ACCOUNTS AND NOTES RECEIVABLE, NET

9 Months Ended

Sep. 28, 2024


(Millions of Dollars)	September 28, 2024		December 30, 2023
Trade accounts receivable	$	1,260.9	$	1,057.8
Notes receivable	86.4		66.9
Other accounts receivable	232.3		253.9
Accounts and notes receivable	$	1,579.6	$	1,378.6
Allowance for credit losses	(76.5)		(76.6)
Accounts and notes receivable, net	$	1,503.1	$	1,302.0

Trade receivables are dispersed among a large number of retailers, distributors and industrial accounts in many countries. Adequate reserves have been established to cover anticipated credit losses.

The changes in the allowance for credit losses for the three and nine months ended September 28, 2024 and September 30, 2023 are as follows:


	Third Quarter				Year-to-Date
(Millions of Dollars)	2024		2023		2024		2023
Beginning balance	$	72.0	$	88.0	$	76.6	$	106.6
Charged to costs and expenses	7.1		2.5		9.7		7.5
Other, including recoveries and deductions (a)	(2.6)		(2.1)		(9.8)		(25.7)
Balance end of period	$	76.5	$	88.4	$	76.5	$	88.4

(a) Amounts represent charge-offs less recoveries, the impacts of foreign currency translation, divestitures and net transfers to/from other accounts.

The Company's payment terms are generally consistent with the industries in which their businesses operate and typically range from 30-90 days globally. The Company does not adjust the promised amount of consideration for the effects of a significant financing component when the period between transfer of the product and receipt of payment is less than one year. Any significant financing components for contracts greater than one year are included in revenue over time.

The Company has an accounts receivable sale program. According to the terms, the Company sells certain of its trade accounts receivables at fair value to a wholly owned, consolidated, bankruptcy-remote special purpose subsidiary (“BRS"). The BRS, in turn, can sell such receivables to a third-party financial institution (“Purchaser”) for cash. The Purchaser’s maximum cash investment in the receivables at any time is $110.0 million. The purpose of the program is to provide liquidity to the Company. These transfers qualify as sales under Accounting Standards Codification ("ASC") 860, Transfers and Servicing, and receivables are derecognized from the Company’s consolidated balance sheet when the BRS sells those receivables to the Purchaser. The Company has no retained interests in the transferred receivables, other than collection and administrative responsibilities. At September 28, 2024, the Company did not record a servicing asset or liability related to its retained responsibility based on its assessment of the servicing fee, market values for similar transactions and its cost of servicing the receivables sold.

At September 28, 2024 and December 30, 2023, net receivables of $83.9 million and $110.0 million, respectively, were derecognized. Proceeds from transfers of receivables to the Purchaser totaled $106.4 million and $270.7 million for the three and nine months ended September 28, 2024, respectively, and payments to the Purchaser totaled $115.9 million and $296.8 million, respectively. Proceeds from transfers of receivables to the Purchaser totaled $123.2 million and $300.0 million for the three and nine months ended September 30, 2023, respectively, and payments to the Purchaser totaled $130.2 million and $320.5 million, respectively. The program resulted in a pre-tax loss of $1.4 million and $4.0 million for the three and nine months ended September 28, 2024, respectively. The program resulted in a pre-tax loss of $1.6 million and $3.9 million for the three and nine months ended September 30, 2023, respectively. All cash flows under the program are reported as a component of changes in working capital within operating activities in the Condensed Consolidated Statements of Cash Flows since all the cash from the Purchaser is received upon the initial sale of the receivable.

As of September 28, 2024 and December 30, 2023, the Company's deferred revenue totaled $105.8 million and $116.8 million, respectively, of which $34.4 million and $31.7 million, respectively, was classified as current. Revenue recognized for the nine months ended September 28, 2024 and September 30, 2023 that was previously deferred as of December 30, 2023 and December 31, 2022 totaled $21.6 million and $17.6 million, respectively.