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FINANCING RECEIVABLES AND OPERATING LEASES
 3 Months Ended
Jun. 30, 2014
FINANCING RECEIVABLES AND OPERATING LEASES [Abstract]  
FINANCING RECEIVABLES AND OPERATING LEASES
2. FINANCING RECEIVABLES AND OPERATING LEASES
 
Our notes receivable, investments in leases, and leased equipment consist of assets that we financed for our customers, which we manage as a portfolio of investments. Our leases to our customers are accounted for as investments in direct financing, sales-type or operating leases in accordance with Codification Topic, Leases. We also finance third-party software, maintenance, and services for our customers, which are classified as notes receivables. Our notes receivables are interest bearing and are often due over a period of time that corresponds with the terms of the leased products.
 
FINANCING RECEIVABLES—NET

Our financing receivables, net consist of the following (in thousands):

   
Notes
  
Lease-Related
  
Total Financing
 
June 30, 2014
 
Receivables
  
Receivables
  
Receivables
 
Minimum payments
 $60,420  $80,177  $140,597 
Estimated unguaranteed residual value (1)
  -   8,119   8,119 
Initial direct costs, net of amortization (2)
  344   489   833 
Unearned income
  -   (5,854)  (5,854)
Reserve for credit losses (3)
  (3,563)  (1,018)  (4,581)
Total, net
 $57,201  $81,913  $139,114 
Reported as:
            
Current
 $25,118  $32,864  $57,982 
Long-term
  32,083   49,049   81,132 
Total, net
 $57,201  $81,913  $139,114 

(1)
Includes estimated unguaranteed residual values of $3,470 thousand for direct financing leases, which have been sold and accounted for as sales under Codification Topic Transfers and Servicing.
(2)
Initial direct costs are shown net of amortization of $539 thousand.
(3)
For details on reserve for credit losses, refer to Note 4, “Reserves for Credit Losses.”

   
Notes
  
Lease-Related
  
Total Financing
 
March 31, 2014
 
Receivables
  
Receivables
  
Receivables
 
Minimum payments
 $43,707  $81,551  $125,258 
Estimated unguaranteed residual value (1)
  -   8,275   8,275 
Initial direct costs, net of amortization (2)
  354   537   891 
Unearned income
  -   (6,285)  (6,285)
Reserve for credit losses (3)
  (3,364)  (1,024)  (4,388)
Total, net
 $40,697  $83,054  $123,751 
Reported as:
            
Current
 $22,109  $35,640  $57,749 
Long-term
  18,588   47,414   66,002 
Total, net
 $40,697  $83,054  $123,751 

(1)
Includes estimated unguaranteed residual values of $3,034 thousand for direct financing leases which have been sold and accounted for as sales under Codification Topic Transfers and Servicing.
(2)
Initial direct costs are shown net of amortization of $525 thousand.
(3)
For details on reserve for credit losses, refer to Note 4, “Reserves for Credit Losses.”
 
OPERATING LEASES—NET
 
Operating leases—net primarily represents leases that do not qualify as direct financing leases. The components of the operating leases—net are as follows (in thousands):

   
June 30,
  
March 31,
 
   
2014
  
2014
 
Cost of equipment under operating leases
 $42,217  $40,513 
Accumulated depreciation
  (22,937)  (20,525)
Investment in operating lease equipment—net (1)
 $19,280  $19,988 

(1)
Includes estimated unguaranteed residual values of $5,672 thousand and $5,610 thousand as of June 30, 2014 and March 31, 2014, respectively.
 
TRANSFERS OF FINANCIAL ASSETS

We enter into arrangements to transfer the contractual payments due under financing receivables and operating leases, which are accounted for as sales or secured borrowings in accordance with Codification Topic, Transfers and Servicing. For transfers accounted for as a secured borrowing, the corresponding investments serve as collateral for non-recourse notes payable. As of June 30, 2014 and March 31, 2014, we had financing receivables and operating leases of $70.1 million and $72.3 million, respectively that were collateral for non-recourse notes payable.  See Note 6, “Notes Payable and Credit Facility.”

For transfers accounted for as sales, we derecognize the carrying value of the asset transferred and recognize a net gain or loss on the sale, which is presented within financing revenues in the unaudited condensed consolidated statement of operations. During the three months ended June 30, 2014 and 2013, we recognized net gains of $2.2 million and $4.3 million, respectively. Total proceeds from these sales were $56.2 million and $87.5 million for the three months ended June 30, 2014 and 2013, respectively.