Accounts Receivable and Note Receivable (Notes)

12 Months Ended

Dec. 31, 2022

Accounts receivable consist of the following:



(In thousands)	December 31 2022		December 31 2021 (a)
Trade accounts receivable	$	272,775	$	389,535
Less: Allowance for expected credit losses (b)	(8,347)		(11,654)
Trade accounts receivable, net	$	264,428	$	377,881
Other receivables (c)	$	25,379	$	33,059

(a)The December 31, 2021 amounts for trade accounts receivable and allowance for expected credit losses have been revised from the presentation in the Company's 2021 Form 10-K. This revision did not impact trade accounts receivable, net.

(b)The decrease in the allowance for expected credit losses is principally due to the write-off of previously reserved trade accounts receivable balances.

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

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


	Years Ended December 31
(In thousands)	2022		2021		2020
Provision for expected credit losses related to trade accounts receivable	$	403	$	589	$	1,961

At December 31, 2022, $11.1 million of the Company's trade accounts receivable were past due by twelve months or more, with $3.9 million of this amount reserved. There has been a recent increase in aged receivables for certain international customers within the Harsco Environmental Segment. Collection of the remaining balance is still ultimately expected.

Accounts Receivable Securitization Facility

In June 2022, the Company and its SPE entered into an AR Facility with PNC Bank, National Association ("PNC") to accelerate cash flows from trade accounts receivable. The AR Facility has a three-year term. The maximum purchase commitment by PNC is $150.0 million.

The total outstanding balance of trade receivables that have been sold and derecognized by the SPE is $145.0 million as of December 31, 2022. The SPE owned $69.7 million of trade receivables as of December 31, 2022, which are included in the caption Trade accounts receivable, net, on the Consolidated Balance Sheets.

In 2022, the Company capitalized fees of $1.8 million related to the AR Facility. See Note 8, Debt and Credit Agreements, for facility expenses incurred.

The following table reflects proceeds the Company received from the AR Facility, which are included in cash from operating activities in the Consolidated Statements of Cash Flows:


	Year Ended December 31
(In millions)	2022
Upon execution in June 2022	$	120.0
Additional proceeds	25.0
Total received	$	145.0

Factoring Arrangements

The Company maintains factoring arrangements with a financial institution to sell certain accounts receivable that are also accounted for as a sale of financial assets. The following table reflects balances for net amounts sold and program capacities for the arrangements:


(In millions)	December 31 2022		December 31 2021
Net amounts sold under factoring arrangements	$	17.3	$	12.9
Program capacities	31.4		16.5

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 as 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 and is included in the caption Other assets on the Consolidated Balance Sheets. 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 (Fair Value Level 3 asset) 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. The Company received payments of $8.6 million and $6.4 million during 2022 and 2021, respectively, related to excess cash flow.

The following table reflects the note receivable at amortized cost and at fair value:


(In millions)	December 31 2022		December 31 2021
Note receivable, at amortized cost	$	23.9	$	31.0
Note receivable, at fair value	$	23.8	$	32.3