Trade Accounts Receivable Sale Programs

6 Months Ended

Apr. 02, 2022

Receivables [Abstract]

Trade Accounts Receivable Sale Programs

Trade Accounts Receivable Sale Programs

The Company has Master Accounts Receivable Purchase Agreements with MUFG Bank, New York Branch (formerly known as The Bank of Tokyo-Mitsubishi UFJ, Ltd.) (the "MUFG RPA"), HSBC Bank (China) Company Limited, Xiamen branch (the "HSBC RPA") and other unaffiliated financial institutions, under which the Company may elect to sell receivables; at a discount. All facilities are uncommitted facilities. The maximum facility amount under the MUFG RPA as of April 2, 2022 is $340.0 million. The maximum facility amount under the HSBC RPA as of April 2, 2022 is $60.0 million. The MUFG RPA will be automatically extended each year unless any party gives no less than 10 days prior notice that the agreement should not be extended. The terms of the HSBC RPA are generally consistent with the terms of the MUFG RPA previously discussed.

Transfers of receivables under the programs are accounted for as sales and, accordingly, receivables sold under the programs are excluded from accounts receivable on the Condensed Consolidated Balance Sheets and are reflected as cash provided by operating activities on the Condensed Consolidated Statements of Cash Flows. Proceeds from the transfer reflect the face value

of the receivables less a discount. The sale discount is recorded within "Miscellaneous, net" in the Condensed Consolidated Statements of Comprehensive Income in the period of the sale. The Company continues servicing receivables sold and performing all accounts receivable administrative functions, and in exchange receives a servicing fee, under both the MUFG RPA and HSBC RPA. Servicing fees related to trade accounts receivable programs recognized during the three and six months ended April 2, 2022 and April 3, 2021 were not material.

The Company sold $202.2 million and $195.6 million of trade accounts receivable under these programs, or their predecessors, during the three months ended April 2, 2022 and April 3, 2021, respectively, in exchange for cash proceeds of $201.5 million and $195.1 million, respectively.

The Company sold $350.2 million and $394.0 million of trade accounts receivable under these programs, or their predecessors, during the six months ended April 2, 2022 and April 3, 2021, respectively, in exchange for cash proceeds of $349.0 million and $392.9 million, respectively.

As of April 2, 2022 and October 2, 2021, $200.4 million and $176.0 million, respectively, of accounts receivables sold under trade accounts receivable programs and subject to servicing by the Company remained outstanding and had not yet been collected.