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Financing Receivables (Tables)
 3 Months Ended
Mar. 31, 2018
Financing Receivables  
Summary of the components of financing receivables

 

 

 

Investment in

 

 

 

Client Loan and

 

 

 

 

 

Sales-Type and

 

Commercial

 

Installment Payment

 

 

 

(Dollars in millions)

 

Direct Financing

 

Financing

 

Receivables/

 

 

 

At March 31, 2018

 

Leases

 

Receivables

 

(Loans)

 

Total

 

Financing receivables, gross

 

$
7,130

 

$
10,120

 

$
12,746

 

$
29,996

 

Unearned income

 
(537

)
(36

)
(628

)
(1,201

)

 

 

 

 

 

 

 

 

 

 

Recorded Investment

 

$
6,594

 

$
10,084

 

$
12,118

 

$
28,795

 

Allowance for credit losses

 
(112

)
(19

)
(210

)
(341

)

Unguaranteed residual value

 
558

 

—

 

—

 
558

 

Guaranteed residual value

 
89

 

—

 

—

 
89

 

 

 

 

 

 

 

 

 

 

 

Total financing receivables, net

 

$
7,128

 

$
10,065

 

$
11,908

 

$
29,101

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current portion

 

$
3,102

 

$
10,065

 

$
7,078

 

$
20,245

 

Noncurrent portion

 

$
4,026

 

$

—

 

$
4,830

 

$
8,856

 

 

 

 

Investment in

 

 

 

Client Loan and

 

 

 

 

 

Sales-Type and

 

Commercial

 

Installment Payment

 

 

 

(Dollars in millions)

 

Direct Financing

 

Financing

 

Receivables/

 

 

 

At December 31, 2017

 

Leases

 

Receivables

 

(Loans)

 

Total

 

Financing receivables, gross

 

$
7,128

 

$
11,649

 

$
13,311

 

$
32,087

 

Unearned income

 
(535

)
(32

)
(644

)
(1,210

)

 

 

 

 

 

 

 

 

 

 

Recorded Investment

 

$
6,593

 

$
11,617

 

$
12,667

 

$
30,877

 

Allowance for credit losses

 
(103

)
(21

)
(211

)
(336

)

Unguaranteed residual value

 
630

 

—

 

—

 
630

 

Guaranteed residual value

 
100

 

—

 

—

 
100

 

 

 

 

 

 

 

 

 

 

 

Total financing receivables, net

 

$
7,220

 

$
11,596

 

$
12,456

 

$
31,272

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current portion

 

$
2,900

 

$
11,596

 

$
7,226

 

$
21,721

 

Noncurrent portion

 

$
4,320

 

$

—

 

$
5,230

 

$
9,550

 

 

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

 

(Dollars in millions)

 

 

 

 

 

 

 

 

 

At March 31, 2018

 

Americas

 

EMEA

 

Asia Pacific

 

Total

 

Recorded Investment

 

 

 

 

 

 

 

 

 

Lease receivables

 

$
3,898

 

$
1,337

 

$
1,359

 

$
6,594

 

Loan receivables

 
6,272

 
3,493

 
2,353

 
12,118

 

 

 

 

 

 

 

 

 

 

 

Ending balance

 

$
10,170

 

$
4,829

 

$
3,712

 

$
18,711

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recorded investment collectively evaluated for impairment

 

$
10,038

 

$
4,775

 

$
3,632

 

$
18,446

 

Recorded investment individually evaluated for impairment

 

$
132

 

$
54

 

$
80

 

$
265

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses

 

 

 

 

 

 

 

 

 

Beginning balance at January 1, 2018

 

 

 

 

 

 

 

 

 

Lease receivables

 

$
63

 

$
9

 

$
31

 

$
103

 

Loan receivables

 
108

 
52

 
51

 
211

 

 

 

 

 

 

 

 

 

 

 

Total

 

$
172

 

$
61

 

$
82

 

$
314

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Write-offs

 

$
(1

)

$
(1

)

$
0

 

$
(2

)

Recoveries

 
0

 

—

 

—

 
0

 

Provision

 
9

 
(5

)
1

 
5

 

Other

 
1

 
2

 
2

 
4

 

 

 

 

 

 

 

 

 

 

 

Ending balance at March 31, 2018

 

$
180

 

$
57

 

$
85

 

$
322

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease receivables

 

$
71

 

$
8

 

$
33

 

$
112

 

Loan receivables

 

$
109

 

$
49

 

$
52

 

$
210

 

 

 

 

 

 

 

 

 

 

 

Related allowance, collectively evaluated for impairment

 

$
50

 

$
14

 

$
7

 

$
71

 

Related allowance, individually evaluated for impairment

 

$
131

 

$
43

 

$
78

 

$
251

 

 

 

(Dollars in millions)

 

 

 

 

 

 

 

 

 

At December 31, 2017:

 

Americas

 

EMEA

 

Asia Pacific

 

Total

 

Recorded Investment

 

 

 

 

 

 

 

 

 

Lease receivables

 

$
3,911

 

$
1,349

 

$
1,333

 

$
6,593

 

Loan receivables

 
6,715

 
3,597

 
2,354

 
12,667

 

 

 

 

 

 

 

 

 

 

 

Ending balance

 

$
10,626

 

$
4,946

 

$
3,687

 

$
19,259

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recorded investment collectively evaluated for impairment

 

$
10,497

 

$
4,889

 

$
3,604

 

$
18,990

 

Recorded investment individually evaluated for impairment

 

$
129

 

$
57

 

$
83

 

$
269

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses

 

 

 

 

 

 

 

 

 

Beginning balance at January 1, 2017

 

 

 

 

 

 

 

 

 

Lease receivables

 

$
54

 

$
4

 

$
76

 

$
133

 

Loan receivables

 
169

 
18

 
89

 
276

 

 

 

 

 

 

 

 

 

 

 

Total

 

$
223

 

$
22

 

$
165

 

$
410

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Write-offs

 

$
(51

)

$
(1

)

$
(85

)

$
(137

)

Recoveries

 
1

 
1

 
0

 
2

 

Provision

 
(8

)
29

 
(4

)
16

 

Other

 
7

 
11

 
6

 
24

 

 

 

 

 

 

 

 

 

 

 

Ending balance at December 31, 2017

 

$
172

 

$
61

 

$
82

 

$
314

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease receivables

 

$
63

 

$
9

 

$
31

 

$
103

 

Loan receivables

 

$
108

 

$
52

 

$
51

 

$
211

 

 

 

 

 

 

 

 

 

 

 

Related allowance, collectively evaluated for impairment

 

$
43

 

$
15

 

$
6

 

$
64

 

Related allowance, individually evaluated for impairment

 

$
128

 

$
46

 

$
76

 

$
250

 

 

Schedule of past due financing receivables

 

 

 

 

 

 

 

Recorded

 

Billed

 

Recorded

 

 

 

Total

 

Recorded

 

Investment

 

Invoices

 

Investment

 

(Dollars in millions)

 

Recorded

 

Investment

 

> 90 Days and

 

> 90 Days and

 

Not

 

At March 31, 2018:

 

Investment

 

> 90 Days (1)

 

Accruing (1)

 

Accruing

 

Accruing (2)

 

Americas

 

$
3,898

 

$
278

 

$
242

 

$
27

 

$
38

 

EMEA

 
1,337

 
26

 
9

 
1

 
17

 

Asia Pacific

 
1,359

 
48

 
19

 
3

 
29

 

 

 

 

 

 

 

 

 

 

 

 

 

Total lease receivables

 

$
6,594

 

$
353

 

$
269

 

$
32

 

$
85

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$
6,272

 

$
265

 

$
168

 

$
31

 

$
103

 

EMEA

 
3,493

 
103

 
23

 
3

 
80

 

Asia Pacific

 
2,353

 
60

 
9

 
4

 
54

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loan receivables

 

$
12,118

 

$
427

 

$
200

 

$
38

 

$
237

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$
18,711

 

$
780

 

$
470

 

$
70

 

$
322

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

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

(2)

Of the recorded investment not accruing, $265 million is individually evaluated for impairment with a related allowance of $251 million.

 

 

 

 

 

 

 

Recorded

 

Billed

 

Recorded

 

 

 

Total

 

Recorded

 

Investment

 

Invoices

 

Investment

 

(Dollars in millions)

 

Recorded

 

Investment

 

> 90 Days and

 

> 90 Days and

 

Not

 

At December 31, 2017:

 

Investment

 

> 90 Days (1)

 

Accruing (1)

 

Accruing

 

Accruing (2)(3)

 

Americas

 

$
3,911

 

$
239

 

$
197

 

$
29

 

$
44

 

EMEA

 
1,349

 
32

 
5

 
3

 
27

 

Asia Pacific

 
1,333

 
57

 
23

 
3

 
36

 

 

 

 

 

 

 

 

 

 

 

 

 

Total lease receivables

 

$
6,593

 

$
328

 

$
225

 

$
36

 

$
107

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$
6,715

 

$
345

 

$
254

 

$
38

 

$
96

 

EMEA

 
3,597

 
90

 
17

 
0

 
74

 

Asia Pacific

 
2,354

 
63

 
12

 
3

 
54

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loan receivables

 

$
12,667

 

$
498

 

$
283

 

$
41

 

$
224

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$
19,259

 

$
825

 

$
507

 

$
77

 

$
331

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

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

(2)

Of the recorded investment not accruing, $269 million is individually evaluated for impairment with a related allowance of $250 million.

(3)

Recast to conform to current period presentation, which includes billed impaired amounts.

 

Schedule of net recorded investment by credit quality indicator

 

(Dollars in millions)

 

Lease Receivables

 

Loan Receivables

 

At March 31, 2018:

 

Americas

 

EMEA

 

Asia Pacific

 

Americas

 

EMEA

 

Asia Pacific

 

Credit Ratings:

 

 

 

 

 

 

 

 

 

 

 

 

 

Aaa — Aa3

 

$
391

 

$
53

 

$
56

 

$
629

 

$
137

 

$
98

 

A1 — A3

 
824

 
161

 
567

 
1,327

 
417

 
984

 

Baa1 — Baa3

 
983

 
373

 
341

 
1,583

 
968

 
592

 

Ba1 — Ba2

 
687

 
441

 
188

 
1,107

 
1,143

 
327

 

Ba3 — B1

 
522

 
196

 
95

 
840

 
508

 
164

 

B2 — B3

 
373

 
94

 
64

 
600

 
243

 
112

 

Caa — D

 
47

 
11

 
14

 
76

 
29

 
25

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$
3,827

 

$
1,329

 

$
1,326

 

$
6,163

 

$
3,444

 

$
2,301

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Dollars in millions)

 

Lease Receivables

 

Loan Receivables

 

At December 31, 2017:

 

Americas

 

EMEA

 

Asia Pacific

 

Americas

 

EMEA

 

Asia Pacific

 

Credit Ratings:

 

 

 

 

 

 

 

 

 

 

 

 

 

Aaa — Aa3

 

$
422

 

$
49

 

$
68

 

$
724

 

$
129

 

$
120

 

A1 — A3

 
855

 
190

 
544

 
1,469

 
502

 
961

 

Baa1 — Baa3

 
980

 
371

 
337

 
1,683

 
982

 
596

 

Ba1 — Ba2

 
730

 
448

 
184

 
1,253

 
1,186

 
325

 

Ba3 — B1

 
443

 
192

 
89

 
760

 
508

 
157

 

B2 — B3

 
367

 
77

 
64

 
630

 
204

 
113

 

Caa — D

 
51

 
13

 
18

 
88

 
34

 
31

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$
3,847

 

$
1,340

 

$
1,302

 

$
6,607

 

$
3,545

 

$
2,303