Accounts Receivable

9 Months Ended

Sep. 30, 2013

Receivables [Abstract]

Accounts Receivable

2. Accounts Receivable

The Company maintains a $500 million revolving trade accounts receivable Securitization Facility. 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 $500 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 debt, effectively reducing 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.

On February 4, 2013, the Company extended the term of its asset Securitization Facility to February 3, 2014. The Company capitalized $0.6 million in deferred financing fees in connection with this extension.

The Company’s accounts receivable and securitized accounts receivable include the following at September 30, 2013 and December 31, 2012 (in thousands):

	September 30, 2013			December 31, 2012
Gross domestic accounts receivable	$	133,429		$	96,964
Gross domestic securitized accounts receivable		394,000			298,000
Gross foreign receivables		549,645			447,940
Total gross receivables		1,077,074			842,904
Less allowance for doubtful accounts		(21,173	)		(19,463	)
Net accounts and securitized accounts receivable	$	1,055,901		$	823,441

All foreign receivables are Company owned receivables and are not included in the Company’s accounts receivable securitization program. At September 30, 2013 and December 31, 2012, there was $394 million and $298 million, respectively, of short-term debt outstanding under the Company’s accounts receivable Securitization Facility.

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):

	2013			2012
Allowance for doubtful accounts beginning of period	$	19,463		$	15,315
Add:
Provision for bad debts		14,069			16,788
Less:
Write-offs		(12,359	)		(12,108	)
Allowance for doubtful accounts end of period	$	21,173		$	19,995