Columbia Sportswear 2009 Annual Report Download - page 61

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COLUMBIA SPORTSWEAR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
$18,659,000 and $20,096,000 of the unrecognized tax benefits balance would affect the effective tax rate if
recognized at December 31, 2009 and 2008, respectively.
The Company conducts business globally, and as a result, the Company or one or more of its subsidiaries
files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. The Company
is subject to examination by taxing authorities throughout the world, including such major jurisdictions as
Canada, China, France, Germany, Hong Kong, Italy, Japan, South Korea, Switzerland, the United Kingdom and
the United States. The Company has effectively settled U.S. tax examinations of all years through 2005.
Internationally, the Company has effectively settled French tax examinations of all years through 2006 and
Italian tax examinations of all years through 2007. The Company has effectively settled Canadian tax
examinations of all years through 2004 and is currently under examination for the tax years 2005 through 2008.
The Company does not anticipate that adjustments relative to this ongoing tax audit will result in a material
change to its consolidated financial position, results of operations or cash flows.
Due to the potential for resolution of income tax audits currently in progress, and the expiration of various
statutes of limitation, it is reasonably possible that the unrecognized tax benefits balance may change within the
twelve months following December 31, 2009 by a range of zero to $9,181,000. At December 31, 2008, the
comparable range was zero to $8,645,000. Open tax years, including those previously mentioned, contain matters
that could be subject to differing interpretations of applicable tax laws and regulations as they relate to the
amount, timing, or inclusion of revenue and expenses or the sustainability of income tax credits for a given
examination cycle.
The Company recognizes interest expense and penalties related to income tax matters in income tax
expense. The Company recognized a net reversal of accrued interest and penalties of $80,000 during 2009. The
Company recognized net interest and penalties related to uncertain tax positions during 2008 of $313,000 and the
Company recognized a net reversal of accrued interest and penalties of $117,000 during 2007. The Company had
$3,155,000 and $3,234,000 of accrued interest and penalties related to uncertain tax positions at December 31,
2009 and 2008, respectively.
Consolidated income from continuing operations before income taxes consists of the following (in
thousands):
Year Ended December 31,
2009 2008 2007
U.S. operations ........................................... $59,629 $ 44,478 $122,588
Foreign operations ........................................ 30,221 81,765 85,439
Income before income tax .............................. $89,850 $126,243 $208,027
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