Financing receivables represent sales-type and direct-financing leases of the Company and third-party products. These receivables typically have terms ranging from two to five years and are usually collateralized by a security interest in the underlying assets. Financing receivables also include billed receivables from operating leases. The allowance for credit losses represents future expected credit losses over the life of the receivables based on past experience, current information and forward-looking economic considerations. The components of financing receivables were as follows:


	As of
	July 31, 2025		October 31, 2024
	In millions
Minimum lease payments receivable	$	10,194	$	10,266
Unguaranteed residual value	680		599
Unearned income	(1,246)		(1,218)
Financing receivables, gross	9,628		9,647
Allowance for credit losses	(206)		(194)
Financing receivables, net	9,422		9,453
Less: current portion	(3,777)		(3,870)
Amounts due after one year, net	$	5,645	$	5,583

The Company enters into arrangements to transfer the contractual payments due under certain financing receivables to third party financial institutions. For the three and nine months ended July 31, 2025, the Company sold $17 million and $164 million of financing receivables, respectively. For the fiscal year ended October 31, 2024, the Company sold $93 million of financing receivables.

Due to the homogeneous nature of its leasing transactions, the Company manages its financing receivables on an aggregate basis when assessing and monitoring credit risk. Credit risk is generally diversified due to the large number of entities comprising the Company's customer base and their dispersion across many different industries and geographic regions. The Company evaluates the credit quality of an obligor at lease inception and monitors that credit quality over the term of a transaction. The Company assigns risk ratings to each lease based on the creditworthiness of the obligor and other variables that augment or mitigate the inherent credit risk of a particular transaction and periodically updates the risk ratings when there is a change in the underlying credit quality. Such variables include the underlying value and liquidity of the collateral, the essential use of the equipment, the term of the lease, and the inclusion of credit enhancements, such as guarantees, letters of credit or security deposits.


	As of October 31, 2024
	Risk Rating
	Low		Moderate		High
Fiscal Year	In millions
2024	$	2,630	$	1,120	$	19
2023	1,804		948		54
2022	1,128		665		46
2021	440		317		52
2020 and prior	158		193		73
Total	$	6,160	$	3,243	$	244

Accounts rated low risk typically have the equivalent of a Standard & Poor's rating of BBB– or higher, while accounts rated moderate risk generally have the equivalent of BB+ or lower. The Company classifies accounts as high risk when it considers the financing receivable to be impaired or when management believes there is a significant near-term risk of impairment. The credit quality indicators do not reflect any mitigation actions taken to transfer credit risk to third parties.


	As of
	July 31, 2025		October 31, 2024
	In millions
Balance at beginning of period	$	194	$	243

Provision for credit losses	56		50
Adjustment to the existing allowance	(2)		(4)
Write-offs	(42)		(95)
Balance at end of period	$	206	$	194

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


	As of
	July 31, 2025		October 31, 2024
	In millions
Billed:(1)
Current 1-30 days	$	318	$	334
Past due 31-60 days	34		29
Past due 61-90 days	13		12
Past due > 90 days	78		79
Unbilled sales-type and direct-financing lease receivables	9,185		9,193
Total gross financing receivables	$	9,628	$	9,647
Gross financing receivables on non-accrual status(2)	$	214	$	214
Gross financing receivables 90 days past due and still accruing interest(2)	$	97	$	82


		For the three months ended July 31,				For the nine months ended July 31,
		2025		2024		2025		2024
	Location	In millions

Interest income from sales-type leases and direct financing leases	Financing Income	$	194	$	168	$	568	$	486
Lease income from operating leases	Services	542		578		1,628		1,771
Total lease income		$	736	$	746	$	2,196	$	2,257

The Company has issued asset-backed debt securities under a fixed-term securitization program to private investors. The asset-backed debt securities are collateralized by the U.S. fixed-term financing receivables and leased equipment in the offering, which is held by a Special Purpose Entity (“SPE”). The SPE meets the definition of a Variable Interest Entity (“VIE”) and is consolidated, along with the associated debt, into the Condensed Consolidated Financial Statements as the Company is the primary beneficiary of the VIE. The SPE is a bankruptcy-remote legal entity with separate assets and liabilities. The purpose of the SPE is to facilitate the funding of customer receivables and leased equipment in the capital markets.

The Company’s risk of loss related to securitized receivables and leased equipment is limited to the amount by which the Company’s right to receive collections for assets securitized exceeds the amount required to pay interest, principal, and fees and expenses related to the asset-backed securities.

The following table presents the assets and liabilities held by the consolidated VIE as of July 31, 2025 and October 31, 2024, which are included in the Condensed Consolidated Balance Sheets. The assets in the table below include those that can be used to settle the obligations of the VIE. Additionally, general creditors of the Company do not have recourse to the assets of the VIE.


	As of
	July 31, 2025		October 31, 2024
Assets held by VIE:	In millions
Other current assets	$	109	$	189
Financing receivables
Short-term	820		872
Long-term	1,124		1,079
Property, plant and equipment, net	775		1,033
Liabilities held by VIE:
Notes payable and short-term borrowings, net of unamortized debt issuance costs	1,109		1,433
Long-term debt, net of unamortized debt issuance costs	$	1,068	$	965

For the nine months ended July 31, 2025, the financing receivables and leased equipment transferred via securitization through the SPE were $0.7 billion and $0.3 billion, respectively. For the fiscal year ended October 31, 2024, financing receivables and leased equipment transferred via securitization through the SPE were $1.2 billion and $0.6 billion, respectively.