Trade receivables are dispersed among a large number of retailers, distributors and industrial accounts in many countries. The Company actively manages its accounts receivable to maximize liquidity and mitigate credit risk through customer payment terms, accounts receivable sale programs, and ongoing customer credit monitoring and evaluations. Adequate reserves have been established to cover anticipated credit losses.

The changes in the allowance for credit losses for the three and six months ended July 4, 2026 and June 28, 2025 are as follows:


	Second Quarter				Year-to-Date
(Millions of Dollars)	2026		2025		2026		2025
Beginning balance	$	74.9	$	91.1	$	68.6	$	84.7
Charged to costs and expenses	3.8		2.7		10.1		17.2
Other, including recoveries and deductions (a)	(1.5)		(11.3)		(1.5)		(19.4)
Balance end of period	$	77.2	$	82.5	$	77.2	$	82.5

(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 in which 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. At July 4, 2026 and January 3, 2026, net receivables of $110.0 million and $110.0 million, respectively, were derecognized. Proceeds from transfers of receivables to the Purchaser totaled $113.1 million and $189.3 million for the three and six months ended July 4, 2026, respectively, and payments to the Purchaser totaled $80.2 million and $189.3 million, respectively. Proceeds from transfers of receivables to the Purchaser totaled $126.1 million and $176.1 million for the three and six months ended June 28, 2025, respectively, and payments to the Purchaser totaled $77.0 million and $161.2 million, respectively. The Company has no retained interests in the transferred receivables, other than collection and administrative responsibilities. At July 4, 2026 and January 3, 2026, 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. Transfers qualify as sales under ASC 860, Transfers and Servicing, and receivables are derecognized from the Company’s Condensed Consolidated Balance Sheets upon the sale of the receivables to the Purchaser. All cash flows 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.