Invacare 2012 Annual Report Download - page 117

INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
At December 31, 2012, the company had foreign tax loss carryforwards of approximately $46,483,000 of
which $46,056,000 are non-expiring and $427,000 expire in 2027, of which $45,128,000 are offset by valuation
allowances. At December 31, 2012, the company also had $380,000,000 of domestic state and local tax loss
carryforwards, of which $156,000,000 expire between 2013 and 2016, $128,000,000 expire between 2017 and
2026 and $96,000,000 expire after 2027. The company has domestic federal tax credit carryforwards of
$35,372,000 of which $12,695,000 expire between 2014 and 2018 and $22,362,000 expire between 2019 and
2022, $68,000 expire in 2031 and $247,000 or indefinite.
As of December 31, 2012 and 2011, the company had a liability for uncertain tax positions, excluding
interest and penalties of $9,401,000 and $3,525,000, 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 $9,401,000 and $3,525,000 at December 31, 2012 and 2011, respectively.
A reconciliation of the beginning and ending balance of unrecognized tax benefits is as follows (in
thousands):
2012 2011
Balance at beginning of year ............................................. $ 4,075 $ 4,500
Additions to:
Positions taken during the current year ................................. 516 475
Positions taken during a prior year .................................... 6,055 105
Deductions due to:
Exchange rate impact ............................................... (14) 20
Positions taken during a prior year .................................... (118) (545)
Settlements with taxing authorities .................................... (621) (195)
Lapse of statute of limitations ........................................ (42) (285)
Balance at end of year .................................................. $ 9,851 $ 4,075
The company recognizes interest and penalties associated with uncertain tax positions in income tax
expense. During 2012, 2011 and 2010 the (expense) benefit for interest and penalties was $(3,309,000), $20,000
and $1,150,000, respectively. The company had approximately $4,029,000 and $720,000 of accrued interest and
penalties as of December 31, 2012 and 2011, respectively.
Included in the 2012 amounts above is an accrual of tax ($5,995,000) and interest ($3,341,000) resulting
from a foreign audit related to years before 2012.
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 years 2009 to 2012, and is subject to
various U.S. state income tax examinations for 2008 to 2012. With regards to foreign income tax jurisdictions,
the company is generally subject to examinations for the periods 2006 to 2012.
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