Accounts Receivable

3 Months Ended

Mar. 31, 2014

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, 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.

On February 3, 2014, the Company extended the term of its asset securitization facility to February 2, 2015. The Company capitalized $0.5 million in deferred financing fees in connection with this extension.

The Company’s accounts receivable and securitized accounts receivable include the following at March 31, 2014 and December 31, 2013 (in thousands):

	March 31, 2014			December 31, 2013
Gross domestic accounts receivable	$	148,786		$	107,627
Gross domestic securitized accounts receivable		393,500			349,000
Gross foreign receivables		555,730			488,140
Total gross receivables		1,098,016			944,767
Less allowance for doubtful accounts		(21,763	)		(22,416	)
Net accounts and securitized accounts receivable	$	1,076,253		$	922,351

Foreign receivables are not included in the Company’s accounts receivable securitization program. At March 31, 2014 and December 31, 2013, there was $393.5 million and $349 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 three months ended March 31 is as follows (in thousands):

	2014			2013
Allowance for doubtful accounts beginning of period	$	22,416		$	19,463
Add:
Provision for bad debts		5,554			4,460
Less:
Write-offs		(6,207	)		(4,347	)
Allowance for doubtful accounts end of period	$	21,763		$	19,576