Financing Receivables (Tables)

6 Months Ended

Jun. 30, 2022

Financing Receivables

Summary of the components of financing receivables

	Client Financing Receivables
	Client Loan and		Investment in
	Installment Payment		Sales-Type and		Commercial Financing Receivables
(Dollars in millions)	Receivables		Direct Financing		Held for		Held for
At June 30, 2022:	(Loans)		Leases		Investment		Sale*		Total
Financing receivables, gross	$	8,343	$	3,851	$	177	$	614	$	12,985
Unearned income		(341)		(305)		—		—		(646)
Unguaranteed residual value		—		383		—		—		383
Amortized cost	$	8,002	$	3,929	$	177	$	614	$	12,721
Allowance for credit losses		(110)		(56)		(6)		—		(172)
Total financing receivables, net	$	7,891	$	3,872	$	171	$	614	$	12,549
Current portion	$	5,010	$	1,438	$	171	$	614	$	7,233
Noncurrent portion	$	2,881	$	2,435	$	—	$	—	$	5,316

	Client Financing Receivables
	Client Loan and		Investment in
	Installment Payment		Sales-Type and		Commercial Financing Receivables
(Dollars in millions)	Receivables		Direct Financing		Held for		Held for
At December 31, 2021:	(Loans)		Leases		Investment		Sale*		Total
Financing receivables, gross	$	9,303	$	3,336	$	450	$	793	$	13,881
Unearned income		(353)		(223)		—		—		(576)
Unguaranteed residual value		—		335		—		—		335
Amortized cost	$	8,949	$	3,448	$	450	$	793	$	13,640
Allowance for credit losses		(131)		(64)		(6)		—		(201)
Total financing receivables, net	$	8,818	$	3,384	$	444	$	793	$	13,439
Current portion	$	5,371	$	1,406	$	444	$	793	$	8,014
Noncurrent portion	$	3,447	$	1,978	$	—	$	—	$	5,425

* The carrying value of the receivables classified as held for sale approximates fair value.

Schedule of transfer of client and commercial financing assets

(Dollars in millions)
For the six months ended June 30:	2022		2021
Client financing receivables
Lease receivables	$	15	$	732
Loan receivables		2		1,359
Total client financing receivables transferred	$	17	$	2,091
Commercial financing receivables
Receivables transferred during the period	$	3,914	$	2,621
Receivables uncollected at end of period*	$	815	$	821

* Of the total amount of commercial financing receivables sold and derecognized from the Consolidated Balance Sheet, the amounts presented remained uncollected from business partners as of June 30, 2022 and 2021.

Schedule of financing receivables and allowance for credit losses by class

(Dollars in millions)
At June 30, 2022:	Americas		EMEA		Asia Pacific		Total
Amortized cost	$	7,092	$	3,173	$	1,666	$	11,930
Allowance for credit losses:
Beginning balance at January 1, 2022	$	111	$	61	$	23	$	195
Write-offs	$	(16)	$	(1)	$	(2)	$	(18)
Recoveries		1		0		4		5
Additions/(releases)		(2)		(3)		(5)		(10)
Other*		2		(5)		(1)		(5)
Ending balance at June 30, 2022	$	96	$	51	$	19	$	166

(Dollars in millions)
At December 31, 2021:	Americas		EMEA		Asia Pacific		Total
Amortized cost	$	6,573	$	3,793	$	2,031	$	12,397
Allowance for credit losses:
Beginning balance at January 1, 2021	$	141	$	77	$	37	$	255
Write-offs	$	(8)	$	(2)	$	(7)	$	(17)
Recoveries		0		0		1		1
Additions/(releases)		(19)		(11)		(7)		(38)
Other*		(3)		(3)		0		(7)
Ending balance at December 31, 2021	$	111	$	61	$	23	$	195

* Primarily represents translation adjustments.

Schedule of past due financing receivables

					Amortized		Billed		Amortized
	Total		Amortized		Cost		Invoices		Cost
(Dollars in millions)	Amortized		Cost		> 90 Days and		> 90 Days and		Not
At June 30, 2022:	Cost		> 90 Days*		Accruing*		Accruing		Accruing**
Americas	$	7,092	$	216	$	141	$	11	$	76
EMEA		3,173		85		4		1		83
Asia Pacific		1,666		23		5		2		18
Total client financing receivables	$	11,930	$	324	$	150	$	15	$	177

					Amortized		Billed		Amortized
	Total		Amortized		Cost		Invoices		Cost
(Dollars in millions)	Amortized		Cost		> 90 Days and		> 90 Days and		Not
At December 31, 2021:	Cost		> 90 Days*		Accruing*		Accruing		Accruing**
Americas	$	6,573	$	188	$	100	$	6	$	90
EMEA		3,793		99		7		2		95
Asia Pacific		2,031		25		5		2		20
Total client financing receivables	$	12,397	$	312	$	112	$	10	$	205

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

** Of the amortized cost not accruing, there was a related allowance of $129 million and $153 million at June 30, 2022 and December 31, 2021, respectively. Financing income recognized on these receivables was immaterial for the three and six months ended June 30, 2022, respectively.

Schedule of amortized cost by credit quality indicator

(Dollars in millions)	Americas				EMEA				Asia Pacific
At June 30, 2022:	Aaa – Baa3		Ba1 – D		Aaa – Baa3		Ba1 – D		Aaa – Baa3		Ba1 – D
Vintage year:
2022	$	1,987	$	799	$	614	$	431	$	393	$	86
2021		1,750		584		645		349		290		108
2020		761		306		337		221		268		60
2019		382		151		190		166		190		30
2018		186		72		86		51		141		35
2017 and prior		61		52		19		65		44		22
Total	$	5,128	$	1,964	$	1,891	$	1,282	$	1,326	$	340

(Dollars in millions)	Americas				EMEA				Asia Pacific
At December 31, 2021:	Aaa – Baa3		Ba1 – D		Aaa – Baa3		Ba1 – D		Aaa – Baa3		Ba1 – D
Vintage year:
2021	$	2,556	$	1,147	$	1,181	$	778	$	565	$	226
2020		1,013		392		506		342		381		86
2019		544		236		287		291		297		51
2018		338		117		189		85		211		64
2017		108		50		15		52		74		17
2016 and prior		20		53		21		46		38		20
Total	$	4,579	$	1,994	$	2,198	$	1,595	$	1,567	$	464