Notes to Financial Statements
NOTE 7—Receivables
The following is a summary of receivables at December
31 (in millions):
The Company's Receivables Securitization (as defined in Note
12—Debt) provides for the sale, on a revolving basis, of
certain of the accounts receivable of Fisher Scientific Company,
L.L.C., a Delaware limited liability corporation ("FSC"),
to a special purpose, bankruptcy remote subsidiary of FSC that
entered into an agreement to transfer, on a revolving basis,
an undivided percentage ownership interest in a designated pool
of accounts receivable up to a maximum amount based on a defined
calculated percentage of the outstanding accounts receivable
balance. As collections reduce accounts receivable included
in the pool, new receivables are sold into the pool. During
2000, the Company collected and reinvested, on a revolving basis,
approximately $475 million of receivables and used $21.7 million
of additional collections to reduce this facility to zero at
December 31, 2000. The special purpose subsidiary has the risk
of credit loss on the receivables and, accordingly, the full
amount of the allowance for doubtful accounts has been retained
in the Company’s balance sheet. Under the terms of the
Receivables Securitization, FSC retains collection and administrative
responsibilities for the receivables in the pool. Due to the
short-term nature of the receivables, the Company’s retained
interest in the pool during the year is valued at historical
cost which approximates fair value. The facility has a remaining
term of two years and the effective interest rate is approximately
one month LIBOR plus 50 basis points. The Company recorded $3.9
million of losses on the sale of receivables as interest expense
in the year ended December 31, 2000.
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