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
	April 30, 2026		October 31, 2025
	In millions
Minimum lease payments receivable	$	9,897	$	10,310
Unguaranteed residual value	719		694
Unearned income	(1,191)		(1,264)
Financing receivables, gross	9,425		9,740
Allowance for credit losses	(210)		(198)
Financing receivables, net	9,215		9,542
Less: current portion	(3,694)		(3,826)
Amounts due after one year, net	$	5,521	$	5,716

The Company enters into arrangements to transfer the contractual payments due under certain financing receivables to third party financial institutions. For the three and six months ended April 30, 2026, the Company sold $20 million and $103 million, respectively. For the fiscal year ended October 31, 2025, the Company sold $196 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, 2025
	Risk Rating
	Low		Moderate		High
Fiscal Year	In millions
2025	$	2,245	$	1,016	$	17
2024	2,160		942		36
2023	1,189		645		47
2022	579		347		26
2021 and prior	213		206		72
Total	$	6,386	$	3,156	$	198

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
	April 30, 2026		October 31, 2025
	In millions
Balance at beginning of period	$	198	$	194

Provision for credit losses	14		77
Adjustment to the existing allowance	8		(1)
Deductions	(10)		(72)
Balance at end of period	$	210	$	198

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


	As of
	April 30, 2026		October 31, 2025
	In millions
Billed:(1)
Current 1-30 days	$	368	$	349
Past due 31-60 days	17		26
Past due 61-90 days	19		13
Past due > 90 days	70		70
Unbilled sales-type and direct-financing lease receivables	8,951		9,282
Total gross financing receivables	$	9,425	$	9,740
Gross financing receivables on non-accrual status(2)	$	120	$	168
Gross financing receivables 90 days past due and still accruing interest(2)	$	90	$	114


		For the three months ended April 30,				For the six months ended April 30,
		2026		2025		2026		2025
	Location	In millions

Interest income from sales-type leases and direct financing leases	Financing Income	$	193	$	188	$	388	$	374
Lease income from operating leases	Services	500		539		1,008		1,086
Total lease income		$	693	$	727	$	1,396	$	1,460

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 April 30, 2026 and October 31, 2025, 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
	April 30, 2026		October 31, 2025
Assets held by VIE:	In millions
Other current assets	$	52	$	73
Financing receivables
Short-term	678		885
Long-term	928		1,283
Property, plant and equipment, net	504		775
Liabilities held by VIE:
Notes payable and short-term borrowings, net of unamortized debt issuance costs	933		1,159
Long-term debt, net of unamortized debt issuance costs	$	861	$	1,287

For the six months ended April 30, 2026, the Company did not transfer any financing receivables and leased equipment via securitization through the SPE. For the fiscal year ended October 31, 2025, financing receivables and leased equipment transferred via securitization through the SPE were $1.3 billion and $0.4 billion, respectively.