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Financing Receivables | 9 Months Ended
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Sep. 28, 2019
Notes To Financial Statements [Abstract] |
Financing Receivables |
(Millions of Dollars) | September 28, 2019 |  | December 29, 2018
Trade accounts receivable | $ | 1,724.7 |  |  | $ | 1,437.1 |
Trade notes receivable | 136.2 |  |  | 150.0 |
Other accounts receivable | 161.8 |  |  | 122.7 |
Gross accounts and notes receivable | $ | 2,022.7 |  |  | $ | 1,709.8 |
Allowance for doubtful accounts | (120.1 | ) |  | (102.0 | )
Accounts and notes receivable, net | $ | 1,902.6 |  |  | $ | 1,607.8 |
Long-term receivables, net | $ | 142.3 |  |  | $ | 153.7 |
Trade receivables are dispersed among a large number of retailers, distributors and industrial accounts in many countries. Adequate reserves have been established to cover anticipated credit losses. Long-term receivables, net of $142.3 million and $153.7 million at September 28, 2019 and December 29, 2018, respectively, are reported within Other assets in the Condensed Consolidated Balance Sheets. The Company's financing receivables are predominantly related to certain security equipment sales-type leases with commercial businesses. As of September 28, 2019, the current portion of finance receivables within Trade notes receivable approximated $76.4 million. Generally, the Company retains legal title to any equipment under lease and holds the right to repossess such equipment in an event of default. All financing receivables are interest-bearing and the Company has not classified any financing receivables as held-for-sale. Interest income earned from financing receivables that are not delinquent is recorded on the effective interest method. The Company considers any financing receivable that has not been collected within 90 days of original billing date as past-due or delinquent. The Company’s payment terms are generally consistent with the industries in which their businesses operate and typically range from 30-90 days globally. Additionally, the Company considers the credit quality of all past-due or delinquent financing receivables as nonperforming. The Company does not adjust the promised amount of consideration for the effects of a significant financing component when the period between transfer of the product and receipt of payment is less than one year. Any significant financing components for contracts greater than one year are included in revenue over time. The following is a summary of the expected timing of receipt of payments from customers on an undiscounted basis as of September 28, 2019 relating to the Company’s lease receivables:
(Millions of Dollars) |  | Total |  | Within 1 Year |  | 2 Years |  | 3 Years |  | 4 Years |  | 5 Years |  | Thereafter
Finance receivables |  | $ | 204.4 |  |  | $ | 76.4 |  |  | $ | 59.6 |  |  | $ | 38.5 |  |  | $ | 19.3 |  |  | $ | 9.1 |  |  | $ | 1.5 |
Operating leases |  | $ | 61.2 |  |  | $ | 59.3 |  |  | $ | 1.4 |  |  | $ | 0.4 |  |  | $ | 0.1 |  |  | $ | — |  |  | $ | — |
The following is a summary of lease revenue and sales-type lease profit for the three and nine months ended September 28, 2019:
(Millions of Dollars) |  | Third Quarter 2019 |  | Year-to-Date 2019
Sales-type lease revenue |  | $ | 20.8 |  |  | $ | 62.3 |
Lease interest revenue |  | 2.7 |  |  | 9.2 |
Operating lease revenue |  | 42.3 |  |  | 116.2 |
Total lease revenue |  | $ | 65.8 |  |  | $ | 187.7 |
Sales-type lease profit |  | $ | 8.2 |  |  | $ | 24.7 |
In October 2018, the Company entered into a new accounts receivable sale program. According to the terms, the Company sells certain of its trade accounts receivables at fair value to a wholly owned, consolidated, bankruptcy-remote special purpose subsidiary (“BRS"). The BRS, in turn, can sell such receivables to a third-party financial institution (“Purchaser”) for cash. The Purchaser’s maximum cash investment in the receivables at any time is $110.0 million. The purpose of the program is to provide liquidity to the Company. These transfers qualify as sales under ASC 860, Transfers and Servicing, and receivables are derecognized from the Company’s consolidated balance sheet when the BRS sells those receivables to the Purchaser. The Company has no retained interests in the transferred receivables, other than collection and administrative responsibilities. At September 28, 2019, the Company did not record a servicing asset or liability related to its retained responsibility based on its assessment of the servicing fee, market values for similar transactions and its cost of servicing the receivables sold. At September 28, 2019 and December 29, 2018, approximately $73.1 million and $100.1 million of net receivables were derecognized, respectively. For the three and nine months ended September 28, 2019, proceeds from transfers of receivables to the Purchaser totaled $107.2 million and $329.7 million, respectively, and payments to the Purchaser totaled $113.1 million and $356.7 million, respectively. Gross receivables sold to the BRS amounted to $418.8 million ($296.3 million, net) and $1,278.9 million ($956.6 million, net) for the three and nine months ended September 28, 2019, respectively. The program resulted in a pre-tax loss of $0.8 million and $2.8 million for the three and nine months ended September 28, 2019, respectively, which included service fees of $0.2 million and $0.7 million, respectively. All cash flows under the program are reported as a component of changes in working capital within operating activities in the Condensed Consolidated Statements of Cash Flows since all the cash from the Purchaser is received upon the initial sale of the receivable. As of September 28, 2019 and December 29, 2018, the Company's deferred revenue totaled $211.7 million and $202.0 million, respectively, of which $104.1 million and $98.6 million, respectively, was classified as current. Revenue recognized for the nine months ended September 28, 2019 and September 29, 2018 that was previously deferred as of December 29, 2018 and December 30, 2017 totaled $81.2 million and $76.5 million, respectively. As of September 28, 2019, approximately $1.158 billion of revenue from long-term contracts primarily in the Security segment was unearned related to customer contracts which were not completely fulfilled and will be recognized on a decelerating basis over the next 5 years. This amount excludes any of the Company's contracts with an original expected duration of one year or less.

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