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Accounts Receivable and Allowance for Doubtful Accounts
12 Months Ended
Dec. 31, 2014
Accounts Receivable, Net [Abstract]  
Accounts Receivable [Text Block]
ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS:
Accounts receivable are recorded at the invoiced amount and generally do not bear interest. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses on existing accounts receivable. Management determines the allowance based on historical write-off experience within each of the Company's regions. Management reviews material past due balances on a monthly basis. Account balances are charged off against the allowance when management determines it is probable that the receivable will not be recovered.
Accounts receivable consisted of the following at December 31, 2014 and 2013 (dollars in thousands): 
 
 
2014
 
2013
Accounts receivable - trade
 
$
304,087

 
$
275,380

Accounts receivable - grants from outside parties
 
32,076

 
33,003

Accounts receivable - insurance and other third-party claims
 
26,941

 
31,643

Total accounts receivable
 
363,104

 
340,026

Allowance for doubtful accounts
 
(5,826
)
 
(3,755
)
Accounts receivable, net
 
$
357,278

 
$
336,271


Grants from Outside Parties
The Company periodically receives grants for the upgrade and construction of rail lines and upgrades of locomotives from federal, provincial, state and local agencies in the United States and Australia and provinces in Canada in which the Company operates. These grants typically reimburse the Company for 50% to 100% of the actual cost of specific projects. In total, the Company received grant proceeds of $28.0 million, $33.9 million and $39.6 million in the years ended December 31, 2014, 2013 and 2012, respectively, from such grant programs. The proceeds were presented as cash inflows from investing activities within each of the applicable periods.
None of the Company's grants represents a future liability of the Company unless the Company abandons the rehabilitated or new track structure within a specified period of time or fails to maintain the upgraded or new track to certain standards and to make certain minimum capital improvements or ceases use of the locomotives within the specified geographic area and time period, as defined in the respective agreements. As the Company intends to comply with these agreements, the Company has recorded additions to track property and locomotives and has deferred the amount of the grants. The amortization of deferred grants is a non-cash offset to depreciation expense over the useful lives of the related assets. During the years ended December 31, 2014, 2013 and 2012, the Company recorded offsets to depreciation expense from grant amortization of $10.4 million, $9.3 million and $8.0 million, respectively.
Insurance and Third-Party Claims
Accounts receivable from insurance and other third-party claims at December 31, 2014 included $15.7 million from the Company's North American & European Operations and $11.3 million from the Company's Australian Operations. The balance from the Company's North American & European Operations resulted predominately from the Company's anticipated insurance recoveries associated with a derailment in Alabama (the Aliceville Derailment) in November 2013. The majority of the balance from the Company's Australian Operations resulted from the Company's anticipated insurance recoveries associated with derailments in Australia in 2012. The Company received proceeds from insurance totaling $13.6 million, $11.1 million and $21.8 million for the years ended December 31, 2014, 2013 and 2012, respectively. During the year ended December 31, 2012, the Company recorded gain on insurance recoveries totaling $5.8 million primarily related to a business interruption claim related to a derailment in Australia in December 2011.
Allowance for Doubtful Accounts
Activity in the Company's allowance for doubtful accounts for the years ended December 31, 2014, 2013 and 2012 was as follows (dollars in thousands): 
 
 
2014
 
2013
 
2012
Balance, beginning of year
 
$
3,755

 
$
2,693

 
$
2,807

Provisions
 
5,191

 
2,741

 
977

Charges
 
(3,120
)
 
(1,679
)
 
(1,091
)
Balance, end of year
 
$
5,826

 
$
3,755

 
$
2,693


The Company's business is subject to credit risk. There is a risk that a customer or counterparty will fail to meet its obligations when due. Customers and counterparties who owe the Company money have defaulted and may continue to default on their obligations to the Company due to bankruptcy, lack of liquidity, operational failure or other reasons. For interline traffic, one railroad typically invoices a customer on behalf of all railroads participating in the route. The invoicing railroad then pays the other railroads their portion of the total amount invoiced on a monthly basis. When the Company is the invoicing railroad it is exposed to customer credit risk for the total amount invoiced and is required to pay the other railroads participating in the route even if the Company is not paid by the customer. Although the Company has procedures for reviewing its receivables and credit exposures to specific customers and counterparties to address present credit concerns, default risk may arise from events or circumstances that are difficult to detect or foresee. Some of the Company's risk management methods depend upon the evaluation of information regarding markets, customers or other matters that are not publicly available or otherwise accessible by the Company and this information may not, in all cases, be accurate, complete, up-to-date or properly evaluated. As a result, unexpected credit exposures could adversely affect the Company's consolidated results of operations, financial condition and liquidity.