Invacare 2008 Annual Report Download - page 103

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INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Fair Values of Financial Instruments—Continued
The carrying amounts and fair values of the company’s financial instruments at December 31, 2008 and
2007 are as follows (in thousands):
2008 2007
Carrying
Value Fair Value
Carrying
Value Fair Value
Cash and cash equivalents ................................ $ 47,516 $ 47,516 $ 62,200 $ 62,200
Marketable securities ................................... 72 72 255 255
Other investments ...................................... 8,657 8,657 8,605 8,605
Installment receivables .................................. 9,946 9,946 27,863 27,863
Long-term debt (including current maturities of long-term
debt) ............................................... 478,820 374,143 537,852 556,743
Interest rate swaps ...................................... (2,737) (2,737) (2,495) (2,495)
Forward contracts in Other Current Assets ................... 1,413 1,413 — —
Forward contracts in Accrued Expenses ..................... (1,719) (1,719) (78) (78)
The company in estimating its fair value disclosures for financial instruments used the following methods
and assumptions:
Cash, cash equivalents and marketable securities: The carrying amount reported in the balance sheet for
cash, cash equivalents and marketable securities approximates its fair value.
Installment receivables: The carrying amount reported in the balance sheet for installment receivables
approximates its fair value. The interest rates associated with these receivables have not varied significantly since
inception. Management believes that after consideration of the credit risk, the net book value of the installment
receivables approximates market value.
Long-term debt: Fair values for the company’s senior notes and convertible debt are based on quoted market
prices as of year end, while the term loan and revolving credit facility fair values are based upon the company’s
estimate of the market for similar borrowing arrangements.
Other investments: The company has made other investments in limited partnerships and non-marketable
equity securities, which are accounted for using the cost method, adjusted for any estimated declines in value.
These investments were acquired in private placements and there are no quoted market prices or stated rates of
return.
Business Segments
The company operates in five primary business segments: North America/Home Medical Equipment (NA/
HME), Invacare Supply Group, Institutional Products Group, Europe and Asia/Pacific.
The NA/HME segment sells each of three primary product lines, which includes: standard, rehab and
respiratory products. Invacare Supply Group sells distributed product and the Institutional Products Group sells
health care furnishings and accessory products. Europe and Asia/Pacific sell the same product lines with the
exception of distributed products. Each business segment sells to the home health care, retail and extended care
markets.
FS-37