Columbia Sportswear 2013 Annual Report Download - page 62

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COLUMBIA SPORTSWEAR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
58
Year Ended December 31,
2013 2012 2011
(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. . . . . . . . 1.5 1.7 1.5
Non-U.S. income taxed at different rates. . . . . . . . . . . . . . . . (3.7) (5.4) (6.5)
Foreign tax credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.5) — (1.8)
Reduction of unrecognized tax benefits. . . . . . . . . . . . . . . . . (1.9) (4.3) (3.5)
Research credits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.1) (1.7) (0.6)
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.5 0.1 0.7
Actual provision for income taxes . . . . . . . . . . . . . . . . . . . . . 28.8% 25.4% 24.8%
Significant components of the Company’s deferred taxes consisted of the following (in thousands):
December 31,
2013 2012
Deferred tax assets:
Non-deductible accruals and allowances . . . . . . . . . . . . . . . . . . . . . . . . . $ 37,986 $ 31,139
Capitalized inventory costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22,589 25,294
Stock compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,329 6,633
Net operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,683 6,198
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,413 1,568
Tax credits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198 10,398
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,055 755
Gross deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,253 81,985
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8,633) (6,935)
Net deferred tax assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71,620 75,050
Deferred tax liabilities:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20,243) (16,802)
Foreign currency loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,540) (2,313)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (810) (587)
Gross deferred tax liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23,593)(19,702)
Total net deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 48,027 $ 55,348
The Company records 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, 2013 and 2012 in certain international tax
jurisdictions of $76,525,000 and $56,749,000, respectively, which will begin to expire in 2015. The net operating losses
result in deferred tax assets of $9,683,000 and $6,198,000 at December 31, 2013 and 2012, respectively. These deferred
tax assets were subject to valuation allowances of $8,297,000 and $6,198,000 at December 31, 2013 and 2012, respectively.
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 $3,994,000 and $6,293,000 are included as a component of other non-current assets
in the consolidated balance sheet at December 31, 2013 and 2012, respectively.
The Company had undistributed earnings of foreign subsidiaries of approximately $320,708,000 at December 31,
2013 for which deferred taxes have not been provided. Such earnings are considered indefinitely invested outside of the