
Balance at December 31, 2019	$	55
Provision	35
Charge-offs	(22)
Recoveries and other(1)	1
Balance at December 31, 2020	$	69
Provision	8
Charge-offs	(18)
Recoveries and other(1)	(1)
Balance at December 31, 2021	$	58

The allowance for doubtful accounts as a percentage of gross receivables was 6.6% at December 31, 2021 and 7.2% at December 31, 2020. The allowance for doubtful accounts as a percent of gross accounts receivable remains at an elevated level as compared to historical levels primarily as a result of the macroeconomic and market disruption caused by the COVID-19 pandemic.

Accounts receivable sale 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

(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.

Finance receivables include sales-type leases and installment loans arising from the marketing of our equipment. These receivables are typically collateralized by a security interest in the underlying equipment.


	December 31,
	2021		2020
Gross receivables	$	3,568	$	3,691
Unearned income	(380)		(393)
Subtotal	3,188		3,298
Residual values	—		—
Allowance for doubtful accounts	(118)		(133)
Finance Receivables, Net	3,070		3,165
Less: Billed portion of finance receivables, net	94		99
Less: Current portion of finance receivables not billed, net	1,042		1,082
Finance Receivables Due After One Year, Net	$	1,934	$	1,984

A summary of our gross finance receivables' future contractual maturities, including those previously billed, is as follows:


	December 31,
	2021		2020
12 Months	$	1,357	$	1,426
24 Months	972		1,006
36 Months	668		697
48 Months	396		395
60 Months	157		152
Thereafter	18		15
Total	$	3,568	$	3,691

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 doubtful credit losses as a percentage of gross financial receivables (net of unearned income) was 3.7% at December 31, 2021 and 4.0% at December 31, 2020. In determining the level of reserve required, we critically assessed 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

Our allowance for doubtful finance receivables is effectively determined by geography. The risk characteristics in our finance receivable portfolio segments are generally 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 bad debt provision of $(1) for the year ended December 31, 2021 included a reserve reduction of approximately $31 reflecting improvements in the macroeconomic environment as well as lower write-offs as a result of the COVID-19 pandemic. This compares to a bad debt provision of $81 for the year ended December 31, 2020, which included a first quarter 2020 charge of approximately $60 to initially record expected losses from the COVID-19 pandemic.

Actual write-offs incurred to date have lagged expectations but we believe estimates of additional losses are in line with current and future economic conditions including the estimated impacts from the on-going COVID-19 pandemic. Despite improvement in the global economy, local economies continue to recover from the impacts of the COVID-19 pandemic including the cessation of government support as well as labor, interest rate and inflation risks and the potential for higher taxes. As a result of these uncertainties, we continue to also consider these various adverse macroeconomic impacts in our models. Accordingly, although our reserves as a percent of receivables have declined from the prior year, they remain elevated as compared to pre-pandemic levels.


Allowance for Credit Losses:	United States		Canada(1)		Europe(1)(2)		Total
Balance at December 31, 2019	$	59	$	10	$	20	$	89
Provision	41		8		32		81
Charge-offs	(23)		(5)		(14)		(42)
Recoveries and other(3)	—		2		3		5

Balance at December 31, 2020	$	77	$	15	$	41	$	133
Provision	5		(3)		(3)		(1)
Charge-offs	(7)		(3)		(6)		(16)
Recoveries and other(3)	2		2		(2)		2

Balance at December 31, 2021	$	77	$	11	$	30	$	118
Finance Receivables Collectively Evaluated for Impairment:
December 31, 2020(4)	$	1,823	$	297	$	1,178	$	3,298
December 31, 2021(4)	$	1,876	$	251	$	1,061	$	3,188

_____________

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-user 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-user 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%.

Credit quality indicators are updated at least annually, or more frequently to the extent required by economic conditions, and the credit quality of any given customer can change during the life of the portfolio.


	December 31, 2021
	2021		2020		2019		2018		2017		Prior		Total Finance Receivables
United States (Direct):
Low Credit Risk	$	148	$	121	$	98	$	68	$	21	$	3	$	459
Average Credit Risk	60		40		57		23		8		2		190
High Credit Risk	91		73		31		16		6		1		218
Total	299		234		186		107		35		6		867

United States (Indirect):
Low Credit Risk	235		145		100		43		11		—		534
Average Credit Risk	201		103		74		35		10		—		423
High Credit Risk	24		15		8		4		1		—		52
Total	460		263		182		82		22		—		1,009

Canada
Low Credit Risk	32		27		22		13		3		1		98
Average Credit Risk	34		34		27		15		6		1		117
High Credit Risk	8		12		7		5		4		—		36
Total	74		73		56		33		13		2		251

EMEA(1)
Low Credit Risk	229		143		121		71		22		6		592
Average Credit Risk	156		109		84		45		15		3		412
High Credit Risk	18		15		13		8		3		—		57
Total	403		267		218		124		40		9		1,061

Total Finance Receivables
Low Credit Risk	644		436		341		195		57		10		1,683
Average Credit Risk	451		286		242		118		39		6		1,142
High Credit Risk	141		115		59		33		14		1		363
Total	$	1,236	$	837	$	642	$	346	$	110	$	17	$	3,188


	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.


	December 31, 2021
	Current		31-90 Days Past Due		>90 Days Past Due		Total Billed		Unbilled		Total Finance Receivables		>90 Days and Accruing






Direct	$	28	$	7	$	7	$	42	$	825	$	867	$	61
Indirect	28		5		4		37		972		1,009		—
Total United States	56		12		11		79		1,797		1,876		61
Canada	6		1		—		7		244		251		9





EMEA (1)	9		2		1		12		1,049		1,061		13

Total	$	71	$	15	$	12	$	98	$	3,090	$	3,188	$	83


	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 September 2021, we sold $331 of U.S. based finance receivables to a consolidated special purpose entity (SPE). At December 31, 2021 the SPE holds $308 of total Finance receivables, net, which are included in our Consolidated Balance Sheet as collateral for the secured loan.

In December 2020, we sold $610 of U.S. based finance receivables to a consolidated SPE. As of December 31, 2021 the SPE holds $380 of total Finance receivables, net, which are included in our Consolidated Balance Sheet as collateral for the secured loan.