Accounts Receivable, Notes Receivable, Allowance for Doubtful Accounts and Bad Debt

12 Months Ended

Dec. 31, 2013

Receivables [Abstract]

Accounts Receivable, Notes Receivable, Allowance for Doubtful Accounts and Bad Debt

Accounts Receivable, Notes Receivable, Allowance for Doubtful Accounts and Bad Debt

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

	As of December 31,
	2013			2012
Current:
Accounts receivable	$	360.4		$	221.1
Notes receivable	164.3			10.3
Allowance for doubtful accounts	(20.0		)	(11.2		)
Current accounts and notes receivable, net	$	504.7		$	220.2
Long-term:
Notes receivable	72.6			—
Total accounts and notes receivable, net	$	577.3		$	220.2

During the fourth quarter of 2013, accounts and notes receivable increased $330.0 million due to our acquisition of WMS. At December 31, 2012, our notes receivable related to the sale of our Racing Business in 2010. We received $10.0 million plus interest in September 2013, which is reflected as proceeds from sale of Racing Business in our Consolidated Statement of Cash Flows for the year ended December 31, 2013. We incurred $9.3 million of bad debt expense for the year ended December 31, 2013 compared to $6.5 million of bad debt expense for the prior year. We incurred bad debt expense of $0.9 million in 2011. We had no modifications of notes receivables from the date of WMS acquisition through December 31, 2013.

Beginning in 2012, the government authorities in Argentina modified the rules related to importing products and limited the exchange of the peso into U.S. dollars and the transfer of funds from Argentina. Our accounts and notes receivable from customers in Argentina at December 31, 2013 was $41.2 million (which is denominated in U.S. dollars) although our customers currently pay us in pesos at the spot exchange rate between the peso and the U.S. dollar on the date of payment. In evaluating the collectability of customer receivables in Argentina, we specifically evaluate recent payment activity, receivable aging, any security arrangements in place (bills of exchange, pledge agreements, etc.) and individual customers’ ability to pay. We collected $9.7 million of the outstanding receivable balances from customers in Argentina from the date we acquired WMS through December 31, 2013.

The following summarizes the components of our notes receivable:

	As of December 31, 2013			Balances over 90 days past due
Notes receivable:
Domestic	$	65.1		$	0.4
International	171.8			8.7
Total notes receivable	236.9			9.1
Allowance for doubtful accounts:
Domestic	—			—
International	(5.6		)	(3.3		)
Total allowance for doubtful accounts	(5.6		)	(3.3		)
Total notes receivable, net	$	231.3		$	5.8

At December 31, 2013, 2.5% of our total notes receivable was past due over 90 days.

The following tables detail our evaluation of notes receivable for impairment at December 31, 2013:

	As of December 31, 2013		Ending Balance Individually Evaluated for Impairment		Ending Balance Collectively Evaluated for Impairment
Notes receivable:
Domestic	$	65.1	$	4.8	$	60.3
International	171.8		99.7		72.1
Total notes receivable	$	236.9	$	104.5	$	132.4

    In certain international jurisdictions, we offer extended financing terms related to our notes receivable. Such financing activities subject us to increased credit risk, which could be exacerbated by unfavorable economic conditions or political or economic instability in those regions. Our notes receivable are concentrated in the following international gaming jurisdictions at December 31, 2013:

Peru	18	%
Mexico	18	%
Argentina	17	%
Colombia	7	%
Other (less than 5% individually)	12	%
International	72	%