Stratasys Ltd. Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Annual and transition report of foreign private issuers pursuant to Section 13 or 15(d)

Income Taxes (Tables)

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Schedule of Deferred Tax Assets (Liabilities)

The components of the Company's deferred tax assets (liabilities) at December 31, 2013 and 2012 were as follows:

in thousands	2013			2012
Current deferred tax assets:
Inventory related	$	9,309		$	1,110
Tax losses carry forward		3,773			-
Deferred revenue		612			528
Allowance for doubtful accounts		462			295
Research and development credit carryforward		475			-
Reserve for warranty expenses		67			468
Provision for employee related obligations		1,219			1,269
Accrued interest		-			1,126
Issuance costs		431			-
Other		153			172
Current deferred tax assets	$	16,501		$	4,968

Long-term deferred tax assets:
Tax losses carry forward		407			-
Foreign currency losses		358			-
Stock-based compensation expense		586			1,184
Long-term deferred tax assets	$	1,351		$	1,184

Current deferred tax liabilities
Issuance costs		(112	)		-
Inventory related		-			(645	)
Deferred revenue		-			(104	)
Order backlog		-			(196	)
Current deferred tax liabilities	$	(112	)	$	(945	)

Long-term deferred tax assets:
Stock-based compensation expense	$	903		$	876
Tax losses carry forward		8,311			463
Depreciation		579			-
Research and development credit carryforward		1,904			-
Issuance costs		478			-
Foreign tax credit		893			-
Other		367			186
Long-term deferred tax assets		13,435			1,525

Long-term deferred tax liabilities:
Intangibles		(115,248	)		(55,320	)
Issuance costs		(430	)		-
Depreciation		(3,658	)		(898	)
Net long-term deferred tax liabilities	$	(105,901	)	$	(54,693	)

Total	$	(88,161	)	$	(49,486	)

Schedule of Income (loss) before Income Taxes

Income (loss) before income taxes for the years ended December 31, 2013, 2012 and 2011 was as follows:

in thousands	2013			2012			2011
Domestic (1)	$	(13,391	)	$	23,274		$	30,464
Foreign		(15,990	)		(4,764	)		888
	$	(29,381	)	$	18,510		$	31,352

Schedule of Components of Income Tax Expense (Benefit)

For 2012 and 2011 domestic represents U.S. federal taxes, while foreign reflects non-U.S.):

in thousands	2013			2012			2011
Current
Domestic		14,714			12,319			10,667
Foreign		1,914			1,445			293
		16,628			13,764			10,960
Deferred
Domestic		(9,428	)		(3,113	)		(234	)
Foreign		(9,674	)		(964	)		-
		(19,102	)		(4,077	)		(234	)
Total income taxes	$	(2,474	)	$	9,687		$	10,726

Schedule of Reconciliation of Income Tax Rate

A reconciliation of the statutory federal income tax rate and the effective tax rate for the years ended December 31, 2013, 2012, and 2011 is set forth below:

	2013			2012			2011
Statutory rate (1)	25.0		%	35.0		%	35.0		%
Approved and Privileged enterprise benefits	6.0
State income taxes, net of
federal benefit	-			2.5			2.1
Tax exempt interest income	-			-			-
Stock compensation expense	(17.3	)		3.4			0.6
Manufacturing deduction	-			(5.9	)		(2.7	)
Federal research and
development tax credit	-			-			(1.6	)
Tax contingencies	(12.1	)		(3.5	)		0.4
Non-deductible acquisition expenses	(4.8	)		12.9			0.3
Earning taxed under foreign law	13.2			3.4			-
Other	(1.6	)		4.5			0.1
Effective income tax rate	8.4		%	52.3		%	34.2		%

Schedule of Unrecognized Tax Benefits

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

in thousands	2013			2012
Balance at beginning of year	$	3,809		$	1,598
Additions for tax positions related to the current year		1,248			223
Additions for tax positions related to previous years		2,562			14
Additions from the merger		-			3,130
Reduction of reserve for statute expirations		(254	)		(1,156	)
Balance at end of year	$	7,365		$	3,809