Receivables, Allowance for Credit Losses and Credit Quality of Receivables

6 Months Ended

Jun. 30, 2022

Receivables, Allowance for Credit Losses and Credit Quality of Receivables

Receivables

The following table summarizes the components of current and long-term receivables, net:


	As of
	June 30, 2022		December 31, 2021
Current:
Receivables	$	461	$	475
Allowance for credit losses	(46)		(52)
Current receivables, net	415		423
Long-term:
Receivables	17		19
Allowance for credit losses	(2)		(2)
Long-term receivables, net	15		17
Total receivables, net	$	430	$	440

Allowance for Credit Losses

We manage our receivable portfolios using both geography and delinquency as key credit quality indicators. The following summarizes geographical delinquencies of total receivables, net:


	As of
	June 30, 2022		Balances over 90 days past due		December 31, 2021		Balances over 90 days past due
Receivables:
U.S. and Canada	$	293	$	25	$	321	$	37
International	185		28		173		44
Total receivables	478		53		494		81

Receivables allowance:
U.S. and Canada	(21)		(6)		(18)		(6)
International	(27)		(25)		(36)		(19)
Total receivables allowance	(48)		(31)		(54)		(25)
Receivables, net	$	430	$	22	$	440	$	56

Account balances are charged against the allowances after all internal and external collection efforts have been exhausted and the potential for recovery is considered remote.

The activity in our allowance for receivable credit losses for each of the three and six months ended June 30, 2022 and 2021 is as follows:


	2022						2021
	Total		U.S. and Canada		International		Total
Beginning allowance for credit losses	$	(54)	$	(18)	$	(36)	$	(81)
Provision	(3)		(3)		—		1
Charge-offs and recoveries	7		—		7		2
Allowance for credit losses as of March 31	(50)		(21)		(29)		(78)
Provision	(1)		(1)		—		(2)
Charge-offs and recoveries	3		1		2		17
Allowance for credit losses as of June 30	$	(48)	$	(21)	$	(27)	$	(63)

As of June 30, 2022, 5% of our total receivables, net, were past due by over 90 days compared to 13% as of December 31, 2021.

Credit Quality of Receivables

We have certain concentrations of outstanding receivables in international locations that impact our assessment of the credit quality of our receivables. We monitor the macroeconomic and political environment in each of these locations in our assessment of the credit quality of our receivables. The international customers with significant concentrations (generally deemed to be exceeding 10%) of our receivables with terms longer than one year are primarily in the Latin America region (“LATAM”) and are primarily comprised of Mexico, Peru and Argentina. The following table summarizes our LATAM receivables:


	As of June 30, 2022
	Total		Current or Not Yet Due		Balances Over 90 days Past Due
Receivables	$	78	$	40	$	38
Allowance for credit losses	(25)		(14)		(11)
Receivables, net	$	53	$	26	$	27

We continuously review receivables and as information concerning credit quality arise, reassess our expectations of future losses and record an incremental reserve if warranted at that time. Our current allowance for credit losses represents our current expectation of credit losses; however future expectations could change as international unrest or other macro-economic factors impact the financial stability of our customers.

The fair value of receivables 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 June 30, 2022 and December 31, 2021, the fair value of receivables, net, approximated the carrying value due to contractual terms of receivables generally being less than 24 months.