proportion of sales to international distributors, which generate lower gross profits than wholesale and direct-to-consumer sales;

partially offset by:

• Unfavorable foreign currency hedge rates.

Our gross profit may not be comparable to that of other companies in our industry because some include costs related to both their distribution network and retail store occupancy in cost of sales while we, like many others, include these expenses as a component of selling, general and administrative ("SG&A") expense.

Selling, General and Administrative Expense: SG&A expense includes all costs associated with design, merchandising, marketing, distribution and corporate functions, including related depreciation and amortization.

SG&A expense increased $20.5 million, or 14%, to $163.4 million, or 38.5% of net sales, for the first quarter of 2014 from $142.9 million, or 41.0% of net sales, for the comparable period in 2013. The SG&A expense increase was primarily due to:

• Incremental costs of operating our China joint venture;

• Expansion of our direct-to-consumer operations globally; and

• Increased advertising expenses;

partially offset by:

• Decreased operating costs in our Europe operations; and

• Favorable foreign currency exchange rates.

Depreciation and amortization included in SG&A expense totaled $9.9 million for the first quarter of 2014, compared to $9.6 million for the same period in 2013.

Net Licensing Income: Net licensing income decreased $0.6 million to $1.7 million for the first quarter of 2014 compared to $2.3 million for the same period in 2013. The decrease in net licensing income was concentrated in the LAAP region due the effect of including in gross profit amounts related to our China joint venture sales in 2014 that were previously classified as licensing income in 2013 under the distributor business model.

Interest Income, Net: Net interest income was $0.2 million for the first quarter of 2014 compared to $0.1 million for the same period in 2013. Interest income increased due to higher average cash and cash equivalent and short-term investment balances compared to the same period in 2013.

Interest Expense on Note Payable to Related Party: Interest expense on note payable to related party was $0.2 million for the first quarter of 2014 due to a long-term note executed between our China joint venture and Swire in January 2014.

Other Non-Operating Expense: Other non-operating expense was $0.4 million for the first quarter of 2014 compared to $0.6 million for the same period in 2013, and consisted of foreign currency transaction gains and losses.

22

Income Tax Expense: Income tax expenseincreased to $11.4 million for the first quarter of 2014 from $2.1 million for the comparable period in 2013. Our effective income tax rate was 32.6% for the first quarter of 2014 compared to 17.4% for the same period in 2013. Our effective income tax rate increased primarily due to the U.S. legislative reinstatement of the research and development tax credit in the first quarter of 2013, which required us to recognize the benefit of our 2012 research and development activities in that quarter. In addition, the first quarter 2014 effective tax rate increased due to changes in the anticipated geographic mix of full year 2014 taxable income, with a higher percentage of income expected to be generated in the United States compared to 2013. Many factors could cause our annual effective tax rate to differ materially from our quarterly effective tax rates, including changes in the geographic mix of taxable income and discrete events in future periods.

Net Income Attributable to Columbia Sportswear Company: Net incomeincreased $12.2 million, or 120%, to $22.3 million, or $0.63 per diluted share, for the first quarter of 2014 from $10.1 million, or $0.29 per diluted share, which included restructuring charges of approximately $2.0 million, or $0.06 per diluted share, net of tax, for the comparable period in 2013.

Liquidity and Capital Resources

Our primary ongoing funding requirements are for working capital, investing activities associated with our ongoing ERP implementation and the expansion of our global operations, including our joint venture in China, and general corporate needs. In addition, on April 29, 2014, we announced an agreement to acquire prAna for approximately $190.0 million. We expect to fund the acquisition with available cash and close the acquisition during the second quarter of 2014. At March 31, 2014, we had total cash and cash equivalents of $528.0 million, compared to $437.5 million at December 31, 2013 and $303.7 million at March 31, 2013. In addition, we had short-term investments of $39.5 million at March 31, 2014, compared to $91.8 million at December 31, 2013 and $71.0 million at March 31, 2013. At March 31, 2014, approximately 40% of our cash and short-term investments were held by foreign subsidiaries where a repatriation of those funds to the United States would likely result in a significant tax expense for us. However, based on the capital and liquidity needs of our foreign operations, as well as the status of current tax law, we intend 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.

Net cash provided by operating activities was $43.5 million for the three months endedMarch 31, 2014, compared to $65.8 million for the same period in 2013. The decrease in cash provided by operating activities was primarily due to lower collections of receivables during the three months ended March 31, 2014, compared to the same period in 2013, partially offset by increased net income.

Net cash provided by investing activities was $34.7 million for the three months endedMarch 31, 2014, compared to net cash used in investing activities of $41.0 million for the comparable period in 2013. For the 2014 period, net cash provided by investing activities primarily consisted of $52.4 million from net sales of short-term investments, partially offset by $17.8 million for capital expenditures. For the same period in 2013, net cash used in investing activities primarily consisted of $26.3 million of net purchases of short-term investments and $14.8 million for capital expenditures.

Net cash provided by financing activities was $17.2 million for the three months endedMarch 31, 2014, compared to net cash used in financing activities of $3.0 million for the comparable period in 2013. For the 2014 period, net cash provided by financing activities primarily consisted of proceeds from a related party note payable of $16.1 million and net proceeds from stock plan activity of $8.4 million, partially offset by dividend payments of $9.8 million. For the same period in 2013, net cash used in financing activities primarily consisted of dividend payments of $7.5 million, partially offset by net proceeds from stock plan activity of $4.1 million.

Short-term borrowings and credit lines

We have an unsecured, committed $125.0 million revolving line of credit available to fund our domestic working capital requirements. At March 31, 2014, no balance was outstanding under this line of credit and we were in compliance with all associated covenants. Internationally, our subsidiaries have operating lines in place guaranteed by the parent company with a combined limit of approximately $102.5 million at March 31, 2014, of which $3.2 million is designated as a European customs guarantee. At March 31, 2014, no balance was outstanding under these subsidiary lines of credit.

We expect to fund our future capital expenditures and our pending acquisition of prAna with existing cash, operating cash flows and credit facilities. If the need arises, we may need to seek additional funding. Our ability to obtain additional financing will depend on many factors, including prevailing market conditions, our financial condition, and our ability to negotiate favorable terms and conditions. Financing may not be available on terms that are acceptable or favorable to us, if at all.

Our operations are affected by seasonal trends typical in the outdoor apparel industry and have historically resulted in higher sales and profits in the third and fourth calendar quarters. This pattern has resulted primarily from the timing of shipments of fall season products to wholesale customers and proportionally higher sales from our direct-to-consumer operations in the fourth

23

quarter, combined with an expense base that is more consistent throughout the year. We believe that our liquidity requirements for at least the next 12 months will be adequately covered by existing cash, cash provided by operations and existing short-term borrowing arrangements.

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 generally accepted accounting principles. 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. We believe that the estimates, assumptions and judgments involved in the accounting policies referred to in our Annual Report on Form 10-K for the year ended December 31, 2013 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. We base our ongoing estimates on historical experience and other assumptions that we believe to be reasonable in the circumstances. Some of these critical accounting policies affect working capital account balances, including the policy for revenue recognition, including sales returns and claims from customers, the allowance for doubtful accounts, the provision for potential excess, slow-moving and closeout inventories, product warranty, income taxes and stock-based compensation.

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 Management’s Discussion and Analysis of Financial Condition and Results of Operations. 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.

There have been no significant changes to our critical accounting policies as described in our Annual Report on Form 10-K for the year ended December 31, 2013.

Recent Accounting Pronouncements

See “Recent Accounting Pronouncements” in Note 2 to the notes to the condensed consolidated financial statements.

24

Item 3 –QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There has not been any material change in the market risk disclosure contained in our Annual Report on Form 10-K for the year ended December 31, 2013.

Item 4 –CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

We have evaluated, under the supervision and with the participation of management, including our chief executive officer and chief financial officer, the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report pursuant to Rule 13a-15(b) under the Securities Exchange Act of 1934 (the “Exchange Act”). Based on that evaluation, our chief executive officer and chief financial officer have concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective in ensuring that information required to be disclosed in our Exchange Act reports is (1) recorded, processed, summarized and reported in a timely manner, and (2) accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

We are implementing an ERP system, including complementary systems that support our operations and financial reporting, which is expected to significantly impact our business and financial transaction and reporting processes. This implementation is occurring in phases globally over several years, with implementation to date at our Canadian operations in April 2012 and our United States operations in April 2014. With the implementation of our United States operations, our North American wholesale business and the majority of our global supply chain are now under one platform. The implementation of a worldwide ERP system and associated systems affects the processes that constitute our internal control over financial reporting and will require continued testing for effectiveness as the implementation progresses.

There were no other changes in internal controls over financial reporting that occurred during the quarter ended March 31, 2014 that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

25

PART II. OTHER INFORMATION

Item 1.    LEGAL PROCEEDINGS

We are involved in litigation and various legal matters arising in the normal course of business, including matters related to employment, retail, intellectual property and various regulatory compliance activities. We have considered facts related to legal and regulatory matters and opinions of counsel handling these matters, and do not believe the ultimate resolution of these proceedings will have a material adverse effect on our financial position, results of operations or cash flows.

In May 2013, we disclosed to the U.S. Environmental Protection Agency ("EPA") that an internal compliance audit identified several inadvertent violations of the labeling requirements of the Federal Insecticide, Fungicide and Rodentcide Act. On April 3, 2014, the EPA informed us of their intent to impose a fine related to labeling violations. We are finalizing the settlement documents with the EPA and expect to pay a fine of approximately $100,800, which was reduced by the EPA in recognition of our cooperativeness.

Item 1A.    RISK FACTORS

In addition to the other information contained in this Form 10-Q, the following risk factors should be considered carefully in evaluating our business. Our business, financial condition, results of operations or cash flows may be materially adversely affected by any of these risks. Please note that additional risks not presently known to us or that we currently deem immaterial may also impair our business and operations. The following risk factors include changes to and supersede the description of the risk factors associated with our business previously disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2013.

We Face Many Challenges Executing Growth Strategies

Our business strategies aim to achieve sustainable, profitable growth by creating innovative products at competitive prices, focusing on product design, utilizing innovations to differentiate our brand from competitors, working to ensure that our products are sold through strong distribution partners capable of effectively presenting our brands to consumers, increasing the impact of consumer communications to drive demand for our brands and sell-through of our products, making sure our products are merchandised and displayed appropriately in retail environments, expanding our presence in key markets around the world, and continuing to build a brand enhancing direct-to-consumer business. We intend to pursue these strategies across our portfolio of brands, product categories and geographic markets. We face many challenges in implementing our business strategies. For example, our focus on innovation depends on our ongoing ability to identify, develop or secure rights to product improvements or developments through internal research, joint developments, acquisitions or licenses. Once obtained, these innovations and developments may not be profitable or have the desired effect of increasing demand for our products or enhancing our brands' image. Our failure to implement our business strategies successfully could have a material adverse effect on our financial condition, results of operations or cash flows.

To implement our business strategies, we must continue to modify and fund various aspects of our business, to maintain and enhance our information systems and supply chain operations to improve efficiencies, and to attract, retain and manage qualified personnel. These efforts, coupled with cost containment measures, place increasing strains on management, financial, product design, marketing, distribution, supply chain and other resources, and we may have operating difficulties as a result. For example, in support of our strategic initiatives, we are making significant investments in our business processes and information technology infrastructure that require significant management attention and corporate resources. These changes may make it increasingly difficult to pursue acquisitions or adapt our information technology systems and business processes to integrate an acquired business. These integration challenges may also be present as we fully integrate operations under a joint venture arrangement in China, which began operations in January 2014. These business initiatives involve many risks and uncertainties that, if not managed effectively, may have a material adverse effect on our financial condition, results of operations or cash flows.

Our business strategies and related increased expenditures could also cause our operating margin to decline if we are unable to offset our increased spending with increased sales or gross profit, or comparable reductions in other operating costs. If our sales or gross profit decline or fail to grow as planned and we fail to sufficiently leverage our operating expenses, our profitability will decline. This could result in a decision to delay, reduce, modify or terminate our strategic business initiatives, which could limit our ability to invest in and grow our business and could have a material adverse effect on our financial condition, results of operations or cash flows.

26

Initiatives to Upgrade Our Business Processes and Information Technology Infrastructure Involve Many Risks Which Could Result In, Among Other Things, Business Interruptions and Higher Costs

We regularly implement business process improvement initiatives to optimize our performance. Our current business process initiatives include plans to improve business results through standardization of business processes and technologies that support our supply chain and go-to-market strategies through implementation of an integrated global ERP software solution and other complementary information technology systems over the next several years. Implementation of these solutions and systems is highly dependent on coordination of numerous contractors and software and system providers. The interdependence of these solutions and systems is a significant risk to the successful completion of the initiatives and the failure of any one contractor or system could have a material adverse effect on the implementation of our overall information technology infrastructure. We may experience difficulties as we transition to these new or upgraded systems and processes, including loss or corruption of data, delayed shipments, decreases in productivity as our personnel implement and become familiar with new systems, increased costs and lost revenues. In addition, transitioning to these new or upgraded systems requires significant capital investments and personnel resources. Difficulties in implementing new or upgraded information systems or significant system failures could disrupt our operations and have a material adverse effect on our capital resources, financial condition, results of operations or cash flows.

We expect implementation of this new information technology infrastructure to have a pervasive impact on our business processes and information systems across a significant portion of our operations. As a result, we will experience significant changes in our operational processes and internal controls as our implementation progresses, which in turn will require significant change management, including training of our personnel. If we are unable to successfully manage these changes in order to implement these systems, including harmonizing our systems, data, processes and reporting analytics, our ability to conduct, manage and control routine business functions could be negatively affected and significant disruptions to our business could occur. In addition, we could incur material unanticipated expenses, including additional costs of implementation or costs of conducting business. These risks could result in significant business disruptions or divert management's attention from key strategic initiatives and have a material adverse effect on our capital resources, financial condition, results of operations or cash flows.

We Rely on Our Highly Customized Information Management Systems

Our business is increasingly reliant on information technology. Information systems are used across our supply chain and retail operations, from design to distribution and sales, and are used as a method of communication among employees, with our subsidiaries and liaison offices overseas and with our customers and retail stores. We also rely on our information systems to allocate resources, pay vendors and collect from customers, manage product data, develop demand and supply plans, forecast and report operating results and meet regulatory requirements. System failures, breaches of confidential information or service interruptions may occur as the result of a number of factors, including our failure to properly maintain systems redundancy or to protect, repair, maintain or upgrade our systems, computer viruses, programming errors, hacking or other unlawful activities by third parties, and disasters. Any breach or interruption of critical business information systems could have a material adverse effect on our financial condition, results of operations or cash flows.

Our legacy ERP, product development, retail point-of-sale and other systems, on which we currently manage a substantial portion of our business activities, are highly customized. As a result, the availability of internal and external resources with the expertise to maintain these systems is limited. Our legacy systems may not support desired functionality for our operations and may inhibit our ability to operate efficiently, which could have an adverse effect on our financial condition, results of operations or cash flows. As we transition from our legacy ERP systems to new ERP systems and supporting systems and third-party systems that interface with our new ERP systems, certain functionality and information from our legacy systems may not be fully compatible with the new systems. As a result, temporary processes may be required, including manual operations, which could significantly increase the risk of human errors in information used by the business and/or result in business disruptions, which could have a material adverse effect on our capital resources, financial condition, results of operations or cash flows.

System Security Risks, Data Breaches and Cyber Attacks Could Disrupt Our Operations

We manage and store various proprietary information and sensitive or confidential data relating to our business, including sensitive and personally identifiable information. Breaches of our security measures or the accidental loss, inadvertent disclosure or unapproved dissemination of proprietary information or sensitive or confidential data about us, or our customers, including the potential loss or disclosure of such information or data as a result of hacking, fraud, trickery or other forms of deception, could expose us, our customers or the individuals affected to a risk of loss or misuse of this information, result in litigation and potential liability for us, damage our brand and reputation or otherwise harm our business. In addition, our current data protection measures might not protect us against increasingly sophisticated and aggressive threats and the cost and operational consequences of implementing further data protection measures could be significant.

27

Experienced computer programmers and hackers may be able to penetrate our network security and misappropriate or compromise our confidential information or that of third parties, create system disruptions or cause shutdowns. Computer programmers and hackers also may be able to develop and deploy viruses, worms and other malicious software programs that attack or otherwise exploit any security vulnerabilities of our systems. In addition, sophisticated hardware and operating system software and applications that we procure from third parties may contain defects in design or manufacture, including "bugs" and other problems that could unexpectedly interfere with the operation of the system. The costs to us to eliminate or alleviate cyber or other security problems, bugs, viruses, worms, malicious software programs and security vulnerabilities could be significant, and our efforts to address these problems may not be successful and could result in significant financial losses and expenses, interruptions, delays, cessation of service and loss of existing or potential customers that may impede our sales, manufacturing, distribution or other critical functions.

We Depend on Independent Factories

Our products are manufactured by independent factories worldwide. Although we enter into purchase order commitments with these independent factories each season, we generally do not maintain long-term manufacturing commitments with them. Without long-term or reserve commitments, there is no assurance that we will be able to secure adequate or timely production capacity or favorable pricing if growth or product demand differs from our forecasts. Independent factories may fail to perform as expected or our competitors may obtain production capacities that effectively limit or eliminate the availability of these resources to us. If an independent manufacturer fails to ship orders in a timely manner or to meet our standards or if we are unable to obtain necessary capacities, we may miss delivery deadlines or incur additional costs, which may cause our wholesale customers to cancel their orders, refuse to accept deliveries, or demand a reduction in purchase prices, any of which could have a material adverse effect on our financial condition, results of operations or cash flows.

Reliance on independent factories also creates quality control risks. Independent factories may need to use sub-contracted manufacturers to fulfill demand and these manufacturers may have less experience producing our products or possess lower overall capabilities, which could result in compromised quality of our products. A failure in our quality control program may result in diminished product quality, which in turn could result in increased order cancellations, price concessions and returns, decreased consumer demand for our products, non-compliance with our product standards or regulatory requirements or product recalls (or other regulatory actions), any of which could have a material adverse effect on our financial condition, results of operations or cash flows.

We also have license agreements that permit unaffiliated parties to manufacture or contract to manufacture products using our trademarks. We impose Standards of Manufacturing Practices on our independent factories and licensees for the benefit of workers and require compliance with our restricted substances list and product safety and other applicable environmental, health and safety laws. We also require our independent factories and licensees to impose these practices, standards and laws on their contractors. If an independent manufacturer, licensee or subcontractor violates labor or other laws, or engages in practices that are not generally accepted as safe or ethical, they and their employees may suffer serious injury due to industrial accidents, the manufacturer may suffer disruptions to its operations due to work stoppages or employee protests and we may experience production disruptions, significant negative publicity or lost sales that could result in long-term damage to our brands and corporate reputation. In some circumstances parties may attempt to assert that we are liable for our independent manufacturers', licensees' or subcontractors' labor and operational practices, which could have a material adverse effect on our financial condition, results of operations or cash flows.

We May be Adversely Affected by Volatility in Global Production and Transportation Costs and Capacity

Our product costs are subject to substantial fluctuation based on:

• Availability and quality of raw materials;

• The prices of oil, leather, natural down, cotton and other raw materials whose prices are determined by global commodity markets and can be very volatile;

• Changes in labor markets and wage rates paid by our independent factory partners, which are often mandated by governments in the countries where our products are manufactured, particularly in China and Vietnam;

• Interest rates and currency exchange rates;

• Availability of skilled labor and production capacity at independent factories; and

• General economic conditions.

28

Prolonged periods of inflationary pressure on some or all input costs will result in increased costs to produce our products that may result in reduced gross profit or necessitate price increases for our products that could adversely affect consumer demand for our products.

In addition, since the majority of our products are manufactured outside of our principal sales markets, our products must be transported by third parties over large geographical distances. Shortages in ocean freight capacity, airfreight capacity and volatile fuel costs can result in rapidly changing transportation costs. For example, in previous years, shortages of sourcing and transportation capacity, combined with later-than-optimal production of advance orders, caused us to rely more heavily on airfreight to achieve timely delivery to our customers, resulting in significantly higher freight costs. Because we price our products in advance and changes in transportation and other costs may be difficult to predict, we may not be able to pass all or any portion of these higher costs on to our customers or adjust our pricing structure in a timely manner in order to remain competitive, either of which could have a material adverse effect on our financial condition, results of operations or cash flows.

We May be Adversely Affected by Volatile Economic Conditions

We are a consumer products company and are highly dependent on consumer discretionary spending patterns and the purchasing patterns of our wholesale customers as they attempt to match their seasonal purchase volumes to volatile consumer demand. In addition, as we have expanded our direct-to-consumer operations, we have increased our direct exposure to the risks associated with volatile and unpredictable consumer discretionary spending patterns. Consumer discretionary spending behavior is inherently unpredictable and consumer demand for our products may not reach our sales targets, or may decline, especially during periods of heightened economic uncertainty in our key markets. Our sensitivity to economic cycles and any related fluctuation in consumer demand may have a material adverse effect on our financial condition, results of operations or cash flows.

In the EMEA region, our business includes direct-to-consumer, wholesale and distributor sales. Prolonged economic weakness in Europe has hampered our ongoing efforts to revitalize sales of our brands in key European markets, and continued erosion of business in these markets could have a continued material adverse effect on our business.

Our Sales Are Subject to Cancellation

We do not have long-term contracts with any of our wholesale customers. We do have contracts with our distributors, typically with terms ranging up to five years; however, although these contracts may have annual purchase minimums which must be met in order to retain the distribution rights, the distributors are not otherwise obligated to purchase product. Sales to our retailers and distributors are generally on an order-by-order basis and are subject to right of cancellation and rescheduling by our wholesale customers. We consider the timing of delivery dates in our wholesale customer orders when we forecast our sales and earnings for future periods. If any of our major customers, including independent distributors, experience a significant downturn in business or fail to remain committed to our products or brands, these customers could postpone, reduce or discontinue purchases from us. As a result, we could experience a decline in sales or gross profit, write-downs of excess inventory, increased discounts, extended credit terms to our customers, or uncollectable accounts receivable, which could have a material adverse effect on our business, results of operations, financial condition, cash flows and our common stock price.

Our Retail Operations May Not Realize Returns on Our Investments

In recent years, our direct-to-consumer business has grown substantially and we anticipate further growth in the future. Accordingly, we have made significant investments in our physical retail locations, including entering into long-term leases, constructing leasehold improvements, purchasing fixtures and equipment, and investing in inventory and personnel. Since many of our retail costs are fixed, if we have insufficient sales, we may be unable to reduce expenses in order to avoid losses or negative cash flows. If we are unable to operate profitable stores or if we close a store, we may incur significant write-downs of inventory, severance costs, lease termination costs, impairment losses on long-lived assets or loss of working capital, which could have a material adverse effect on our financial condition, results of operations or cash flows.

In addition, from time to time we license the right to operate retail stores for our brands to third parties, primarily to our international independent distributors. We provide training to support these stores, and set and monitor operational standards. However, these third parties may not operate the stores in a manner consistent with our standards, which could harm their sales and as a result harm our results of operations or cause damage to our brands.

Our Results of Operations Could be Materially Harmed If We Are Unable to Accurately Match Supply Forecast with Consumer Demand for Our Products

Many factors may significantly affect demand for our products, including, among other things, economic conditions, fashion trends, the financial condition of our distributors and wholesale customers, consumer and customer preferences and weather, making it difficult to accurately forecast demand for our products and our future results of operations. To minimize our purchasing

29

costs, the time necessary to fill customer orders and the risk of non-delivery, we place a significant amount of orders for our products with independent factories prior to receiving orders from our customers, and we maintain an inventory of various products that we anticipate will be in greatest demand. In addition, customers are generally allowed to cancel orders prior to shipment.

Factors that could affect our ability to accurately forecast demand for our products include:

• Unseasonable weather conditions;

• Our reliance, for certain demand and supply planning functions, on manual processes and judgment that are subject to human error;

• Consumer acceptance of our products or changes in consumer demand for products of our competitors;

• Unanticipated changes in general market conditions or other factors, which may result in lower advance orders from wholesale customers and independent distributors, cancellations of advance orders or a reduction or increase in the rate of reorders placed by retailers; and

• Weak economic conditions or consumer confidence, which could reduce demand for discretionary items such as our products.

In some cases, we may produce quantities of product that exceed actual demand, which could result in higher inventory levels that we need to liquidate at discounted prices. During periods of weak economic conditions we may experience a significant increase in the volume of order cancellations by our customers, including cancellations resulting from the bankruptcy, liquidation or contraction of some customers’ operations. We may not be able to sell all of the products we have ordered from independent factories or that we have in our inventory. Inventory levels in excess of customer demand may result in inventory write-downs and the sale of excess inventory at discounted prices through our owned outlet stores or third-party liquidation channels, which could have a material adverse effect on our brand image, financial condition, results of operations or cash flows.

Conversely, if we underestimate demand for our products or if our independent factories are unable to supply products when we need them, we may experience inventory shortages. Inventory shortages may prevent us from fulfilling customer orders, delay shipments to customers, negatively affect customer relationships, result in increased costs to expedite production and delivery, and diminish our ability to build brand loyalty. Shipments delayed due to limited factory capacity or other factors could result in order cancellations by our customers, which could have a material adverse effect on our financial condition, results of operations or cash flows.

We May be Adversely Affected by Weather Conditions, Including Global Climate Change Trends

Our business is adversely affected by unseasonable weather conditions. A significant portion of the sales of our products is dependent in part on the weather and likely to decline in years in which weather conditions do not stimulate demand for our products. Periods of unseasonably warm weather in the fall or winter or unseasonably cold or wet weather in the spring and summer may have a material adverse effect on our financial condition, results of operations or cash flows. Unintended inventory accumulation by our wholesale customers resulting from unseasonable weather in one season generally negatively affects orders in future seasons, which may have a material adverse effect on our financial condition, results of operations or cash flows.

A significant portion of our business is highly dependent on cold-weather seasons and patterns to generate consumer demand for our cold-weather apparel and footwear. Consumer demand for our cold-weather apparel and footwear may be negatively affected to the extent global weather patterns trend warmer, reducing typical patterns of cold-weather events, or increasing weather volatility, which could have a material adverse effect on our financial condition, results of operations or cash flows.

Acquisitions are Subject to Many Risks

From time to time, we may pursue growth through strategic acquisitions of assets or companies. Acquisitions, including our recently announced, contemplated acquisition of prAna, are subject to many risks, including potential loss of significant customers or key personnel of the acquired business as a result of the change in ownership; difficulty in integrating the operations of the acquired business or achieving targeted efficiencies; the incurrence of substantial costs and expenses related to the acquisition effort and diversion of management's attention from other aspects of our business operations.

Acquisitions may also cause us to incur debt or result in dilutive issuances of our equity securities. Our acquisitions may cause large one-time expenses or create goodwill or other intangible assets that could result in significant impairment charges in the future. We also make various estimates and assumptions in order to determine purchase price allocation and estimate the fair value of assets acquired and liabilities assumed. If our estimates or assumptions used to value these assets and liabilities are not accurate, we may be exposed to losses that may be material.

30

We do not provide any assurance that we will be able to successfully integrate the operations of any acquired businesses into our operations and achieve the expected benefits of any acquisitions. The failure to successfully integrate newly acquired businesses or achieve the expected benefits of strategic acquisitions in the future could have an adverse effect on our business, capital resources, cash flows, results of operations and financial position. We may not complete a potential acquisition for a variety of reasons, but we may nonetheless incur material costs in the preliminary stages of such an acquisition that we cannot recover.

We May Not Succeed in Realizing the Anticipated Benefits of Our New Joint Venture in China

Effective January 2014, our joint venture in China with Swire began operations. The joint venture, in which we hold a 60% interest, is subject to a number of risks and uncertainties, including the following:

• Our ability to operate the joint venture is dependent upon, among other things, our ability to attract and retain personnel with the skills, knowledge and experience necessary to carry out the operations of the joint venture. Approximately 600 employees working with, or for Swire, became employees of, or provide services to, the joint venture. Our ability to effectively operate the joint venture depends upon our ability to manage the employees of the joint venture, and to attract new employees as necessary to supplement the skills, knowledge and expertise of the existing management team and other key personnel. We face intense competition for these individuals worldwide, including in China. We may not be able to attract qualified new employees or retain existing employees to operate the joint venture. Additionally, turnover in key management positions in China could impair our ability to execute our growth strategy, which may negatively affect the value of our investment in the joint venture and the growth of our sales in China.

• Initially, we are relying in part on the operational skill of our joint venture partner. Additionally, because our joint venture partner has protective voting rights with respect to specified major business decisions of the joint venture, we may experience difficulty reaching agreement as to implementation of various changes to the joint venture’s business. For these reasons, or as a result of other factors, we may not realize the anticipated benefits of the joint venture, and our participation in the joint venture could adversely affect the results of our operations.

• Continued sales growth in China is an important part of our expectations for our joint venture business. Although China has experienced significant economic growth in recent years, that growth is slowing. Slowing economic growth in China could result in reduced consumer discretionary spending, which in turn could result in less demand for our products, and thus negatively affect the value of our investment in the joint venture and the growth of our sales in China.

• Although we believe we have achieved a leading market position in China, many of our competitors who are significantly larger than we are and have substantially greater financial, distribution, marketing and other resources, more stable manufacturing resources and greater brand strength are also concentrating on growing their businesses in China. In addition, the number of competitors in the marketplace has increased significantly in recent years. Increased investment by our competitors in this market could decrease our market share and competitive position in China.

Our International Operations Involve Many Risks

We are subject to risks generally associated with doing business internationally. These risks include the effects of foreign laws and regulations, foreign government fiscal and political crises, changes in consumer preferences, foreign currency fluctuations, managing a diverse and widespread workforce, political unrest, terrorist acts, military operations, disruptions or delays in shipments, disease outbreaks, natural disasters and changes in economic conditions in countries in which we manufacture or sell products. These factors, among others, may affect our ability to sell products in international markets, our ability to collect accounts receivable, our ability to manufacture products or procure materials, and our cost of doing business. For example, unseasonably warm winter weather and a challenging macroeconomic environment in our EMEA region have hampered our ongoing efforts to revitalize the Columbia brand in key European markets, where we have significant infrastructure investments. In addition, our distributor in Russia is a significant customer, with sales and distribution in both Russia and Ukraine. To the extent that the political uncertainty with respect to Ukraine results in significant business disruptions, including potential effects from current or future economic sanctions or other actions by the United States or other governments, we could experience significant order reductions or cancellations, payment restrictions or other disruptions in our business. Also, ongoing political and economic uncertainty in two South American distributor markets have resulted in currency and import restrictions, limiting our ability to sell products in this region. If any of these or other factors make the conduct of business in a particular country undesirable or impractical, our business may be materially and adversely affected. As we expand our operations in geographic scope and product categories, we anticipate intellectual property disputes will increase, making it more expensive and challenging to establish and protect our intellectual property rights and to defend against claims of infringement by others.

In addition, many of our imported products are subject to duties, tariffs or other import limitations that affect the cost and quantity of various types of goods imported into the United States and other markets. Any country in which our products are

31

produced or sold may eliminate, adjust or impose new import limitations, duties, anti-dumping penalties or other charges or restrictions, any of which could have a material adverse effect on our financial condition, results of operations or cash flows.

We May Have Additional Tax Liabilities

As a global company, we determine our income tax liability in various competing tax jurisdictions based on an analysis and interpretation of local tax laws and regulations. This analysis requires a significant amount of judgment and estimation and is often based on various assumptions about the future actions of the local tax authorities. These determinations are the subject of periodic domestic and foreign tax audits. Although we accrue for uncertain tax positions, our accrual may be insufficient to satisfy unfavorable findings. Unfavorable audit findings and tax rulings may result in payment of taxes, fines and penalties for prior periods and higher tax rates in future periods, which may have a material adverse effect on our financial condition, results of operations or cash flows. 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 taxes in our consolidated financial statements.

We earn a significant amount of our operating income from outside the United States, and any repatriation of funds currently held in foreign jurisdictions may result in higher effective tax rates for us. If we encounter a significant need for liquidity domestically or at a particular location that we cannot fulfill through borrowings, equity offerings or other internal or external sources, we may experience unfavorable tax and earnings consequences as a result of cash transfers. These adverse consequences would occur, for example, if the transfer of cash into the United States is taxed and no offsetting foreign tax credit is available to offset the U.S. tax liability, resulting in lower earnings. Furthermore, foreign exchange ceilings imposed by local governments and the sometimes lengthy approval processes that foreign governments require for international cash transfers may delay or otherwise limit our internal cash transfers from time to time.

We Operate in Very Competitive Markets

The markets for apparel, footwear, accessories and equipment are highly competitive, as are the markets for our licensed products. In each of our geographic markets, we face significant competition from global and regional branded apparel, footwear, accessories and equipment companies, including competition from companies with significantly greater resources than ours.

Retailers who are our customers often pose our most significant competitive threat by designing and marketing apparel, footwear, equipment and accessories under their own private labels. For example, in the United States and Europe, several of our largest customers have developed significant private label brands during the past decade that compete directly with our products. These retailers have assumed an increasing degree of inventory risk in their private label products and, as a result, may first cancel advance orders with us in order to manage their own inventory levels downward during periods of unseasonable weather or weak economic cycles. As our direct-to-consumer businesses grow, we also experience direct competition from retailers who are our customers, some of which primarily operate e-commerce operations and employ aggressive pricing strategies. We also compete with other companies for the production capacity of independent factories that manufacture our products and for import capacity. Many of our competitors are significantly larger than we are and have substantially greater financial, distribution, marketing and other resources, more stable manufacturing resources and greater brand strength than we have. In addition, when our competitors combine operations through mergers, acquisitions or other transactions, their competitive strengths may increase.

Increased competition may result in reduced access to production capacity, challenges in obtaining favorable locations for our retail stores, reductions in display areas in retail locations, reductions in sales, or reductions in our profit margins, any of which may have a material adverse effect on our financial condition, results of operations or cash flows.

We May be Adversely Affected by the Financial Health of our Customers

In recent periods, sluggish economies and consumer uncertainty regarding future economic prospects in our key markets had an adverse effect on the financial health of our customers, some of whom filed or may file for protection under bankruptcy laws, which may in turn have a material adverse effect on our results of operations and financial condition. We extend credit to our customers based on an assessment of the customer’s financial condition, generally without requiring collateral. To assist in the scheduling of production and the shipping of seasonal products, we offer customers discounts for placing advance orders and extended payment terms for taking delivery before the peak shipping season. These extended payment terms increase our exposure to the risk of uncollectable receivables. In addition, we face increased risk of order reduction or cancellation or reduced availability of credit insurance coverage when dealing with financially ailing retailers or retailers struggling with economic uncertainty. Some of our significant wholesale customers and distributors have liquidated or reorganized, while others have had financial difficulties in the past or have experienced tightened credit markets and sales declines and reduced profitability, which in turn has had an adverse effect on our business. We may reduce our level of business with customers and distributors experiencing financial difficulties and may not be able to replace that business with other customers, which could have a material adverse effect on our financial condition, results of operations or cash flows.

32

We May be Adversely Affected by Global Credit Market Conditions

Economic downturns and economic uncertainty generally affect global credit markets. Our vendors, customers and other participants in our supply chain may require access to credit markets in order to do business. Credit market conditions may slow our collection efforts as customers find it more difficult to obtain necessary financing, leading to higher than normal accounts receivable. This could result in greater expense associated with collection efforts and increased bad debt expense. Credit conditions may impair our vendors’ ability to finance the purchase of raw materials or general working capital needs to support our production requirements, resulting in a delay or non-receipt of inventory shipments during key seasons.

Historically, we have limited our reliance on debt to finance our working capital, capital expenditures and investing activity requirements. We expect to fund our future capital expenditures with existing cash, expected operating cash flows and credit facilities, but if the need arises to finance additional expenditures, we may need to seek additional funding. Our ability to obtain additional financing will depend on many factors, including prevailing market conditions, our financial condition, and our ability to negotiate favorable terms and conditions. Financing may not be available on terms that are acceptable or favorable to us, if at all.

We May be Adversely Affected by Retailer Consolidation

When our wholesale customers combine their operations through mergers, acquisitions, or other transactions, their consolidated order volume may decrease while their bargaining power and the competitive threat they pose by marketing products under their own private labels may increase. Some of our significant customers have consolidated their operations in the past, which in turn has had a negative effect on our business. Future customer consolidations could have a material adverse effect on our financial condition, results of operations or cash flows.

We Rely on Innovation to Compete in the Market for our Products

To distinguish our products in the marketplace and achieve commercial success, we rely on product innovations, including new or exclusive technologies, inventive and appealing design, or other differentiating features. Research and development plays a key role in technical innovation. We rely upon specialists in the fields of chemistry, biochemistry, engineering, industrial design, and related fields, guided by consumer feedback, to develop and test innovative performance products. Although we are committed to designing innovative and functional products that deliver relevant performance benefits to consumers who participate in a wide range of competitive and recreational outdoor activities, if we fail to introduce technical innovation in our products that address consumers’ performance expectations, demand for our products could decline.

As we strive to achieve product innovations, we face a greater risk of inadvertent infringements of third party rights or compliance issues with regulations applicable to products with technical innovations such as electrical heating components and material treatments. In addition, technical innovations often involve more complex manufacturing processes, which may lead to higher instances of quality issues, and if we experience problems with the quality of our products, we may incur substantial expense to address the problems and any associated product risks. For example, in recent years we incurred costs in connection with recalls of some of our battery-powered electrically heated apparel. Failure to successfully bring to market innovations in our product lines could have a material adverse effect on our financial condition, results of operations or cash flows.

We Face Risks Associated with Consumer Preferences and Fashion Trends

Changes in consumer preferences or consumer interest in outdoor activities may have a material adverse effect on our business. In addition, changes in fashion trends may have a greater impact than in the past as we expand our offerings to include more product categories in more geographic areas, particularly with the Sorel brand, a product line generally more sensitive to fashion trends. We also face risks because our business requires us and our customers to anticipate consumer preferences. Our decisions about product designs often are made far in advance of consumer acceptance. Although we try to manage our inventory risk by soliciting advance order commitments by retailers, we must generally place a significant portion of our seasonal production orders with our independent factories before we have received all of a season’s advance orders from customers, and orders may be cancelled by customers before shipment. If we or our customers fail to anticipate and respond to consumer preferences, we may experience lower sales, excess inventories and lower profit margins in current and future periods, any of which could have a material adverse effect on our financial condition, results of operations or cash flows.

Our Success Depends on Our Use and Protection of Intellectual Property Rights

Our registered and common law trademarks and our patented or patent-pending designs and technologies have significant value and are important to our ability to differentiate our products from those of our competitors and to create and sustain demand for our products. We also place significant value on our trade dress, the overall appearance and image of our products. We regularly discover products that are counterfeit reproductions of our products or that otherwise infringe on our proprietary rights.

33

Counterfeiting activities typically increase as brand recognition increases, especially in markets outside the United States. Increased instances of counterfeit manufacture and sales may adversely affect our sales and our brand and result in a shift of consumer preference away from our products. The actions we take to establish and protect trademarks and other proprietary rights may not be adequate to prevent imitation of our products by others or to prevent others from seeking to block sales of our products as violations of proprietary rights. In markets outside of the United States, it may be more difficult for us to establish our proprietary rights and to successfully challenge use of those rights by other parties. We also license our proprietary rights to third parties. Failure to choose appropriate licensees and licensed product categories may dilute or harm our brands. In addition to our own intellectual property rights, many of the intellectual property rights in the technology, fabrics and processes used to manufacture our products are generally owned or controlled by our suppliers and are generally not unique to us. In those cases, we may not be able to adequately protect our products or differentiate their performance characteristics and fabrications from those of our competitors. The management of our intellectual property portfolio may affect the strength of our brands, which may in turn have a material adverse effect on our financial condition, results of operations or cash flows.

Although we have not been materially inhibited from selling products in connection with patent, trademark and trade dress disputes, as we focus on innovation in our product lines, extend our brands into new product categories and expand the geographic scope of our marketing, we may become subject to litigation based on allegations of infringement or other improper use of intellectual property rights of third parties, including third party trademark, copyright and patent rights. An increasing number of our products include technologies and/or designs for which we have obtained or applied for patent protection. Failure to successfully obtain and maintain patents on these innovations could negatively affect our ability to market and sell our products. Future litigation also may be necessary to defend against claims of infringement or to enforce and protect our intellectual property rights. As we utilize e-commerce and social media to a greater degree in our sales and marketing efforts, we face an increasing risk of patent infringement claims from non-operating entities and others covering broad functional aspects of internet operations. Intellectual property litigation may be costly and may divert management’s attention from the operation of our business. Adverse determinations in any litigation may result in the loss of our proprietary rights, subject us to significant liabilities or require us to seek licenses from third parties, which may not be available on commercially reasonable terms, if at all. Any of these outcomes may have a material adverse effect on our financial condition, results of operations or cash flows.

Our Success Depends on Our Distribution Facilities

Our ability to meet customer expectations, manage inventory, complete sales and achieve objectives for operating efficiencies depends on the proper operation of our existing distribution facilities, the development or expansion of additional distribution capabilities and services, such as the transition of value-added services functions from independent factories to our distribution centers, and the timely performance of services by third parties, including those involved in shipping product to and from our distribution facilities. In the United States, we rely primarily on our distribution centers in Portland, Oregon and Robards, Kentucky; in Canada, we rely primarily on our distribution facility in London, Ontario; in Europe, we rely primarily on our distribution center in Cambrai, France; in Japan, we rely primarily on a third-party logistics distribution provider in Tokyo; in Korea, we rely primarily on two leased distribution facilities near Seoul that we manage and operate; and in China, we rely primarily on four third-party managed distribution centers, two of which are operated by our joint venture partner.

Our distribution facilities in the United States, France and Canada are highly automated, which means that their operations are complicated and may be subject to a number of risks related to computer viruses, the proper operation of software and hardware, electronic or power interruptions, and other system failures. Risks associated with upgrading or expanding these facilities may significantly disrupt or increase the cost of our operations. For example, in addition to supporting our traditional wholesale business, our existing distribution facilities have been modified to enable them to also support our e-commerce business in the United States. Failure to successfully maintain and update these modifications could disrupt our wholesale and e-commerce shipments and may have a material adverse effect on our financial condition, results of operations or cash flows.

The fixed costs associated with owning, operating and maintaining these large, highly automated distribution centers during a period of economic weakness or declining sales can result in lower operating efficiencies, financial deleverage and potential impairment in the recorded value of distribution assets. This has occurred in recent years in Europe, where our distribution center is underutilized. This fixed cost structure globally may make it difficult for us to achieve or maintain profitability if sales volumes decline for an extended period of time and could have material adverse effects on our financial condition, results of operations or cash flows.

Our distribution facilities may also be interrupted by disasters, such as earthquakes, tornadoes or fires. We maintain business interruption insurance, but it may not adequately protect us from the adverse effect that may be caused by significant disruptions in our distribution facilities.

34

We May be Adversely Affected by Currency Exchange Rate Fluctuations

Although the majority of our product purchases are denominated in U.S. dollars, the cost of these products may be affected by relative changes in the value of the local currencies of our subsidiaries and our manufacturers. Price increases caused by currency exchange rate fluctuations may make our products less competitive or have an adverse effect on our margins. Our international revenues and expenses generally are derived from sales and operations in currencies other than the U.S. dollar. Because the functional currency of many of our subsidiaries is not the U.S. dollar, we are exposed to the potential of material gains or losses from the remeasurement of U.S. dollar monetary transactions into the respective functional currencies. Currency exchange rate fluctuations may also disrupt the business of the independent factories that produce our products by making their purchases of raw materials more expensive and more difficult to finance. As a result, currency fluctuations may have a material adverse effect on our financial condition, results of operations or cash flows.

All of our independent distributors purchase the vast majority of their inventory from us in U.S. dollars and, therefore, are dependent upon their ability to exchange their functional currency for U.S. dollars on global currency exchanges. At times, some of our distributors have experienced periods during which they have been unable to obtain U.S. dollars in sufficient quantity to complete their purchase of goods or to pay amounts owed for past deliveries. Disruptions in currency exchange markets may have a material adverse effect on our financial condition, results of operations, or cash flows.

Our Investments May be Adversely Affected by Market Conditions

Our investment portfolio is subject to a number of risks and uncertainties. Changes in market conditions, such as those that accompany an economic downturn or economic uncertainty, may negatively affect the value and liquidity of our investment portfolio, perhaps significantly. Our ability to find diversified investments that are both safe and liquid and that provide a reasonable return may be impaired, potentially resulting in lower interest income, less diversification, longer investment maturities and/or other-than-temporary impairments.

We May be Adversely Affected by Labor Disruptions

Our business depends on our ability to source and distribute products in a timely manner. While a majority of our own operations are not subject to organized labor agreements, our relationship with our Cambrai distribution center employees is governed by French law, including a formal representation of employees by a Works Council and the application of a collective bargaining agreement. Labor disputes at independent factories where our goods are produced, shipping ports, transportation carriers, retail stores or distribution centers create significant risks for our business, particularly if these disputes result in work slowdowns, lockouts, strikes or other disruptions during our peak manufacturing, shipping and selling seasons, and may have a material adverse effect on our business, potentially resulting in cancelled orders by customers, unanticipated inventory accumulation, and reduced revenues and earnings.

We Depend on Key Suppliers

Some of the materials that we use may be available from only one source or a very limited number of sources. For example, some specialty fabrics are manufactured to our specification by one source or a few sources, and a single vendor supplies the majority of the zippers used in our products. From time to time, we have difficulty satisfying our raw material and finished goods requirements. Although we believe that we can identify and qualify additional independent factories to produce these materials as necessary, there are no guarantees that additional independent factories will be available. In addition, depending on the timing, any changes in sources or materials may result in increased costs or production delays, which may have a material adverse effect on our financial condition, results of operations or cash flows.

We Depend on Key Personnel

Our future success will depend in part on the continued service of key personnel and our ability to attract, retain and develop key managers, designers, sales and information technology professionals and others. We face intense competition for these individuals worldwide, and there is a significant concentration of well-funded apparel and footwear competitors in and around our headquarters in Portland, Oregon. We may not be able to attract qualified new employees or retain existing employees, which may have a material adverse effect on our financial condition, results of operations or cash flows.

Our Business Is Affected by Seasonality

Our business is affected by the general seasonal trends common to the outdoor industry. Our products are marketed on a seasonal basis and our annual net sales are weighted heavily toward the fall/winter season, while our operating expenses are more equally distributed throughout the year. As a result, the majority, and sometimes all, of our operating profits are generated in the second half of the year. The expansion of our direct-to-consumer operations and sales growth in our winter footwear business has

35

increased the proportion of sales and profits that we generate in the fourth calendar quarter. This seasonality, along with other factors that are beyond our control and that are discussed elsewhere in this section, may adversely affect our business and cause our results of operations to fluctuate. As a result, our profitability may be materially affected if management is not able to timely adjust expenses in reaction to adverse events such as unfavorable weather, weak consumer spending patterns or unanticipated levels of order cancellations. Results of operations in any period should not be considered indicative of the results to be expected for any future period.

Our Products Are Subject to Increasing Product Regulations and We Face Risks of Product Liability and Warranty Claims

Our products are subject to increasingly stringent and complex domestic and foreign product labeling and performance and safety standards, laws and other regulations. These requirements could result in greater expense associated with compliance efforts, and failure to comply with these regulations could result in a delay, non-delivery or recall or destruction of inventory shipments during key seasons, or in other financial penalties. Significant or continuing noncompliance with these standards and laws could disrupt our business and harm our reputation and, as a result, could have a material adverse effect on our financial condition, results of operations or cash flows.

Our products are used in outdoor activities, sometimes in severe conditions. Product recalls or product liability claims resulting from the failure, or alleged failure, of our products could have a material adverse effect on our financial condition, results of operations or cash flows. Most of our products carry limited warranties for defects in quality and workmanship. We maintain a warranty reserve for future warranty claims, but the actual costs of servicing future warranty claims may exceed the reserve, which may also have a material adverse effect on our financial condition, results of operations or cash flows.

Our Common Stock Price May Be Volatile

The price of our common stock has fluctuated substantially since our initial public offering. Our common stock is traded on the NASDAQ Global Select Market. Factors such as general market conditions, actions by institutional investors to rapidly accumulate or divest of a substantial number of our shares, fluctuations in financial results, variances from financial market expectations, changes in earnings estimates or recommendations by analysts, or announcements by us or our competitors may cause the market price of our common stock to fluctuate, perhaps substantially.

Insiders Control a Majority of Our Common Stock and May Sell Shares

Three related shareholders, Timothy Boyle, Gertrude Boyle and Sarah Bany, beneficially own a majority of our common stock. As a result, if acting together, they can effectively control matters requiring shareholder approval without the cooperation of other shareholders. Shares held by these three insiders are available for resale, subject to the requirements of, and the rules under, the Securities Act of 1933 and the Securities Exchange Act of 1934. The sale or the prospect of the sale of a substantial number of these shares may have an adverse effect on the market price of our common stock.

36

Item 2 –UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Our Board of Directors has authorized the repurchase of $500,000,000 of our common stock. As of March 31, 2014, we had repurchased 9,593,278 shares under this program at an aggregate purchase price of approximately $441,443,000. Shares of our common stock may be purchased in the open market or through privately negotiated transactions, subject to market conditions. The repurchase program does not obligate us to acquire any specific number of shares or to acquire shares over any specified period of time.

We did not repurchase any equity securities during the three months ended March 31, 2014.

Item 6 –EXHIBITS

(a) Exhibits

31.1	Rule 13a-14(a) Certification of Timothy P. Boyle, President and Chief Executive Officer
31.2	Rule 13a-14(a) Certification of Thomas B. Cusick, Senior Vice President of Finance and Chief Financial Officer
32.1	Section 1350 Certification of Timothy P. Boyle, President and Chief Executive Officer
32.2	Section 1350 Certification of Thomas B. Cusick, Senior Vice President of Finance and Chief Financial Officer
101	INS XBRL Instance Document *
101	SCH XBRL Taxonomy Extension Schema Document *
101	CAL XBRL Taxonomy Extension Calculation Linkbase Document *
101	DEF XBRL Taxonomy Extension Definition Linkbase Document*
101	LAB XBRL Taxonomy Extension Label Linkbase Document *
101	PRE XBRL Taxonomy Extension Presentation Linkbase Document *

* Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, or Section 18 of the Securities and Exchange Act of 1934, as amended and otherwise are not subject to liability under those sections.

37

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	COLUMBIA SPORTSWEAR COMPANY
Date: May 8, 2014	/s/ THOMAS B. CUSICK
	Thomas B. Cusick
	Senior Vice President of Finance and Chief Financial Officer
	(Duly Authorized Officer and Principal Financial and Accounting Officer)

38