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Financing Receivables (Tables)

3 Months Ended

Oct. 24, 2020

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


October 24, 2020	Lease Receivables		Loan Receivables		Financed Service Contracts		Total
Gross	$	2,063	$	5,954	$	2,744	$	10,761
Residual value	119		—		—		119
Unearned income	(105)		—		—		(105)
Allowance for credit loss	(46)		(101)		(7)		(154)
Total, net	$	2,031	$	5,853	$	2,737	$	10,621
Reported as:
Current	$	936	$	2,733	$	1,436	$	5,105
Noncurrent	1,095		3,120		1,301		5,516
Total, net	$	2,031	$	5,853	$	2,737	$	10,621


July 25, 2020	Lease Receivables		Loan Receivables		Financed Service Contracts		Total
Gross	$	2,127	$	5,937	$	2,830	$	10,894
Residual value	123		—		—		123
Unearned income	(114)		—		—		(114)
Allowance for credit loss	(48)		(81)		(9)		(138)
Total, net	$	2,088	$	5,856	$	2,821	$	10,765
Reported as:
Current	$	918	$	2,692	$	1,441	$	5,051
Noncurrent	1,170		3,164		1,380		5,714
Total, net	$	2,088	$	5,856	$	2,821	$	10,765

Schedule of Financing Receivables by Internal Credit Risk Rating by Period of Origination

Gross financing receivables(1) categorized by our internal credit risk rating by period of origination as of October 24, 2020 are summarized as follows (in millions):


			Fiscal Year								Three Months Ended
Internal Credit Risk Rating	Prior		July 29, 2017		July 28, 2018		July 27, 2019		July 25, 2020		October 24, 2020		Total
Lease Receivables:
1 to 4	$	17	$	60	$	166	$	263	$	389	$	25	$	920
5 to 6	17		65		151		300		389		54		976
7 and Higher	4		3		9		21		21		4		62
Total Lease Receivables	$	38	$	128	$	326	$	584	$	799	$	83	$	1,958

Loan Receivables:
1 to 4	$	30	$	170	$	458	$	858	$	1,430	$	793	$	3,739
5 to 6	16		87		174		456		887		441		2,061
7 and Higher	3		3		9		72		62		5		154
Total Loan Receivables	$	49	$	260	$	641	$	1,386	$	2,379	$	1,239	$	5,954

Financed Service Contracts:
1 to 4	$	4	$	56	$	88	$	246	$	555	$	634	$	1,583
5 to 6	2		36		73		285		465		267		1,128
7 and Higher	—		—		3		16		13		1		33
Total Financed Service Contracts	$	6	$	92	$	164	$	547	$	1,033	$	902	$	2,744

(1) Lease receivables calculated as gross lease receivables, excluding residual value, less unearned income

The following table summarizes our gross receivables categorized by our internal credit risk rating as of July 25, 2020 and was not restated to reflect the impact of adoption of the accounting standards update on Credit Losses on Financial Instruments:


	INTERNAL CREDIT RISK RATING
July 25, 2020	1 to 4		5 to 6		7 and Higher		Total
Lease receivables	$	992	$	952	$	69	$	2,013
Loan receivables	3,808		1,961		168		5,937
Financed service contracts	1,645		1,153		32		2,830
Total	$	6,445	$	4,066	$	269	$	10,780

Schedule of Aging Analysis of Financing Receivables

The following tables present the aging analysis of gross receivables as of October 24, 2020 and July 25, 2020 (in millions):


	DAYS PAST DUE (INCLUDES BILLED AND UNBILLED)
October 24, 2020	31-60		61-90		91+		Total Past Due		Current		Total		120+ Still Accruing		Nonaccrual Financing Receivables		Impaired Financing Receivables
Lease receivables	$	45	$	21	$	103	$	169	$	1,789	$	1,958	$	4	$	39	$	39
Loan receivables	113		32		80		225		5,729		5,954		10		54		54
Financed service contracts	77		34		182		293		2,451		2,744		33		4		4
Total	$	235	$	87	$	365	$	687	$	9,969	$	10,656	$	47	$	97	$	97


	DAYS PAST DUE (INCLUDES BILLED AND UNBILLED)
July 25, 2020	31-60		61-90		91+		Total Past Due		Current		Total		Nonaccrual Financing Receivables		Impaired Financing Receivables
Lease receivables	$	29	$	47	$	48	$	124	$	1,889	$	2,013	$	43	$	43
Loan receivables	129		78		78		285		5,652		5,937		65		65
Financed service contracts	69		75		124		268		2,562		2,830		4		4
Total	$	227	$	200	$	250	$	677	$	10,103	$	10,780	$	112	$	112

Schedule of 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 24, 2020	CREDIT LOSS ALLOWANCES
	Lease Receivables		Loan Receivables		Financed Service Contracts		Total
Allowance for credit loss as of July 25, 2020	$	48	$	81	$	9	$	138
Provisions (benefits)	(3)		3		(1)		(1)
Other	1		17		(1)		17
Allowance for credit loss as of October 24, 2020	$	46	$	101	$	7	$	154


Three months ended October 26, 2019	CREDIT LOSS ALLOWANCES
	Lease Receivables		Loan Receivables		Financed Service Contracts		Total
Allowance for credit loss as of July 27, 2019	$	46	$	71	$	9	$	126
Provisions (benefits)	(3)		27		—		24
Recoveries (write-offs), net	—		(16)		—		(16)
Foreign exchange and other	—		(1)		—		(1)
Allowance for credit loss as of October 26, 2019	$	43	$	81	$	9	$	133