IBM 2000 Annual Report Download - page 76

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Divestitures
During 1999, the company completed the sale of its Global
Network business to AT&T for $4,991 million. More than
5,300 IBM employees joined AT&T as a result of these sales
of operations in 71 countries.
During 1999, the company recognized a pre-tax gain of
$4,057 million ($2,495 million after tax, or $1.33 per diluted
common share). The net gain reflects dispositions of plant,
rental machines and other property of $410 million, other
assets of $182 million and contractual obligations of $342
million. The gain was recorded as a reduction of Selling,
general and administrative expense in the Consolidated
Statement of Earnings.
EINVENTORIES
(dollars in millions)
AT DECEMBER 31: 2000 1999
Finished goods $«1,446 $«1,162
Work in process and raw materials 3,319 3,706
Total $«4,765 $«4,868
FFINANCING RECEIVABLES
The following table includes receivables resulting from leas-
ing activities and installment loans to customers, as well as
commercial financing activities primarily to dealers, arising
from the Global Financing business. See note X, “Segment
Information,” on pages 89 through 93 for information on
the total assets of the Global Financing segment, which also
includes cash, rental machine fixed assets, intercompany
amounts and other.
(dollars in millions)
AT DECEMBER 31: 2000 1999
Short term:
Commercial financing receivables $«««6,851 $«««6,062
Customer loan receivables 4,065 3,764
Installment payment receivables 1,221 1,110
Net investment in sales-type leases 6,568 6,220
Total short-term financing
receivables $«18,705 $«17,156
Long term:
Commercial financing receivables $««««««779 $«««0,030
Customer loan receivables 4,359 4,219
Installment payment receivables 574 848
Net investment in sales-type leases 7,596 7,981
Total long-term financing receivables $«13,308 $«13,078
Net investment in sales-type leases is for leases that relate
principally to IBM equipment and is generally for terms
ranging from two to five years. Net investment in sales-type
leases includes unguaranteed residual values of approximately
$751 million and $737 million at December 31, 2000 and
1999, respectively, and is reflected net of unearned income at
those dates of approximately $1,500 million and $1,600 mil-
lion, respectively. Scheduled maturities of minimum lease
payments outstanding at December 31, 2000, expressed as a
percentage of the total, are approximately as follows: 2001,
50 percent; 2002, 30 percent; 2003, 14 percent; 2004, 4 per-
cent; and 2005 and beyond, 2 percent.
GPLANT, RENTAL MACHINES AND OTHER PROPERTY
(dollars in millions)
AT DECEMBER 31: 2000 1999
Land and land improvements $««««««896 $«««1,026
Buildings and building improvements 9,904 10,395
Plant, laboratory and
office equipment 22,354 22,503
33,154 33,924
Less: Accumulated depreciation 18,857 19,268
14,297 14,656
Rental machines 5,301 5,692
Less: Accumulated depreciation 2,884 2,758
2,417 2,934
Total $«16,714 $«17,590
HINVESTMENTS AND SUNDRY ASSETS
(dollars in millions)
AT DECEMBER 31: 2000 1999
Deferred taxes $«««2,968 $«««2,654
Prepaid pension assets 6,806 5,636
Alliance investments:
Equity method 629 595
Other 909 1,439
Goodwill (less accum. amortization) 848 1,045
Marketable securities
—
non-current 171 113
Software 782 663
Other assets 1,334 1,527
Total $«14,447 $«13,672
ISALE AND SECURITIZATION OF RECEIVABLES
The company manages assets of $136 million and $273 mil-
lion from the securitization of loans, leases and trade
receivables, at year-end 2000 and 1999, respectively. The
company did not sell any receivables in 2000, and therefore
had no cash proceeds for the year. Cash proceeds from the
sale and securitization of these receivables and assets were
$1,311 million in 1999. No significant gain or loss resulted
from these transactions. The company expects recourse
amounts associated with the aforementioned sale and securi-
tization activities to be minimal and has adequate reserves to
cover potential losses.
notes to consolidated financial statements
international business machines corporation
and Subsidiary Companies
page no.
seventy-four