Financing Receivables

9 Months Ended

Apr. 29, 2023

(a)Financing Receivables

Financing receivables primarily consist of loan receivables and lease receivables. Loan receivables represent financing arrangements related to the sale of our hardware, software, and services (including technical support and advanced services), and also may include additional funding for other costs associated with network installation and integration of our products and services. Loan receivables have terms of one year to three years on average. Lease receivables represent sales-type leases resulting from the sale of Cisco’s and complementary third-party products and are typically collateralized by a security interest in the underlying assets. Lease receivables consist of arrangements with terms of four years on average.

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


April 29, 2023	Loan Receivables		Lease Receivables		Total
Gross	$	5,879	$	992	$	6,871
Residual value	—		66		66
Unearned income	—		(72)		(72)
Allowance for credit loss	(53)		(17)		(70)
Total, net	$	5,826	$	969	$	6,795
Reported as:
Current	$	2,949	$	453	$	3,402
Noncurrent	2,877		516		3,393
Total, net	$	5,826	$	969	$	6,795


July 30, 2022	Loan Receivables		Lease Receivables		Total
Gross	$	6,842	$	1,176	$	8,018
Residual value	—		76		76
Unearned income	—		(54)		(54)
Allowance for credit loss	(103)		(23)		(126)
Total, net	$	6,739	$	1,175	$	7,914
Reported as:
Current	$	3,327	$	578	$	3,905
Noncurrent	3,412		597		4,009
Total, net	$	6,739	$	1,175	$	7,914

(b)Credit Quality of Financing Receivables

The tables below present our gross financing receivables, excluding residual value, less unearned income, categorized by our internal credit risk rating by period of origination (in millions):


April 29, 2023			Fiscal Year								Nine Months Ended
Internal Credit Risk Rating	Prior		July 27, 2019		July 25, 2020		July 31, 2021		July 30, 2022		April 29, 2023		Total
Loan Receivables:
1 to 4	$	26	$	82	$	295	$	929	$	1,197	$	1,442	$	3,971
5 to 6	5		24		146		354		521		763		1,813
7 and Higher	1		11		19		17		32		15		95
Total Loan Receivables	$	32	$	117	$	460	$	1,300	$	1,750	$	2,220	$	5,879
Lease Receivables:
1 to 4	$	4	$	32	$	73	$	135	$	90	$	160	$	494
5 to 6	2		18		56		71		98		160		405
7 and Higher	1		2		4		4		4		6		21
Total Lease Receivables	$	7	$	52	$	133	$	210	$	192	$	326	$	920
Total	$	39	$	169	$	593	$	1,510	$	1,942	$	2,546	$	6,799


July 30, 2022			Fiscal Year
Internal Credit Risk Rating	Prior		July 28, 2018		July 27, 2019		July 25, 2020		July 31, 2021		July 30, 2022		Total
Loan Receivables:
1 to 4	$	2	$	49	$	173	$	536	$	1,458	$	2,287	$	4,505
5 to 6	1		17		115		345		709		1,030		2,217
7 and Higher	1		1		22		45		39		12		120
Total Loan Receivables	$	4	$	67	$	310	$	926	$	2,206	$	3,329	$	6,842
Lease Receivables:
1 to 4	$	2	$	25	$	74	$	124	$	176	$	152	$	553
5 to 6	1		10		67		146		165		151		540
7 and Higher	—		1		4		12		2		10		29
Total Lease Receivables	$	3	$	36	$	145	$	282	$	343	$	313	$	1,122
Total	$	7	$	103	$	455	$	1,208	$	2,549	$	3,642	$	7,964

The following tables present the aging analysis of gross receivables as of April 29, 2023 and July 30, 2022 (in millions):


	DAYS PAST DUE (INCLUDES BILLED AND UNBILLED)
April 29, 2023	31-60		61-90		91+		Total Past Due		Current		Total		120+ Still Accruing		Nonaccrual Financing Receivables		Impaired Financing Receivables
Loan receivables	$	94	$	39	$	79	$	212	$	5,667	$	5,879	$	15	$	15	$	15
Lease receivables	15		10		24		49		871		920		7		4		4
Total	$	109	$	49	$	103	$	261	$	6,538	$	6,799	$	22	$	19	$	19


	DAYS PAST DUE (INCLUDES BILLED AND UNBILLED)
July 30, 2022	31-60		61-90		91+		Total Past Due		Current		Total		120+ Still Accruing		Nonaccrual Financing Receivables		Impaired Financing Receivables
Loan receivables	$	98	$	62	$	129	$	289	$	6,553	$	6,842	$	14	$	60	$	60
Lease receivables	8		6		26		40		1,082		1,122		7		11		11
Total	$	106	$	68	$	155	$	329	$	7,635	$	7,964	$	21	$	71	$	71

Past due financing receivables are those that are 31 days or more past due according to their contractual payment terms. The data in the preceding tables is presented by contract, and the aging classification of each contract is based on the oldest outstanding receivable, and therefore past due amounts also include unbilled and current receivables within the same contract.

(c)Allowance for Credit Loss Rollforward

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


Three Months Ended April 29, 2023	CREDIT LOSS ALLOWANCES
	Loan Receivables		Lease Receivables		Total
Allowance for credit loss as of January 28, 2023	$	94	$	19	$	113
Provisions (benefits)	(3)		(1)		(4)
Recoveries (write-offs), net	(38)		(1)		(39)
Allowance for credit loss as of April 29, 2023	$	53	$	17	$	70


Three Months Ended April 30, 2022	CREDIT LOSS ALLOWANCES
	Loan Receivables		Lease Receivables		Total
Allowance for credit loss as of January 29, 2022	$	70	$	27	$	97
Provisions (benefits)	26		(2)		24
Other	3		—		3
Allowance for credit loss as of April 30, 2022	$	99	$	25	$	124


Nine Months Ended April 29, 2023	CREDIT LOSS ALLOWANCES
	Loan Receivables		Lease Receivables		Total
Allowance for credit loss as of July 30, 2022	$	103	$	23	$	126
Provisions (benefits)	(7)		(5)		(12)
Recoveries (write-offs), net	(38)		(1)		(39)
Other	(5)		—		(5)
Allowance for credit loss as of April 29, 2023	$	53	$	17	$	70


Nine Months Ended April 30, 2022	CREDIT LOSS ALLOWANCES
	Loan Receivables		Lease Receivables		Total
Allowance for credit loss as of July 31, 2021	$	89	$	38	$	127
Provisions (benefits)	7		(11)		(4)
Recoveries (write-offs), net	—		(2)		(2)
Other	3		—		3
Allowance for credit loss as of April 30, 2022	$	99	$	25	$	124