Financing Receivables (Tables)

12 Months Ended

Dec. 31, 2020

Financing Receivables

Summary of the components of financing receivables

($ in millions)
	Client Financing Receivables
	Client Loan and		Investment in
	Installment Payment		Sales-Type and		Commercial
	Receivables/		Direct Financing		Financing
At December 31, 2020:	(Loans)		Leases		Receivables		Total
Financing receivables, gross	$	12,159	$	4,001	$	2,419	$	18,580
Unearned income		(488)		(335)		0		(823)
Residual value*		—		485		—		485
Amortized cost	$	11,671	$	4,151	$	2,419	$	18,242
Allowance for credit losses		(173)		(82)		(8)		(263)
Total financing receivables, net	$	11,498	$	4,069	$	2,411	$	17,979
Current portion	$	6,955	$	1,525	$	2,411	$	10,892
Noncurrent portion	$	4,542	$	2,544	$	—	$	7,086

* Includes guaranteed and unguaranteed residual value.

($ in millions)
	Client Financing Receivables
	Client Loan and		Investment in
	Installment Payment		Sales-Type and		Commercial
	Receivables/		Direct Financing		Financing
At December 31, 2019:	(Loans)		Leases		Receivables		Total
Financing receivables, gross	$	13,592	$	6,077	$	3,836	$	23,504
Unearned income		(570)		(509)		(4)		(1,083)
Recorded investment	$	13,022	$	5,567	$	3,831	$	22,421
Allowance for credit losses		(138)		(72)		(11)		(221)
Unguaranteed residual value		—		652		—		652
Guaranteed residual value		—		53		—		53
Total financing receivables, net	$	12,884	$	6,199	$	3,820	$	22,904
Current portion	$	8,037	$	2,334	$	3,820	$	14,192
Noncurrent portion	$	4,847	$	3,865	$	—	$	8,712

Schedule of financing receivables and allowance for credit losses by class

($ in millions)
At December 31, 2020:	Americas		EMEA		Asia Pacific		Total
Amortized cost	$	7,758	$	5,023	$	3,042	$	15,822
Allowance for credit losses
Beginning balance at December 31, 2019	$	120	$	54	$	36	$	210
Adjustment for adoption of new standard		21		15		5		41
Beginning balance at January 1, 2020	$	142	$	69	$	41	$	252
Write-offs		(28)		(3)		(3)		(34)
Recoveries		0		0		2		3
Additions/(releases)		33		5		(4)		34
Other*		(6)		6		1		1
Ending balance at December 31, 2020	$	141	$	77	$	37	$	255

* Primarily represents translation adjustments.

($ in millions)
At December 31, 2019:	Americas		EMEA		Asia Pacific		Total
Recorded investment
Lease receivables	$	3,419	$	1,186	$	963	$	5,567
Loan receivables		6,726		3,901		2,395		13,022
Ending balance	$	10,144	$	5,087	$	3,359	$	18,590
Recorded investment, collectively evaluated for impairment	$	10,032	$	5,040	$	3,326	$	18,399
Recorded investment, individually evaluated for impairment	$	112	$	47	$	32	$	191
Allowance for credit losses
Beginning balance at January 1, 2019
Lease receivables	$	53	$	22	$	24	$	99
Loan receivables		105		43		32		179
Total	$	158	$	65	$	56	$	279
Write-offs		(42)		(3)		(18)		(63)
Recoveries		1		0		1		2
Additions/(releases)		5		(7)		(3)		(5)
Other*		(1)		0		(1)		(2)
Ending balance at December 31, 2019	$	120	$	54	$	36	$	210
Lease receivables	$	33	$	23	$	16	$	72
Loan receivables	$	88	$	31	$	20	$	138
Related allowance, collectively evaluated for impairment	$	25	$	11	$	4	$	39
Related allowance, individually evaluated for impairment	$	96	$	43	$	32	$	171

* Primarily represents translation adjustments.

Schedule of past due financing receivables

($ in millions)
						Amortized			Billed		Amortized
	Total		Amortized			Cost			Invoices		Cost
	Amortized		Cost			> 90 Days and			> 90 Days and		Not
At December 31, 2020:	Cost		> 90 Days		(1)	Accruing		(1)	Accruing		Accruing		(2)
Americas	$	7,758	$	295		$	200		$	12	$	96
EMEA		5,023		119			28			5		95
Asia Pacific		3,042		42			12			4		32
Total client financing receivables	$	15,822	$	456		$	241		$	20	$	223

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

(2) Of the amortized cost not accruing, there is a related allowance of $178 million. Financing income recognized on these receivables was immaterial for the year ended December 31, 2020.

($ in millions)
						Recorded			Billed		Recorded
	Total		Recorded			Investment			Invoices		Investment
	Recorded		Investment			> 90 Days and			> 90 Days and		Not
At December 31, 2019:	Investment		> 90 Days		(1)	Accruing		(1)	Accruing		Accruing		(2)
Americas	$	3,419	$	187		$	147		$	11	$	41
EMEA		1,186		28			13			2		17
Asia Pacific		963		19			7			1		11
Total lease receivables	$	5,567	$	234		$	168		$	14	$	69
Americas	$	6,726	$	127		$	71		$	11	$	72
EMEA		3,901		77			8			3		72
Asia Pacific		2,395		26			6			2		21
Total loan receivables	$	13,022	$	231		$	85		$	15	$	166
Total	$	18,590	$	465		$	253		$	29	$	235

(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, $191 million is individually evaluated for impairment with a related allowance of $171 million.  Financing income on these receivables was immaterial for the year ended December 31, 2019.

Schedule of amortized cost/net recorded investment by credit quality indicator

($ in millions)
	Americas				EMEA				Asia Pacific
At December 31, 2020:	Aaa - Baa3		Ba1 - D		Aaa - Baa3		Ba1 - D		Aaa - Baa3		Ba1 - D
Vintage year:
2020	$	2,818	$	1,449	$	1,513	$	1,427	$	958	$	351
2019		988		623		668		519		564		123
2018		829		360		329		245		419		167
2017		285		154		70		128		205		52
2016		90		52		33		46		114		33
2015 and prior		28		81		22		22		38		18
Total	$	5,038	$	2,720	$	2,635	$	2,387	$	2,298	$	743

($ in millions)
	Lease Receivables						Loan Receivables
At December 31, 2019:	Americas		EMEA		Asia Pacific		Americas		EMEA		Asia Pacific
Credit rating
Aaa—Aa3	$	465	$	54	$	43	$	1,028	$	193	$	189
A1—A3		750		181		454		1,186		395		892
Baa1—Baa3		955		409		147		1,882		1,527		619
Ba1—Ba2		746		326		154		1,513		921		388
Ba3—B1		215		140		101		471		564		205
B2—B3		242		50		47		522		253		72
Caa—D		13		2		2		36		18		10
Total	$	3,385	$	1,162	$	947	$	6,638	$	3,871	$	2,376