4. Inventories
As of December 31, 2010 and 2009, inventories consisted of the following:
Inventories |
||
|---|---|---|
in $ THOUS |
||
2010 |
2009 |
|
| Raw materials and purchased components | 158,163 | 154,599 |
| Work in process | 56,345 | 63,683 |
| Finished goods | 475,641 | 481,047 |
| Health care supplies | 118,948 | 122,325 |
TOTAL |
809,097 | 821,654 |
Under the terms of certain unconditional purchase agreements, the Company is obligated to purchase approximately $2,164,532 of materials, of which $374,083 is committed at December 31, 2010 for 2011. The terms of these agreements run 1 to 8 years. At December 31, 2009, the Company was obligated to purchase approximately $2,414,214 of materials, of which $407,889 was committed at that date for 2010. The Company has a contingent liability of up to $60,400, subject to renegotiation of certain supply contracts.
Inventories as of December 31, 2010 and 2009 include $32,987 and $34,788, 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 administration of EPO accounted for approximately 19% and 21% of total dialysis care revenue in the North America segment for 2010 and 2009, respectively. Delays, stoppages, or interruptions in the supply of EPO could adversely affect the operating results of the Company.