Allowance for notes and loans receivable

[Table of Contents](#iee2f14225b9a4b108d08cd0fe2886fa0_7)AMETEK, Inc.Notes to Consolidated Financial StatementsMarch 31, 2022(Unaudited)

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Three months ended March 31, 2021 |  |  |
|  | EIG |  | EMG |  | Total |  |  |  |  |  |  |
|  | (In thousands) |
| Process and analytical instrumentation | $ | 576,559  |  |  | $ | —  |  |  | $ | 576,559  |  |  |  |  |  |  |  |
| Aerospace and power | 214,365  |  |  | 122,173  |  |  | 336,538  |  |  |  |  |  |  |  |
| Automation and engineered solutions | —  |  |  | 302,645  |  |  | 302,645  |  |  |  |  |  |  |  |
| Consolidated net sales | $ | 790,924  |  |  | $ | 424,818  |  |  | $ | 1,215,742  |  |  |  |  |  |  |  |

Timing of Revenue Recognition

|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Three months ended March 31, 2022 |  |  |
|  | EIG |  | EMG |  | Total |  |  |  |  |  |  |
|  | (In thousands) |
| Products transferred at a point in time | $ | 812,948  |  |  | $ | 412,654  |  |  | $ | 1,225,602  |  |  |  |  |  |  |  |
| Products and services transferred over time | 174,811  |  |  | 58,112  |  |  | 232,923  |  |  |  |  |  |  |  |
| Consolidated net sales | $ | 987,759  |  |  | $ | 470,766  |  |  | $ | 1,458,525  |  |  |  |  |  |  |  |

  


|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Three months ended March 31, 2021 |  |  |
|  | EIG |  | EMG |  | Total |  |  |  |  |  |  |
|  | (In thousands) |
| Products transferred at a point in time | $ | 647,252  |  |  | $ | 383,031  |  |  | $ | 1,030,283  |  |  |  |  |  |  |  |
| Products and services transferred over time | 143,672  |  |  | 41,787  |  |  | 185,459  |  |  |  |  |  |  |  |
| Consolidated net sales | $ | 790,924  |  |  | $ | 424,818  |  |  | $ | 1,215,742  |  |  |  |  |  |  |  |

Product WarrantiesThe Company provides limited warranties in connection with the sale of its products. The warranty periods for products sold vary among the Company’s operations, but the majority do not exceed one year. The Company calculates its warranty expense provision based on its historical warranty experience and adjustments are made periodically to reflect actual warranty expenses. Product warranty obligations are reported as a component of Accrued liabilities and other in the consolidated balance sheet.Changes in the accrued product warranty obligation were as follows:

|  |  |  |  |  |  |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
|  |  |  |  |  |  |  |  |  |  |  |  |
|  | Three Months Ended March 31, |
|  | 2022 |  | 2021 |
|  | (In thousands) |
| Balance at the beginning of the period | $ | 27,478  |  |  | $ | 27,839  |  |
| Accruals for warranties issued during the period | 2,753  |  |  | 2,780  |  |
| Settlements made during the period | (3,023) |  |  | (3,292) |  |
| Warranty accruals related to acquired businesses and other during the period | (166) |  |  | (99) |  |
| Balance at the end of the period | $ | 27,042  |  |  | $ | 27,228  |  |

Accounts ReceivableThe Company maintains allowances for estimated losses resulting from the inability of customers to meet their financial obligations to the Company. The Company recognizes an allowance for credit losses, on all accounts receivable and contract assets, which considers risk of future credit losses based on factors such as historical experience, contract terms, as well as general and market business conditions, country, and political risk. Balances are written off when determined to be uncollectible.At March 31, 2022, the Company had $854.5 million of accounts receivable, net of allowances of $10.9 million. Changes in the allowance were not material for the three months ended March 31, 2022.10
