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Accounting for Leases as a Lessor (Tables)

6 Months Ended

Apr. 30, 2021

Leases [Abstract]

Components of Financing Receivables

The components of financing receivables were as follows:

			As of
			April 30, 2021						October 31, 2020
			In millions
Minimum lease payments receivable			$	9,503					$	9,448
Unguaranteed residual value			383						364
Unearned income			(744)						(754)
Financing receivables, gross			9,142						9,058
Allowance for credit losses			(224)						(154)
Financing receivables, net			8,918						8,904
Less: current portion			(3,845)						(3,794)
Amounts due after one year, net			$	5,073					$	5,110

Sales-type and Direct Financing Leases, Lease Receivable, Maturity

As of April 30, 2021 and October 31, 2020, scheduled maturities of the Company's minimum lease payments receivable were as follows:

			As of
			April 30, 2021			October 31, 2020
Fiscal year			In millions
Remainder of fiscal 2021			$	2,428		$	4,182
2022			3,157			2,662
2023			2,110			1,572
2024			1,153			720
2025			506			252
Thereafter			149			60
Total undiscounted cash flows			$	9,503		$	9,448
Present value of lease payments (recognized as finance receivables)			$	8,759		$	8,694
Unearned income			$	744		$	754

Credit Risk Profile of Gross Financing Receivables

The credit risk profile of financing receivables, based on internal risk ratings as of April 30, 2021, presented on amortized cost basis by year of origination was as follows:

			As of April 30, 2021
			Risk Rating
			Low						Moderate						High
Fiscal Year			In millions
2021			$	698					$	575					$	20
2020			1,841						1,402						95
2019			1,173						1,072						93
2018			603						615						93
2017 and prior			317						405						140
Total			$	4,632					$	4,069					$	441

The credit risk profile of gross financing receivables, based on internal risk ratings as of October 31, 2020, was as follows:

									As of
									October 31, 2020
									In millions
Risk Rating:
Low									$	4,590
Moderate									4,091
High									377
Total									$	9,058

Allowance for Doubtful Accounts for Financing Receivables

The allowance for credit losses for financing receivables as of April 30, 2021 and October 31, 2020 and the respective changes during the six and twelve months then ended were as follows:

			As of
			April 30, 2021						October 31, 2020
			In millions
Balance at beginning of period			$	154					$	131
Adjustment for adoption of the new credit loss standard			28						—
Provision for credit losses			39						43
Adjustment to the existing allowance			19						—
Write-offs			(16)						(20)
Balance at end of period			$	224					$	154

Summary of the Aging and Non-accrual Status of Gross Financing Receivables

The following table summarizes the aging and non-accrual status of gross financing receivables:

			As of
			April 30, 2021						October 31, 2020
			In millions
Billed:(1)
Current 1-30 days			$	351					$	340
Past due 31-60 days			29						43
Past due 61-90 days			27						22
Past due > 90 days			112						140
Unbilled sales-type and direct-financing lease receivables			8,623						8,513
Total gross financing receivables			$	9,142					$	9,058
Gross financing receivables on non-accrual status(2)			$	326					$	364
Gross financing receivables 90 days past due and still accruing interest(2)			$	74					$	74

(1)Includes billed operating lease receivables and billed sales-type and direct-financing lease receivables.

(2)Includes billed operating lease receivables and billed and unbilled sales-type and direct-financing lease receivables.

Operating Lease Assets Included in Machinery and Equipment

Operating lease assets included in Property, plant and equipment in the Condensed Consolidated Balance Sheets were as follows:

			As of
			April 30, 2021						October 31, 2020
			In millions
Equipment leased to customers			$	7,207					$	7,184
Accumulated depreciation			(3,281)						(3,157)
Total			$	3,926					$	4,027

Lessor Operating Lease Payments Maturity

Minimum future rentals on non-cancelable operating leases related to leased equipment were as follows:

			As of
			April 30, 2021
Fiscal year			In millions
Remainder of fiscal 2021			$	959
2022			1,358
2023			734
2024			197
2025			18
Thereafter			2
Total			$	3,268

Lessor Lease Activity

The following table presents amounts included in the Condensed Consolidated Statement of Earnings related to lessor activity:

			Three Months Ended April 30,												Six Months Ended April 30,
			2021						2020						2021						2020
			In millions
Sales-type leases and direct financing leases:
Interest income			$	124					$	115					$	246					$	228
Lease income - operating leases			595						608						1,199						1,233
Total lease income			$	719					$	723					$	1,445					$	1,461

Schedule of Variable Interest Entities

The assets in the table below include those that can be used to settle the obligations of the VIE. Additionally, general creditors do not have recourse to the assets of the VIE.

			As of
			April 30, 2021						October 31, 2020
Assets held by VIE			In millions
Other current assets			$	128					$	120
Financing receivables
Short-term			$	693					$	531
Long-term			$	733					$	584
Property, plant and equipment			$	868					$	665
Liabilities held by VIE
Notes payable and short-term borrowings, net of unamortized debt issuance costs			$	1,150					$	886
Long-term debt, net of unamortized debt issuance costs			$	1,005					$	834

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