05.5
Notes to Consolidated Financial Statements
4. INVENTORIES
As of December 31, 2008 and 2007, inventories consisted of the following:
| Table 05.5.2 | INVENTORIES |
| $ in thousands | 2008 | 2007 |
|---|---|---|
| Raw materials and purchased components | 145,756 |
136,013 |
| Work in process | 60,960 |
51,829 |
| Finished goods | 385,607 |
350,478 |
| Health care supplies | 114,727 |
97,914 |
| TOTAL | 707,050 |
636,234 |
Under the terms of certain unconditional purchase agreements, the Company is obligated to purchase approximately $2,556,603 of materials, of which $ 358,283 is committed at December 31, 2008 for 2009. The terms of these agreements run 1 to 10 years.
Inventories as of December 31, 2008 and 2007 include $35,143 and $30,999 respectively, of Erythropoietin (“EPO”), which is supplied by a single source supplier in the United States. In October 2006, the Company entered into a five-year exclusive sourcing and supply agreement with its EPO supplier. Revenues from epo accounted for approximately 20 % and 21 % of total dialysis care revenue in the North America segment for 2008 and 2007, respectively. Delays, stoppages, or interruptions in the supply of EPO could adversely affect the operating results of the Company.
