Invacare 2006 Annual Report Download - page 86

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Currency
Translation
Adjustments
Unrealized Gain
(Loss) on
Available-for-Sale
Securities
Adjustment to
initially apply
FASB 158
Unrealized Gain
(Loss) on
Derivative
Financial
Instruments Total
Foreign currency translation adjustments . . . . (56,176) (56,176)
Unrealized gain on available for sale
securities . . . . . . . . . . . . . . . . . . . . . . . . 54 54
Deferred tax liability relating to unrealized
gain on available for sale securities . . . . . . (19) (19)
Current period unrealized loss on cash flow
hedges, net of reclassifications . . . . . . . . . (1,551) (1,551)
Deferred tax benefit relating to unrealized
loss on derivative financial instruments . . . 543 543
Balance at December 31, 2005 . . . . . . . . . . . 48,294 701 (1,515) 47,480
Foreign currency translation adjustments . . . . 64,386 64,386
Unrealized loss on available for sale
securities . . . . . . . . . . . . . . . . . . . . . . . . (63) (63)
Deferred tax benefit relating to unrealized
loss on available for sale securities . . . . . . 22 22
Adjustment to initially apply FASB Statement
No. 158 . . . . . . . . . . . . . . . . . . . . . . . . . (14,940) (14,940)
Deferred tax benefit resulting from
adjustment to initially apply FASB
Statement No. 158 . . . . . . . . . . . . . . . . . . 5,229 5,229
Valuation reserve resulting from adjustment
to initially apply FASB Statement
No. 158 . . . . . . . . . . . . . . . . . . . . . . . . . (5,229) (5,229)
Current period unrealized gain on cash flow
hedges, net of reclassifications . . . . . . . . . 3,543 3,543
Deferred tax liability relating to unrealized
gain on derivative financial instruments . . . (1,240) (1,240)
Balance at December 31, 2006 . . . . . . . . . . . $112,680 $660 $(14,940) $ 788 $ 99,188
Net losses of $240,000 and $283,000 and a net gain of $6,650,000 were reclassified into earnings related to
derivative instruments designated and qualifying as cash flow hedges in 2006, 2005 and 2004, respectively.
Charge Related to Restructuring Activities
On July 28, 2005, the company announced multi-year cost reductions and profit improvement actions, which
included: reducing global headcount, outsourcing improvements utilizing the company’s China manufacturing
capability and third parties, shifting substantial resources from product development to manufacturing cost
reduction activities and product rationalization, reducing freight exposure through freight auctions and changing
the freight policy, general expense reductions, and exiting four facilities.
The restructuring was necessitated by the continued decline in reimbursement by the U.S. government as well
as similar reimbursement pressures abroad and continued pricing pressures faced by the company as a result of
outsourcing by competitors to lower cost locations.
FS-27
INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Other Comprehensive Earnings (Loss) — Continued