Invacare 2012 Annual Report Download - page 72

Debentures due in February 2027, of which $3,341,000 is included in equity. Accordingly, while the company is
exposed to increases in interest rates, its exposure to the volatility of the current market environment is limited as
the company does not currently need to re-finance any of its debt. However, the company’s Credit Agreement
contains covenants with respect to, among other items, consolidated funded indebtedness to consolidated
earnings before interest, taxes, depreciation and amortization (EBITDA) and interest coverage, as defined in the
agreement. The company is in compliance with all covenant requirements, but should it fall out of compliance
with these requirements, the company would have to attempt to obtain alternative financing and thus likely be
required to pay much higher interest rates.
Item 8. Financial Statements and Supplementary Data.
Reference is made to the Report of Independent Registered Public Accounting Firm, Consolidated Balance
Sheets, Consolidated Statement of Comprehensive Income (Loss), Consolidated Statement of Cash Flows,
Consolidated Statement of Shareholders’ Equity, Notes to Consolidated Financial Statements and Financial
Statement Schedule, which appear on pages FS-1 to FS-64 of this Annual Report on Form 10-K.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
None.
Item 9A. Controls and Procedures.
(a) Evaluation of Disclosure Controls and Procedures
As of December 31, 2012, an evaluation was performed, under the supervision and with the participation of
the company’s management, including the Chief Executive Officer and Chief Financial Officer, of the
effectiveness of the design and operation of the company’s disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)). Based on that evaluation, the company’s management, including
the Chief Executive Officer and Chief Financial Officer, concluded that the company’s disclosure controls and
procedures were effective as of December 31, 2012, in ensuring that information required to be disclosed by the
company in the reports it files and submits under the Exchange Act is (1) recorded, processed, summarized and
reported, within the time periods specified in the Commission’s rules and forms and (2) accumulated and
communicated to the company’s management, including the Chief Executive Officer and the Chief Financial
Officer, as appropriate to allow for timely decisions regarding required disclosure.
(b) Management’s Annual Report on Internal Control Over Financial Reporting
Management is responsible for establishing and maintaining a system of adequate internal control over
financial reporting that provides reasonable assurance that assets are safeguarded and that transactions are
authorized, recorded and reported properly. The system includes self-monitoring mechanisms; regular testing by
the company’s internal auditors; a Code of Conduct; written policies and procedures; and a careful selection and
training of employees. Actions are taken to correct deficiencies as they are identified. An effective internal
control system, no matter how well designed, has inherent limitations—including the possibility of the
circumvention or overriding of controls—and therefore can provide only reasonable assurance that errors and
fraud that can be material to the financial statements are prevented or would be detected on a timely basis.
Further, because of changes in conditions, internal control system effectiveness may vary over time.
Management’s assessment of the effectiveness of the company’s internal control over financial reporting is
based on the Internal Control—Integrated Framework published by the Committee of Sponsoring Organizations
of the Treadway Commission.
In management’s opinion, internal control over financial reporting is effective as of December 31, 2012.
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