Xerox 2014 Annual Report Download - page 97

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The following is a summary of selected financial information of the ITO business for the three years ended
December 31, 2014:
Year Ended December 31,
2014 2013 2012
Expense (Income):
Depreciation of buildings and equipment $ 98 $ 99 $ 98
Amortization of internal use software 910 2
Amortization of acquired intangible assets 27 27 27
Amortization of customer contract costs 26 22 15
Operating lease rent expense 258 241 185
Defined contribution plans 872
Interest expense (1) 433
Expenditures:
Cost of additions to land, buildings and equipment $ 105 $99$
140
Cost of additions to internal use software 24
15
Customer-related deferred set-up/transition and inducement
costs 26 35 60
_______________
(1) Interest expense is related to capital lease obligations, which are expected to be assumed by purchaser of the ITO business.
Note 5 – Accounts Receivable, Net
Accounts receivable, net were as follows:
December 31,
2014 2013
Amounts billed or billable $2,634 $2,651
Unbilled amounts 319 390
Allowance for doubtful accounts (88)(112)
Subtotal 2,865 2,929
Discontinued operations (1) (213)—
Accounts Receivable, Net $2,652 $2,929
(1) Represents net accounts receivable related to our ITO business which is held for sale and being reported as a discontinued operation at
December 31, 2014. Refer to Note 4 - Divestitures for additional information regarding this pending sale.
Unbilled amounts include amounts associated with percentage-of-completion accounting and other earned
revenues not currently billable due to contractual provisions. Amounts to be invoiced in the subsequent month for
current services provided are included in amounts billable, and at December 31, 2014 and 2013 were approximately
$997 and $1,054, respectively. The balance at December 31, 2014 includes $52 related to our ITO business.
We perform ongoing credit evaluations of our customers and adjust credit limits based upon customer payment
history and current creditworthiness. The allowance for uncollectible accounts receivables is determined principally
on the basis of past collection experience as well as consideration of current economic conditions and changes in
our customer collection trends.
Accounts Receivable Sales Arrangements
Accounts receivable sales arrangements are utilized in the normal course of business as part of our cash and
liquidity management. We have facilities in the U.S., Canada and several countries in Europe that enable us to sell
certain accounts receivable without recourse to third-parties. The accounts receivables sold are generally short-term
trade receivables with payment due dates of less than 60 days.
All of our arrangements involve the sale of our entire interest in groups of accounts receivable for cash. In most
instances a portion of the sales proceeds are held back by the purchaser and payment is deferred until collection of
the related receivables sold. Such holdbacks are not considered legal securities nor are they certificated. We report
collections on such receivables as operating cash flows in the Consolidated Statements of Cash Flows because
such receivables are the result of an operating activity and the associated interest rate risk is de minimis due to their
Xerox 2014 Annual Report 82