Accounts and Notes Receivable and Credit Quality of Notes Receivable

3 Months Ended

Mar. 31, 2017

Receivables [Abstract]

Accounts and Notes Receivable and Credit Quality of Notes Receivable

Accounts and Notes Receivable and Credit Quality of Notes Receivable

Accounts and Notes Receivable

The following summarizes the components of current and long-term accounts and notes receivable, net:

	March 31, 2017			December 31, 2016
Current:
Accounts receivable	$	474.8		$	508.1
Notes receivable	146.9			140.0
Allowance for doubtful accounts and notes	(27.2		)	(27.7		)
Current accounts and notes receivable, net	$	594.5		$	620.4
Long-term:
Notes receivable, net of allowance of $0.4 and $0.4	48.7			48.1
Total accounts and notes receivable, net	$	643.2		$	668.5

Credit Quality of Notes Receivable

The interest rates on our outstanding notes receivable ranged from 4.0% to 10.4% at March 31, 2017 and 3.3% to 10.4% at December 31, 2016.

We have certain concentrations of outstanding notes receivable in international locations that impact our assessment of the credit quality of our notes receivable. We monitor the macroeconomic and political environment in each of these locations in our assessment of the credit quality of our notes receivable. We have not identified changes in the aforementioned factors during the three months ended March 31, 2017 that require a reassessment of our receivable balances. The international locations with significant concentrations (generally deemed to be exceeding 10%) of our notes receivable are as follows:

• Mexico - Our notes receivable, net, from certain customers in Mexico at March 31, 2017 was $30.8 million. We collected $8.1 million of outstanding receivables from these customers during the three months ended March 31, 2017.

• Peru - Our notes receivable, net, from certain customers in Peru at March 31, 2017 was $25.1 million. We collected $4.4 million of outstanding receivables from these customers during the three months ended March 31, 2017.

• Argentina - Our notes receivable, net, from customers in Argentina at March 31, 2017 was $11.8 million denominated in USD. Our customers are required to, and have continued to, pay us in pesos at the spot exchange rate on the date of payment. We collected $6.4 million of outstanding receivables from customers in Argentina during the three months ended March 31, 2017.

In addition to the macroeconomic and political factors noted above, we also evaluated recent payments, receivables aging, any additional security or collateral we had (bills of exchange, pledge agreements, etc.) and other facts and circumstances relevant to our customers' ability to pay.

The following summarizes the components of total notes receivable, net:

	March 31, 2017			Balances over 90 days past due			December 31, 2016			Balances over 90 days past due
Notes receivable:
Domestic	$	66.1		$	1.4		$	45.1		$	1.1
International	129.9			37.4			143.0			38.7
Total notes receivable	196.0			38.8			188.1			39.8
Notes receivable allowance
Domestic	(2.1		)	(2.0		)	(1.0		)	(0.9		)
International	(14.2		)	(14.2		)	(14.0		)	(14.0		)
Total notes receivable allowance	(16.3		)	(16.2		)	(15.0		)	(14.9		)
Notes receivable, net	$	179.7		$	22.6		$	173.1		$	24.9

At March 31, 2017, 12.6% of our total notes receivable, net, was past due by over 90 days, compared to 14.4% at December 31, 2016.

We evaluate our exposure to credit loss on notes receivable on both a collective and individual basis. In addition, we evaluate such notes receivable on a geographic basis and take into account any other factors (such as general economic conditions, other macroeconomic considerations, etc.) that could impact our collectability of notes receivable individually or in the aggregate. Accordingly, notes receivable may be evaluated under multiple methodologies, and the resulting allowance is not determined based on one specific methodology taking all factors into consideration. The activity in our allowance for notes receivable for each of the three month periods ended March 31, 2017 and 2016 is as follows:

	For the Three Months Ended March 31,
	2017			2016
Beginning allowance for notes receivable	$	15.0		$	13.2
Provision	1.7			2.0
Charge-offs and recoveries	(0.4		)	(0.6		)
Ending allowance for notes receivable	$	16.3		$	14.6

The fair value of notes receivable is estimated by discounting expected future cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings and remaining maturities. As of March 31, 2017 and December 31, 2016, the fair value of notes receivable, net, approximated the carrying value due to contractual terms of notes receivable generally being under 24 months.