Columbia Sportswear 2012 Annual Report Download - page 60

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COLUMBIA SPORTSWEAR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
56
December 31,
2012 2011 2010
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . $ 14,316 $ 18,694 $ 20,183
Increases related to prior year tax positions . . . . . . . . . . . . . . . 3,208 43 893
Decreases related to prior year tax positions. . . . . . . . . . . . . . . (19) (141) (27)
Increases related to current year tax positions . . . . . . . . . . . . . 2,049 1,388 1,278
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,817) (649) —
Expiration of statute of limitations . . . . . . . . . . . . . . . . . . . . . . (5,306) (5,019) (3,633)
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,431 $ 14,316 $ 18,694
Unrecognized tax benefits of $10,328,000 and $12,735,000 would affect the effective tax rate if recognized at December
31, 2012 and 2011, 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 2008, with the exception of a 2008 income tax refund claim filed in 2012.
The Company received a notification from the Internal Revenue Service ("IRS") dated February 15, 2013 indicating that
its 2011 United States federal income tax return and its 2008-2010 amended federal income tax returns filed during 2012
have been selected for audit. Internationally, the Company has effectively settled Canadian and Korean tax examinations
of all years through 2008, Swiss and French tax examinations of all years through 2009 and Japanese tax examinations of
all years through 2010. The Company is not currently under examination in any major jurisdictions. The Company does
not anticipate that adjustments relative to ongoing tax audits 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, 2012 by a range of zero to $10,136,000. 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 $357,000 in 2012, a net reversal of accrued interest
and penalties of $501,000 in 2011 and net accrued interest and penalties of $780,000 in 2010, all related to uncertain tax
positions. The Company had $3,077,000 and $3,434,000 of accrued interest and penalties related to uncertain tax positions
at December 31, 2012 and 2011, respectively.
NOTE 11—OTHER LONG-TERM LIABILITIES
Other long-term liabilities consisted of the following (in thousands):
December 31,
2012 2011
Straight-line and deferred rent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,395 $ 18,028
Asset retirement obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,849 1,565
Deferred compensation plan liability (Note 12) . . . . . . . . . . . . . . . . . . . . . . . . . . 4,080 2,521
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 847 1,739
$ 27,171 $ 23,853
NOTE 12—RETIREMENT SAVINGS PLANS