Columbia Sportswear 2014 Annual Report Download - page 65

COLUMBIA SPORTSWEAR COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
61
December 31,
2014 2013
Deferred tax assets:
Non-deductible accruals and allowances $ 44,678 $ 37,986
Capitalized inventory costs 25,962 22,589
Stock compensation 6,488 6,329
Net operating loss carryforwards 6,660 9,683
Depreciation and amortization 1,947 2,413
Tax credits 5,496 198
Other 578 1,055
Gross deferred tax assets 91,809 80,253
Valuation allowance (6,008) (8,633)
Net deferred tax assets 85,801 71,620
Deferred tax liabilities:
Depreciation and amortization (25,579) (20,243)
Foreign currency loss (3,055) (2,540)
Other (814) (810)
Gross deferred tax liabilities (29,448)(23,593)
Total net deferred taxes $ 56,353 $ 48,027
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, 2014 and 2013 in certain international tax
jurisdictions of $51,965,000 and $76,525,000, respectively, which will begin to expire in 2017. The net operating losses
result in deferred tax assets of $6,660,000 and $9,683,000 at December 31, 2014 and 2013, respectively. These deferred
tax assets were subject to valuation allowances of $5,707,000 and $8,297,000 at December 31, 2014 and 2013, 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 $2,825,000 and $3,994,000 are included as a component of other non-current assets
in the consolidated balance sheet at December 31, 2014 and 2013, respectively.
The Company had undistributed earnings of foreign subsidiaries of approximately $381,959,000 at December 31,
2014 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 $92,123,000
at December 31, 2014. 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.
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, Japan, South Korea,
Switzerland and the United States. The Company has effectively settled Canadian tax examinations of all years through
2009, Japanese tax examinations of all years through 2010, French tax examinations of all years through 2011 and U.S. and
Swiss tax examinations of all years through 2012. The Korean National Tax Service concluded an audit of the Company's
2009 through 2013 corporate income tax returns in May and the Company is appealing the results of the audit to the Korean
Tax Tribunal. The Italian tax authorities have notified the Company that its 2011 income tax return has been selected for
audit. Other than the audits previously noted, the Company is not currently under examination in any major jurisdiction,