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 6.1% at March 31, 2023 and 5.7% at December 31, 2022.

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, 2023		December 31, 2022
Gross receivables	$	3,438	$	3,593
Unearned income	(357)		(374)
Subtotal	3,081		3,219
Residual values	—		—
Allowance for doubtful accounts	(101)		(117)
Finance receivables, net	2,980		3,102
Less: Billed portion of finance receivables, net	94		93
Less: Current portion of finance receivables not billed, net	1,022		1,061
Finance receivables due after one year, net	$	1,864	$	1,948

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 is principally determined 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 3.3% at March 31, 2023 and 3.6% at December 31, 2022. Our finance receivable bad debt provision was a $12 credit in the first quarter 2023 primarily related to a reserve release in the U.S. of approximately $12 due to the favorable reassessment of the credit exposure on a large customer receivable balance after a contract amendment which improved our credit position as well as a reserve release of approximately $5 related to the sale of finance receivables on a non-recourse basis as part of the on-going sales under the Receivable Funding Agreement - see Sales of Receivables below.

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.

In determining the level of reserve required we critically assessed current and forecasted economic conditions and trends to ensure we objectively considered 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. We believe our current reserve position remains sufficient to cover expected future losses that may result from current and future macro-economic conditions including higher inflation, interest rates, and the potential for recessions in the geographic areas of our customers. We continue to monitor developments in future economic conditions and trends, and as a result, our reserves may need to be updated in future periods.


	United States		Canada		EMEA(1)		Total
Balance at December 31, 2022	$	83	$	7	$	27	$	117
Provision	(15)		—		3		(12)
Charge-offs	(5)		—		(2)		(7)
Recoveries and other(2)	2		—		1		3
Balance at March 31, 2023	$	65	$	7	$	29	$	101










Balance at December 31, 2021	$	77	$	11	$	30	$	118
Provision	3		—		3		6
Charge-offs	(2)		(1)		(1)		(4)
Recoveries and other(2)	—		1		(1)		—
Balance at March 31, 2022	$	78	$	11	$	31	$	120










Finance receivables collectively evaluated for impairment (3)
March 31, 2023(3)	$	1,756	$	233	$	1,092	$	3,081
March 31, 2022(3)	$	1,863	$	246	$	1,016	$	3,125

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 and 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, 2023
	2023		2022		2021		2020		2019		Prior		Total Finance Receivables
United States (Direct)
Low Credit Risk	$	59	$	69	$	85	$	69	$	44	$	16	$	342
Average Credit Risk	32		50		70		36		26		7		221
High Credit Risk	12		41		30		32		12		6		133
Total	$	103	$	160	$	185	$	137	$	82	$	29	$	696
Charge-offs	$	—	$	—	$	—	$	—	$	—	$	1	$	1

United States (Indirect)
Low Credit Risk	$	100	$	211	$	141	$	73	$	38	$	8	$	571
Average Credit Risk	61		170		119		52		27		5		434
High Credit Risk	8		20		16		7		3		1		55
Total	$	169	$	401	$	276	$	132	$	68	$	14	$	1,060
Charge-offs	$	—	$	—	$	1	$	—	$	1	$	2	$	4

Canada
Low Credit Risk	$	13	$	30	$	20	$	14	$	9	$	3	$	89
Average Credit Risk	18		43		23		19		13		3		119
High Credit Risk	2		6		5		7		3		2		25
Total	$	33	$	79	$	48	$	40	$	25	$	8	$	233
Charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—

EMEA(1)
Low Credit Risk	$	84	$	258	$	155	$	80	$	48	$	18	$	643
Average Credit Risk	47		148		98		58		37		12		400
High Credit Risk	5		17		12		8		6		1		49
Total	$	136	$	423	$	265	$	146	$	91	$	31	$	1,092
Charge-offs	$	—	$	1	$	—	$	—	$	—	$	1	$	2







Total Finance Receivables
Low Credit Risk	$	256	$	568	$	401	$	236	$	139	$	45	$	1,645
Average Credit Risk	158		411		310		165		103		27		1,174
High Credit Risk	27		84		63		54		24		10		262
Total	$	441	$	1,063	$	774	$	455	$	266	$	82	$	3,081
Total Charge-offs	$	—	$	1	$	1	$	—	$	1	$	4	$	7


	December 31, 2022
	2022		2021		2020		2019		2018		Prior		Total Finance Receivables
United States (Direct)
Low Credit Risk	$	173	$	104	$	80	$	53	$	23	$	2	$	435
Average Credit Risk	83		36		26		28		7		2		182
High Credit Risk	71		70		49		18		6		2		216
Total	$	327	$	210	$	155	$	99	$	36	$	6	$	833

United States (Indirect)
Low Credit Risk	$	249	$	165	$	91	$	49	$	12	$	1	$	567
Average Credit Risk	210		156		73		40		11		—		490
High Credit Risk	22		20		9		5		2		—		58
Total	$	481	$	341	$	173	$	94	$	25	$	1	$	1,115

Canada
Low Credit Risk	$	31	$	22	$	17	$	12	$	5	$	—	$	87
Average Credit Risk	46		25		22		16		5		—		114
High Credit Risk	6		6		8		4		2		1		27
Total	$	83	$	53	$	47	$	32	$	12	$	1	$	228

EMEA(1)
Low Credit Risk	$	269	$	167	$	90	$	59	$	24	$	5	$	614
Average Credit Risk	152		105		63		43		15		3		381
High Credit Risk	17		13		9		7		2		—		48
Total	$	438	$	285	$	162	$	109	$	41	$	8	$	1,043







Total Finance Receivables
Low Credit Risk	$	722	$	458	$	278	$	173	$	64	$	8	$	1,703
Average Credit Risk	491		322		184		127		38		5		1,167
High Credit Risk	116		109		75		34		12		3		349
Total	$	1,329	$	889	$	537	$	334	$	114	$	16	$	3,219

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 probable.


	March 31, 2023
	Current		31-90 Days Past Due		>90 Days Past Due		Total Billed		Unbilled		Total Finance Receivables		>90 Days and Accruing
Direct	$	28	$	6	$	5	$	39	$	657	$	696	$	40
Indirect	31		7		4		42		1,018		1,060		—






Total United States	59		13		9		81		1,675		1,756		40
Canada	5		1		—		6		227		233		8





EMEA(1)	8		2		1		11		1,081		1,092		11

Total	$	72	$	16	$	10	$	98	$	2,983	$	3,081	$	59

	December 31, 2022
	Current		31-90 Days Past Due		>90 Days Past Due		Total Billed		Unbilled		Total Finance Receivables		>90 Days and Accruing
Direct	$	30	$	6	$	6	$	42	$	791	$	833	$	47
Indirect	27		6		4		37		1,078		1,115		—






Total United States	57		12		10		79		1,869		1,948		47
Canada	5		1		—		6		222		228		6





EMEA(1)	9		2		1		12		1,031		1,043		12

Total	$	71	$	15	$	11	$	97	$	3,122	$	3,219	$	65

In December 2022, the Company entered into a Receivables Funding Agreement with an affiliate of HPS Investment Partners (the Purchaser) pursuant to which the Company agreed to offer for sale, and Purchaser agreed to purchase, certain eligible pools of finance receivables on a monthly basis in transactions structured as "true sales at law" and bankruptcy remote transfers and we have received an opinion to that effect from outside legal counsel. Accordingly, the receivables sold were derecognized from our financial statements and the Purchaser does not have recourse back to the Company for uncollectible receivables.

The Receivables Funding Agreement has an initial term through January 31, 2024, with automatic one-year extensions thereafter, unless terminated by either the Company or the Purchaser. The Receivables Funding Agreement contemplates lease receivable sales totaling approximately $600 during the initial term. Additionally, the Company will continue to service the lease receivables for a specified fee and will also be paid a commission on lease receivables sold under the Receivables Funding Agreement.