Financing Receivables (Tables)

9 Months Ended

Sep. 30, 2016

Financing Receivables:

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

	At September 30,		At December 31,
(Dollars in millions)	2016		2015
Current:
Net investment in sales-type and direct financing leases	$	3,171	$	3,057
Commercial financing receivables	6,856		8,948
Client loan and installment payment receivables (loans)	6,005		7,015
Total	$	16,032	$	19,020
Noncurrent:
Net investment in sales-type and direct financing leases	$	4,155	$	4,501
Client loan and installment payment receivables (loans)	4,782		5,512
Total	$	8,936	$	10,013

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

(Dollars in millions)	Major			Growth
At September 30, 2016	Markets			Markets			Total
Financing receivables:
Lease receivables	$	5,180		$	1,626		$	6,806
Loan receivables	8,678			2,541			11,219
Ending balance	$	13,858		$	4,167		$	18,025
Collectively evaluated for impairment	$	13,781		$	3,703		$	17,483
Individually evaluated for impairment	$	77		$	464		$	542
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	(19		)	(26		)	(45		)
Provision	3			69			72
Other	4			5			9
Ending balance at September 30, 2016	$	97		$	529		$	626
Lease receivables	$	7		$	187		$	194
Loan receivables	$	90		$	343		$	432
Collectively evaluated for impairment	$	32		$	80		$	113
Individually evaluated for impairment	$	64		$	449		$	513

(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 September 30,		At December 31,
(Dollars in millions)	2016		2015
Major markets	$	2	$	2
Growth markets	42		63
Total lease receivables	$	43	$	65
Major markets	$	19	$	13
Growth markets	139		91
Total loan receivables	$	157	$	104
Total receivables	$	200	$	168

Schedule of impaired client loan receivables

	At September 30, 2016				At December 31, 2015
	Recorded		Related		Recorded		Related
(Dollars in millions)	Investment		Allowance		Investment		Allowance
Major markets	$	53	$	50	$	50	$	47
Growth markets	318		307		297		284
Total	$	371	$	357	$	347	$	331

					Interest
	Average		Interest		Income
(Dollars in millions)	Recorded		Income		Recognized on
For the three months ended September 30, 2016:	Investment		Recognized		Cash Basis
Major markets	$	64	$	0	$	—
Growth markets	318		0		—
Total	$	382	$	0	$	—

					Interest
	Average		Interest		Income
(Dollars in millions)	Recorded		Income		Recognized on
For the three months ended September 30, 2015:	Investment		Recognized		Cash Basis
Major markets	$	51	$	—	$	—
Growth markets	325		0		—
Total	$	376	$	0	$	—

					Interest
	Average		Interest		Income
(Dollars in millions)	Recorded		Income		Recognized on
For the nine months ended September 30, 2016:	Investment		Recognized		Cash Basis
Major markets	$	61	$	0	$	—
Growth markets	307		0		—
Total	$	368	$	0	$	—

					Interest
	Average		Interest		Income
(Dollars in millions)	Recorded		Income		Recognized on
For the nine months ended September 30, 2015:	Investment		Recognized		Cash Basis
Major markets	$	52	$	—	$	—
Growth markets	320		0		—
Total	$	371	$	0	$	—

Schedule of net recorded investment by credit quality indicator

	Lease Receivables				Loan Receivables
(Dollars in millions)	Major		Growth		Major		Growth
At September 30, 2016:	Markets		Markets		Markets		Markets
Credit Rating:
Aaa – Aa3	$	449	$	29	$	745	$	44
A1 – A3	1,205		123		2,000		188
Baa1 – Baa3	1,444		181		2,398		276
Ba1 – Ba2	1,171		409		1,944		624
Ba3 – B1	520		403		864		615
B2 – B3	352		196		585		299
Caa – D	32		99		53		151
Total	$	5,173	$	1,439	$	8,588	$	2,199

	Lease Receivables				Loan Receivables
(Dollars in millions)	Major		Growth		Major		Growth
At December 31, 2015*;	Markets		Markets		Markets		Markets
Credit Rating:
Aaa – Aa3	$	535	$	34	$	941	$	73
A1 – A3	1,318		142		2,318		305
Baa1 – Baa3	1,486		343		2,613		738
Ba1 – Ba2	1,208		309		2,125		664
Ba3 – B1	510		243		897		522
B2 – B3	401		189		705		406
Caa – D	33		76		58		164
Total	$	5,492	$	1,336	$	9,656	$	2,872

* Reclassified to conform with 2016 presentation.

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 September 30, 2016:	> 90 days (1)		Receivables		Receivables		Receivables		Accruing (2)
Major markets	$	8	$	19	$	5,154	$	5,180	$	133
Growth markets	24		152		1,449		1,626		55
Total lease receivables	$	32	$	171	$	6,603	$	6,806	$	188
Major markets	$	10	$	40	$	8,628	$	8,678	$	162
Growth markets	16		302		2,223		2,541		49
Total loan receivables	$	26	$	342	$	10,851	$	11,219	$	210
Total	$	58	$	513	$	17,454	$	18,025	$	399

(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.