Financing Receivables and Operating Leases (Tables)

12 Months Ended

Jul. 27, 2019

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



July 27, 2019	Lease Receivables			Loan Receivables			Financed Service Contracts			Total
Gross	$	2,367		$	5,438		$	2,369		$	10,174
Residual value	142			—			—			142
Unearned income	(137		)	—			—			(137		)
Allowance for credit loss	(46		)	(71		)	(9		)	(126		)
Total, net	$	2,326		$	5,367		$	2,360		$	10,053
Reported as:
Current	$	1,029		$	2,653		$	1,413		$	5,095
Noncurrent	1,297			2,714			947			4,958
Total, net	$	2,326		$	5,367		$	2,360		$	10,053



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 July 27, 2019 are summarized as follows (in millions):



Fiscal Year	Amount
2020	$	1,028
2021	702
2022	399
2023	185
2024	53
Total	$	2,367

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 July 27, 2019 and July 28, 2018 are summarized as follows (in millions):



	INTERNAL CREDIT RISK RATING
July 27, 2019	1 to 4		5 to 6		7 and Higher		Total
Lease receivables	$	1,204	$	991	$	35	$	2,230
Loan receivables	3,367		1,920		151		5,438
Financed service contracts	1,413		939		17		2,369
Total	$	5,984	$	3,850	$	203	$	10,037



	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 July 27, 2019 and July 28, 2018 (in millions):



	DAYS PAST DUE (INCLUDES BILLED AND UNBILLED)
July 27, 2019	31 - 60		61 - 90		91+		Total Past Due		Current		Total		Nonaccrual Financing Receivables		Impaired Financing Receivables
Lease receivables	$	101	$	42	$	291	$	434	$	1,796	$	2,230	$	13	$	13
Loan receivables	257		67		338		662		4,776		5,438		31		31
Financed service contracts	145		131		271		547		1,822		2,369		3		3
Total	$	503	$	240	$	900	$	1,643	$	8,394	$	10,037	$	47	$	47



	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):



	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)	(54		)	11		27			(16		)
Recoveries (write-offs), net	(14		)	—		(28		)	(42		)
Foreign exchange and other	(21		)	—		—			(21		)
Allowance for credit loss as of July 27, 2019	$	46		$	71	$	9		$	126



	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)	(26		)	(43		)	(20		)	(89		)
Recoveries (write-offs), net	(1		)	(5		)	—			(6		)
Foreign exchange and other	—			5			—			5
Allowance for credit loss as of July 28, 2018	$	135		$	60		$	10		$	205



	CREDIT LOSS ALLOWANCES
	Lease Receivables			Loan Receivables			Financed Service Contracts			Total
Allowance for credit loss as of July 30, 2016	$	230		$	97		$	48		$	375
Provisions (benefits)	(25		)	7			(17		)	(35		)
Recoveries (write-offs), net	(37		)	(11		)	(1		)	(49		)
Foreign exchange and other	(6		)	10			—			4
Allowance for credit loss as of July 29, 2017	$	162		$	103		$	30		$	295

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):



	July 27, 2019			July 28, 2018
Operating lease assets	$	485		$	356
Accumulated depreciation	(306		)	(238		)
Operating lease assets, net	$	179		$	118

Schedule of Future Minimum Rental Payments for Operating Leases

Minimum future rentals on noncancelable operating leases as of July 27, 2019 are summarized as follows (in millions):



Fiscal Year	Amount
2020	$	125
2021	64
2022	16
2023	1
Total	$	206