Accounts Receivable

6 Months Ended

Jun. 30, 2023

2. Accounts Receivable

Accounts Receivable and Allowance for Credit Losses

When we extend credit on an unsecured basis, our exposure to credit losses depends on the financial condition of our customers and macroeconomic factors beyond our control, such as global economic conditions or adverse impacts in the industries we serve, changes in oil prices and political instability.

We actively monitor and manage our credit exposure and work to respond to both changes in our customers' financial conditions and macroeconomic events. Based on the ongoing credit evaluations of our customers, we adjust credit limits based upon payment history and our customers' current creditworthiness. However, because we extend credit on an unsecured basis to most of our customers, there is a possibility that any accounts receivable not collected may ultimately need to be written off.

We had accounts receivable, net, of $2.5 billion and $3.3 billion and an allowance for expected credit losses, primarily related to accounts receivable, of $17.5 million and $17.3 million, as of June 30, 2023 and December 31, 2022, respectively. Changes to the expected credit loss provision during the six months ended June 30, 2023 include global economic outlook considerations as a result of the Company's assessment of reasonable and supportable forward-looking information. Based on an aging analysis as of June 30, 2023, 95% of our accounts receivable were outstanding less than 60 days.

The following table sets forth activities in our allowance for expected credit losses (in millions):


	For the Six Months Ended June 30,
	2023		2022
Balance as of January 1,	$	17.3	$	29.8
Charges to allowance for credit losses	2.5		4.6
Write-off of uncollectible receivables	(2.4)		(12.8)
Recoveries of credit losses	0.1		0.7
Translation adjustments	(0.1)		0.4
Balance as of June 30,	$	17.5	$	22.7

Receivable Purchase Agreements

We have receivable purchase agreements ("RPAs") that allow for the sale of our qualifying accounts receivable in exchange for cash consideration equal to the total balance, less a discount margin, depending on the outstanding accounts receivable at any given time. During the second quarter of 2023, we amended one of our RPAs to, among other things, reduce the overall fee structure.

Accounts receivable sold under the RPAs are accounted for as sales and excluded from Accounts receivable, net of allowance for credit losses on the accompanying Condensed Consolidated Balance Sheets. Fees paid under the RPAs are recorded within Interest expense and other financing costs, net on the Condensed Consolidated Statements of Income and Comprehensive Income.

During the six months ended June 30, 2023 and 2022, we sold receivables under the RPAs with an aggregate face value of $6.0 billion and $6.2 billion, respectively, and recognized fees of $22.8 million and $14.6 million, respectively.