Invacare 2008 Annual Report Download - page 97

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INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Income Taxes
Earnings (loss) before income taxes consist of the following (in thousands):
2008 2007 2006
Domestic ....................................................... $(6,444) $(40,369) $(349,144)
Foreign ......................................................... 57,945 54,859 39,620
$51,501 $ 14,490 $(309,524)
The company has provided for income taxes (benefits) as follows (in thousands):
2008 2007 2006
Current:
Federal ........................................................... $ 560 $(2,340) $(12,815)
State ............................................................. (600) 1,430 750
Foreign .......................................................... 11,570 8,180 16,030
11,530 7,270 3,965
Deferred:
Federal ........................................................... 190 3,230 11,695
Foreign .......................................................... 1,230 2,800 (7,410)
1,420 6,030 4,285
Income Taxes ..................................................... $12,950 $13,300 $ 8,250
A reconciliation to the effective income tax rate from the federal statutory rate follows:
2008 2007 2006
Statutory federal income tax rate .............................................. 35.0% 35.0% (35.0)%
State and local income taxes, net of federal income tax benefit ...................... (.8) 6.4 0.2
Tax credits ............................................................... (2.8) (37.9) (0.1)
Foreign taxes at less than the federal statutory rate excluding valuation allowances ...... (14.8) (92.4) (2.0)
Asset write-downs related to goodwill and other intangibles, without tax benefit ........ — — 30.2
Federal and foreign valuation allowance ........................................ 6.1 176.2 9.3
Variable interest entity without tax ............................................ — (12.3) .9
Withholding taxes ......................................................... 1.5 9.0 .5
Compensation ............................................................ .6 10.4 —
Dividends ................................................................ 3.7 — —
Life Insurance ............................................................ 2.2 (4.4) (.1)
Foreign branch activity ..................................................... (6.8) (20.3) (1.1)
Other, net ................................................................ 1.2 22.1 (.1)
25.1% 91.8% 2.7%
Included in 2007 foreign deferred tax expense is a $7,820,000 benefit related to a tax rate change in
Germany corresponding to the reduction of the company’s net German deferred tax liability.
FS-31