Columbia Sportswear Company Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Reconciliation of Statutory Federal Income Tax Rate to Effective Rate

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,
(percent of income before tax)	2023		2022		2021
Provision for federal income taxes at the statutory rate	21.0	%	21.0	%	21.0	%
State and local income taxes, net of federal benefit	1.2		1.6		2.5
Non-United States income taxed at different rates	(1.4)		(0.4)		2.7
Foreign tax credits	—		—		(2.4)
Adjustment to deferred taxes	—		0.1		—
Global Intangible Low-Taxed Income	0.9		0.1		0.1
Research credits	(0.7)		(0.4)		(0.4)
Withholding taxes	1.0		0.2		(1.4)
Excess tax benefits from stock plans	0.1		—		(0.9)
Other	0.8		(0.6)		0.4
Actual provision for income taxes	22.9	%	21.6	%	21.6	%

Significant Components of Deferred Taxes

Significant components of the Company's deferred taxes consisted of the following:


	December 31,
(in thousands)	2023		2022
Deferred tax assets:
Accruals and allowances	$	29,585	$	31,957
Lease liability	103,551		89,742
Capitalized inventory costs	20,589		26,147
Sales reserves	16,559		16,897
Stock compensation	9,166		7,659
Net operating loss carryforwards	1,720		18,778
Depreciation and amortization	20,335		15,463
Capitalized research and development expenditures (1)	17,008		8,530
Tax credits	860		2,751

Other	2,471		2,372
Gross deferred tax assets	221,844		220,296
Valuation allowance	(7,141)		(19,649)
Net deferred tax assets	214,703		200,647
Deferred tax liabilities:
Depreciation and amortization	(879)		(5,844)
Prepaid expenses	(3,315)		(2,892)
ROU lease asset	(90,756)		(78,274)
Deferred tax liability associated with future repatriations	(11,657)		(11,267)
Foreign currency	(2,588)		(8,351)
Gross deferred tax liabilities	(109,195)		(106,628)
Total net deferred taxes	$	105,508	$	94,019

(1) Capitalized research and development expenditures balance as of December 31, 2022 were previously classified as Other.

The Company records net deferred tax assets to the extent it believes these assets will more likely than not be realized. In making such a determination, the Company considers 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.

Reconciliation of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of gross unrecognized tax benefits is as follows:


	Year Ended December 31,
(in thousands)	2023		2022		2021
Balance at beginning of year	$	10,177	$	13,855	$	14,493
Increases related to prior year tax positions	578		234		355
Decreases related to prior year tax positions	—		(1,646)		(1,447)
Increases related to current year tax positions	1,376		1,355		883

Expiration of statute of limitations	(1,813)		(3,621)		(429)
Balance at end of year	$	10,318	$	10,177	$	13,855