Financing Receivables (Tables)

6 Months Ended

Jun. 30, 2021

Financing Receivables

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 June 30, 2021:		(Loans)			Leases			Receivables			Total
Financing receivables, gross		$	9,776		$	3,576		$	1,019		$	14,370
Unearned income			(400)			(267)			0			(667)
Residual value*			—			392			—			392
Amortized cost		$	9,376		$	3,701		$	1,019		$	14,096
Allowance for credit losses			(151)			(70)			(6)			(228)
Total financing receivables, net		$	9,225		$	3,631		$	1,012		$	13,868
Current portion		$	5,614		$	1,567		$	1,012		$	8,194
Noncurrent portion		$	3,610		$	2,064		$	—		$	5,674


		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

Schedule of financing receivables and allowance for credit losses by class


(Dollars in millions)
At June 30, 2021:		Americas			EMEA			Asia Pacific			Total
Amortized cost		$	6,538		$	4,039		$	2,500		$	13,077
Allowance for credit losses:
Beginning balance at January 1, 2021		$	141		$	77		$	37		$	255
Write-offs		$	(4)		$	(1)		$	(7)		$	(12)
Recoveries			0			0			1			1
Additions/(releases)			(16)			(2)			(4)			(22)
Other*			1			(2)			0			(1)
Ending balance at June 30, 2021		$	122		$	73		$	26		$	221


(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.

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 June 30, 2021:		Cost			> 90 Days (1)			Accruing (1)			Accruing			Accruing (2)
Americas		$	6,538		$	343		$	251		$	9		$	95
EMEA			4,039			103			15			4			92
Asia Pacific			2,500			33			10			3			23
Total client financing receivables		$	13,077		$	479		$	276		$	16		$	210


								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 of 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 June 30, 2021 and December 31, 2020, respectively. Financing income recognized on these receivables was immaterial for the three and six months ended June 30, 2021, respectively.

Schedule of amortized cost by credit quality indicator


(Dollars in millions)		Americas						EMEA						Asia Pacific
At June 30, 2021:		Aaa – Baa3			Ba1 – D			Aaa – Baa3			Ba1 – D			Aaa – Baa3			Ba1 – D
Vintage year:
2021		$	1,339		$	757		$	664		$	607		$	428		$	167
2020			1,514			668			796			614			549			158
2019			751			360			391			389			421			90
2018			528			227			250			144			317			99
2017			176			91			33			80			131			33
2016 and prior			46			80			24			46			78			29
Total		$	4,355		$	2,183		$	2,159		$	1,880		$	1,924		$	576


(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