Annual report pursuant to Section 13 and 15(d)

Receivables and Allowance for Doubtful Receivables

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Receivables and Allowance for Doubtful Receivables
 12 Months Ended
Dec. 31, 2011
Receivables and Allowance for Doubtful Receivables [Abstract]  
Receivables and Allowance for Doubtful Receivables [Text Block]

(3)       Receivables and Allowance for Doubtful Receivables

Receivables consist of the following at December 31, 2011 and 2010 (amounts in thousands):

 

 

      2011   2010
  Trade $ 140,533   130,708
  Employee   720   722
  Other   574   1,426
  Total Receivables $ 141,827   132,856

As described in Note 1(t), Revenue Recognition, we receive support from each of the various USF programs: high cost, low income, rural health care, and schools and libraries.  This support was 19%, 18%, and 14% of our revenue for the years ended December 31, 2011, 2010 and 2009, respectively.  We had USF net receivables of $69.8 million and $64.3 million at December 31, 2011 and 2010, respectively

 

Changes in the allowance for doubtful receivables during the years ended December 31, 2011, 2010 and 2009 are summarized below (amounts in thousands):

 

          Additions   Deductions    
  Description   Balance at beginning of year   Charged to costs and expenses   Charged to other accounts   Write-offs net of recoveries   Balance at end of year
  December 31, 2011 $ 9,189   4,294   (29)   7,658   5,796
  December 31, 2010 $ 7,060   3,085   1,670   2,626   9,189
  December 31, 2009 $ 2,582   3,818   1,734   1,074   7,060

Charged to other accounts during the year ended December 31, 2011, includes a $1.6 million reserve for a customer that participates in the Rural Health Care Division support program that is operated by the USAC. We provided service to this customer pursuant to a contract from July 2008 to June 2009. In 2010 we received a funding commitment letter from USAC for the year from July 2008 to June 2009 committing funding for all but $1.7 million of that particular year. USAC denied funding of $1.7 million based on the timing of customer-owned equipment placed in service in relation to service charges. In August 2010, we filed with the FCC a request for review of the denial and at December 31, 2011, our appeal was still being reviewed by the FCC. We recorded a reserve by reducing revenue $1.7 million in the year ended December 31, 2010. During the second quarter of 2011, we decreased the allowance by $100,000 to true up 2008 and 2009's funding amounts. After recording an adjustment in 2011, the allowance related to this customer is $1.6 million at December 31, 2011.

 

Charged to Other Accounts for the year ended December 31, 2009 consists of a $914,000 adjustment recorded upon the conversion of our Alaska DigiTel customer accounts into a Consumer customer billing system that grossed up accounts receivable and the allowance for doubtful receivables to record termination fees for tracking purposes. Additionally, the year ended December 31, 2009 includes an adjustment of $820,000 due to the decision to temporarily stop revenue recognition for services provided to a customer whose funding from the USAC was denied.