Sprint - Nextel 2014 Annual Report Download - page 106
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Table of Contents
Index to Consolidated Financial Statements
SPRINT CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
F-23
Conduits and other creditors of the SPEs may be remitted to the Originators and Sprint during and after the term of the
Receivables Facility.
Continuing Involvement
Sprint has continuing involvement in the Receivables sold by the SPEs to the Conduits because a subsidiary of
Sprint services the receivables. Additionally, in accordance with the Receivables Facility, Sprint is required to repurchase
aged receivables, or those that will be written off in accordance with Sprint's credit and collection policies, both of which
result from subscriber non-payment. Sprint recognizes assets and liabilities, as applicable, with respect to its continuing
involvement at fair value. Sprint's continuing involvement did not have a material impact on its financial statements as of
Mach 31, 2015.
Variable Interest Entity
Sprint determined the Conduits are considered variable interest entities because they lack sufficient equity to
finance their activities. Sprint's interests in the Receivables purchased by the Conduits, which is comprised of the net
receivable due to Sprint, is not considered a variable interest because it is in assets that represent less than 50% of the total
activity of the Conduits.
Note 4. Installment Receivables
Certain subscribers have the option to purchase their devices in installments up to a 24-month period. Short-term
installment receivables are recorded in "Accounts and notes receivable, net" and long-term installment receivables are
recorded in "Other assets" in the consolidated balance sheets.
The following table summarizes the installment receivables:
March 31,
2015 March 31,
2014
(in millions)
Installment receivables, gross $ 1,725 $ 740
Deferred interest (139) (77)
Installment receivables, net of deferred interest 1,586 663
Allowance for credit losses (190) (47)
Installment receivables, net $ 1,396 $ 616
Classified on the consolidated balance sheets as:
Accounts and notes receivable, net $ 1,035 $ 299
Other assets 361 317
Installment receivables, net $ 1,396 $ 616
The balance and aging of installment receivables on a gross basis by credit category were as follows:
March 31, 2015 March 31, 2014
Prime Subprime Total Prime Subprime Total
(in millions)
Unbilled $ 1,243 $ 359 $ 1,602 $ 466 $ 242 $ 708
Billed - current 65 22 87 16 9 25
Billed - past due 21 15 36 5 2 7
Installment receivables, gross $ 1,329 $ 396 $ 1,725 $ 487 $ 253 $ 740