ACCOUNTS AND NOTES RECEIVABLE, NET

12 Months Ended

Dec. 31, 2022


(Millions of Dollars)	December 31, 2022		January 1, 2022
Trade accounts receivable	$	1,142.0	$	1,398.2
Trade notes receivable	100.1		75.3
Other accounts receivable	95.5		104.1
Accounts and notes receivable	1,337.6		1,577.6
Allowance for credit losses	(106.6)		(95.9)
Accounts and notes receivable, net	$	1,231.0	$	1,481.7

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.

The changes in the allowance for credit losses for the years ended December 31, 2022 and January 1, 2022 are as follows:


(Millions of Dollars)	2022		2021
Balance beginning of period	$	95.9	$	106.2
Charged to costs and expenses	14.3		—
Other, including recoveries and deductions (a)	(3.6)		(10.3)
Balance end of period	$	106.6	$	95.9

(a) Amounts represent charge-offs less recoveries, the impacts of foreign currency translation, acquisitions, divestitures and net transfers to/from other accounts.

At December 31, 2022 and January 1, 2022, the Industrial segment operating lease receivable was $0.7 million and $21.2 million, respectively, from leasing equipment to customers. Net sales from operating lease revenue were $39.8 million and $62.0 million for the years ended December 31, 2022 and January 1, 2022, respectively. The decrease in operating lease receivable and revenue compared to prior year was primarily due to the sale of the Oil & Gas business.

The Company has an 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 Sheets 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 December 31, 2022, 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 December 31, 2022 and January 1, 2022, net receivables of approximately $110.0 million and $100.0 million, respectively, were derecognized. Proceeds from transfers of receivables to the Purchaser totaled $496.4 million and $447.7 million for the years ended December 31, 2022 and January 1, 2022, respectively, and payments to the Purchaser totaled $486.4 million and $434.5 million, respectively. The program resulted in a pre-tax loss of $4.1 million and $2.0 million for the years ended December 31, 2022 and January 1, 2022, respectively, which included service fees of $0.9 million and $0.9 million, respectively. All cash flows under the program are reported as a component of changes in accounts receivable within operating activities in the Consolidated Statements of Cash Flows since all the cash from the Purchaser is received upon the initial sale of the receivable.

As of December 31, 2022 and January 1, 2022, the Company's deferred revenue totaled $122.9 million and $117.1 million, respectively, of which $29.6 million and $35.0 million, respectively, was classified as current. Revenue recognized for the years ended December 31, 2022 and January 1, 2022 that was previously deferred as of January 1, 2022 and January 2, 2021 totaled $22.9 million and $24.0 million, respectively.