Columbia Sportswear 2012 Annual Report Download - page 59

COLUMBIA SPORTSWEAR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
55
Significant components of the Company’s deferred taxes consisted of the following (in thousands):
December 31,
2012 2011
Deferred tax assets:
Non-deductible accruals and allowances . . . . . . . . . . . . . . . . . . . . . . . . . $ 31,139 $ 30,307
Capitalized inventory costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,294 25,814
Stock compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,633 6,283
Net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,198 6,364
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,568 1,693
Tax credits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,398 12,702
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 755 1,121
Gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81,985 84,284
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,935) (6,690)
Net deferred tax assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75,050 77,594
Deferred tax liabilities:
Deductible accruals and allowance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (801)
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16,802) (12,320)
Foreign currency loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,313) (2,494)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (587) (596)
Gross deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19,702)(16,211)
Total net deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 55,348 $ 61,383
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, 2012 and 2011 in certain international tax jurisdictions of
$56,749,000 and $58,272,000, respectively, which will begin to expire in 2015. The net operating losses result in a deferred
tax asset of $6,198,000 and $6,364,000 at December 31, 2012 and 2011, 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.
Non-current deferred tax assets of $6,293,000 and $11,605,000 are included as a component of other non-current
assets in the consolidated balance sheet at December 31, 2012 and 2011, respectively.
The Company had undistributed earnings of foreign subsidiaries of approximately $284,611,000 at December 31,
2012 for which deferred taxes have not been provided. Such earnings are considered indefinitely invested outside of the
United States. If these earnings were repatriated to the United States, the earnings would be subject to U.S. taxation. The
amount of the unrecognized deferred tax liability associated with the undistributed earnings was approximately $70,218,000
at December 31, 2012. The unrecognized deferred tax liability approximates the excess of the United States tax liability
over the creditable foreign taxes paid that would result from a full remittance of undistributed earnings.
A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows (in thousands):