Accounts Receivable

9 Months Ended

Sep. 30, 2016

The Company maintains a $950 million revolving trade accounts receivable Securitization Facility. Accounts receivable collateralized within our Securitization Facility relate to trade receivables resulting from charge card activity. Pursuant to the terms of the Securitization Facility, the Company transfers certain of its domestic receivables, on a revolving basis, to FleetCor Funding LLC (Funding) a wholly-owned bankruptcy remote subsidiary. In turn, Funding sells, without recourse, on a revolving basis, up to $950 million of undivided ownership interests in this pool of accounts receivable to a multi-seller, asset-backed commercial paper conduit (Conduit). Funding maintains a subordinated interest, in the form of over-collateralization, in a portion of the receivables sold to the Conduit. Purchases by the Conduit are financed with the sale of highly-rated commercial paper.

The Company utilizes proceeds from the sale of its accounts receivable as an alternative to other forms of financing to reduce its overall borrowing costs. The Company has agreed to continue servicing the sold receivables for the financial institution at market rates, which approximates the Company’s cost of servicing. The Company retains a residual interest in the accounts receivable sold as a form of credit enhancement. The residual interest’s fair value approximates carrying value due to its short-term nature. Funding determines the level of funding achieved by the sale of trade accounts receivable, subject to a maximum amount.

The Company’s consolidated balance sheets and statements of income reflect the activity related to securitized accounts receivable and the corresponding securitized debt, including interest income, fees generated from late payments, provision for losses on accounts receivable and interest expense. The cash flows from borrowings and repayments, associated with the securitized debt, are presented as cash flows from financing activities.

The Company’s accounts receivable and securitized accounts receivable include the following at September 30, 2016 and December 31, 2015 (in thousands):



	September 30, 2016			December 31, 2015
Gross domestic accounts receivable	$	627,138		$	338,275
Gross domestic securitized accounts receivable	656,000			614,000
Gross foreign receivables	737,620			322,582
Total gross receivables	2,020,758			1,274,857
Less allowance for doubtful accounts	(30,072		)	(21,903		)
Net accounts and securitized accounts receivable	$	1,990,686		$	1,252,954

A rollforward of the Company’s allowance for doubtful accounts related to accounts receivable for nine months ended September 30 is as follows (in thousands):



	2016			2015
Allowance for doubtful accounts beginning of period	$	21,903		$	23,842
Provision for bad debts	24,512			18,287
Write-offs	(16,343		)	(19,586		)
Allowance for doubtful accounts end of period	$	30,072		$	22,543

Foreign receivables are not included in the Company’s accounts receivable securitization program. At September 30, 2016 and December 31, 2015, there was $656 million and $614 million, respectively, of short-term debt outstanding under the Company’s accounts receivable Securitization Facility.