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INVACARE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
FS-18
While there was no indication of impairment in 2013 related to goodwill for the Europe or IPG segments, a future potential
impairment is possible for these segments should actual results differ materially from forecasted results used in the valuation
analysis. Furthermore, the Company's annual valuation of goodwill can differ materially if the market inputs used to determine
the discount rate change significantly. For instance, higher interest rates or greater stock price volatility would increase the discount
rate and thus increase the chance of impairment. In consideration of this potential, the Company reviewed the results if the discount
rate used were 100 basis points higher for the 2013 impairment analysis and determined that there still would not be an indicator
of potential impairment for the Europe or IPG segments.
Other Intangibles
All of the Company’s other intangible assets have been assigned definite lives and continue to be amortized over their useful
lives, except for $31,944,000 related to trademarks, which have indefinite lives. The changes in intangible balances reflected on
the balance sheet from December 31, 2012 to December 31, 2013 were the result of foreign currency translation and amortization
except for intangible write-downs, noted below, which totaled $1,523,000.
The Company’s intangibles consist of the following (in thousands):
December 31, 2013 December 31, 2012
Historical
Cost Accumulated
Amortization Historical
Cost Accumulated
Amortization
Customer Lists. . . . . . . . . . . . . . . . . . . . . . . . . . . $ 92,637 $ 65,158 $ 93,572 $ 58,447
Trademarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,944 — 31,280 —
License agreements . . . . . . . . . . . . . . . . . . . . . . . 1,393 1,393 3,212 3,212
Developed Technology . . . . . . . . . . . . . . . . . . . . 9,916 6,390 9,650 5,588
Patents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,107 5,568 6,060 5,234
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,407 8,311 7,571 7,212
$ 149,404 $ 86,820 $ 151,345 $ 79,693
Amortization expense related to other intangibles was $10,567,000, $10,747,000 and $10,542,000 for 2013, 2012 and 2011,
respectively. Estimated amortization expense for each of the next five years is expected to be $8,431,000 for 2014, $7,041,000 in
2015, $5,706,000 in 2016, $2,262,000 in 2017 and $2,262,000 in 2018. Amortized intangibles are being amortized on a straight-
line basis over remaining lives from 1 to 11 years with the majority of the intangibles being amortized over an average remaining
life of approximately 6 years.
In accordance with ASC 350, Intangibles—Goodwill and Other, the Company reviews intangibles for impairment. The
Company's intangible assets consist of intangible assets with defined lives as well as intangible assets with indefinite lives. Defined-
lived intangible assets consist principally of customer lists, developed technology, license agreements, patents and other
miscellaneous intangibles such as non-compete agreements. The Company's indefinite lived intangible assets consist entirely of
trademarks.
The Company evaluates the carrying value of definite-lived assets whenever events or circumstances indicate possible
impairment. Definite-lived assets are determined to be impaired if the future un-discounted cash flows expected to be generated
by the asset are less than the carrying value. Actual impairment amounts for definite-lived assets are then calculated using a
discounted cash flow calculation. The Company reviews indefinite-lived assets for impairment annually in the fourth quarter of
each year and whenever events or circumstances indicate possible impairment. Any impairment amounts for indefinite-lived
assets are calculated as the difference between the future discounted cash flows expected to be generated by the asset less than
the carrying value for the asset.
During 2013, the Company recognized intangible write-down charges of $1,523,000 comprised of: trademarks with indefinite
lives impairment of $568,000, a trademark with a definite life impairment of $123,000, customer list impairment of $442,000 and
developed technology impairment of $223,000 all recorded in the IPG segment and a customer list impairment of $167,000
recorded in the North America/HME segment. The after-tax and pre-tax impairment amounts were the same for each of the above
impairments except for the indefinite-lived trademark impairments in the IPG segment, which were $496,000 after-tax.