Sales of Certain Accounts Receivable

6 Months Ended

Jun. 30, 2011

Sales of Certain Accounts Receivable

Sales of Certain Accounts Receivable

NOTE 2: Sales of Certain Accounts Receivable

In order to improve the Company’s liquidity, one of the Company’s international subsidiaries in Latin America sells certain eligible trade accounts receivable without recourse under a program sponsored by a financial agent of the foreign government to accelerate collections.  There is no recourse to the subsidiary for uncollectible receivables and, once sold, the subsidiary’s effective control over the accounts is ceded.  The cost associated with these sales is calculated based on LIBOR plus five percentage points and the value and due date of the accounts receivable sold.

At the time of sale, the related accounts receivable are removed from the balance sheet and the proceeds and cost are recorded.  Accounts receivable sold under this arrangement totaled $45.5 million during the six months ended June 30, 2011.  The loss on the sale of these accounts for the three and six months ended June 30, 2011 was $0.1 million and $0.2 million, respectively, and is included in operating expenses in the Company’s consolidated statement of operations.  There were no sales of trade accounts receivable during the same period in 2010.