Financing Receivables (Tables)
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3 Months Ended |
Mar. 31, 2021 |
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| Financing Receivables |
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| Summary of the components of financing receivables |
| | | | | | | | | | | | | | | Client Financing Receivables | | | | | | | | | Client Loan and | | Investment in | | | | | | | | | Installment Payment | | Sales-Type and | | Commercial | | | | (Dollars in millions) | | Receivables | | Direct Financing | | Financing | | | | At March 31, 2021: | | (Loans) | | Leases | | Receivables | | Total | Financing receivables, gross | | $ | 10,218 | | $ | 3,923 | | $ | 1,119 | | $ | 15,261 | Unearned income | | | (421) | | | (290) | | | 0 | | | (711) | Residual value* | | | — | | | 430 | | | — | | | 430 | Amortized cost | | $ | 9,797 | | $ | 4,064 | | $ | 1,119 | | $ | 14,980 | Allowance for credit losses | | | (154) | | | (74) | | | (7) | | | (236) | Total financing receivables, net | | $ | 9,643 | | $ | 3,989 | | $ | 1,112 | | $ | 14,744 | Current portion | | $ | 6,050 | | $ | 1,660 | | $ | 1,112 | | $ | 8,822 | Noncurrent portion | | $ | 3,592 | | $ | 2,329 | | $ | — | | $ | 5,922 |
| | | | | | | | | | | | | | | Client Financing Receivables | | | | | | | | | Client Loan and | | Investment in | | | | | | | | | Installment Payment | | Sales-Type and | | Commercial | | | | (Dollars in millions) | | Receivables | | Direct Financing | | Financing | | | | At December 31, 2020: | | (Loans) | | Leases | | Receivables | | Total | Financing receivables, gross | | $ | 12,159 | | $ | 4,001 | | $ | 2,419 | | $ | 18,580 | Unearned income | | | (488) | | | (335) | | | 0 | | | (823) | Residual value* | | | — | | | 485 | | | — | | | 485 | Amortized cost | | $ | 11,671 | | $ | 4,151 | | $ | 2,419 | | $ | 18,242 | Allowance for credit losses | | | (173) | | | (82) | | | (8) | | | (263) | Total financing receivables, net | | $ | 11,498 | | $ | 4,069 | | $ | 2,411 | | $ | 17,979 | Current portion | | $ | 6,955 | | $ | 1,525 | | $ | 2,411 | | $ | 10,892 | Noncurrent portion | | $ | 4,542 | | $ | 2,544 | | $ | — | | $ | 7,086 |
* Includes guaranteed and unguaranteed residual value.
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| Schedule of financing receivables and allowance for credit losses by class |
| | | | | | | | | | | | | (Dollars in millions) | | | | | | | | | | | | | At March 31, 2021: | | Americas | | EMEA | | Asia Pacific | | Total | Amortized cost | | $ | 6,867 | | $ | 4,244 | | $ | 2,750 | | $ | 13,861 | Allowance for credit losses | | | | | | | | | | | | | Beginning balance at January 1, 2021 | | $ | 141 | | $ | 77 | | $ | 37 | | $ | 255 | Write-offs | | | (2) | | | (1) | | | (6) | | | (9) | Recoveries | | | 0 | | | 0 | | | 0 | | | 1 | Additions/(releases) | | | (11) | | | 2 | | | (3) | | | (12) | Other* | | | (3) | | | (3) | | | 0 | | | (6) | Ending balance at March 31, 2021 | | $ | 125 | | $ | 76 | | $ | 27 | | $ | 229 |
| | | | | | | | | | | | | (Dollars in millions) | | | | | | | | | | | | | At December 31, 2020: | | Americas | | EMEA | | Asia Pacific | | Total | Amortized cost | | $ | 7,758 | | $ | 5,023 | | $ | 3,042 | | $ | 15,822 | Allowance for credit losses | | | | | | | | | | | | | Beginning balance at January 1, 2020 | | $ | 142 | | $ | 69 | | $ | 41 | | $ | 252 | Write-offs | | $ | (28) | | $ | (3) | | $ | (3) | | $ | (34) | Recoveries | | | 0 | | | 0 | | | 2 | | | 3 | Additions/(releases) | | | 33 | | | 5 | | | (4) | | | 34 | Other* | | | (6) | | | 6 | | | 1 | | | 1 | Ending balance at December 31, 2020 | | $ | 141 | | $ | 77 | | $ | 37 | | $ | 255 |
* Primarily represents translation adjustments.
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| Schedule of past due financing receivables |
| | | | | | | | | | | | | | | | | | | | | | | | Amortized | | Billed | | Amortized | | | Total | | Amortized | | Cost | | Invoices | | Cost | (Dollars in millions) | | Amortized | | Cost | | > 90 Days and | | > 90 Days and | | Not | At March 31, 2021: | | Cost | | > 90 Days (1) | | Accruing (1) | | Accruing | | Accruing (2) | Americas | | $ | 6,867 | | $ | 271 | | $ | 182 | | $ | 11 | | $ | 94 | EMEA | | | 4,244 | | | 102 | | | 14 | | | 3 | | | 93 | Asia Pacific | | | 2,750 | | | 32 | | | 9 | | | 4 | | | 24 | Total client financing receivables | | $ | 13,861 | | $ | 405 | | $ | 205 | | $ | 18 | | $ | 212 |
| | | | | | | | | | | | | | | | | | | | | | | | Amortized | | Billed | | Amortized | | | Total | | Amortized | | Cost | | Invoices | | Cost | (Dollars in millions) | | Amortized | | Cost | | > 90 Days and | | > 90 Days and | | Not | At December 31, 2020: | | Cost | | > 90 Days (1) | | Accruing (1) | | Accruing | | Accruing (2) | Americas | | $ | 7,758 | | $ | 295 | | $ | 200 | | $ | 12 | | $ | 96 | EMEA | | | 5,023 | | | 119 | | | 28 | | | 5 | | | 95 | Asia Pacific | | | 3,042 | | | 42 | | | 12 | | | 4 | | | 32 | Total client financing receivables | | $ | 15,822 | | $ | 456 | | $ | 241 | | $ | 20 | | $ | 223 |
| (1) | At a contract level, which includes total billed and unbilled amounts for financing receivables aged greater than 90 days. |
| (2) | Of the amortized cost not accruing, there was a related allowance of $167 million and $178 million at March 31, 2021 and December 31, 2020, respectively. Financing income recognized on these receivables was immaterial for the three months ended March 31, 2021 and 2020, respectively. |
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| Schedule of amortized cost/net recorded investment by credit quality indicator |
| | | | | | | | | | | | | | | | | | | (Dollars in millions) | | Americas | | EMEA | | Asia Pacific | At March 31, 2021: | | Aaa – Baa3 | | Ba1 – D | | Aaa – Baa3 | | Ba1 – D | | Aaa – Baa3 | | Ba1 – D | Vintage year: | | | | | | | | | | | | | | | | | | | 2021 | | $ | 808 | | $ | 421 | | $ | 310 | | $ | 349 | | $ | 253 | | $ | 105 | 2020 | | | 1,966 | | | 923 | | | 1,086 | | | 887 | | | 721 | | | 230 | 2019 | | | 871 | | | 457 | | | 471 | | | 431 | | | 499 | | | 94 | 2018 | | | 666 | | | 283 | | | 311 | | | 166 | | | 365 | | | 133 | 2017 | | | 206 | | | 117 | | | 43 | | | 103 | | | 165 | | | 40 | 2016 and prior | | | 56 | | | 92 | | | 34 | | | 53 | | | 109 | | | 36 | Total | | $ | 4,573 | | $ | 2,294 | | $ | 2,254 | | $ | 1,989 | | $ | 2,111 | | $ | 639 |
| | | | | | | | | | | | | | | | | | | (Dollars in millions) | | Americas | | EMEA | | Asia Pacific | At December 31, 2020: | | Aaa – Baa3 | | Ba1 – D | | Aaa – Baa3 | | Ba1 – D | | Aaa – Baa3 | | Ba1 – D | Vintage year: | | | | | | | | | | | | | | | | | | | 2020 | | $ | 2,818 | | $ | 1,449 | | $ | 1,513 | | $ | 1,427 | | $ | 958 | | $ | 351 | 2019 | | | 988 | | | 623 | | | 668 | | | 519 | | | 564 | | | 123 | 2018 | | | 829 | | | 360 | | | 329 | | | 245 | | | 419 | | | 167 | 2017 | | | 285 | | | 154 | | | 70 | | | 128 | | | 205 | | | 52 | 2016 | | | 90 | | | 52 | | | 33 | | | 46 | | | 114 | | | 33 | 2015 and prior | | | 28 | | | 81 | | | 22 | | | 22 | | | 38 | | | 18 | Total | | $ | 5,038 | | $ | 2,720 | | $ | 2,635 | | $ | 2,387 | | $ | 2,298 | | $ | 743 |
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