Invacare 2013 Annual Report Download - page 96

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INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
FS-22
The components of the Company’s convertible debt as of December 31, 2013 and 2012 consist of the following (in thousands):
2013 2012
Carrying amount of equity component. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25,381 $ 25,381
Principal amount of liability component . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 13,350 $ 13,350
Unamortized discount. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,709)(3,341)
Net carrying amount of liability component. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10,641 $ 10,009
The unamortized discount of $2,709,000 is to be amortized through February 2017. The effective interest rate on the liability
component was 11.5% for 2007 through 2012. Non-cash interest expense of $633,000, $577,000 and $1,565,000 was recognized
in 2013, 2012 and 2011, respectively, in comparison to actual interest expense paid of $551,000, $560,000 and $1,670,000 based
on the stated coupon rate of 4.125%, for each of the same periods. The convertible debt was not convertible as of December 31,
2013 nor was the convertible debt conversion price threshold of $32.23 met during 2013.
Included in the senior secured revolving credit facility, there were no borrowings denominated in foreign currencies as of
December 31, 2012 or December 31, 2013. For 2013 and 2012, the weighted average interest rate on all borrowings was 2.73%
and 2.36%, respectively.
The aggregate minimum maturities of long-term debt for each of the next five years are as follows: $14,102,000 in 2014,
$1,148,000 in 2015, $16,175,000 in 2016, $1,249,000 in 2017, and $694,000 in 2018. Interest paid on all borrowings was
$4,046,000, $8,866,000 and $10,789,000 in 2013, 2012 and 2011, respectively.
Other Long-Term Obligations
Other long-term obligations as of December 31, 2013 and 2012 consist of the following (in thousands):
2013 2012
Supplemental Executive Retirement Plan liability. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 27,049 $ 27,460
Product liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,185 17,011
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36,328 30,123
Deferred compensation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,679 11,774
Uncertain tax obligation including interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,524 13,430
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,511 12,397
Total long-term obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 118,276 $ 112,195
Leases and Commitments
The Company leases a portion of its facilities, transportation equipment, data processing equipment and certain other
equipment. These leases have terms from 1 to 20 years and provide for renewal options. Generally, the Company is required to
pay taxes and normal expenses of operating the facilities and equipment. As of December 31, 2013, the Company is committed
under non-cancelable operating leases, which have initial or remaining terms in excess of one year and expire on various dates
through 2024. Lease expenses were approximately $24,802,000 in 2013, $24,277,000 in 2012 and $24,249,000 in 2011.
The amount of buildings and equipment capitalized in connection with capital leases was $13,435,000 and $14,416,000 at
December 31, 2013 and 2012, respectively. At December 31, 2013 and 2012, accumulated amortization was $6,942,000 and
$6,982,000, respectively, which is included in depreciation expense.