We perform ongoing credit evaluations of our customers and adjust credit limits based upon customer payment history and current creditworthiness. The allowance for uncollectible accounts receivable is determined based on an assessment of past collection experience as well as consideration of current and future economic conditions and changes in our customer collection trends. Based on that assessment the allowance for doubtful accounts as a percent of gross accounts receivable was 8.0% at March 31, 2021 and 7.2% at December 31, 2020. The allowance for doubtful accounts as a percent of gross accounts receivable remain at an elevated level as compared to historical levels primarily as a result of the macroeconomic and market disruption caused by COVID-19.

Accounts receivable sales arrangements are utilized in the normal course of business as part of our cash and liquidity management. The accounts receivable sold are generally short-term trade receivables with payment due dates of less than 60 days. We have one facility in Europe that enables us to sell accounts receivable associated with our distributor network on an ongoing basis, without recourse. Under this arrangement, we sell our entire interest in the related accounts receivable for cash and no portion of the payment is held back or deferred by the purchaser.

(1)Losses on sales were not material. Customers may also enter into structured-payable arrangements that require us to sell our receivables from that customer to a third-party financial institution, which then makes payments to us to settle the customer's receivable. In these instances, we ensure the sale of the receivables are bankruptcy-remote and the payment made to us is without recourse. The activity associated with these arrangements is not reflected in this disclosure, as payments under these arrangements have not been material and these are customer directed arrangements.


	March 31, 2021		December 31, 2020
Gross receivables	$	3,596	$	3,691
Unearned income	(384)		(393)
Subtotal	3,212		3,298
Residual values	—		—
Allowance for doubtful accounts	(135)		(133)
Finance receivables, net	3,077		3,165
Less: Billed portion of finance receivables, net	92		99
Less: Current portion of finance receivables not billed, net	1,065		1,082
Finance receivables due after one year, net	$	1,920	$	1,984

Our finance receivable portfolios are primarily in the U.S., Canada and EMEA. We generally establish customer credit limits and estimate the allowance for credit losses on a country or geographic basis. Customer credit limits are based upon an initial evaluation of the customer's credit quality and we adjust that limit accordingly based upon ongoing credit assessments of the customer, including payment history and changes in credit quality.

The allowance for credit losses is determined principally based on an assessment of origination year and past collection experience as well as consideration of current and future economic conditions and changes in our customer collection trends. Based on that assessment the allowance for doubtful credit losses as a percentage of gross finance receivables (net of unearned income) was 4.2% at March 31, 2021 and 4.0% at December 31, 2020. In determining the level of reserve required we had to critically assess current and forecasted economic conditions in light of the COVID-19 pandemic to ensure we objectively included those expected impacts in the determination of our reserve. Our assessment also included a review of current portfolio credit metrics and the level of write-offs incurred over the past year of the COVID-19 pandemic.

The allowance for doubtful accounts and provision for credit losses represents an estimate of the losses expected to be incurred from the Company's finance receivable portfolio. The level of the allowance is determined on a collective basis by applying projected loss rates to our different portfolios by country, which represent our portfolio segments. This is the level at which we develop and document our methodology to determine the allowance for credit losses. This projected loss rates are primarily based upon historical loss experience adjusted for judgments about the probable effects of relevant observable data including current and future economic conditions as well as delinquency trends, resolution rates, the aging of receivables, credit quality indicators and the financial health of specific customer classes or groups.

The allowance for doubtful finance receivables is inherently more difficult to estimate than the allowance for trade accounts receivable because the underlying lease portfolio has an average maturity, at any time, of approximately two to three years and contains past due billed amounts, as well as unbilled amounts. We consider all available information in our quarterly assessments of the adequacy of the allowance for doubtful accounts. We believe our estimates, including any qualitative adjustments, are reasonable and have considered all reasonably available information about past events, current conditions, and reasonable and supportable forecasts of future events and economic conditions. The identification of account-specific exposure is not a significant factor in establishing the allowance for doubtful finance receivables. Our policy and methodology used to establish our allowance for doubtful accounts has been consistently applied over all periods presented.

Since our allowance for doubtful finance receivables is effectively determined by geography, the risk characteristics in our finance receivable portfolio segments will generally be consistent with the risk factors associated with the economies of the countries/regions included in those geographies. Since EMEA is comprised of various countries and regional economies, the risk profile within that portfolio segment is somewhat more diversified due to the varying economic conditions among and within the countries.

The first quarter 2020 reflected an incremental $60 provision to cover estimated write-offs on our finance receivable portfolio from the economic disruption caused by the COVID-19 pandemic. Subsequent to the first quarter of 2020 provision and through the first quarter of 2021, actual write-offs incurred to date have lagged expectations but

remain in line with our original projections over the life of the lease portfolio and consistent with future expectations regarding our estimated impacts from the COVID-19 pandemic. Accordingly, our total reserve as a percent of receivables has remained fairly consistent subsequent to the first quarter 2020 charge at around 4%.


	United States		Canada		EMEA(1)		Total
Balance at December 31, 2020	$	77	$	15	$	41	$	133
Provision	2		1		3		6
Charge-offs	(2)		—		(1)		(3)
Recoveries and other(2)	1		—		(2)		(1)
Balance at March 31, 2021	$	78	$	16	$	41	$	135









Finance receivables as of March 31, 2021 collectively evaluated for impairment (3)	$	1,806	$	288	$	1,118	$	3,212

Balance at December 31, 2019	$	59	$	10	$	20	$	89
Provision	35		6		25		66
Charge-offs	(3)		(1)		(4)		(8)
Recoveries and other(2)	—		—		(1)		(1)
Balance at March 31, 2020	$	91	$	15	$	40	$	146









Finance receivables as of March 31, 2020 collectively evaluated for impairment(3)	$	1,866	$	289	$	1,132	$	3,287

In the U.S., customers are further evaluated by class based on the type of lease origination. The primary categories are direct, which primarily includes leases originated directly with end customers through bundled lease arrangements, and indirect, which primarily includes leases originated through our XBS sales channel that utilizes a combination of internal and third party leasing in its lease arrangements with end customers. Indirect also includes lease financing to end-user customers who purchased equipment we sold to distributors or resellers.

•Low Credit Risk: This rating includes accounts with excellent to good business credit, asset quality and capacity to meet financial obligations. These customers are less susceptible to adverse effects due to shifts in economic conditions or changes in circumstance. The rating generally equates to a Standard & Poor's (S&P) rating of BBB- or better. Loss rates in this category in the normal course are generally less than 1%.

•Average Credit Risk: This rating includes accounts with average credit risk that are more susceptible to loss in the event of adverse business or economic conditions. This rating generally equates to a BB S&P rating. Although we experience higher loss rates associated with this customer class, we believe the risk is somewhat mitigated by the fact that our leases are fairly well dispersed across a large and diverse customer base. In addition, the higher loss rates are largely offset by the higher rates of return we obtain with such leases. Loss rates in this category in the normal course are generally in the range of 2% to 5%.

•High Credit Risk: This rating includes accounts that have marginal credit risk such that the customer’s ability to make repayment is impaired or may likely become impaired. We use numerous strategies to mitigate risk including higher rates of interest, prepayments, personal guarantees, etc. Accounts in this category include customers who were downgraded during the term of the lease from low and average credit risk evaluation when the lease was originated. Accordingly, there is a distinct possibility for a loss of principal and interest or customer default. The loss rates in this category in the normal course are generally in the range of 7% to 10%.


	March 31, 2021
	2021		2020		2019		2018		2017		Prior		Total Finance Receivables
United States (Direct):
Low Credit Risk	$	46	$	154	$	134	$	111	$	56	$	21	$	522
Average Credit Risk	17		53		89		43		20		6		228
High Credit Risk	18		87		39		24		12		5		185
Total	$	81	$	294	$	262	$	178	$	88	$	32	$	935

United States (Indirect):
Low Credit Risk	$	57	$	194	$	140	$	69	$	26	$	4	$	490
Average Credit Risk	42		110		99		56		24		5		336
High Credit Risk	9		16		8		8		3		1		45
Total	$	108	$	320	$	247	$	133	$	53	$	10	$	871

Canada
Low Credit Risk	$	11	$	36	$	31	$	21	$	7	$	3	$	109
Average Credit Risk	10		44		36		23		15		4		132
High Credit Risk	3		16		10		9		7		2		47
Total	$	24	$	96	$	77	$	53	$	29	$	9	$	288

EMEA(1)
Low Credit Risk	$	65	$	176	$	156	$	109	$	46	$	14	$	566
Average Credit Risk	52		153		138		89		38		12		482
High Credit Risk	7		19		21		12		8		3		70
Total	$	124	$	348	$	315	$	210	$	92	$	29	$	1,118







Total Finance Receivables
Low Credit Risk	$	179	$	560	$	461	$	310	$	135	$	42	$	1,687
Average Credit Risk	121		360		362		211		97		27		1,178
High Credit Risk	37		138		78		53		30		11		347
Total	$	337	$	1,058	$	901	$	574	$	262	$	80	$	3,212


	December 31, 2020
	2020		2019		2018		2017		2016		Prior		Total Finance Receivables
United States (Direct):
Low Credit Risk	$	164	$	151	$	128	$	71	$	32	$	4	$	550
Average Credit Risk	54		95		52		26		8		2		237
High Credit Risk	90		42		27		13		5		3		180
Total	$	308	$	288	$	207	$	110	$	45	$	9	$	967

United States (Indirect):
Low Credit Risk	$	193	$	140	$	79	$	33	$	7	$	—	$	452
Average Credit Risk	129		124		71		31		8		—		363
High Credit Risk	19		9		9		3		1		—		41
Total	$	341	$	273	$	159	$	67	$	16	$	—	$	856

Canada
Low Credit Risk	$	37	$	34	$	24	$	10	$	5	$	1	$	111
Average Credit Risk	46		39		26		17		6		1		135
High Credit Risk	18		10		10		10		3		—		51
Total	$	101	$	83	$	60	$	37	$	14	$	2	$	297

EMEA(1)
Low Credit Risk	$	197	$	177	$	131	$	62	$	20	$	4	$	591
Average Credit Risk	170		160		108		51		17		4		510
High Credit Risk	23		24		15		10		4		1		77
Total	$	390	$	361	$	254	$	123	$	41	$	9	$	1,178







Total Finance Receivables
Low Credit Risk	$	591	$	502	$	362	$	176	$	64	$	9	$	1,704
Average Credit Risk	399		418		257		125		39		7		1,245
High Credit Risk	150		85		61		36		13		4		349
Total	$	1,140	$	1,005	$	680	$	337	$	116	$	20	$	3,298

The aging of our receivables portfolio is based upon the number of days an invoice is past due. Receivables that are more than 90 days past due are considered delinquent. Receivable losses are charged against the allowance when management believes the uncollectibility of the receivable is confirmed and is generally based on individual credit evaluations, results of collection efforts and specific circumstances of the customer. Subsequent recoveries, if any, are credited to the allowance.

We generally continue to maintain equipment on lease and provide services to customers that have invoices for finance receivables that are 90 days or more past due and, as a result of the bundled nature of billings, we also continue to accrue interest on those receivables. However, interest revenue for such billings is only recognized if collectability is deemed reasonably assured.


	March 31, 2021
	Current		31-90 Days Past Due		>90 Days Past Due		Total Billed		Unbilled		Total Finance Receivables		>90 Days and Accruing
Direct	$	30	$	7	$	8	$	45	$	890	$	935	$	70
Indirect	18		4		3		25		846		871		—






Total United States	48		11		11		70		1,736		1,806		70
Canada	6		2		1		9		279		288		13





EMEA(1)	12		3		2		17		1,101		1,118		17

Total	$	66	$	16	$	14	$	96	$	3,116	$	3,212	$	100

	December 31, 2020
	Current		31-90 Days Past Due		>90 Days Past Due		Total Billed		Unbilled		Total Finance Receivables		>90 Days and Accruing
Direct	$	33	$	6	$	9	$	48	$	919	$	967	$	74
Indirect	21		4		3		28		828		856		—






Total United States	54		10		12		76		1,747		1,823		74
Canada	8		2		—		10		287		297		12





EMEA(1)	12		3		2		17		1,161		1,178		23

Total	$	74	$	15	$	14	$	103	$	3,195	$	3,298	$	109

In July 2020, we sold $355 of U.S. based finance receivables to a consolidated special purpose entity (SPE), which funded the purchase through a secured loan agreement with a financial institution. As of March 31, 2021 the SPE holds $248 of total Finance receivables, net, which are included in our Condensed Consolidated Balance Sheet as collateral for the secured loan agreement.

In December 2020, we sold $610 of U.S. based finance receivables to a consolidated SPE, which funded the purchase through a secured loan agreement with a financial institution. As of March 31, 2021 the SPE holds $543 of total Finance receivables, net, which are included in our Condensed Consolidated Balance Sheet as collateral for the secured loan agreement.