Receivables (Tables)

9 Months Ended

Sep. 30, 2022

Allowance for doubtful trade receivables

The following table displays a roll forward of the allowance for doubtful trade receivables.


(in Millions)
Balance, December 31, 2020	$	27.9
Additions - charged to expense	17.2
Transfer from (to) allowance for credit losses (see below)	(0.6)
Net recoveries, write-offs and other	(7.1)
Balance, December 31, 2021	$	37.4
Additions - charged to expense	(0.9)
Transfer from (to) allowance for credit losses (see below)	0.5
Net recoveries, write-offs and other	(2.5)
Balance, September 30, 2022	$	34.5

Schedule of allowance for credit losses rollforward

The following table displays a roll forward of the allowance for credit losses related to long-term customer receivables:


(in Millions)
Balance, December 31, 2020	$	24.7
Additions - charged to expense	3.9
Transfer from (to) allowance for doubtful accounts (see above)	0.6
Foreign currency adjustments	(1.5)
Net recoveries, write-offs and other	—
Balance, December 31, 2021	$	27.7
Additions - charged to expense	(1.3)
Transfer from (to) allowance for doubtful accounts (see above)	(0.5)
Foreign currency adjustments	(0.4)

Balance, September 30, 2022	$	25.5

Receivables Securitization Facility:

FMC entered into a trade receivables securitization program, primarily impacting our Brazilian operations during the third quarter of 2022. On a revolving basis, FMC may sell certain trade receivables into the facility in exchange for cash. A portion of the total receivables sold are deferred as an asset on our condensed consolidated balance sheets representing FMC’s beneficial interest in the securitization fund.

During the third quarter of 2022, approximately $50 million of trade receivables were transferred to the fund. In all instances, the transferred financial assets are sold on a nonrecourse basis and have met the true sale criteria under ASC Topic 860. FMC has surrendered control of the receivables and as a result they will no longer be recognized on the condensed consolidated balance sheets. FMC may be engaged to serve as a special servicer for any delinquent receivables. In that capacity, we are entitled to market rate compensation for those services. The $5 million charge associated with the transfer of these financial assets is included as a component within selling, general and administrative expense and recognized during the third quarter.

Cash receipts totaling $26 million from the sale of trade receivables under the securitization arrangement, received at the time of sale, are classified as cash flows from operating activities. During the third quarter, approximately $19 million of the sale was retained by the securitization fund and is recognized as a noncash investing activity. This asset is recorded within other long-term assets on the condensed consolidated balance sheets.

Other Receivable Factoring:

In addition to the above, we may sell trade receivables on a non-recourse basis to third-party financial institutions. These sales are normally driven by specific market conditions, including, but not limited to, foreign exchange environments, customer credit management, as well as other factors where the receivables may lay.

We account for these transactions as true sales and as a result they will no longer be recognized on the condensed consolidated balance sheets because the agreements transfer effective control and risk related to the receivables to the buyers. The net cash proceeds received are presented within cash provided by operating activities within our condensed consolidated statements of cash flows. The cost of factoring these accounts receivables is recorded as an expense within the condensed consolidated statements of income (loss) and has been inconsequential during each reporting period. There were no other material factoring transactions completed during the three and nine months ended September 30, 2022.