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INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
FS-31
The Company has provided for income taxes (benefits) from continuing operations as follows (in thousands):
2013 2012 2011
Current:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(700) $ (9,411) $ 3,244
State . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300 716 580
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,043 21,154 13,008
10,643 12,459 16,832
Deferred:
Federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,011 3,968 (3,474)
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (994) 348 (4,078)
2,017 4,316 (7,552)
Income Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 12,660 $ 16,775 $ 9,280
Included in the 2013 and 2012 Federal current tax benefit is a benefit of $1,220,000 and $7,126,000 related to an intra-
period allocation to continuing operations. A charge in an equal amount is in discontinued operations. A reconciliation to the
effective income tax rate from the federal statutory rate is as follows:
2013 2012 2011
Statutory federal income tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (35.0)% 35.0% (35.0)%
State and local income taxes, net of federal income tax benefit. . . . . . . . . . . . . . 0.5 8.2 3.0
Tax credits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25.9) (8.5) (9.9)
Foreign taxes at less than the federal statutory rate (including tax holidays). . . . (12.0) (60.7) (39.9)
Federal and foreign valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48.2 302.2 51.0
Non-deductible extinguishment and debt finance costs . . . . . . . . . . . . . . . . . . . . — 1.2 20.6
Withholding taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.8 12.3 (0.3)
Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.6 1.3 2.5
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61.9 (1.8) 21.1
Life insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1.7) (11.3) (5.5)
Foreign branch activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2.0) (14.7) (11.3)
Uncertain tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5 155.5 0.9
Goodwill and intangible asset impairment (Asia/Pacific) . . . . . . . . . . . . . . . . . . — — 113.1
Foreign tax audit settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (39.6)
Other, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3.9) (124.4) 3.7
33.0 % 294.3% 74.4 %
The foreign tax audit settlement in 2011 relates to a tax settlement in Germany as the German government agreed to follow
a European Court of Justice case and a German Tax Court case that impacted an open tax return year for a benefit of $4,947,000
or $0.15 per diluted share. The increase in 2012 uncertain tax positions relates primarily to a foreign audit of years prior to 2012.
At December 31, 2013, total deferred tax assets were $126,350,000, total deferred tax liabilities were $40,723,000 and the
tax valuation allowance total was $120,470,000 for a net deferred income tax liability of $34,843,000 compared to total deferred
tax assets of $111,107,000, total deferred tax liabilities of $43,052,000 and a tax valuation allowance total of $100,314,000 for a
net deferred income tax liability of $32,259,000 at December 31, 2012.