Quarterly report pursuant to Section 13 or 15(d)

ALLOWANCE FOR CREDIT LOSSES

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ALLOWANCE FOR CREDIT LOSSES
 6 Months Ended
Jun. 30, 2023
Receivables [Abstract]  
ALLOWANCE FOR CREDIT LOSSES ALLOWANCE FOR CREDIT LOSSES
The Company is exposed to credit losses primarily related to accounts receivables and financed receivables derived from customer services revenue. To reduce credit risk for residential pest control accounts receivable, we promote enrollment in our auto-pay programs. In general, we may suspend future services for customers with past due balances. The Company’s credit risk is generally low with a large number of individuals and entities comprising Rollins’ customer base and dispersion across many different geographical regions.
The Company manages its financing receivables on an aggregate basis when assessing and monitoring credit risks. The Company’s established credit evaluation and monitoring procedures seek to minimize the amount of business we conduct with higher risk customers. The credit quality of a potential obligor is evaluated at the loan origination based on an
assessment of the individual’s Beacon/credit bureau score. Rollins requires a potential obligor to have good credit worthiness with low risk before entering into a contract. Depending upon the individual’s credit score, the Company may accept with 100% financing, require a significant down payment or turn down the contract. Delinquencies of accounts are monitored each month. Financing receivables include installment receivable amounts, some of which are due subsequent to one year from the balance sheet dates.
The Company’s allowances for credit losses for trade accounts receivable and financed receivables are developed using historical collection experience, current economic and market conditions, reasonable and supportable forecasts, and a review of the current status of customers’ receivables. The Company’s receivable pools are classified between residential customers, commercial customers, large commercial customers, and financed receivables. Accounts are written off against the allowance for credit losses when the Company determines that amounts are uncollectible, and recoveries of amounts previously written off are recorded when collected. The Company stops accruing interest to these receivables when they are deemed uncollectible. Below is a roll forward of the Company’s allowance for credit losses for the three and six months ended June 30, 2023, and 2022.
Allowance for Credit Losses
(in thousands) Trade
Receivables		 Financed
Receivables		 Total
Receivables
Balance at December 31, 2022 $ 14,073  $ 4,968  $ 19,041 
Provision for expected credit losses 1,461  2,435  3,896 
Write-offs charged against the allowance (4,687) (1,927) (6,614)
Recoveries collected 1,629  —  1,629 
Balance at March 31, 2023 $ 12,476  $ 5,476  $ 17,952 
Provision for expected credit losses 3,185  2,865  6,050 
Write-offs charged against the allowance (4,271) (2,332) (6,603)
Recoveries collected 1,349  —  1,349 
Balance at June 30, 2023 $ 12,739  $ 6,009  $ 18,748 
Allowance for Credit Losses
(in thousands) Trade
Receivables		 Financed
Receivables		 Total
Receivables
Balance at December 31, 2021 $ 13,885  $ 3,985  $ 17,870 
Provision for expected credit losses 3,204  1,054  4,258 
Write-offs charged against the allowance (4,248) (1,189) (5,437)
Recoveries collected 1,329  —  1,329 
Balance at March 31, 2022 $ 14,170  $ 3,850  $ 18,020 
Provision for expected credit losses 2,350  1,825  4,175 
Write-offs charged against the allowance (4,218) (1,121) (5,339)
Recoveries collected 1,364  —  1,364 
Balance at June 30, 2022 $ 13,666  $ 4,554  $ 18,220