Financing Receivables and Operating Leases (Tables)

3 Months Ended

Oct. 27, 2018

A summary of our financing receivables is presented as follows (in millions):



October 27, 2018	Lease Receivables			Loan Receivables			Financed Service Contracts			Total
Gross	$	2,511		$	4,924		$	2,240		$	9,675
Residual value	159			—			—			159
Unearned income	(140		)	—			—			(140		)
Allowance for credit loss	(131		)	(60		)	(8		)	(199		)
Total, net	$	2,399		$	4,864		$	2,232		$	9,495
Reported as:
Current	$	1,143		$	2,422		$	1,286		$	4,851
Noncurrent	1,256			2,442			946			4,644
Total, net	$	2,399		$	4,864		$	2,232		$	9,495



July 28, 2018	Lease Receivables			Loan Receivables			Financed Service Contracts			Total
Gross	$	2,688		$	4,999		$	2,326		$	10,013
Residual value	164			—			—			164
Unearned income	(141		)	—			—			(141		)
Allowance for credit loss	(135		)	(60		)	(10		)	(205		)
Total, net	$	2,576		$	4,939		$	2,316		$	9,831
Reported as:
Current	$	1,249		$	2,376		$	1,324		$	4,949
Noncurrent	1,327			2,563			992			4,882
Total, net	$	2,576		$	4,939		$	2,316		$	9,831

Contractual Maturities of the Gross Lease Receivables

Future minimum lease payments to Cisco on lease receivables as of October 27, 2018 are summarized as follows (in millions):



Fiscal Year	Amount
2019 (remaining nine months)	$	1,105
2020	614
2021	478
2022	231
2023	78
Thereafter	5
Total	$	2,511

Schedule of Internal Credit Risk Rating for Each Portfolio Segment and Class

Gross receivables, excluding residual value, less unearned income categorized by our internal credit risk rating as of October 27, 2018 and July 28, 2018 are summarized as follows (in millions):



	INTERNAL CREDIT RISK RATING
October 27, 2018	1 to 4		5 to 6		7 and Higher		Total
Lease receivables	$	1,238	$	1,084	$	49	$	2,371
Loan receivables	3,122		1,744		58		4,924
Financed service contracts	1,454		768		18		2,240
Total	$	5,814	$	3,596	$	125	$	9,535



	INTERNAL CREDIT RISK RATING
July 28, 2018	1 to 4		5 to 6		7 and Higher		Total
Lease receivables	$	1,294	$	1,199	$	54	$	2,547
Loan receivables	3,184		1,752		63		4,999
Financed service contracts	1,468		835		23		2,326
Total	$	5,946	$	3,786	$	140	$	9,872

Schedule of Financing Receivables by Portfolio Segment and Class Aging Analysis

The following tables present the aging analysis of gross receivables, excluding residual value and less unearned income as of October 27, 2018 and July 28, 2018 (in millions):



	DAYS PAST DUE (INCLUDES BILLED AND UNBILLED)
October 27, 2018	31-60		61-90		91+		Total Past Due		Current		Total		Nonaccrual Financing Receivables		Impaired Financing Receivables
Lease receivables	$	79	$	27	$	121	$	227	$	2,144	$	2,371	$	5	$	5
Loan receivables	123		85		348		556		4,368		4,924		29		29
Financed service contracts	102		147		262		511		1,729		2,240		3		3
Total	$	304	$	259	$	731	$	1,294	$	8,241	$	9,535	$	37	$	37



	DAYS PAST DUE (INCLUDES BILLED AND UNBILLED)
July 28, 2018	31-60		61-90		91+		Total Past Due		Current		Total		Nonaccrual Financing Receivables		Impaired Financing Receivables
Lease receivables	$	72	$	27	$	155	$	254	$	2,293	$	2,547	$	9	$	9
Loan receivables	104		55		252		411		4,588		4,999		30		30
Financed service contracts	138		78		304		520		1,806		2,326		3		3
Total	$	314	$	160	$	711	$	1,185	$	8,687	$	9,872	$	42	$	42

Allowance for Credit Loss and Related Financing Receivables

The allowances for credit loss and the related financing receivables are summarized as follows (in millions):



Three months ended October 27, 2018	CREDIT LOSS ALLOWANCES
	Lease Receivables			Loan Receivables		Financed Service Contracts			Total
Allowance for credit loss as of July 28, 2018	$	135		$	60	$	10		$	205
Provisions (benefits)	(3		)	—		(2		)	(5		)
Foreign exchange and other	(1		)	—		—			(1		)
Allowance for credit loss as of October 27, 2018	$	131		$	60	$	8		$	199



Three months ended October 28, 2017	CREDIT LOSS ALLOWANCES
	Lease Receivables			Loan Receivables		Financed Service Contracts			Total
Allowance for credit loss as of July 29, 2017	$	162		$	103	$	30		$	295
Provisions	(2		)	2		(6		)	(6		)
Foreign exchange and other	—			1		(1		)	—
Allowance for credit loss as of October 28, 2017	$	160		$	106	$	23		$	289

Schedule of Property Subject to or Available for Operating Lease

Amounts relating to equipment on operating lease assets and the associated accumulated depreciation are summarized as follows (in millions):



	October 27, 2018			July 28, 2018
Operating lease assets	$	475		$	356
Accumulated depreciation	(333		)	(238		)
Operating lease assets, net	$	142		$	118

Schedule of Future Minimum Rental Payments for Operating Leases

Minimum future rentals on noncancelable operating leases as of October 27, 2018 are summarized as follows (in millions):



Fiscal Year	Amount
2019 (remaining nine months)	$	125
2020	108
2021	44
2022	3
Thereafter	1
Total	$	281