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:



	June 29, 2013			December 31, 2012
Long-term customer financing receivables	$	63		$	101
Less current portion	(41		)	(41		)
Non-current long-term receivables, net	$	22		$	60

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 $91 million at June 29, 2013, compared to $84 million at December 31, 2012.

Sales of Receivables

The following table summarizes the proceeds received from sales of accounts receivable and long-term receivables for the three and six months ended June 29, 2013 and June 30, 2012:



	Three Months Ended				Six Months Ended
	June 29, 2013		June 30, 2012		June 29, 2013		June 30, 2012
Cumulative quarterly proceeds received from sales:
Accounts receivable sales proceeds	$	2	$	2	$	3	$	7
Long-term receivable sales proceeds	24		62		52		129
Total proceeds from sales of accounts receivable	$	26	$	64	$	55	$	136

At June 29, 2013, the Company had retained servicing obligations for $390 million of long-term receivables, compared to $375 million of long-term receivables at December 31, 2012. 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 June 29, 2013 and December 31, 2012 is as follows:



June 29, 2013	Total Long-term Receivable		Current Billed Due		Past Due Under 90 Days		Past Due Over 90 Days
Municipal leases secured tax exempt	$	2	$	—	$	—	$	—
Commercial loans and leases secured	61		12		2		7
Total gross long-term receivables, including current portion	$	63	$	12	$	2	$	7



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 had a total of $7 million of financing receivables past due over 90 days as of June 29, 2013 in relation to two loans. The Company has not accrued interest on these loans during the three and six months ended June 29, 2013.