Columbia Sportswear 2011 Annual Report Download - page 63

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,
2011 2010 2009
(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 .......................... 1.4 2.6 1.9
Non-U.S. income taxed at different rates .................................. (6.5) (2.3) 0.4
Foreign tax credits ................................................... (1.8) (3.5) (5.8)
Reduction of accrued income taxes ...................................... (3.5) (4.0) (4.1)
Tax-exempt interest .................................................. (0.1) (0.2) (0.5)
Other .............................................................. 0.3 (1.0) (1.5)
Actual provision for income taxes ....................................... 24.8% 26.6% 25.4%
Significant components of the Company’s deferred taxes consisted of the following (in thousands):
December 31,
2011 2010
Deferred tax assets:
Non-deductible accruals and allowances ............................. $30,307 $26,905
Capitalized inventory costs ....................................... 25,814 21,065
Stock compensation ............................................. 6,283 6,157
Net operating loss carryforwards ................................... 6,364 6,894
Depreciation and amortization ..................................... 1,693 1,722
Tax credits .................................................... 12,702 11,187
Other ........................................................ 1,121 414
Gross deferred tax assets ..................................... 84,284 74,344
Valuation allowance ............................................. (6,690) (7,261)
Net deferred tax assets ....................................... 77,594 67,083
Deferred tax liabilities:
Deductible accruals and allowance ................................. (801) (593)
Depreciation and amortization ..................................... (12,320) (7,182)
Foreign currency loss ............................................ (2,494) —
Other ........................................................ (596) (1,564)
Gross deferred tax liabilities .................................. (16,211) (9,339)
Total net deferred taxes .............................................. $61,383 $57,744
We record net deferred tax assets to the extent we believe these assets will more likely than not be
realized. In making such a determination, we consider all available positive and negative evidence, including
future reversals of existing taxable temporary differences, projected future taxable income, tax-planning
strategies, and results of recent operations. The Company had net operating loss carryforwards at December 31,
2011 and 2010 in certain international tax jurisdictions of $58,272,000 and $67,800,000, respectively, which will
begin to expire in 2015. The net operating losses result in a deferred tax asset of $6,364,000 and $6,894,000 at
December 31, 2011 and 2010, respectively, both of which were subject to a 100% 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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