Accounts Receivable (Notes)

6 Months Ended

Jun. 30, 2022

Accounts receivable consist of the following:


	June 30 2022		December 31 2021
Trade accounts receivable (a)	$	275,946	$	389,535
Less: Allowance for expected credit losses (a)	(8,199)		(11,654)

Trade accounts receivable, net	$	267,747	$	377,881

Other receivables (b)	$	28,174	$	33,059

(a) The December 31, 2021 amounts for trade accounts receivable and allowance for expected credit losses have been corrected from their previous presentation. These corrections did not impact the amount of the allowance for expected credit losses recorded in the June 30, 2022 Condensed Consolidated Balance Sheets or the Condensed Consolidated Statement of Operations for the three and six months ended June 30, 2022.

(b) Other receivables include employee receivables, insurance receivable, tax claims and refunds and other miscellaneous items not included in Trade accounts receivable, net.

The provision for expected credit losses related to trade accounts receivable was as follows:


	Three Months Ended				Six Months Ended
	June 30				June 30
(In thousands)	2022		2021		2022		2021
Provision for expected credit losses and doubtful accounts related to trade accounts receivable	$	(268)	$	74	$	57	$	728

At June 30, 2022, $5.6 million of the Company's trade accounts receivable were past due by twelve months or more, with $2.9 million of this amount reserved. Collection of the remaining balance is still ultimately expected.

Accounts Receivable Securitization Facility

On June 24, 2022, the Company entered into a trade receivables securitization facility (“AR Facility”) to accelerate cash flows from trade accounts receivable. Under the AR Facility, the Company and its subsidiaries continuously sell their trade receivables as they are originated to a wholly-owned special purpose entity (“SPE”). The SPE transfers ownership and control of qualifying receivables to PNC Bank, National Association (“PNC”) and other unaffiliated purchasers in exchange for cash. None of the assets or credit of the SPE is available to satisfy the debts and obligations owed to the creditors of the Company or any other person until the obligations of the SPE under the facility have been satisfied. The Company controls and consolidates the SPE in its condensed consolidated financial statements. The AR Facility has a term of three years.

As cash is collected on the trade receivables, the SPE has the ability to continuously transfer ownership and control of new qualifying receivables to PNC and the other unaffiliated purchasers such that the total outstanding balance of trade receivables sold can be up to $150 million at any point in time, which is the maximum purchase commitment of PNC and the other unaffiliated purchasers. The future outstanding balance of trade receivables that are sold is expected to vary based on the level of activity and other factors and could be less than the maximum purchase commitment of $150 million. The Company accounts for receivables sold under the AR Facility as a sale of financial assets and derecognizes these trade receivables from the Company’s Condensed Consolidated Balance Sheets. The total outstanding balance of trade receivables that have been sold and derecognized by the SPE is $120 million as of June 30, 2022. The SPE owned $92.0 million of trade receivables as of June 30, 2022, and these amounts are included in the caption Trade accounts receivable, net on the Condensed Consolidated Balance Sheets. The Company continues to be involved with the trade receivables after they are sold to PNC by acting as servicer.

The fees incurred for the AR Facility are included in Facility fees and debt-related income (expense) on the Condensed Consolidated Statements of Operations. See Note 1, Basis of Presentation, for additional details. The Company capitalized fees of $1.8 million related to the securitization facility, which will be amortized over the term of the agreement.

Upon execution of the AR Facility during the second quarter of 2022, the Company received proceeds of $120.0 million, which is presented as a cash flow from operating activities in the Condensed Consolidated Statements of Cash Flows.

Factoring Arrangement

The Company maintains a factoring arrangement with a financial institution to sell certain accounts receivable that are also accounted for as a sale of financial assets. At June 30, 2022 and December 31, 2021, the amounts outstanding under the arrangement was $12.6 million and $12.9 million, respectively, under a program capacity of $18.8 million and $16.5 million, respectively.

Note Receivable

In January 2020 the Company sold IKG for $85.0 million including cash and a note receivable, subject to post-closing adjustments. The note receivable from the buyer has a face value of $40.0 million, bearing interest at 2.50%, that is paid in kind and matures on January 31, 2027. Any unpaid principal, along with any accrued but unpaid interest is payable at maturity. Prepayment is required in case of a change in control or a percentage of excess cash flow, as defined in the note receivable agreement. Because there are no scheduled payments under the terms of the note receivable, the balance is not classified as current as of June 30, 2022 and is included in the caption Other assets on the Condensed Consolidated Balance Sheet. The initial fair value of the note receivable was $34.3 million which was calculated using an average of various discounted cash flow scenarios based on anticipated timing of repayments (Level 3) and was a non-cash transaction. The note receivable is subsequently measured at amortized cost. Key inputs into the valuation model include: projected timing and amount of cash flows, pro forma debt rating, option-adjusted spread and U.S. Treasury spot rate. During the three and six months ended June 30, 2022, the Company received a payment of $8.6 million related to excess cash flow. At June 30, 2022 the amortized cost of the note receivable was $23.2 million, compared with a fair value of $23.3 million.


(In thousands)	June 30 2022		December 31 2021
Note receivable	$	23,205	$	31,025