Invacare 2013 Annual Report Download - page 84

INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
FS-10
number of Common Shares and Class B Common Shares outstanding plus the effects of dilutive stock options and awards
outstanding during the year. Diluted earnings per share can potentially be impacted by the convertible notes should the conditions
be met to make the notes convertible or if average market price of Company stock for the period exceeds the conversion price of
$24.79. For periods in which there was a net loss, loss per share assuming dilution utilized weighted average shares-basic.
Defined Benefit Plans: The Company’s benefit plans are accounted for in accordance with Compensation-Retirement
Benefits, ASC 715 which requires plan sponsors to recognize the funded status of their defined benefit postretirement benefit plans
in the consolidated balance sheet, measure the fair value of plan assets and benefit obligations as of the balance sheet date and to
recognize changes in that funded status in the year in which the changes occur through comprehensive income.
Reclassifications: Certain amounts in prior period financial statements have been reclassified to conform to the presentation
used in the year ended December 31, 2013 as a result of discontinued operations.
Recent Accounting Pronouncements: In February, 2013, the Financial Accounting Standards Board (FASB) issued
Accounting Standards Update No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income
(ASU 2013-02 or the ASU). ASU 2013-02 requires companies to report, in one place, changes in and reclassifications out of
accumulated other comprehensive income (OCI). The ASU does not change what is required to be reported in OCI. The Company
adopted ASU 2013-02 in the first quarter of 2013 with no impact on the Company's Condensed Consolidated Statement of
Comprehensive Income (Loss), Balance Sheets or Statement of Cash Flows. See Accumulated Other Comprehensive Income
(Loss) in the Notes to these Consolidated Financial Statements.
In February 2013, the FASB issued ASU No. 2013-04, Liabilities (Topic 405), Obligations Resulting from Joint and Several
Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date. This update requires an entity
to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed
at the reporting date, as the sum of a) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-
obligors and b) any additional amount the reporting entity expects to pay on behalf of its co-obligors. The update also requires an
entity to disclose the nature and amount of the obligation as well as other information about those obligations. The requirements
of ASU No. 2013-04 are effective on a retrospective basis for interim and annual periods beginning after December 15, 2013. The
Company is in the process of determining the effects, if any, that the adoption of ASU No. 2013-04 will have on the Company’s
financial position, results of operations or cash flows.
In December, 2011, the FASB issued ASU 2011-11, Disclosures about Offsetting Assets and Liabilities, and in January,
2013, issued ASU 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities (ASU 2013-01). ASU
2013-01 is intended to help investors and other financial statement users to better assess the effect or potential effect of offsetting
arrangements on an entity's financial position and requires companies to disclose both gross and net information about both
instruments and transactions eligible for offset in the financial position; and to disclose instruments and transactions subject to an
agreement similar to a master netting agreement. The Company adopted ASU 2013-01 in the first quarter of 2013 with no impact
on the Company's Condensed Consolidated Statement of Comprehensive Income (Loss), Balance Sheets or Statement of Cash
Flows. See Derivatives in the Notes to these Consolidated Financial Statements. See Accumulated Other Comprehensive Income
(Loss) in the Notes to these Consolidated Financial Statements.
Discontinued Operations
On December 21, 2012, as part of the Company's globalization strategy, and to allow it to focus on its core equipment product
lines, the Company entered into an agreement to sell ISG and determined on that date that the "held for sale" criteria of ASC
360-10-45-9 were met. Accordingly, the assets and liabilities of ISG (long-lived asset disposal group) are shown at their carrying
amounts, which are lower than the fair values less cost to sale as of December 31, 2012.
On January 18, 2013, the Company completed the sale of the ISG medical supplies business to AssuraMed, Inc. for a purchase
price of $150,800,000 in cash. ISG had been operated on a stand-alone basis and reported as a reportable segment of the Company.
The Company recorded a gain of $59,402,000 pre-tax in 2013 which represented the excess of the net sales price over the book
value of the assets and liabilities of ISG, excluding cash. The sale of this business is dilutive to the Company's results. The Company
utilized the proceeds from the sale to reduce debt outstanding under its revolving credit facility in the first quarter of 2013. The
Company recorded expenses related to the sale of $5,350,000, of which $4,998,000 was paid as of December 31, 2013.