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Financing Receivables (Tables)
 6 Months Ended
Jun. 30, 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 June 30, 2018:

 

Leases

 

Receivables

 

(Loans)

 

Total

 

Financing receivables, gross

 

$
6,834

 

$
9,711

 

$
12,874

 

$
29,420

 

Unearned income

 
(523

)
(30

)
(605

)
(1,158

)

 

 

 

 

 

 

 

 

 

 

Recorded Investment

 

$
6,312

 

$
9,681

 

$
12,269

 

$
28,262

 

Allowance for credit losses

 
(110

)
(14

)
(215

)
(339

)

Unguaranteed residual value

 
575

 

—

 

—

 
575

 

Guaranteed residual value

 
91

 

—

 

—

 
91

 

 

 

 

 

 

 

 

 

 

 

Total financing receivables, net

 

$
6,867

 

$
9,667

 

$
12,055

 

$
28,589

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current portion

 

$
2,866

 

$
9,667

 

$
7,273

 

$
19,806

 

Noncurrent portion

 

$
4,001

 

$

—

 

$
4,781

 

$
8,783

 

 

 

 

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 June 30, 2018:

 

Americas

 

EMEA

 

Asia Pacific

 

Total

 

Recorded Investment

 

 

 

 

 

 

 

 

 

Lease receivables

 

$
3,744

 

$
1,303

 

$
1,264

 

$
6,312

 

Loan receivables

 
6,313

 
3,544

 
2,413

 
12,269

 

 

 

 

 

 

 

 

 

 

 

Ending balance

 

$
10,057

 

$
4,847

 

$
3,677

 

$
18,581

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Recorded investment collectively evaluated for impairment

 

$
9,933

 

$
4,791

 

$
3,599

 

$
18,323

 

Recorded investment individually evaluated for impairment

 

$
125

 

$
56

 

$
77

 

$
258

 

 

 

 

 

 

 

 

 

 

 

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

 

$
(3

)

$
(1

)

$
(2

)

$
(6

)

Recoveries

 
0

 
0

 
2

 
2

 

Provision

 
15

 
10

 
2

 
26

 

Other

 
(8

)
(2

)
(1

)
(12

)

 

 

 

 

 

 

 

 

 

 

Ending balance at June 30, 2018

 

$
175

 

$
68

 

$
82

 

$
325

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lease receivables

 

$
68

 

$
11

 

$
31

 

$
110

 

Loan receivables

 

$
107

 

$
57

 

$
51

 

$
215

 

 

 

 

 

 

 

 

 

 

 

Related allowance, collectively evaluated for impairment

 

$
51

 

$
16

 

$
6

 

$
72

 

Related allowance, individually evaluated for impairment

 

$
125

 

$
53

 

$
76

 

$
253

 

 

(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 June 30, 2018:

 

Investment

 

> 90 Days (1)

 

Accruing (1)

 

Accruing

 

Accruing (2)

 

Americas

 

$
3,744

 

$
232

 

$
185

 

$
24

 

$
52

 

EMEA

 
1,303

 
20

 
4

 
1

 
16

 

Asia Pacific

 
1,264

 
48

 
18

 
3

 
32

 

 

 

 

 

 

 

 

 

 

 

 

 

Total lease receivables

 

$
6,312

 

$
300

 

$
208

 

$
29

 

$
100

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Americas

 

$
6,313

 

$
326

 

$
245

 

$
31

 

$
101

 

EMEA

 
3,544

 
90

 
12

 
4

 
79

 

Asia Pacific

 
2,413

 
86

 
38

 
7

 
51

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loan receivables

 

$
12,269

 

$
502

 

$
295

 

$
41

 

$
231

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$
18,581

 

$
803

 

$
503

 

$
70

 

$
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, $258 million is individually evaluated for impairment with a related allowance of $253 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 June 30, 2018:

 

Americas

 

EMEA

 

Asia Pacific

 

Americas

 

EMEA

 

Asia Pacific

 

Credit Ratings:

 

 

 

 

 

 

 

 

 

 

 

 

 

Aaa – Aa3

 

$
390

 

$
51

 

$
101

 

$
658

 

$
137

 

$
194

 

A1 – A3

 
808

 
156

 
477

 
1,364

 
420

 
913

 

Baa1 – Baa3

 
857

 
397

 
320

 
1,446

 
1,072

 
613

 

Ba1 – Ba2

 
784

 
401

 
188

 
1,323

 
1,082

 
359

 

Ba3 – B1

 
479

 
177

 
85

 
808

 
477

 
162

 

B2 – B3

 
320

 
102

 
54

 
540

 
274

 
103

 

Caa – D

 
39

 
9

 
9

 
67

 
24

 
17

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

$
3,676

 

$
1,292

 

$
1,233

 

$
6,206

 

$
3,487

 

$
2,362

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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