Customer Financing	12 Months Ended
Apr. 28, 2012
Customer Financing	6. Customer Financing As a convenience to our customers, we offer several different financing alternatives including both a Company sponsored program and a third party program. For the third party program, Patterson acts as a facilitator between the customer and the third party financing entity with no on-going involvement in the financing transaction. Under this sponsored program, equipment purchases by customers with strong credit are financed to a maximum of $0.4 million for any one customer. We generally sell the customers’ financing contracts to outside financial institutions in the normal course of its business. Patterson currently has two arrangements under which we have sold these contracts. In fiscal 2003, Patterson initiated an agreement to sell our equipment finance contracts to a commercial paper conduit managed by JPMorgan Chase Bank N.A. To participate in the commercial paper conduit, Patterson was required to establish a special purpose entity (“SPE”), PDC Funding Company, LLC, a consolidated, wholly owned subsidiary. In December 2010, this agreement was amended and restated and The Bank of Tokyo-Mitsubishi UFJ, Ltd. became the managing agent under the agreement. We transfer financing contracts to the SPE and in turn, the SPE sells the contracts to the commercial paper conduits. The SPE does not issue any debt. While there is no recourse to Patterson by the commercial paper conduits on the sale of contracts, we receive only approximately 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 deferred purchase price receivable from the conduit is recorded as a non-current asset, which is carried at its estimated fair market value. As of April 28, 2012, the maximum outstanding capacity of this arrangement with the conduits at any one time is $500 million. Patterson also maintains an agreement with commercial banks whereby the banks purchase customers’ financing contracts. Patterson has established another SPE, PDC Funding LLC II (“PDC II”), as a consolidated, wholly owned subsidiary, which sells financing contracts to the banks. We receive a portion of the principal amounts of the contracts upon sale with the remaining portion 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 at April 28, 2012 was $75 million. In the fourth quarter of fiscal 2010, this agreement was amended such that no additional contracts were sold, but the remaining contracts previously sold and outstanding under the agreement will continue under the agreement. On August 12, 2011, Fifth Third Bank replaced U.S. Bank National Association and the agreement was amended and restated. Under the restated agreement, Fifth Third Bank is the agent and contracts are again being sold. Approximately $75 million of such contracts were outstanding as of April 28, 2012. These financing arrangements are accounted for as a sale of assets under the provisions of ASC Topic No. 860, “Transfers and Servicing.” During fiscal 2012, 2011 and 2010, we sold approximately $287.6, $296.4 and $300.8 million, respectively, of contracts under these arrangements. Patterson retains servicing responsibilities under both agreements, for which we are paid a servicing fee. The servicing fees received by Patterson are considered adequate compensation for services rendered. Accordingly, no servicing asset or liability has been recorded. The agreements require us to maintain a minimum current ratio and maximum leverage ratio. Patterson was in compliance with the covenants at April 28, 2012. Included in current receivables in the consolidated balance sheets are approximately $81.8 million, net of unearned income of $7.4 million, and $78.5 million, net of unearned income of $3.6 million, as of April 28, 2012 and April 30, 2011, respectively, of finance contracts not yet sold by Patterson. A total of $479.4 million of finance contracts receivable sold under the agreements were outstanding at April 28, 2012. The residual receivable under the arrangements was approximately $78.9 and $78.0 million as of April 28, 2012 and April 30, 2011, respectively. Since the internal financing program began in 1994, bad debt write-offs have amounted to less than one-percent of the loans originated.

6. Customer Financing

As a convenience to our customers, we offer several different financing alternatives including both a Company sponsored program and a third party program. For the third party program, Patterson acts as a facilitator between the customer and the third party financing entity with no on-going involvement in the financing transaction. Under this sponsored program, equipment purchases by customers with strong credit are financed to a maximum of $0.4 million for any one customer. We generally sell the customers’ financing contracts to outside financial institutions in the normal course of its business. Patterson currently has two arrangements under which we have sold these contracts.

In fiscal 2003, Patterson initiated an agreement to sell our equipment finance contracts to a commercial paper conduit managed by JPMorgan Chase Bank N.A. To participate in the commercial paper conduit, Patterson was required to establish a special purpose entity (“SPE”), PDC Funding Company, LLC, a consolidated, wholly owned subsidiary. In December 2010, this agreement was amended and restated and The Bank of Tokyo-Mitsubishi UFJ, Ltd. became the managing agent under the agreement.

We transfer financing contracts to the SPE and in turn, the SPE sells the contracts to the commercial paper conduits. The SPE does not issue any debt. While there is no recourse to Patterson by the commercial paper conduits on the sale of contracts, we receive only approximately 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 deferred purchase price receivable from the conduit is recorded as a non-current asset, which is carried at its estimated fair market value. As of April 28, 2012, the maximum outstanding capacity of this arrangement with the conduits at any one time is $500 million.

Patterson also maintains an agreement with commercial banks whereby the banks purchase customers’ financing contracts. Patterson has established another SPE, PDC Funding LLC II (“PDC II”), as a consolidated, wholly owned subsidiary, which sells financing contracts to the banks. We receive a portion of the principal amounts of the contracts upon sale with the remaining portion 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 at April 28, 2012 was $75 million. In the fourth quarter of fiscal 2010, this agreement was amended such that no additional contracts were sold, but the remaining contracts previously sold and outstanding under the agreement will continue under the agreement. On August 12, 2011, Fifth Third Bank replaced U.S. Bank National Association and the agreement was amended and restated. Under the restated agreement, Fifth Third Bank is the agent and contracts are again being sold. Approximately $75 million of such contracts were outstanding as of April 28, 2012.

These financing arrangements are accounted for as a sale of assets under the provisions of ASC Topic No. 860, “Transfers and Servicing.” During fiscal 2012, 2011 and 2010, we sold approximately $287.6, $296.4 and $300.8 million, respectively, of contracts under these arrangements. Patterson retains servicing responsibilities under both agreements, for which we are paid a servicing fee. The servicing fees received by Patterson are considered adequate compensation for services rendered. Accordingly, no servicing asset or liability has been recorded. The agreements require us to maintain a minimum current ratio and maximum leverage ratio. Patterson was in compliance with the covenants at April 28, 2012.

Included in current receivables in the consolidated balance sheets are approximately $81.8 million, net of unearned income of $7.4 million, and $78.5 million, net of unearned income of $3.6 million, as of April 28, 2012 and April 30, 2011, respectively, of finance contracts not yet sold by Patterson. A total of $479.4 million of finance contracts receivable sold under the agreements were outstanding at April 28, 2012. The residual receivable under the arrangements was approximately $78.9 and $78.0 million as of April 28, 2012 and April 30, 2011, respectively. Since the internal financing program began in 1994, bad debt write-offs have amounted to less than one-percent of the loans originated.