Nature of Operations and Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2022

Accounting Policies [Abstract]

Reconciliation of Cash

Cash, cash equivalents and restricted cash reported in the Company’s balance sheet as of September 30, 2022, December 31, 2021, September 30, 2021 and December 31, 2020 were as follows:

(DOLLARS IN MILLIONS)	September 30, 2022		December 31, 2021		September 30, 2021		December 31, 2020
Current assets
Cash and cash equivalents	$	538	$	711	$	672	$	650
Restricted cash	10		4		122		7
Noncurrent assets
Restricted cash included in Other assets	7		1		1		3
Cash, cash equivalents and restricted cash	$	555	$	716	$	795	$	660

Contract Asset and Accounts Receivable

Contract Assets and Liabilities

With respect to a small number of contracts for the sale of compounds, the Company has an “enforceable right to payment for performance to date” and as the products do not have an alternative use, the Company recognizes revenue for these contracts over time and records a contract asset using the output method. The output method recognizes revenue on the basis of direct measurements of the value to the customer of the goods or services transferred to date relative to the remaining goods or services promised under the contract.

As of September 30, 2022 and December 31, 2021, the Company’s gross accounts receivable was $2.088 billion and $1.952 billion, respectively. The Company’s contract assets and contract liabilities as of September 30, 2022 and December 31, 2021 were not material.

Schedule of Bad Debt Reserve

The following is a rollforward of the Company’s allowances for bad debts for the nine months ended September 30, 2022:

(DOLLARS IN MILLIONS)	Allowances for Bad Debts
Balance at December 31, 2021	$	46
Bad debt expense(1)	17
Foreign exchange	(6)
Balance at September 30, 2022	$	57

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(1)The bad debt expense included approximately $11 million related to expected credit losses on receivables from customers located in Russia and Ukraine (for export and domestic sales) due to recent events in those countries. The Company will continue to evaluate its credit exposure related to Russia and Ukraine.