Invacare 2009 Annual Report Download - page 98

INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Income Taxes—Continued
At December 31, 2009, total deferred tax assets were $96,495,000, total deferred tax liabilities were
$61,331,000 and the tax valuation allowance total was $65,050,000 for a net deferred income tax liability of
$29,886,000 compared to total deferred tax assets of $107,230,000, total deferred tax liabilities of $55,336,000
and a tax valuation allowance total of $75,507,000 for a net deferred income tax liability of $23,613,000 at
December 31, 2008. Significant components of deferred income tax assets and liabilities at December 31, 2009
and 2008 are as follows (in thousands):
2009 2008
Current deferred income tax assets (liabilities), net:
Loss carryforwards ............................................... $ 907 $ 1,307
Bad debt ....................................................... 8,657 6,721
Warranty ....................................................... 5,167 4,121
State and local taxes .............................................. 2,628 3,339
Other accrued expenses and reserves ................................. 1,932 1,690
Inventory ....................................................... 3,984 2,320
Compensation and benefits ......................................... 2,089 2,821
Product liability ................................................. 292 292
Valuation allowance .............................................. (23,229) (21,984)
Other, net ...................................................... (2,037) 1,424
$ 390 $ 2,051
Long-term deferred income tax assets (liabilities), net:
Goodwill & intangibles ........................................... (27,176) (21,995)
Convertible debt ................................................. (16,895) (18,348)
Fixed assets ..................................................... (15,223) (14,993)
Compensation and benefits ......................................... 12,300 14,875
Loss and credit carryforwards ...................................... 44,116 49,758
Product liability ................................................. 4,203 4,429
State and local taxes .............................................. 6,559 13,160
Valuation allowance .............................................. (41,821) (53,523)
Other, net ...................................................... 3,661 973
$(30,276) $(25,664)
Net Deferred Income Taxes ........................................ $(29,886) $(23,613)
The company recorded a valuation allowance for its domestic net deferred tax assets due to the domestic
loss recognized in 2006, 2007, 2008 and 2009 and based upon near term domestic projections. During 2007,
2008 and 2009, the company also recorded valuation allowances for certain foreign country net deferred tax
assets where recent performance results in a three year cumulative loss and near term projections indicate it is
more likely than not that the deferred tax assets will not be realized. The company made income tax payments of
$12,340,000, $10,564,000, and $1,060,000 during the years ended December 31, 2009, 2008 and 2007,
respectively.
At December 31, 2009, the company had foreign tax loss carryforwards of approximately $40,600,000 of
which $29,600,000 are non-expiring, $500,000 expire in 2014, $5,750,000 expire in 2015, and $4,750,000 expire
in 2026, of which $29,600,000 are offset by valuation allowances. At December 31, 2009 the company also had a
$13,025,000 domestic capital loss carryforward of which $9,225,000 expires in 2011 and $3,800,000 expires in
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