Financing Receivables (Tables)

6 Months Ended

Jun. 30, 2016

Financing Receivables:

Financing receivables, net of allowances for credit losses, including residual values

	At June 30,		At December 31,
(Dollars in millions)	2016		2015
Current:
Net investment in sales-type and direct financing leases	$	3,089	$	3,057
Commercial financing receivables	7,146		8,948
Client loan and installment payment receivables (loans)	6,400		7,015
Total	$	16,635	$	19,020
Noncurrent:
Net investment in sales-type and direct financing leases	$	4,200	$	4,501
Client loan and installment payment receivables (loans)	5,067		5,512
Total	$	9,267	$	10,013

Schedule of financing receivables and allowance for credit losses by portfolio segment

(Dollars in millions)	Major			Growth
At June 30, 2016	Markets			Markets			Total
Financing receivables:
Lease receivables	$	5,355		$	1,478		$	6,833
Loan receivables	9,077			2,817			11,894
Ending balance	$	14,433		$	4,294		$	18,727
Collectively evaluated for impairment	$	14,334		$	3,829		$	18,163
Individually evaluated for impairment	$	99		$	465		$	564
Allowance for credit losses:
Beginning balance at January 1, 2016
Lease receivables	$	25		$	188		$	213
Loan receivables	83			293			377
Total	$	109		$	481		$	590
Write-offs	(3		)	(25		)	(27		)
Provision	12			64			76
Other	3			8			11
Ending balance at June 30, 2016	$	121		$	528		$	649
Lease receivables	$	36		$	186		$	222
Loan receivables	$	85		$	343		$	428
Collectively evaluated for impairment	$	36		$	82		$	119
Individually evaluated for impairment	$	85		$	446		$	531

(Dollars in millions)	Major			Growth
At December 31, 2015	Markets			Markets			Total
Financing receivables:
Lease receivables	$	5,517		$	1,524		$	7,041
Loan receivables	9,739			3,165			12,904
Ending balance	$	15,256		$	4,689		$	19,945
Collectively evaluated for impairment	$	15,180		$	4,227		$	19,406
Individually evaluated for impairment	$	76		$	462		$	539
Allowance for credit losses:
Beginning balance at January 1, 2015
Lease receivables	$	32		$	133		$	165
Loan receivables	79			317			396
Total	$	111		$	450		$	561
Write-offs	(14		)	(48		)	(62		)
Provision	20			122			141
Other	(8		)	(43		)	(51		)
Ending balance at December 31, 2015	$	109		$	481		$	590
Lease receivables	$	25		$	188		$	213
Loan receivables	$	83		$	293		$	377
Collectively evaluated for impairment	$	43		$	36		$	79
Individually evaluated for impairment	$	65		$	445		$	511

Schedule of recorded investment in financing receivables which are on non-accrual status

	At June 30,		At December 31,
(Dollars in millions)	2016		2015
Major markets	$	1	$	2
Growth markets	44		63
Total lease receivables	$	45	$	65
Major markets	$	18	$	13
Growth markets	121		91
Total loan receivables	$	139	$	104
Total receivables	$	184	$	168

Schedule of impaired client loan receivables

	At June 30, 2016				At December 31, 2015
	Recorded		Related		Recorded		Related
(Dollars in millions)	Investment		Allowance		Investment		Allowance
Major markets	$	74	$	70	$	50	$	47
Growth markets	319		302		297		284
Total	$	393	$	372	$	347	$	331

					Interest
	Average		Interest		Income
(Dollars in millions)	Recorded		Income		Recognized on
For the three months ended June 30, 2016:	Investment		Recognized		Cash Basis
Major markets	$	70	$	0	$	—
Growth markets	307		0		—
Total	$	377	$	0	$	—

					Interest
	Average		Interest		Income
(Dollars in millions)	Recorded		Income		Recognized on
For the three months ended June 30, 2015:	Investment		Recognized		Cash Basis
Major markets	$	51	$	—	$	—
Growth markets	341		0		—
Total	$	392	$	0	$	—

					Interest
	Average		Interest		Income
(Dollars in millions)	Recorded		Income		Recognized on
For the six months ended June 30, 2016:	Investment		Recognized		Cash Basis
Major markets	$	64	$	0	$	—
Growth markets	304		0		—
Total	$	367	$	0	$	—

					Interest
	Average		Interest		Income
(Dollars in millions)	Recorded		Income		Recognized on
For the six months ended June 30, 2015:	Investment		Recognized		Cash Basis
Major markets	$	52	$	—	$	—
Growth markets	327		0		—
Total	$	379	$	0	$	—

Schedule of gross recorded investment by credit quality indicator

	Lease Receivables				Loan Receivables
(Dollars in millions)	Major		Growth		Major		Growth
At June 30, 2016:	Markets		Markets		Markets		Markets
Credit Rating:
Aaa – Aa3	$	490	$	41	$	831	$	78
A1 – A3	1,235		136		2,093		260
Baa1 – Baa3	1,498		192		2,539		366
Ba1 – Ba2	1,213		359		2,055		684
Ba3 – B1	513		427		870		814
B2 – B3	372		213		631		407
Caa – D	35		109		59		209
Total	$	5,355	$	1,478	$	9,077	$	2,817

	Lease Receivables				Loan Receivables
(Dollars in millions)	Major		Growth		Major		Growth
At December 31, 2015:	Markets		Markets		Markets		Markets
Credit Rating:
Aaa – Aa3	$	538	$	39	$	949	$	80
A1 – A3	1,324		162		2,338		336
Baa1 – Baa3	1,493		392		2,635		813
Ba1 – Ba2	1,214		352		2,143		732
Ba3 – B1	513		277		905		576
B2 – B3	403		215		711		447
Caa – D	33		87		59		181
Total	$	5,517	$	1,524	$	9,739	$	3,165

Schedule of past due financing receivables

			Fully		<90 Days				Recorded
	Total		Reserved		or Unbilled		Total		Investment
(Dollars in millions)	Past Due		Financing		Financing		Financing		> 90 Days and
At June 30, 2016:	> 90 days (1)		Receivables		Receivables		Receivables		Accruing (2)
Major markets	$	7	$	35	$	5,314	$	5,355	$	106
Growth markets	24		144		1,310		1,478		73
Total lease receivables	$	30	$	179	$	6,624	$	6,833	$	179
Major markets	$	9	$	39	$	9,030	$	9,077	$	130
Growth markets	15		296		2,506		2,817		55
Total loan receivables	$	24	$	335	$	11,536	$	11,894	$	185
Total	$	54	$	513	$	18,160	$	18,727	$	364

(1) Only the portion of a financing receivable which is greater than 90 days past due, excluding amounts that are fully reserved.

(2) At a contract level, which includes total billed and unbilled amounts for aged financing receivables greater than 90 days.

			Fully		<90 Days				Recorded
	Total		Reserved		or Unbilled		Total		Investment
(Dollars in millions)	Past Due		Financing		Financing		Financing		> 90 Days and
At December 31, 2015*:	> 90 days (1)		Receivables		Receivables		Receivables		Accruing (2)
Major markets	$	5	$	33	$	5,479	$	5,517	$	108
Growth markets	30		140		1,355		1,524		60
Total lease receivables	$	35	$	173	$	6,834	$	7,041	$	168
Major markets	$	7	$	35	$	9,696	$	9,739	$	134
Growth markets	31		309		2,825		3,165		86
Total loan receivables	$	38	$	344	$	12,521	$	12,904	$	220
Total	$	73	$	517	$	19,355	$	19,945	$	388

(1) Only the portion of a financing receivable which is greater than 90 days past due, excluding amounts that are fully reserved.

(2) At a contract level, which includes total billed and unbilled amounts for aged financing receivables greater than 90 days.

 *Reclassified to conform with 2016 presentation.