In 2001, for federal tax purposes, NOLs are being utilized to the extent of the company's federal taxable income. The primary reason for the improvement is the increase in net income. The larger increase in accounts receivable in the first quarter of 2001 versus the same period in 2000 was offset by changes in other operating assets and liabilities. The variance is due to an increase in business acquisitions and increases in patient service equipment purchases to support revenue growth. Evaluation of Net Realizable Value.
Management performs various analyses to evaluate the net realizable value of accounts receivable.
Specifically, management considers historical realization data, accounts receivable aging trends, operating statistics and relevant business conditions. Because of continuing changes in the healthcare industry and third-party reimbursement, it is possible that management's estimates could change in the near term, which could have an impact on operations and cash flows. Delays between the date of service and billing can occur due to delays in obtaining certain required payor-specific documentation from internal and external sources. Earned but unbilled receivables are aged from date of service and are considered in Apria's analysis of historical performance and collectibility. Apria periodically makes acquisitions of complementary businesses in specific geographic markets.