v3.26.1
Finance Receivables, Net
 12 Months Ended
Dec. 31, 2025
Financing Receivable, after Allowance for Credit Loss [Abstract]  
Finance Receivables, Net Accounts Receivable, Net
Accounts receivable, net were as follows:
December 31,
20252024
Invoiced$1,024 $692 
Accrued (1)
171 173 
Allowance for doubtful accounts(73)(69)
Accounts receivable, net$1,122 $796 
____________
(1)Accrued receivables includes amounts to be invoiced in the subsequent quarter for current products and services provided.

The allowance for doubtful accounts was as follows:
Balance at December 31, 2023$64 
Provision25 
Charge-offs, net(20)
Recoveries and Other(1)
— 
Balance at December 31, 2024$69 
Provision23 
Charge-offs, net(23)
Acquisition(2)
3 
Recoveries and Other(1)
1 
Balance at December 31, 2025$73 
_____________
(1)Includes the impacts of foreign currency translation and adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations.
(2)Reflects the Lexmark Acquisition on July 1, 2025. Refer to Note 6 - Acquisitions and Divestitures for additional information regarding the Lexmark acquisition.
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 percentage of gross receivables was 6.1% at December 31, 2025 and 8.0% at December 31, 2024.
Accounts Receivable Sale Arrangements
We have two facilities in Europe that enable us to sell accounts receivable without recourse on an ongoing basis. Under these arrangements, we sell our entire interest in the related accounts receivable for cash. Our arrangements are associated with our European distributor network as well as domestic sales in UK, France, Germany and Italy.

Accounts receivable sales activity was as follows:
 Year Ended December 31,
 202520242023
Accounts receivable sales(1)
$427 $450 $399 
_____________
(1)Losses on sales were not material.
Finance Receivables, Net
Finance receivables include sales-type leases and installment loans arising from the sales of our equipment. These receivables are typically collateralized by a security interest in the underlying equipment.
Finance receivables, net were as follows:
December 31,
 20252024
Gross receivables$1,643 $2,032 
Unearned income(196)(230)
Subtotal1,447 1,802 
Residual values— — 
Allowance for doubtful accounts(45)(57)
Finance Receivables, Net1,402 1,745 
Less: Billed portion of finance receivables, net46 48 
Less: Current portion of finance receivables not billed, net510 608 
Finance Receivables Due After One Year, Net$846 $1,089 
A summary of our gross finance receivables' future contractual maturities, including those previously billed, is as follows:
December 31, 2025
12 months$661 
24 months454 
36 months297 
48 months166 
60 months59 
Thereafter6 
Total$1,643 
Finance Receivables - Allowance for Credit Losses and Credit Quality
Our finance receivable portfolios are primarily in the U.S., Canada and EMEA. We generally establish customer credit limits and estimate the allowance for doubtful credit losses on a country or geographic basis. Customer credit limits are based upon an initial evaluation of the customer's credit quality, and are adjusted through ongoing credit assessments of the customer, which includes the past collections experience and changes in credit quality. The allowance for doubtful credit losses is 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.
Our allowance for doubtful credit losses 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 those countries.
The net bad debt provision was $16 for the year ended December 31, 2025. This compares to the net bad debt provision of $17 for the year ended December 31, 2024. The allowance for credit losses as a percentage of net finance receivables before allowance was 3.1% at December 31, 2025 and 3.2% at December 31, 2024.
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 macroeconomic 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.
The allowance for credit losses as well as the related investment in finance receivables were as follows:
Allowance for Credit Losses:United StatesCanadaEMEAOtherTotal
Balance at December 31, 2023$58 $7 $27 $— $92 
Provision(7)10 14 — 17 
Charge-offs, net(23)(11)(17)— (51)
Other(1)
1 (1)(1)— (1)
Balance at December 31, 2024$29 $5 $23 $— $57 
Provision7 2 7 — 16 
Charge-offs, net(12)(3)(16)— (31)
Other(1)
— 1 2 — 3 
Balance at December 31, 2025$24 $5 $16 $— $45 
Finance Receivables Collectively Evaluated for Impairment:
December 31, 2024(2)(3)
$749 $144 $909 $— $1,802 
December 31, 2025(2)(3)
$616 $151 $663 $17 $1,447 
 _____________
(1)Includes the impacts of foreign currency translation and adjustments to reserves necessary to reflect events of non-payment such as customer accommodations and contract terminations.
(2)As a result of the Lexmark Acquisition on July 1, 2025, Other includes amounts for Latin America, Asia Pacific and South Africa. Allowance
for doubtful credit losses in Other for the year ended December 31, 2025 was nil. Refer to Note 6 - Acquisitions and Divestitures for additional information regarding the Lexmark acquisition.
(3)Total Finance receivables exclude the allowance for credit losses of $45 and $57 at December 31, 2025 and 2024, respectively.
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.
We evaluate our customers based on the following credit quality indicators:
•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. Loss rates in this category in the normal course are generally in the range of 1% to 2%
•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. 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 3% 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 6% to 7%.
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.
Details about our finance receivables portfolio based on geography, origination year and credit quality indicators are as follows:
 December 31, 2025
 20252024202320222021PriorTotal
Finance Receivables
United States (Direct):
Low Credit Risk$102 $66 $48 $19 $7 $1 $243 
Average Credit Risk49 31 41 14 13 2 150 
High Credit Risk24 23 18 13 5 2 85 
Total$175 $120 $107 $46 $25 $5 $478 
Charge-offs$— $1 $3 $2 $1 $2 $9 
United States (Indirect):
Low Credit Risk$2 $4 $10 $15 $6 $— $37 
Average Credit Risk12 7 25 22 6 1 73 
High Credit Risk— 8 13 5 2 — 28 
Total$14 $19 $48 $42 $14 $1 $138 
Charge-offs$— $— $4 $4 $2 $1 $11 
Canada
Low Credit Risk$31 $20 $13 $4 $1 $— $69 
Average Credit Risk29 20 13 7 2 — 71 
High Credit Risk4 3 2 1 1 — 11 
Total$64 $43 $28 $12 $4 $— $151 
Charge-offs$— $1 $1 $1 $— $— $3 
EMEA
Low Credit Risk$135 $76 $96 $51 $14 $4 $376 
Average Credit Risk68 45 79 49 13 3 257 
High Credit Risk8 5 10 4 2 1 30 
Total$211 $126 $185 $104 $29 $8 $663 
Charge-offs$5 $3 $7 $4 $1 $— $20 
Other(1)
Low Credit Risk7 4 3 1 — — 15 
Average Credit Risk— 1 1 — — — 2 
High Credit Risk— — — — — — — 
Total$7 $5 $4 $1 $— $— $17 
Charge-offs$— $— $— $— $— $— $— 
Total Finance Receivables
Low Credit Risk$277 $170 $170 $90 $28 $5 $740 
Average Credit Risk158 104 159 92 34 6 553 
High Credit Risk36 39 43 23 10 3 154 
Total$471 $313 $372 $205 $72 $14 $1,447 
Total Charge-offs$5 $5 $15 $11 $4 $3 $43 
_____________
(1) As a result of the Lexmark Acquisition on July 1, 2025, includes amounts for Latin America, Asia Pacific and South Africa.
 
December 31, 2024
 20242023202220212020PriorTotal
Finance Receivables
United States (Direct):
Low Credit Risk$93 $69 $34 $23 $10 $1 $230 
Average Credit Risk51 61 23 27 9 2 173 
High Credit Risk28 24 23 14 7 3 99 
Total$172 $154 $80 $64 $26 $6 $502 
Charge-offs$1 $— $1 $1 $2 $2 $7 
United States (Indirect):
Low Credit Risk$40 $48 $25 $13 $3 $— $129 
Average Credit Risk29 42 22 11 3 — 107 
High Credit Risk3 5 2 1 — — 11 
Total$72 $95 $49 $25 $6 $— $247 
Charge-offs$1 $7 $3 $4 $2 $4 $21 
Canada
Low Credit Risk$33 $18 $7 $5 $1 $— $64 
Average Credit Risk32 17 11 5 2 1 68 
High Credit Risk5 2 2 2 1 — 12 
Total$70 $37 $20 $12 $4 $1 $144 
Charge-offs$— $9 $1 $— $— $1 $11 
EMEA
Low Credit Risk$131 $175 $116 $55 $20 $3 $500 
Average Credit Risk75 130 92 45 19 5 366 
High Credit Risk8 14 11 6 3 1 43 
Total$214 $319 $219 $106 $42 $9 $909 
Charge-offs$— $7 $6 $3 $1 $— $17 
Total Finance Receivables
Low Credit Risk$297 $310 $182 $96 $34 $4 $923 
Average Credit Risk187 250 148 88 33 8 714 
High Credit Risk44 45 38 23 11 4 165 
Total$528 $605 $368 $207 $78 $16 $1,802 
Total Charge-offs$2 $23 $11 $8 $5 $7 $56 

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 uncollectability 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.
The aging of our billed finance receivables is as follows:
 December 31, 2025
 Current31-90
Days
Past Due		>90 Days
Past Due		Total BilledUnbilledTotal
Finance
Receivables		>90 Days
and
Accruing
Direct $18 $5 $4 $27 $451 $478 $35 
Indirect4 2 2 8 130 138 — 
Total United States22 7 6 35 581 616 35 
Canada3 1 — 4 147 151 4 
EMEA
8 1 1 10 653 663 17 
Other (1)
— — — — 17 17 — 
Total$33 $9 $7 $49 $1,398 $1,447 $56 
 December 31, 2024
 Current31-90
Days
Past Due		>90 Days
Past Due		Total BilledUnbilledTotal
Finance
Receivables		>90 Days
and
Accruing
Direct $19 $5 $4 $28 $474 $502 $35 
Indirect6 1 1 8 239 247 — 
Total United States25 6 5 36 713 749 35 
Canada5 1 1 7 137 144 5 
EMEA5 1 1 7 902 909 15 
Total$35 $8 $7 $50 $1,752 $1,802 $55 
___________
(1) As a result of the Lexmark Acquisition on July 1, 2025, includes amounts for Latin America, Asia Pacific and South Africa.
Sales of Finance Receivables
The Company has finance receivables funding arrangements with third-party funding partners in the U.S., Canada, and in EMEA. Under these arrangements, the Company sells certain eligible pools of finance receivables. The transfers are structured to qualify for sale accounting treatment and the related receivables are derecognized from the Company's consolidated financial statements. The Company's funding partners generally do not have recourse to the Company for credit losses on the transferred receivables.
In addition, under certain arrangements, the Company may transfer servicing responsibilities for funded receivables to a funding partner. In such cases, the Company pays a servicing fee related to certain retained finance receivables and may continue to service certain finance receivables under prior servicing arrangements with that funding partner for an agreed-upon fee.
Finance receivable sales activity was as follows:
Year Ended December 31,
 202520242023
Finance receivable sales - net proceeds(1)
$357 $752 $1,102 
Gain on sale/Commissions(2)
2 30 25 
Servicing revenue(2)
$6 $17 $9 
_____________
(1)Cash proceeds were reported in Net cash provided by operating activities.
(2)Recorded in Services, maintenance, rentals and other as Other Revenue. Amounts include revenues associated with the sale of the underlying leased equipment.
Secured Borrowings and Collateral
Prior to 2025, we sold certain finance receivables to consolidated special purpose entities included in our Consolidated Balance Sheet as collateral for secured loans. During 2025, we fully repaid the outstanding balance related to these secured borrowings. Refer to Note 15 - Debt, for additional information related to these arrangements.