Long-term Customer Financing and Sales of Receivables

Long-term Customer Financing

Long-term customer financing receivables consist of trade receivables with payment terms greater than twelve months, long-term loans and lease receivables under sales-type leases. Long-term customer financing receivables consist of the following:



	March 29, 2014			December 31, 2013
Long-term receivables	$	72		$	36
Less current portion	(25		)	(30		)
Non-current long-term receivables, net	$	47		$	6

The current portion of long-term receivables is included in Accounts receivable, net and the non-current portion of long-term receivables is included in Other assets in the Company’s condensed consolidated balance sheets.

Certain purchasers of the Company’s products and services may request that the Company provide long-term financing (defined as financing with a term of greater than one year) in connection with the sale of products and services. These requests may include all or a portion of the purchase price of the products and services. The Company’s obligation to provide long-term financing may be conditioned on the issuance of a letter of credit in favor of the Company by a reputable bank to support the purchaser’s credit or a pre-existing commitment from a reputable bank to purchase the long-term receivables from the Company. The Company had outstanding commitments to provide long-term financing to third parties totaling $223 million at March 29, 2014, compared to $120 million at December 31, 2013.

Sales of Receivables

The following table summarizes the proceeds received from sales of accounts receivable and long-term receivables for the three months ended March 29, 2014 and March 30, 2013:



	Three Months Ended
	March 29, 2014		March 30, 2013
Cumulative annual proceeds received from sales:
Accounts receivable sales proceeds	$	7	$	1
Long-term receivables sales proceeds	2		28
Total proceeds from receivable sales	$	9	$	29

At March 29, 2014, the Company had retained servicing obligations for $418 million of long-term receivables, compared to $434 million of long-term receivables at December 31, 2013. Servicing obligations are limited to collection activities related to the sales of accounts receivables and long-term receivables.

Credit Quality of Customer Financing Receivables and Allowance for Credit Losses

An aging analysis of financing receivables at March 29, 2014 and December 31, 2013 is as follows:



March 29, 2014	Total Long-term Receivable		Current Billed Due		Past Due Under 90 Days		Past Due Over 90 Days
Municipal leases secured tax exempt	$	9	$	—	$	—	$	—
Commercial loans and leases secured	63		1		—		12
Total gross long-term receivables, including current portion	$	72	$	1	$	—	$	12



December 31, 2013	Total Long-term Receivable		Current Billed Due		Past Due Under 90 Days		Past Due Over 90 Days
Municipal leases secured tax exempt	$	1	$	—	$	—	$	—
Commercial loans and leases secured	35		13		2		10
Total gross long-term receivables, including current portion	$	36	$	13	$	2	$	10

The Company had a total of $12 million of financing receivables past due over 90 days as of March 29, 2014 in relation to two loans. The Company has not accrued interest on these loans, which are adequately reserved, during the three months ended March 29, 2014.