RKT » Topics » Cash and Cash Equivalents

These excerpts taken from the RKT 10-K filed Nov 26, 2008.

Cash Equivalents

We consider all highly liquid investments that mature three months or less from the date of purchase to be cash equivalents. The carrying amounts we report in the consolidated balance sheets for cash and cash equivalents approximate fair market values. We place our cash and cash equivalents with large credit worthy banks, which limits the amount of our credit exposure.

Cash Equivalents

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">We consider all highly liquid investments that mature three months or less from the date of purchase to be cash equivalents. The carrying amounts we
report in the consolidated balance sheets for cash and cash equivalents approximate fair market values. We place our cash and cash equivalents with large credit worthy banks, which limits the amount of our credit exposure.

STYLE="margin-top:12px;margin-bottom:0px; margin-left:2%">Restricted Cash and Marketable Debt Securities

FACE="Times New Roman" SIZE="2">As part of the Southern Container Acquisition we received restricted cash and marketable debt securities. The restricted cash and marketable debt securities are classified in the balance sheet in current assets
because they are to be used within a year for payment of existing or maturing obligations. We classify these marketable debt securities as available-for-sale. We carry these securities at fair market value based on current market quotes. There was
no significant unrealized gain or loss in fiscal 2008. The restricted cash and securities were liquidated in November 2008 at amounts that approximated carrying value.

FACE="Times New Roman" SIZE="2">Accounts Receivable and Allowances

We perform periodic evaluations of our customers’
financial condition and generally do not require collateral. Receivables generally are due within 30 to 45 days. We serve a diverse customer base primarily in North America and, therefore, have limited exposure from credit loss to any particular
customer or industry segment.

We state accounts receivable at the amount owed by the customer, net of an allowance for estimated
uncollectible accounts, returns and allowances, and cash discounts. We do not discount accounts receivable because we generally collect accounts receivable over a relatively short time. We account for sales and other

 


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Index to Financial Statements



ROCK-TENN COMPANY

ALIGN="center">NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

 



taxes that are imposed on and concurrent with individual revenue-producing transactions between a seller and a customer on a net basis which excludes the
taxes from our net sales. We estimate our allowance for doubtful accounts based on our historical experience, current economic conditions and the credit worthiness of our customers. We charge off receivables when they are determined to be no longer
collectible. In fiscal 2008, 2007, and 2006, we recorded bad debt expense of $3.1 million, $1.0 million, and $2.0 million, respectively.

SIZE="2">The following table represents a summary of the changes in the reserve for allowance for doubtful accounts, returns and allowances and cash discounts for fiscal 2008, 2007, and 2006 (in millions):

STYLE="font-size:12px;margin-top:0px;margin-bottom:0px"> 































































































































   2008  2007  2006 

Balance at the beginning of period

  $5.4  $5.2  $5.1 

Reduction in sales and charges to costs and expenses

   35.9   22.6   24.7 

Southern Container opening balance

   4.7   —     —   

Deductions

   (34.6)  (22.4)  (24.6)
             

Balance at the end of period

  $11.4  $5.4  $5.2 
             
This excerpt taken from the RKT 8-K filed Mar 11, 2008.
Cash and Cash Equivalents
 
The Company considers all highly liquid investments or those that have original maturities of three months or less to be cash equivalents. Cash equivalents include time deposits, money market funds, and commercial paper.
 
This excerpt taken from the RKT 10-K filed Nov 28, 2007.
Cash Equivalents
 
We consider all highly liquid investments that mature three months or less from the date of purchase to be cash equivalents. The carrying amounts we report in the consolidated balance sheets for cash and cash equivalents approximate fair market values. We place our cash and cash equivalents with large credit worthy banks, which limits the amount of our credit exposure.
 
This excerpt taken from the RKT 10-K filed Nov 22, 2006.
Cash Equivalents
 
We consider all highly liquid investments that mature three months or less from the date of purchase to be cash equivalents. The carrying amounts we report in the consolidated balance sheets for cash and cash equivalents approximate fair market values. We place our cash and cash equivalents with large credit worthy banks, which limits the amount of our credit exposure.


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ROCK-TENN COMPANY
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

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