Financing Receivables and Operating Leases (Tables)

6 Months Ended

Jan. 26, 2019

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



January 26, 2019	Lease Receivables			Loan Receivables			Financed Service Contracts			Total
Gross	$	2,483		$	4,926		$	2,398		$	9,807
Residual value	153			—			—			153
Unearned income	(138		)	—			—			(138		)
Allowance for credit loss	(127		)	(64		)	(9		)	(200		)
Total, net	$	2,371		$	4,862		$	2,389		$	9,622
Reported as:
Current	$	1,121		$	2,502		$	1,434		$	5,057
Noncurrent	1,250			2,360			955			4,565
Total, net	$	2,371		$	4,862		$	2,389		$	9,622



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 January 26, 2019 are summarized as follows (in millions):



Fiscal Year	Amount
2019 (remaining six months)	$	637
2020	855
2021	532
2022	309
2023	126
Thereafter	24
Total	$	2,483

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 January 26, 2019 and July 28, 2018 are summarized as follows (in millions):



	INTERNAL CREDIT RISK RATING
January 26, 2019	1 to 4		5 to 6		7 and Higher		Total
Lease receivables	$	1,233	$	1,066	$	46	$	2,345
Loan receivables	3,000		1,875		51		4,926
Financed service contracts	1,390		995		13		2,398
Total	$	5,623	$	3,936	$	110	$	9,669



	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 January 26, 2019 and July 28, 2018 (in millions):



	DAYS PAST DUE (INCLUDES BILLED AND UNBILLED)
January 26, 2019	31-60		61-90		91+		Total Past Due		Current		Total		Nonaccrual Financing Receivables		Impaired Financing Receivables
Lease receivables	$	79	$	34	$	152	$	265	$	2,080	$	2,345	$	3	$	3
Loan receivables	73		39		235		347		4,579		4,926		28		28
Financed service contracts	74		38		280		392		2,006		2,398		2		2
Total	$	226	$	111	$	667	$	1,004	$	8,665	$	9,669	$	33	$	33



	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 January 26, 2019	CREDIT LOSS ALLOWANCES
	Lease Receivables			Loan Receivables		Financed Service Contracts		Total
Allowance for credit loss as of October 27, 2018	$	131		$	60	$	8	$	199
Provisions (benefits)	(4		)	4		1		1
Allowance for credit loss as of January 26, 2019	$	127		$	64	$	9	$	200



Six months ended January 26, 2019	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)	(7		)	4		(1		)	(4		)
Foreign exchange and other	(1		)	—		—			(1		)
Allowance for credit loss as of January 26, 2019	$	127		$	64	$	9		$	200



Three months ended January 27, 2018	CREDIT LOSS ALLOWANCES
	Lease Receivables		Loan Receivables			Financed Service Contracts			Total
Allowance for credit loss as of October 28, 2017	$	160	$	106		$	23		$	289
Provisions (benefits)	3		(13		)	(10		)	(20		)
Foreign exchange and other	2		1			—			3
Allowance for credit loss as of January 27, 2018	$	165	$	94		$	13		$	272



Six months ended January 27, 2018	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 (benefits)	1		(11		)	(16		)	(26		)
Foreign exchange and other	2		2			(1		)	3
Allowance for credit loss as of January 27, 2018	$	165	$	94		$	13		$	272

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):



	January 26, 2019			July 28, 2018
Operating lease assets	$	529		$	356
Accumulated depreciation	(370		)	(238		)
Operating lease assets, net	$	159		$	118

Schedule of Future Minimum Rental Payments for Operating Leases

Minimum future rentals on noncancelable operating leases as of January 26, 2019 are summarized as follows (in millions):



Fiscal Year	Amount
2019 (remaining six months)	$	81
2020	111
2021	48
2022	5
Total	$	245