Motorola 2013 Annual Report Download - page 91

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89
The following table summarizes the proceeds received from sales of accounts receivable and long-term receivables for
the years ended December 31, 2013, 2012 and 2011.
Years ended December 31 2013 2012 2011
Cumulative annual proceeds received from sales:
Accounts receivable sales proceeds $ 14 $ 12 $ 8
Long-term receivables sales proceeds 151 178 224
Total proceeds from receivable sales $ 165 $ 190 $ 232
At December 31, 2013, the Company had retained servicing obligations for $434 million of long-term receivables,
compared to $375 million of long-term receivables at December 31, 2012. Servicing obligations are limited to collection
activities of 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 December 31, 2013 and December 31, 2012 is as follows:
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
December 31, 2012
Total
Long-term
Receivable Current Billed
Due Past Due Under
90 Days Past Due Over
90 Days
Municipal leases secured tax exempt $ 23 $ — $ — $ —
Commercial loans and leases secured 78 1 2 4
Total gross long-term receivables, including
current portion $ 101 $ 1 $ 2 $ 4
The Company uses an internally developed credit risk rating system for establishing customer credit limits. This system is
aligned and comparable to the rating systems utilized by independent rating agencies.
The Company’s policy for valuing the allowance for credit losses is to review all customer financing receivables for
collectability on an individual receivable basis. For those receivables where collection risk is probable, the Company calculates
the value of impairment based on the net present value of expected future cash flows from the customer.
The Company had a total of $10 million of financing receivables past due over 90 days as of December 31, 2013 in
relation to two loans. The Company is not accruing interest on these loans as of December 31, 2013, which are adequately
reserved.
11. Commitments and Contingencies
Lease Obligations
The Company leases certain office, factory and warehouse space, land, and information technology and other equipment
under principally non-cancelable operating leases. Rental expense, net of sublease income, for the years ended December 31,
2013, 2012 and 2011 was $66 million, $65 million, and $92 million, respectively.