Invacare 2011 Annual Report Download - page 105

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INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Income Taxes—Continued
At December 31, 2011, the company had foreign tax loss carryforwards of approximately $39,102,000 of
which $31,662,000 are non-expiring and $7,440,000 expire in 2027, of which $30,305,000 are offset by valuation
allowances. At December 31, 2011, the company also had a $3,798,000 domestic capital loss carryforward which
expires in 2012, and $370,000,000 of domestic state and local tax loss carryforwards, of which $175,000,000
expire between 2012 and 2015, $92,000,000 expire between 2016 and 2025 and $103,000,000 expire after 2026.
The company has domestic federal tax credit carryforwards of $34,340,000 of which $12,953,000 expire between
2014 and 2018 and $21,387,000 expire between 2019 and 2021.
As of December 31, 2011 and 2010, the company had a liability for uncertain tax positions, excluding
interest and penalties of $3,525,000 and $3,420,000, respectively. The company does not believe there will be a
material change in its unrecognized tax positions over the next twelve months.
The total liabilities associated with unrecognized tax benefits that, if recognized, would impact the effective
tax rates were $3,525,000 and $3,420,000 at December 31, 2011 and 2010, respectively.
A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows (in
thousands):
2011 2010
Balance at beginning of year ................................................... $4,500 $ 6,710
Additions to:
Positions taken during the current year ....................................... 475 1,400
Positions taken during a prior year .......................................... 105 265
Deductions due to:
Exchange rate impact .................................................... 20 (65)
Positions taken during a prior year .......................................... (545) (15)
Settlements with taxing authorities .......................................... (195) (3,185)
Lapse of statute of limitations .............................................. (285) (610)
Balance at end of year ........................................................ $4,075 $ 4,500
The company recognizes interest and penalties associated with uncertain tax positions in income tax
expense. During 2011, 2010 and 2009 the benefit for interest and penalties was $20,000, $1,150,000 and
$490,000, respectively. The company had approximately $720,000 and $740,000 of accrued interest and
penalties as of December 31, 2011 and 2010, respectively.
The company and its subsidiaries file income tax returns in the U.S. and certain foreign jurisdictions. The
company is subject to U.S. federal income tax examinations for calendar year 2009 and 2011, and is subject to
various U.S. state income tax examinations for 2006 to 2011. With regards to foreign income tax jurisdictions,
the company is generally subject to examinations for the periods 2006 to 2011.
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