Xerox 2015 Annual Report Download - page 104

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, 2015 and 2014 were approximately
$849 and $945, respectively.
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
short-term nature. Our risk of loss following the sales of accounts receivable is limited to the outstanding deferred
purchase price receivable. These receivables are included in the caption "Other current assets" in the
accompanying Consolidated Balance Sheets and were $61 and $73 at December 31, 2015 and 2014, respectively.
Under most of the agreements, we continue to service the sold accounts receivable. When applicable, a servicing
liability is recorded for the estimated fair value of the servicing. The amounts associated with the servicing liability
were not material.
Of the accounts receivables sold and derecognized from our balance sheet, $660 and $580 remained uncollected
as of December 31, 2015 and 2014, respectively. Accounts receivable sales were as follows:
Year Ended December 31,
2015 2014 2013
Accounts receivable sales $2,467 $2,906 $3,401
Deferred proceeds 247 387 486
Loss on sale of accounts receivable 13 15 17
Estimated increase (decrease) to operating cash flows(1) 120 (68)(55)
__________
(1) Represents the difference between current and prior year fourth quarter receivable sales adjusted for the effects of: (i) the deferred
proceeds, (ii) collections prior to the end of the year and (iii) currency.
Note 6 – Finance Receivables, Net
Finance receivables include sales-type leases, direct financing leases and installment loans arising from the
marketing of our equipment. These receivables are typically collateralized by a security interest in the underlying
assets. Finance receivables, net were as follows:
December 31,
2015 2014
Gross receivables $4,683 $5,009
Unearned income (577)(624)
Subtotal 4,106 4,385
Residual values ——
Allowance for doubtful accounts (118)(131)
Finance Receivables, Net 3,988 4,254
Less: Billed portion of finance receivables, net 97 110
Less: Current portion of finance receivables not billed, net 1,315 1,425
Finance Receivables Due After One Year, Net $2,576 $2,719
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