TRADE RECEIVABLES SECURITIZATION

12 Months Ended

Mar. 31, 2014

TRADE RECEIVABLES SECURITIZATION

TRADE RECEIVABLES SECURITIZATION

10. TRADE RECEIVABLES SECURITIZATION

        The Company sells trade receivables under two asset-backed securitization programs and an accounts receivable factoring program.

Asset-Backed Securitization Programs

        The Company continuously sells designated pools of trade receivables under its Global Asset-Backed Securitization Agreement (the "Global Program") and its North American Asset-Backed Securitization Agreement (the "North American Program," collectively, the "ABS Programs") to affiliated special purpose entities, each of which in turn sells 100% of the receivables to unaffiliated financial institutions. These programs allow the operating subsidiaries to receive a cash payment and a deferred purchase price receivable for sold receivables. Following the transfer of the receivables to the special purpose entities, the transferred receivables are isolated from the Company and its affiliates, and upon the sale of the receivables from the special purpose entities to the unaffiliated financial institutions effective control of the transferred receivables is passed to the unaffiliated financial institutions, which has the right to pledge or sell the receivables. Although the special purpose entities are consolidated by the Company, they are separate corporate entities and their assets are available first to satisfy the claims of their creditors. The investment limits set by the financial institutions are $500.0 million for the Global Program, of which $400.0 million is committed and $100.0 million is uncommitted, and $300.0 million for the North American Program. Both programs require a minimum level of deferred purchase price receivable to be retained by the Company in connection with the sales.

        The Company services, administers and collects the receivables on behalf of the special purpose entities and receives a servicing fee of 0.5% to 1.00% of serviced receivables per annum. Servicing fees recognized during the fiscal years ended March 31, 2014, 2013 and 2012 were not material and are included in interest and other, net within the consolidated statements of operations. As the Company estimates the fee it receives in return for its obligation to service these receivables is at fair value, no servicing assets or liabilities are recognized.

        As of March 31, 2014 and 2013, the accounts receivable balances that were sold under the ABS Programs were removed from the consolidated balance sheets and the net cash proceeds received by the Company during fiscal years ended March 31, 2014, 2013 and 2012 were included as cash provided by operating activities in the consolidated statements of cash flows.

        As of March 31, 2014, approximately $1.2 billion of accounts receivable had been sold to the special purpose entities under the ABS Programs for which the Company had received net cash proceeds of $729.3 million and deferred purchase price receivables of $470.9 million. As of March 31, 2013, approximately $1.0 billion of accounts receivable had been sold to the special purpose entities for which the Company had received net cash proceeds of $556.9 million and deferred purchase price receivables of $412.4 million. The portion of the purchase price for the receivables which is not paid by the unaffiliated financial institutions in cash is a deferred purchase price receivable, which is paid to the special purpose entity as payments on the receivables are collected from account debtors. The deferred purchase price receivable represents a beneficial interest in the transferred financial assets and is recognized at fair value as part of the sale transaction. The deferred purchase price receivables are included in other current assets as of March 31, 2014 and 2013, and were carried at the expected recovery amount of the related receivables. The difference between the carrying amount of the receivables sold under these programs and the sum of the cash and fair value of the deferred purchase price receivables received at time of transfer is recognized as a loss on sale of the related receivables and recorded in interest and other, net in the consolidated statements of operations; such amounts were $7.1 million, $7.2 million and $10.9 million for the fiscal years ended March 31, 2014, 2013 and 2012, respectively.

        For the fiscal years ended March 31, 2014, 2013 and 2012, cash flows from sales of receivables under the ABS Programs consisted of approximately $4.2 billion, $3.5 billion and $4.7 billion, respectively for transfers of receivables (of which approximately $0.4 billion, $0.7 billion and $0.6 billion, respectively represented new transfers and the remainder proceeds from collections reinvested in revolving period transfers).

        The following table summarizes the activity in the deferred purchase price receivables account during the fiscal years ended March 31, 2014 and 2013:

	As of March 31,
	2014			2013
	(In thousands)
Beginning balance	$	412,357		$	514,895
Transfers of receivables		3,778,420			3,896,495
Collections		(3,719,869	)		(3,999,033	)
Ending balance	$	470,908		$	412,357

Trade Accounts Receivable Sale Programs

        The Company also sold accounts receivables to certain third-party banking institutions. The outstanding balance of receivables sold and not yet collected was approximately $341.8 million and $163.6 million as of March 31, 2014 and 2013, respectively. For the years ended March 31, 2014, 2013 and 2012, total accounts receivables sold to certain third party banking institutions was approximately $3.4 billion, $1.1 billion and $2.0 billion, respectively. The receivables that were sold were removed from the consolidated balance sheets and were reflected as cash provided by operating activities in the consolidated statements of cash flows.