Greetings, and welcome to the Columbia Sportswear Third Quarter 2016 Financial Results. At this time all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder this conference is being recorded. I would now like to turn the conference over to your host Ron Parham, Senior Director of Investor Relations and Corporate Communications for Columbia Sportswear. Thank you, Mr. Ron. You may begin.

All right. Thanks, Bob and good afternoon everyone. Thanks for joining us to discuss Columbia Sportswear Company's third quarter financial results and our updated 2016 financial outlook. In addition to the earnings release, we furnished an 8-K containing a detailed CFO commentary analyzing our third quarter results and explaining the assumptions behind our updated 2016 financial outlook. The CFO commentary is available on our Investor Relations website. With me today on the call are Chairman of the Board, Gert Boyle; Chief Executive Officer, Tim Boyle; Executive Vice President of Finance and Chief Financial Officer, Tom Cusick; and Executive Vice President and Chief Administrative Officer, Peter Bragdon. President and Chief Operating Officer, Bryan Timm who also usually participates on our call is down on our Mountain Hardwear Headquarters today for the kick-off of that brands fall 2017 sales meeting. And Gert is going to start us off by covering the Safe Harbor reminder.

Good afternoon. This conference call will contain forward-looking statements regarding Columbia's business opportunities and anticipated results of operations. Please bear in mind that forward-looking information is subject to many risks and uncertainties, and actual results may differ materially from what is projected. Many of these risks and uncertainties are described in Columbia's Annual Report on Form 10-K and subsequent filing with the SEC. Forward-looking statements in this conference call are based on our current expectations and beliefs and we do not undertake any duty to update any of the forward-looking statement after the date of this conference call to conform the forward-looking statement to actual results or to change in our expectations.

Thank you, Gert. And I'd also like to point out that during the call we will reference constant-currency net sales growth, which is a non-GAAP financial measure. And you'll find the reconciliation of constant-currency net sales to net sales as reported under U.S. GAAP in the supplemental financial tables that accompany our earnings release, along with an explanation of management's rationale for including this non-GAAP measure. And now I'll turn the call over to Tim.

Thanks, Ron. Welcome, everyone, and thank you for joining us this afternoon. I want to start by looking back to Q3 2015, when North American wholesale customers were aggressively restocking their fall inventory following a very favorable winter, driving U.S. sales up 26% and Canada's up 39% on constant currency basis, and contributing to a 39% increase in net income. Our slightly better than expected third quarter earnings of $83.6 million, or $1.18 per diluted share were achieved against those very difficult comparisons, despite a North American marketplace that looks and feels very different than it did one year ago, including weak consumer traffic across brick-and-mortar retail landscape, lingering effects of wholesale customer bankruptcies, a glut of competitor brands in liquidation channels. I'd like to take this opportunity to remind listeners that we chose, in contrast, to rely primarily on our own outlet stores to clear last year's excess inventory. This year's lingering warm weather across key portions of the Northern Hemisphere, a conservative inventory posture among our North American wholesale customers and North American wholesale customers shifting delivery of a larger portion of their cold-weather products into the fourth quarter. During the third quarter, these headwinds in our U.S. wholesale business were partially offset by mid-teen growth in our U.S. direct-to-consumer business, as consumers increasingly seek to engage directly with brand. In our Europe-direct markets, the Columbia brand drove high 20% growth making the seventh consecutive quarter of 15% or greater constant currency growth and producing mid-20% growth through the first nine months of 2016. Momentum in our Europe-direct markets is broad-based, consisting of growth across each of the markets where we operate, growth within each channel of distribution and growth from each of our brands led by the Columbia brand. Our Tested Tough marketing campaign, our global partnership…

Thank you. Our first question comes from the line of Bob Drbul with Guggenheim Securities. Please proceed with your question.

Hi. Good afternoon.

Hi Bob.

Hi Tim. I guess, just a couple of questions for you. The first one is, when you look at the marketplace and where your inventories are versus what you're seeing in off-price competitively, what are your assumptions over the next couple of weeks and months as it relates to demand overall for the cold weather merchandise or for the outerwear category?

Well, Bob, as you know we've been in this business a long time, and frankly we spent a lot of time looking at not only this market but other markets globally, and that amalgamation of all those kinds of variables basically gives us confidence to give you the outlook for the balance of the year that we've given you.

Got it. Okay.

And, Bob, this is Tom. Maybe just to add a little more color to that. If you look at where we're sold in from a wholesale perspective for fall for Columbia and SOREL brands, the cold weather brands in the U.S. wholesale market will be about 80 plus percent exiting October, so that's a pretty typical pattern for us.

Okay. And as you think about the bankruptcies that have gone on and some of the mergers that are taking place in the consolidation, especially in the U.S. here, when you look at next year, is there sort of a base case on how you consider your positioning and door count on a wholesale basis as you think through the next 12 months?

Yeah. I mean, we do a lot of analysis, and in fact we're just about to start selling our fall 2017 product in the next few days. We've concluded our sales meeting here at Columbia and the SOREL and Mountain Hardwear meetings are in place now. And so we have a fairly good idea about where we think the product will be placed, and where we think the business is going to end up. Of course, there's a bit of a weather variable involved in all of this stuff but, frankly, we're behind some of our competitors, and we think there's an opportunity for us to gain market share based on the current performance of the product at retail against our competitors. So we're not looking to add a bunch of doors, we're not looking to add additional distribution, but we think there's an opportunity for us to gain share – to continue to gain share in those key retailers across the U.S., and obviously in Europe where we've been doing very well against competitors there in terms of gaining share.

Great. I guess just when you look at – Tim, when you look at the fourth quarter, and you look at your inventory levels and the inventory levels at retail, when you think about how we're positioned, especially year-over-year, do you think there is a lot of risk in what's happening with the inventory levels out there in the outerwear categories?

Not really. If you remember last year, the enormous warm weather was in November and December of last year. I think we've looked at the comparable sales, the expectations across not only our stores, but our customer stores, and the expectation is we've got the right amount of inventory. This is a time when a strong balance sheet really trumps, I hate to use that word, but the strong balance sheet makes us less vulnerable than others perhaps.

Okay. Thank you very much Tim, good luck.

Yeah. Thanks.

Thank you. Our next question comes the line of Andrew Burns with D.A. Davidson. Please proceed with your question. Andrew S. Burns - D. A. Davidson & Co.: Good afternoon.

Hi Andrew. Andrew S. Burns - D. A. Davidson & Co.: It seems like every season we hear more and more about the buy now, wear now trend and retailers pushing inventory risk back on to the brands and is this what you saw this quarter? Is this just a reflection of the cautionary environment we're in or is there any sort of reflection of a more structural change occurring and if it's structural, is there any ways, if you look at your business, that you think you need to evolve? Thanks.

Well, we've gotten pretty good over the years at managing seasonal businesses, especially as it relates to cold weather businesses. And you might remember that 2014 was a terribly cold year and so retailers ran out of the cold weather product and we had a high demand at the beginning of 2015 and consumers actually went into stores and bought that merchandise earlier than any year when they've had – when there's been warm weather. So we're pretty good at managing these things and, again, I focus on the balance sheet in terms of making sure that the company can do the right things as it relates to growing the business and maintaining relationships without having to react to save the company. Inventory risk will continue to be an issue, especially in the environment where we have consolidation and fewer wholesale customers. So it will be a constant discussion point, I'm sure. And over the next several years will be more important and a bigger part of our discussions. But structurally, we're committed to being a supplier of merchandise for wholesale to retail customers and we're going to be focused on those retail customers that we believe will be here for the long term. We have great relationships lasting 40 years plus with some of these great retailers, and we expect that we'll be able to take advantage of working together to get through these particularly tough times. Andrew S. Burns - D. A. Davidson & Co.: Okay. Thank you. And if you could spend just a little more time as to what the lingering wholesale bankruptcy issues that you brought up are, and as you look at 4Q. are we fully past this and how should we think of that as a headwind in terms of the timing here?

Well, I think Tom had the number earlier, but it's in the neighborhood of like 1% of our sales were to these folks who went bankrupt, they were great customers, but unfortunately they couldn't survive. But the expectation is that as, obviously, the business climate improves a bit for retailers that the remaining retailers are going to be able to pick up their business, so – yeah, it's tough to lose that part.

And maybe just to add a little more color to that, Andrew. So in the quarter, the bankruptcies that we've alluded to, Sports Authority, Sports Chalet et cetera, impacted Q3 in the U.S. region by about 4% and we expect to have about a 2% impact on the U.S. region for the full year and about a 1% impact on the consolidated revenue for the full year. Andrew S. Burns - D. A. Davidson & Co.: Great. Thanks for the color, good luck.

Thanks.

Thank you. Our next question comes to the line of Laurent Vasilescu of Macquarie Group. Please proceed with your question. Laurent Vasilescu - Macquarie Capital (USA), Inc.: Good afternoon. And thank you very much for taking my question. I want to ask about the U.S. revenue guide and it's predicated on high-teen percentage growth in direct-to-consumer for the full year, is that U.S. guide depend on further acceleration in direct-to-consumer during the fourth quarter. I think, in the prepared remarks, it says that the third quarter had mid-teen growth in direct-to-consumer.

Yeah. We're planning – so don't want to get too far into the specifics with regard to the specific direct-to-consumer guidance in the fourth quarter, but I guess to just provide some amount of color there, we're planning – obviously, we're comping much easier against Q4 a year ago assuming normal winter weather this year. And I would say, our outlook is fairly consistent in Q4 with where that business has trended through September of this year. Laurent Vasilescu - Macquarie Capital (USA), Inc.: Okay, very helpful. And then maybe just asked a little bit differently, I think the direct-to-consumer number percentage for global sales last year was about 35% of the global sales, is it fair to assume that the percentage is around 45% for the fourth quarter?

I would say for the full year we estimate DTC to be about 38% of business this year and we would expect Q4 to be less than half the business. Laurent Vasilescu - Macquarie Capital (USA), Inc.: Okay. Very helpful. And then lastly, I noticed you raised your free cash flow forecast for the year. Can you talk about the drivers for this raise?

Yeah. I would say predominantly it's a function of CapEx spending for the year. We've taken that down $10 million to $15 million. And just the puts and takes within our working capital assumption set. So we think we'll be $150 million plus or minus for the full year. Laurent Vasilescu - Macquarie Capital (USA), Inc.: Okay. Thank you. And then lastly, if I can squeeze one more in. I think there was some call out in the prepared remarks that traffic is challenging across the space. Could you provide any color on how your U.S. stores are doing quarter to-date?

Yeah. We really don't consider ourselves a retailer, so don't publish traffic numbers or other typical retail metrics. I can tell you that we're not immune to the reduction in traffic, which has been seen across all channels. And so I might leave it at that. Laurent Vasilescu - Macquarie Capital (USA), Inc.: Okay. Thank you very much and best of luck.

Thank you. Our next question comes from the line of Jessica Schmidt with KeyBanc Capital Markets. Please proceed with your question.

Hi. Thanks for taking my question. Can you bridge the gap between what you're seeing in wholesale and I guess direct-to-consumer. How were your sell-throughs at retail?

Our sell-throughs at retail, I would say, will be comparable to prior periods. We're about where we want to be globally in terms of how the business is progressing at retail. In our own DTC business, obviously we don't talk about the metrics there, but those should be comparable.

Okay. And then in terms of pricing, where have you seen these increases? And has this been difficult just given how promotional the environment still is? And are you still expecting promotions overall to be up for the holiday?

I would say the bulk of our increases in price has probably been spread across our global business. And then as it relates to promotion, really you can take a look at the temperatures and determine if there's going to be greater or lesser promotions this year. So I would just caution as it relates to Columbia to remember that we're a global company and we have sales outside of northeastern part of the United States.

Okay. Great. Thank you.

Thank you. Our next question comes from the line of Jonathan Komp with Robert W. Baird. Please proceed with your question. Jonathan R. Komp - Robert W. Baird & Co., Inc. (Broker): Yeah. Hi, thanks. Maybe first just to clarify the U.S. implied outlook in the fourth quarter. I know DTC is strong. It's a higher portion of the mix. Any way to clarify the shift of the wholesale shipments, the later timing, how much of a swing that will have on the growth when you look quarter-to-quarter?

Yeah. That's a good question, Jon. So when we spoke in July, we had assumed that – so if we step back, we had about a $40 million shift a year ago into Q3 from Q4 in terms of just the normal historical order book and how it shifts between Q3 and Q4 for our U.S. wholesale business. So $40 million shift a year ago. Coming into the quarter, we had planned a $30 million shift back from Q3 into Q4, and we actually ended up at roughly – a $20 million shift is what we planned and we ended up with a $30 million shift into Q4. And like I'd mentioned earlier in addressing Bob's question, in terms of percentage of the book shipped through the month of October for the Columbia and SOREL brands, we'll be 80%-plus exiting October. So we're basically right on track relative to historical norms in terms of how we deliver fall wholesale orders. Jonathan R. Komp - Robert W. Baird & Co., Inc. (Broker): Okay. That's fair.

And maybe just one more point there. So if you look at our Q4 consolidated sales growth rate, roughly half of that is coming from this timing shift of U.S. wholesale. Jonathan R. Komp - Robert W. Baird & Co., Inc. (Broker): Got it. Great. And maybe just following up on the fourth quarter, just a little bit, at least on the top end, of diminished outlook given some of the headwinds you see in the environment. Could you just explicitly outline what changes you made, or at least brought the top end down for the fourth quarter in terms of the guidance?

Yeah. I would say it's really a combination of the U.S. business and Korea. Korea continues to trend downward. We haven't found the bottom there yet. Jonathan R. Komp - Robert W. Baird & Co., Inc. (Broker): Okay. Great. And then maybe a bigger picture question for Tim. I know you outlined before the North American environment looks and feels a lot different than it did this time last year, but yet you've had a couple of periods now recently where, depending on the weather in the prior year, you've had pretty big swings in the business. When you look forward to 2017, if you have a normal winter for the next two months here or few months, do you think 2017 again could look more like 2015, the last time you came off of a normal winter? Or do you think there's structural changes that would make the environment look different in 2017?

Well, we talked about the consolidation at retail, so that will be an overhang. But I think, frankly, retailers bought cautiously for 2016. So if we have a normal winter that extends through the January and early February portion, I think that those shelves will be rather empty and we'll be closer maybe to 2015. But some of it has to do with share shift where we would expect to be the recipient of some of the good news there. Jonathan R. Komp - Robert W. Baird & Co., Inc. (Broker): Okay. And a last one just if I could, broader on the marketing efforts. The Director of Toughness campaign seems to be driving a pretty big increase in the impressions. Any change in the thinking bigger picture longer term about just given some of the social interaction and engagement you're seeing going forward, if that changes your plans at all for marketing the brand?

Is that a veiled application for a Director of Toughness position? No, we've obviously been mindful of the change in how consumers get information about brands and products specifically, so we've emphasized that part of the business in our marketing efforts to be larger on the social and digital front, frankly, than we've been in the past. And it's reaping terrific rewards, especially when we have really interesting technical stories to talk about the product as well as interesting personal stories about the Directors of Toughness and what they do globally. Jonathan R. Komp - Robert W. Baird & Co., Inc. (Broker): And I'm just wondering, previously you've talked about wanting to maybe increase the marketing spend, at least as a percent of sales. And does the success you're seeing on more of a grassroots basis change that view at all?

No. We still need to be spending more than we have been as a percentage. We believe that we'll grow our market spend in 2016 against 2015, but we need to do more and at the same time spending more can be multiplied by spending it more efficiently. So we hope to be doing both. Jonathan R. Komp - Robert W. Baird & Co., Inc. (Broker): Okay. Great. Thanks a lot.

Thank you. Our next question comes from the line of Susan Anderson with FBR Capital Markets. Please proceed with your question. Susan K. Anderson - FBR Capital Markets & Co.: Hi, thanks for taking my question. I was wondering if you could talk about just the shelf space in the stores this fall, how are you stacking up versus your peers? I think you made a comment just saying that, hopefully you would be a potential winner of any shelf space that's given up. And then also in footwear, are you getting more products sell on the shelves for this fall?

Yeah, certainly. So let me answer the first one. In these independent studies that a few of these firms provide shows that we're gaining share against most of our competitors which is a positive, especially in the outdoor space. So we'd expect that will continue through the balance of the year and into next year as well. In terms of footwear, I've said for years that it should be our biggest product category, obviously, it's not. We have a new team there in place that our expectations frankly is going to be to grow the Columbia branded footwear team. And of course, even though we've – the SOREL has been impacted by the winter of 2015, our expectations for that brand are really for it to become a year-round global brand, as Mark Nenow says, toe to head, and where we'll be leading in that space. And so far the results have been astounding, absent of lack of winter and so our expectations in footwear in total that we'll be a much bigger company between the Columbia brand and the SOREL brand over time. Susan K. Anderson - FBR Capital Markets & Co.: Okay. Great. That's helpful. And then just to clarify or follow-up on the third quarter revenue, so was the lower revenue just primarily the issues within the U.S. wholesale business and then maybe the bankruptcy is a little bit worse, I guess split between the two of them, or was there something else? And then on the U.S. wholesale business, are you seeing kind of those lower orders across all channels?

Yeah. So maybe to start with the timing shift and the bankruptcy impact, so between the two of them, they impacted the third quarter by about 9% with bankruptcy, the bankruptcies is being 4%. So, slightly bigger impact from the timing shift of roughly $30 million. And maybe you could repeat your second question. Susan K. Anderson - FBR Capital Markets & Co.: I was just wondering, so the weakness at wholesale in the U.S., because I know you're selling in Kohl's, too, in sporting goods, is it really kind of what you're seeing across all of the channels?

Yeah. It's really a traffic issue I believe and weather. But we have a lot of information that would show that where there's weather there's fairly significant delta against – in sell-through against non-weather locations, so, yes. Susan K. Anderson - FBR Capital Markets & Co.: Got it. Okay. And then last one just on the inventory carryover, I guess how much is kind of left in your inventory now and where you guys are expecting to end fourth quarter?

Yeah. So, I mean, we're generally comfortable with our inventory level. I mean, virtually all the growth is in the U.S. and our Europe-direct region where we're planning for growth in Q4 and beyond. We've got the outlet channel to clear excesses in both of those regions, obviously inventory turns at 2.4 times, 2.5 times aren't where we want them to be. We'd like them to be ultimately north of 3 times. So we've got work to do there. We expect inventory exiting the year – and some of this will be dependent on timing of spring receipts, but we expect inventory to be up in the mid to perhaps high-single digits depending on receipt of timing and how weather plays out here over the next couple of months. Susan K. Anderson - FBR Capital Markets & Co.: Got it. That's helpful. Thanks a lot. Good luck next quarter, you guys.

Thank you. Our next question comes from the line of Lindsay Drucker Mann with Goldman Sachs. Please proceed with your question. Lindsay Drucker Mann - Goldman Sachs & Co.: Thanks. Good afternoon, guys.

Hi, Lindsay. Lindsay Drucker Mann - Goldman Sachs & Co.: I wanted to ask about the shop-in-shops that you talked about in your prepared remarks. Can you specify maybe what retail partners you're looking to roll these out at, whether they involve greater square footage in existing doors, maybe the cost to do it and how you think it might impact productivity in those doors or any other details you have?

Certainly. Well, yeah, in the U.S., we're talking about DICK'S and Academy. They're two of the recipients of the installations in Canada with Forzani Group. And then there's one INTERSPORT store in Europe. We actually opened a partner store in Korea with this installation. And the stores in China are partner stores of ours as well as one store that we directly operate. The expectation frankly is for, call it, in the 4% to 5% lift on comparable space. And we've been seeing both comparable space as well as increased space in certain installations. One of the things we talk about as well as the fact that we've been spending less than we should be on marketing is the fact that our merchandise doesn't look as good, we believe, in store as it should. It doesn't look as good as our competitors. And, frankly, this is something that we have to work on diligently to get that comparable appearance. And this shop-in-shop focus is going to get us there. We showed it to our group of independent distributors last week when they were here in Portland for the sales meeting, universal acclaim, and the expectation is that this is going to be helping us to improve our sell-throughs sort of globally. Lindsay Drucker Mann - Goldman Sachs & Co.: I think you said hundreds. How many of these do you expect to have?

Yeah. I'm sorry, I think we're just talking about the ones in this year, 2016. No, we're going put several hundred in place across the bulk of our key accounts in the U.S. and in Canada and as well as installations in our direct businesses in China, Korea, Europe-direct as well as Japan. And then we'll have installations throughout Russia, et cetera. So we're putting several hundred in next year and the plan is to put several hundred per year in key stores were we can get a lift. Lindsay Drucker Mann - Goldman Sachs & Co.: And who pays for the fixturing for the installation?

It really depends. The primary investment is on the company, is on Columbia. But there are times some of our distributors actually will make the investment themselves. But the bulk of the investments in our direct businesses will be our own. Lindsay Drucker Mann - Goldman Sachs & Co.: Got it. I wanted to go back to one of your part of your prepared remarks where you talked about you didn't participate as much in or you declined to participate in off-price for a lot of the excess product you had exiting last year. Could you talk or maybe just clarify on how you transacted with off-price this year and if you're not in that channel, how the heavy inventory levels that you referenced is impacting you?

Well, since we get almost zero return on our cash, we find it a better use of cash if we have excess inventory to hang to the bulk of the, especially the valuable outerwear component. That's not to say that we don't have good customers in the off-price channel, we do, but when the market is stuffed, it's more challenging to make that decision to sell off-price, sell in that channel. So our expectations are that we end the year with the inventory levels that Tom indicated, we think that there's likely to be some impact by sales of competitors' products in the off-price channel and we've taken that into account when we've given you our guidance. Lindsay Drucker Mann - Goldman Sachs & Co.: Okay. And then one last thing, you talked about for next year the impact, well this year and I guess maybe next year the impact of consolidation on your U.S. wholesale business, could you put any numbers behind how you think whether its stores or accounts or even dollars what you think the impact that could be on your business in 2017?

Well, we haven't talked much about 2017 at all, but I wouldn't expect that the entire revenue we had with Sports Authority as an example would be picked up by existing retailers. So I'm assuming some of that revenue is going to be gone and some of it will be picked up by existing wholesale customers, some of it frankly will be picked up by ourselves in our DTC business, but that should be the smaller portion. So as retailers continue to consolidate, it'll become more competitive environment at wholesale which we're prepared for. And it's hard to know exactly what's going to happen, the vagaries of the weather obviously have to be taken into account as well. Lindsay Drucker Mann - Goldman Sachs & Co.: I guess what I'm asking is, are your comments really specific to the impact, the carryover impact of the Sports Authority or any other consolidation we're seeing among retailers, is that something that you're also thinking about?

Well, the company is adept at extending credit, so we get a chance to see the financial health of many of our customers. So I'm talking about the consolidated consolidation which would include the Sports Authority, Sports Chalet, Bobs, EMS, the combination of Cabela's and Bass Pro shops and other bankruptcies which are likely to occur in the future depending on the state of the retail business. Lindsay Drucker Mann - Goldman Sachs & Co.: Okay, thanks very much.

Yeah.

Thank you. Our next question comes from the line of Eddie Ryan with Morgan Stanley. Please proceed with your question. Edward A. Ryan - Morgan Stanley & Co. LLC: Thanks for taking my question. I was wondering how are you thinking about the potential opportunity with online pure play retailers, is that something you're considering, or there are too many challenges in that business?

Yeah, we currently sell-through many of those online pure play retailers, and it's been solid vehicles for the company to distribute its products. Edward A. Ryan - Morgan Stanley & Co. LLC: And are there any sort of margin differentials between that and your typical wholesale arrangement?

No, not in sales from us. Edward A. Ryan - Morgan Stanley & Co. LLC: Okay, got it. And then I had one question on 4Q. So you mentioned how you had the mix shift to DTC in 3Q benefiting your gross margin, do you expect that to reverse in 4Q and how much of that of sort the – that shift to wholesale in 4Q is going to really be impacting that gross margin?

Yeah. So the implied gross margin lift in Q4 this year versus – projection versus last year is about what, 25 basis points plus or minus, and that's really going to be a function of channel mix shift, full price, off-price, again assuming normal winter weather conditions offset by some FX impact, but the FX impact won't be as dramatic in Q4 as it is in Q3, where a higher percentage of international wholesale shipments are delivered. Edward A. Ryan - Morgan Stanley & Co. LLC: Okay. That's helpful. Thank you.

Thank you. Our next question comes from the line of John Kernan with Cowen & Company. Please proceed with your question. David Buckley - Cowen & Co. LLC: This is David Buckley on for John Kernan. Thanks for taking our question. Could you guys please provide an update on the timing of European distributor improvement and how that channel performed in the quarter ex the Russian business?

Yeah, I want to make sure I answer your question properly because our EMEA distributor business, frankly, is driven almost – a very high percentage of that business is through our Russian distributor. As we said, they've been challenged from the basically economy in Russia as well as the currency levels in Russia. So we have a strong relationship with that firm. Our business is solid there, but they've been impacted along with other retailers. So I want to make sure I answer your question. Can you maybe clarify? David Buckley - Cowen & Co. LLC: No, that's helpful. And you guys are expecting Russia to return to moderate growth in the first half of 2017. Is that correct?

Well, I would say growth. We really haven't quantified it, but it will be growing in the first half of 2017, yes. David Buckley - Cowen & Co. LLC: Okay. Excellent. And then can you just discuss the SOREL and prAna brands for a second? What are the remaining growth opportunities for both of those brands and how should we think about the growth rates as we look into 2017 and beyond?

Well, let me take SOREL first, which is obviously we've added a spring component to the business and that's going to be a significant portion of growth for that brand. Once we get the DNA properly situated on the spring product, frankly it'll allow us to be much more impactful internationally. We had a number of our international distributors very interested in that product range, but if they're going to make an investment in a store or a portion of their store, it's going to have to be a year-round business and we've got to get ourselves calibrated there so that the spring merchandise is successful. So far, the early indications from leading retailers across North America are that we have a really solid chance of that business growing nicely and becoming a real foundation for an international expansion on SOREL. And as we de-winterize SOREL, frankly, the fall portion and spring portions of the business have enormous opportunity. PrAna has been growing nicely. As you can see, it's led the growth in the business this year. We expect that that business, as they expand their wholesale base and their e-commerce business as well, that will provide a solid base for us to, again, find the Holy Grail as it relates to getting that merchandise distributed globally. We've struggled a bit on that. We thought we'd be further along at this time. But we think there's a large opportunity internationally with prAna that we have to capture. David Buckley - Cowen & Co. LLC: Great. Thank you. And then just one last question. How sustainable is your CapEx rate at current levels, especially as you guys go more direct domestically and in Europe looking out into next year? Thank you.

I would say the CapEx in the $60 million range plus or minus is fairly sustainable for the foreseeable future. David Buckley - Cowen & Co. LLC: Okay. Great. Thank you very much.

Thanks.

Thank you. Our next question comes from the line of Rafe Jadrosich with Bank of America Merrill Lynch. Please proceed with your question.

Hi, guys. It's Rafe. Thanks for taking my question.

Hey, Rafe.

So you called out faster sell-through than competitors and you're picking up some market share. Is there any specific channel that you can call out where that's happening and what do you think is driving the share gains?

Well, specifically, in our sportswear PFG business, we have a very dominant position in the marketplace there. It's unique and that's an area specifically where we've been picking up share in the outdoor business, and especially in the southern part of the United States, where winter is relatively absent year-round. So that gives us a significant lift. And the business there has been quite good. So I would point to that as one of the specifics around our growth in market share.

Thank you. And then in terms of thinking about the margins longer-term and your opportunity to drive SG&A leverage, can you give us some color on what level of sales growth you think you need to hit where you can continue to invest in marketing, but still achieve leverage overall?

Yeah. This is Tom, Rafe. I would say, and we've said that historically, we generally need all things considered equal, high-single digit to low-double digit top-line growth to leverage the operating margin. And we're not seeing that this year. But we're holding sort of (56:40) on the operating margin. And that's a function of diligent cost management and some improvement in gross margin. So there's lots of components here. But generally speaking, high-single digit top-line growth will drive operating margin leverage.

And then is there a target for where you want to take marketing over time? And can you just remind us where it is right now as a percentage of sales?

Sure. We're just north of 5%. And our key competitors would range from 12% of sales to high-single digits. So that's where we need to be and we're focused on getting there.

And then one final question. Just based on where you are hedged right now, I know FX is a big headwind to 2016, do you have any visibility on, if rates stay where they are right now, what the impact of FX will be to 2017?

Yeah, I would say we're fairly well hedged in many currencies, but not all. And as we sit here today, I would say that, currency will be a tailwind to gross margin next year absent any major weakness in the China R&D.

Great. Thank you. That's really helpful.

Thank you. Our next question comes from the line of Camilo Lyon with Canaccord Genuity. Please proceed with your question.

Thanks. Good afternoon, guys. I just wanted to ask a couple follow-ups here. It's starting to get a little colder here on the East Coast. Has that tempered any of the skepticism (58:31) that the wholesale partners are speaking to you with. Is there some pent up demand that's starting to release that they're seeing that maybe they're considering they're under inventoried or is the consciousness still consistent with what it has been leading up to the start of the season?

Yeah. I mean, we're thrilled when it starts to get cold, I know we had some snowflakes in Massachusetts today, and we've had some snow already in Canada in many places. So we're excited about that kind of weather appearing. But we take into account all of the expectations and our knowledge of the marketplace and it takes a long time to put these plans in place as you've seen today. So that's where we believe the business will end up.

Okay. So it sounds like you're a little bit more sanguine than what your wholesale partners are reflecting?

Well, again harping on the balance sheet, it gives us a lot of conference and comfort that we can establish strategic plans and stay with them despite the daily weather impacts.

Okay. So is that to assume that there hasn't been any adjustments to your inventory receipts because of some of these timing shifts that may or may not impact reorders?

No, I mean, I think I'd have to rely on what Tom might tell you about the cadence of our inventory deliveries. But we've been fully stocked for winter for quite some time now.

Yeah. We're on a pretty normal delivery trajectory through October at this point in time. So I think a polar vortex like we saw in 2014 and early November would be good for everybody.

Yeah, from your lips, absolutely. The other question I had was, you mentioned in your prepared remarks that, you expect Europe to be EBITDA neutral this year. Does that suggest that with your last comment around FX being a tailwind to gross margin that you expect a return to profitability next year?

Europe returning to profitability next year. From an EBITDA perspective, yes that would be our expectation.

Is there any sense of magnitude assuming...

Maybe just some color there. Our European direct business has been hit by a double-digit millions of dollar gross margin impact from currency, so when you look at the $0.26 from currency, they've taken their fair share of that hit this year. It's not like – we've hedged the euro at mid $1.30s a year ago and it's $1.10 plus or minus today. So we're not going to see a snap back there in 2017 for the Euro, but it's better than it was. we expect it to be better in 2017 than it was this year in 2016 based on where we've placed our hedges.

Okay. Great. And then just finally, from where you sit today, what you can tell to the balance of the year, is there any incremental risk that you see from the deferral of distributor shipments flowing out of Q4 into Q1?

That one is always a tough call because these distributor shipments for spring really straddle two to three weeks before year-end and after and they're factory direct shipments. So they come out of factory and go straight to our distributor. We don't have tremendous control on that process. It's really more a function of manufacturing process. So we've used all the intelligence we have to forecast that, which is considered in our outlook here.

Is there a way to think about what that magnitude could be if there were a shift, what percentage of the shipments are distributor based in the fourth quarter?

They go both ways really.

They do go both ways. I think we've talked historically about $10 million to $20 million, $30 million shifts one way or the other, so it's kind of an order of magnitude.

Okay.

It's not like we don't have access plenty of factory capacity right now in Asia, though, so keep that in mind as it relates do timely delivery of product.

Got it. Thanks very much and good luck in the holiday season guys.

Thank you.

Thank you. Our next question comes from the line of Jarrod Feinstein with Buckingham Research Group. Please proceed with your question.

Hi, guys. Thanks for taking my question.

Hi.

I was wondering if you could talk a little bit more about the potential puts and takes with regards to input costs in the fourth quarter and then maybe some high-level thoughts on 2017 to give us a way to conceptualize any potential opportunity you have?

Sure, you're talking about input, you're talking about cost in Asia as it relates to 2016?

Correct and next year, if you could?

Yeah. So we've made purchases obviously for 2017 spring, and we're on the cusp of making 2017 fall purchases. And we find that, as Tom mentioned earlier, there's plenty of capacity, the dampened demand in the U.S. has had a similar impact in Asia and there's factory capacity which is available and that tends to be one of the key components of the costs that are being put in our business as well as the commodity costs which, in many cases, are based on the price of oil. I would say the same thing would be true of 2016 as it relates to 2015 and early 2016 when we were buying that product. So there's capacity in Asia for production and there's obviously low commodity prices right now in oil, so our expectation is that there shouldn't be too much impact negatively on our pricing for 2017.

Okay, great, thanks for taking my question.

You're welcome.

Thank you. There are no further questions at this time. I would like to turn the floor back to management for closing comments.

Well, thank you very much for listening to us, and we're looking forward to talking to you next quarter.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.