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

3 Months Ended

Mar. 31, 2023

Cash, cash equivalents and restricted cash reported in the Company’s balance sheet as of March 31, 2023, December 31, 2022, March 31, 2022 and December 31, 2021 were as follows:


(DOLLARS IN MILLIONS)	March 31, 2023		December 31, 2022		March 31, 2022		December 31, 2021
Current assets
Cash and cash equivalents	$	590	$	483	$	657	$	711
Cash and cash equivalents included in Assets held for sale	4		52		—		—
Restricted cash	16		10		4		4
Non-current assets
Restricted cash included in Other assets	7		7		1		1
Cash, cash equivalents and restricted cash	$	617	$	552	$	662	$	716

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 March 31, 2023 and December 31, 2022, the Company’s gross accounts receivable was $1.953 billion and $1.871 billion, respectively. The Company’s contract assets and contract liabilities as of March 31, 2023 and December 31, 2022 were not material.

Schedule of Bad Debt Reserve

The following is a rollforward of the Company’s allowances for bad debts for the three months ended March 31, 2023:


(DOLLARS IN MILLIONS)	Allowances for Bad Debts
Balance at December 31, 2022	$	53
Bad debt expense(1)	1



Balance at March 31, 2023	$	54

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(1)The bad debt expense included approximately $9 million related to expected credit losses on receivables from certain customers in Egypt, offset by approximately $8 million of reversals of allowances on receivables from customers located in Russia and Ukraine. The Company will continue to evaluate its credit exposure related to Egypt, Russia and Ukraine.