Columbia Sportswear 2010 Annual Report Download - page 63

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COLUMBIA SPORTSWEAR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
The following is a reconciliation of the statutory federal income tax rate to the effective rate reported in the
financial statements:
Year Ended
December 31,
2010 2009 2008
(percent of income)
Provision for federal income taxes at the statutory rate ....................... 35.0% 35.0% 35.0%
State and local income taxes, net of federal benefit .......................... 2.6 1.9 0.8
Non-U.S. income taxed at different rates .................................. (2.3) 0.4 (4.1)
Foreign tax credits ................................................... (3.5) (5.8) (3.2)
Reduction of accrued income taxes ...................................... (4.0) (4.1) (3.3)
Tax-exempt interest .................................................. (0.2) (0.5) (0.8)
Other .............................................................. (1.0) (1.5) 0.3
Actual provision for income taxes ....................................... 26.6% 25.4% 24.7%
Significant components of the Company’s deferred taxes consisted of the following (in thousands):
December 31,
2010 2009
Deferred tax assets:
Non-deductible accruals and allowances ............................. $26,905 $18,979
Capitalized inventory costs ........................................ 21,065 15,326
Stock compensation .............................................. 6,157 5,399
Net operating loss carryforward .................................... 6,894 4,734
Depreciation and amortization ..................................... 1,722 582
Tax credits ..................................................... 11,187 —
Other ......................................................... 414 1,633
74,344 46,653
Valuation allowance ............................................. (7,261) (5,163)
Net deferred tax assets ............................................ 67,083 41,490
Deferred tax liabilities:
Deductible accruals and allowance .................................. (593) (1,129)
Depreciation and amortization ..................................... (7,182) (4,624)
Foreign currency loss ............................................ — (1,475)
Other ......................................................... (1,564) (1,368)
(9,339) (8,596)
Total ............................................................. $57,744 $32,894
The Company had net operating loss carryforwards at December 31, 2010 and 2009 in certain international
tax jurisdictions of $67,800,000 and $50,338,000, respectively, which will begin to expire in 2014. The net
operating losses result in a deferred tax asset at December 31, 2010 of $6,894,000, which was subject to a
$6,894,000 valuation allowance, and a deferred tax asset at December 31, 2009 of $4,734,000, which was subject
to a $4,734,000 valuation allowance. To the extent that the Company reverses a portion of the valuation
allowance, the adjustment would be recorded as a reduction to income tax expense.
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