2.2.0.7 false CUSTOMER FINANCING 10501 - Disclosure - CUSTOMER FINANCING true false false false 1 USD false false Unit12 Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 Unit13 Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 Unit1 Standard http://www.xbrl.org/2003/instance shares xbrli 0 $ 5 CUSTOMER FINANCING 3 pdco_CustomerFinancing pdco false na duration This item represents the disclosure of arrangements under which the Company sells its customer finance contracts. false false false false false false false false false false false label false 1 false false false false 0 0 <div> <div> NOTE 5 CUSTOMER FINANCING As a convenience to its customers, the Company offers several different financing alternatives including both a Company sponsored program and a third party program. For the third party program, the Company acts as a facilitator between the customer and the third party financing entity with no on-going involvement in the financing transaction. Under the Company sponsored program, equipment purchases by customers with strong credit are financed to a maximum of $0.4 million for any one customer. The Company generally sells the customers' financing contracts to outside financial institutions in the normal course of its business. The Company currently has two arrangements under which it has sold these contracts. In fiscal 2003, the Company initiated an agreement to sell its equipment finance contracts to a commercial paper conduit managed by JPMorgan Chase Bank N.A. To participate in the commercial paper conduit, the Company was required to establish a special purpose entity ("SPE"), PDC Funding Company, LLC, a consolidated, wholly owned subsidiary. The Company transfers financing contracts to the SPE and in turn, the SPE sells the contracts to the commercial paper conduit. The SPE does not issue any debt. While there is no recourse to the Company by the commercial paper conduit on the sale of contracts, the Company receives only 84% of the principal amount of the contracts upon the sale. The remaining 16% of the proceeds is held by the conduit as security against the eventual performance of the portfolio. The holdback receivable from the conduit is recorded as a non-current asset, which is carried at its estimated fair market value. The capacity of this arrangement with the conduit was amended in the fourth quarter of fiscal 2010 from $367 million to a maximum of $550 million. The Company also maintains an agreement with U.S. Bank National Association, as agent, whereby the U.S. Bank group purchased customers' financing contracts. The Company has established another SPE, PDC Funding LLC II ("PDC II"), as a consolidated, wholly owned subsidiary, which sold financing contracts to the U.S. Bank group. The Company received 88% of the principal amounts of the contracts upon sale with the remaining 12% of the proceeds held by the banks as security against the eventual performance of the portfolio. The holdback receivable from the banks is recorded as a non-current asset, which is carried at its estimated fair market value. The capacity under the agreement was $110 million. In the fourth quarter of fiscal 2010, this agreement was amended such that no additional contracts will be sold, but the remaining contracts previously sold and outstanding under the agreement will continue under the agreement. Approximately $71 million of such contracts were outstanding as of July 31, 2010.   These financing arrangements are accounted for as a sale of assets under the provisions of ASC Topic No. 860, "Transfers and Servicing." During the three months ended July 31, 2010 and July 25, 2009, the Company sold $71.5 million and $43.6 million, respectively, of its contracts under these arrangements. The Company retains servicing responsibilities under both agreements, for which it is paid a servicing fee. The servicing fees received by the Company are considered adequate compensation for services rendered. Accordingly, no servicing asset or liability has been recorded. The agreements require the Company to maintain a minimum current ratio and maximum leverage ratio. The Company was in compliance with the covenants at July 31, 2010. Included in current receivables in the consolidated balance sheets are approximately $100.3 million, net of unearned income of $2.6 million, and $116.7 million, net of unearned income of $4.2 million, as of July 31, 2010 and April 24, 2010, respectively, of finance contracts not yet sold by the Company. A total of $444.1 million of finance contracts receivable sold under the agreements was outstanding at July 31, 2010. The residual receivable under the arrangements was approximately $66.2 and $65.2 million as of July 31, 2010 and April 24, 2010, respectively. Since the internal financing program began in 1994, bad debt write-offs have amounted to less than one-percent of the loans originated. </div>   </div> NOTE 5 CUSTOMER FINANCING As a convenience to its customers, the Company offers several different financing alternatives including both a Company sponsored false false false us-types:textBlockItemType textblock This item represents the disclosure of arrangements under which the Company sells its customer finance contracts. No authoritative reference available. false 1 1 false UnKnown UnKnown UnKnown false true