Invacare 2007 Annual Report Download - page 51

Download and view the complete annual report

Please find page 51 of the 2007 Invacare annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 114

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114

CONTRACTUAL OBLIGATIONS
Payments due by period
Total
Less than
1 year 1-3 years 3-5 years
More than
5 years
(In thousands)
Long-term debt obligations
Credit Facility .................................. $266,600 $31,727* $ 31,762 $30,145 $172,966
9.75% Senior Notes due 2015 ..................... 296,571 17,063 34,125 34,125 211,258
4.125% Convertible Senior Subordinated Debentures
due 2027 .................................... 241,504 5,569 11,138 11,138 213,659
Operating lease obligations ....................... 49,601 20,361 19,007 5,144 5,089
Capital lease obligations ......................... 18,786 2,021 3,516 3,074 10,175
Purchase obligations (primarily computer systems
contracts) ................................... 1,033 400 633 — —
Product liability ................................ 21,136 3,556 8,447 3,999 5,134
SERP ........................................ 33,920 424 2,074 2,074 29,348
Other, principally deferred compensation ............ 10,464 473 1,374 285 8,332
Total ......................................... $939,615 $81,594 $112,076 $89,984 $655,961
* Includes an estimated additional payment of $13,572,000 as required by the company’s credit facility based
upon “excess cash flow” (as defined in the agreement). While additional payments may be required based on
excess cash flow, the above table does not include any additional such payments beyond the estimated
payment for 2008.
“Other” includes an estimated payment of $321,000 in less than 1 year and $959,000 in years 1-3 for
liabilities recorded for uncertain tax positions. The table does not include any other payments related to liabilities
recorded for uncertain tax positions as the company can not make a reasonably reliable estimate as to any other
payments. See Income Taxes in the Notes to the Consolidated Financial Statements included in this report.
DIVIDEND POLICY
It is the company’s policy to pay a nominal dividend in order for its stock to be more attractive to a broader
range of investors. The current annual dividend rate remains at $0.05 per Common Share and $0.045 per Class B
Common Share. It is not anticipated that this will change materially as the company continues to have available
significant growth opportunities through internal development and acquisitions. For 2007, dividends of $0.05 per
Common Share and $0.045 per Class B Common Share were declared and paid.
CRITICAL ACCOUNTING POLICIES
The Consolidated Financial Statements included in the report include accounts of the company, all majority-
owned subsidiaries and a variable interest entity for which the company is the primary beneficiary. The
preparation of financial statements in conformity with accounting principles generally accepted in the United
States requires management to make estimates and assumptions in certain circumstances that affect amounts
reported in the accompanying Consolidated Financial Statements and related footnotes. In preparing these
financial statements, management has made its best estimates and judgments of certain amounts included in the
financial statements, giving due consideration to materiality. However, application of these accounting policies
involves the exercise of judgment and use of assumptions as to future uncertainties and, as a result, actual results
could differ from these estimates.
The following critical accounting policies, among others, affect the more significant judgments and
estimates used in preparation of our consolidated financial statements.
I-46