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Trade and other receivables, net

3 Months Ended

Mar. 31, 2020

4. TRADE AND OTHER RECEIVABLES, NET


	March 31,		December 31,
	2020		2019
Billed	$	184	$	211
Unbilled		77		100
Total trade receivables		261		311
Orbital receivables, current portion		42		43
Other		3		4
Allowance for doubtful accounts		(1)		(1)
Trade and other receivables, net	$	305	$	357

Orbital receivables relate to performance incentives due under certain satellite construction contracts that are paid over the in-orbit life of the satellite. As of March 31, 2020 and December 31, 2019, non-current orbital receivables, net of allowances were $363 million and $382 million, respectively, and are included in Non-current assets on the Unaudited Condensed Consolidated Balance Sheets.

Orbital receivables are recognized as an asset on the balance sheet in conjunction with revenue recognition under the cost-to-cost method of accounting during the satellite construction period and are stated at their carrying value less allowances for expected credit losses. The Company utilizes customer credit ratings, expected credit loss and other credit quality indicators to evaluate the collectability of orbital receivables on a quarterly basis. Assessments for impairments of the orbital receivables are completed utilizing a discounted cash flow analysis based on discount rates which reflect the credit risk of customers and are included as an addition to the orbital receivable allowance. Income is recognized on orbital receivable balances based upon contractual rates.

As of March 31, 2020, the Company had orbital receivables from 14 customers for which the largest customer’s value represents $48 million, or 12% of the stated balance sheet value. During the three months ended March 31, 2020, the Company recognized an impairment of $14 million, primarily due to an increase in credit risk associated with the Company’s largest orbital customer as of March 31, 2020. There were no orbital impairments during the three months ended March 31, 2019.

The changes in allowance for expected credit losses related to non-current orbital receivables for the three months ended March 31, 2020 consist of the following:


	Orbital Receivables Allowance
Allowance as of January 1, 2020	$	(35)
Additions		(14)
Allowance as of March 31, 2020	$	(49)

The Company has sold certain orbital receivables that are accounted for as securitized borrowings in the Unaudited Condensed Consolidated Balance Sheets as the Company does not meet the accounting criteria for surrendering control of the receivables. The net proceeds received on the orbital receivables have been recognized as securitization liabilities and are subsequently measured at amortized cost using the effective interest rate method. The securitized orbital receivables and the securitization liabilities are being drawn down as payments are received from the customers and passed on to the purchaser. The Company continues to recognize orbital interest revenue on the orbital receivables that are subject to the securitization transactions and recognizes interest expense to accrete the securitization liability. The total amount of securitization liabilities at March 31, 2020 and December 31, 2019 was $63 million and $65 million, respectively, Current securitization liabilities of $17 million and $17 million, are included in Other current liabilities on the Unaudited Condensed Consolidated Balance Sheets at March 31, 2020 and December 31, 2019, respectively. Non-current securitization liabilities of $46 million and $48 million are included in Other non-current liabilities on the Unaudited Condensed Consolidated Balance Sheets at March 31, 2020 and December 31, 2019, respectively.