Invacare 2011 Annual Report Download - page 94

INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
Long-Term Debt—Continued
convertible debt equates to 559,000 shares. The debentures are redeemable at the company’s option, subject to
specified conditions, on or after February 6, 2012 through and including February 1, 2017. The company may
redeem some or all of the debentures for cash on or after February 1, 2017. Holders have the right to require the
company to repurchase all or some of their debentures upon the occurrence of certain circumstances on
February 1, 2017 and 2022. The company evaluated the terms of the call, redemption and conversion features
under the applicable accounting literature, including Derivatives and Hedging, ASC 815, and determined that the
features did not require separate accounting as derivatives. The notes, debentures and common shares issuable
upon conversion of the debentures have been registered under the Securities Act.
The components of the company’s convertible debt as of December 31, 2011 and 2010 consist of the
following (in thousands):
2011 2010
Carrying amount of equity component .......................................... $25,216 $ 46,205
Principal amount of liability component ......................................... $13,850 $ 77,201
Unamortized discount ....................................................... (4,053) (25,137)
Net carrying amount of liability component ...................................... $ 9,797 $ 52,064
The unamortized discount of $4,053,000 is to be amortized through February 2017. The effective interest
rate on the liability component was 11.5% for 2007 through 2011. Non-cash interest expense of $1,565,000,
$3,198,000 and $4,142,000 was recognized in 2011, 2010 and 2009, respectively, in comparison to actual interest
expense paid of $1,670,000, $4,178,000 and $5,569,000 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, 2011 nor was the convertible debt
conversion price threshold of $32.23, as noted above, met.
Included in the $400,000,000 senior secured revolving credit facility, there was $12,982,000 of borrowings
denominated in foreign currencies as of December 31, 2010 compared to none as of December 31, 2011. For
2011 and 2010, the weighted average interest rate on all borrowings was 2.64% and 6.06%, respectively.
The aggregate minimum maturities of long-term debt for each of the next five years are as follows:
$5,044,000 in 2012, $1,143,000 in 2013, $1,071,000 in 2014, $1,088,000 in 2015, and $244,161,000 in 2016.
Interest paid on all borrowings was $10,789,000, $28,341,000 and $33,188,000 in 2011, 2010 and 2009,
respectively.
Other Long-Term Obligations
Other long-term obligations as of December 31, 2011 and 2010 consist of the following (in thousands):
2011 2010
Supplemental Executive Retirement Plan liability ................................. $ 27,488 $26,133
Product liability ............................................................ 18,280 20,026
Deferred income taxes ....................................................... 28,948 32,559
Deferred compensation ...................................................... 9,937 8,542
Other .................................................................... 21,497 12,331
Total long-term obligations ................................................... $106,150 $99,591
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