Accounts Receivable and Note Receivable

6 Months Ended

Jun. 30, 2023

Accounts receivable consist of the following:


(In thousands)	June 30 2023		December 31 2022
Trade accounts receivable	$	305,106	$	272,775
Less: Allowance for expected credit losses	(8,585)		(8,347)

Trade accounts receivable, net	$	296,521	$	264,428

Other receivables (a)	$	41,941	$	25,379

(a) 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)	2023		2022		2023		2022
Provision for expected credit losses related to trade accounts receivable	$	(113)	$	(268)	$	394	$	57

At June 30, 2023, $13.6 million of the Company's trade accounts receivable were past due by twelve months or more, with $4.0 million of this amount reserved. There has been a recent increase in aged receivables for certain international customers within the HE segment. Collection of the remaining balance is still ultimately expected.

One of HE’s steel mill customers in the Middle East has idled operations and has missed contractual progress payments. The Company has approximately $5.5 million of net receivables with this customer. The customer has indicated it plans to restart operations. Accordingly, the Company believes this amount is fully collectible; however, if there is an adverse change in the Company's view on collectability, there could be a charge against income in future periods.

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 $150.0 million and $145.0 million as of June 30, 2023 and December 31, 2022, respectively. The SPE owned $79.0 million and $69.7 million of trade receivables as of June 30, 2023 and December 31, 2022, respectively, which is included in the caption Trade accounts receivable, net, on the Condensed Consolidated Balance Sheets. See Note 9, Debt and Credit Agreements, for AR Facility expenses incurred.

Proceeds received from the AR Facility were as follows and are included in cash from operating activities in the Condensed Consolidated Statements of Cash Flows:


	Six Months Ended June 30
(In millions)	2023		2022
Upon execution in June 2022	$	—	$	120.0
Additional proceeds	5.0		—
Total received	$	5.0	$	120.0

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)	June 30 2023		December 31 2022
Net amounts sold under factoring arrangements	$	15.2	$	17.3
Program capacities	32.2		31.4

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 classified as noncurrent as of June 30, 2023 and December 31, 2022, and is included in the caption Other assets on the Condensed Consolidated Balance Sheet. During the three and six months ended June 30, 2023, the Company received a payment of $11.2 million related to excess cash flow.


(In millions)	June 30 2023		December 31 2022
Note receivable, at amortized cost	$	13.4	$	23.9
Note receivable, fair value	15.1		23.8