IBM 2002 Annual Report Download - page 84

Notes to Consolidated Financial Statements
82 international business machines corporation and Subsidiary Companies
The net carrying amount of intangible assets increased by
$259 million for the year ended December 31, 2002, primarily
due to the acquisition of PwCC, offset by the amortization of
existing intangible asset balances and the intangible assets
associated with divestitures.
The aggregate amortization expense was $181 million and
$100 million for the years ended December 31, 2002 and
2001, respectively.
The future amortization expense for each of the five
succeeding years relating to intangible assets currently
recorded in the Consolidated Statement of Financial Position
is estimated to be the following at December 31, 2002:
(dollars in millions)
2003 $«245
2004 208
2005 138
2006 82
2007 ««««42
iGoodwill
The changes in the carrying amount of goodwill, by reporting segment, for the year ended December 31, 2002, are as follows:
foreign
balance assembled purchase currency balance
(dollars in millions) jan. 1, workforce goodwill price translation dec. 31,
segment 2002 reclass*additions adjustments divestitures adjustments 2002
Global Services $««««325 $«— $«2,532 $««— $««— $«69 $«2,926
Enterprise Systems 111 ««««««26 ————137
Personal and Printing Systems 13 —————13
Technology 102 5 — — (83) — 24
Software 727 2 293 (12) — 5 1,015
Global Financing ———————
Enterprise Investments ———————
Total $«1,278 $«33 $«2,825 $«(12) $«(83) $«74 $«4,115
*In accordance with SFAS No. 141, “Business Combinations,” the unamortized balance for acquired assembled workforce, which had been recognized as an intangible asset separate from
goodwill, has been reclassified to goodwill effective January 1, 2002.
There were no goodwill impairment losses recorded during the period.
jSale and Securitization of Receivables
The company periodically sells receivables through the securi-
tization of loans, leases and trade receivables. The company
retains servicing rights in the securitized receivables for
which it receives a servicing fee. Any gain or loss incurred as
a result of such sales is recognized in the period in which the
sale occurs.
During 2001, the company entered into an uncommitted
trade receivables securitization facility that allows for the
ongoing sale of up to $500 million of trade receivables. This
facility was put in place primarily to provide backup liquidity
and can be accessed on three days notice. The company sold
$179 million of trade receivables through this facility in 2001.
In addition, the company has a program to sell loans receiv-
able from state and local government customers. This
program was established in 1990 and has been used from time
to time since then. The company sold $278 million of loans
receivable due from state and local government customers in
2001. No receivables were sold under either of these programs
in 2002.
At December 31, 2002 and 2001, the total balance of the
state and local receivables securitized and under the company’s
management was $101 million and $213 million, respectively.
Servicing assets net of servicing liabilities were insignificant.
The investors in the state and local loans receivable secu-
ritizations have recourse to the company via a limited
guarantee of $69 million at December 31, 2002. At year-end
2002, delinquent amounts from the receivables sold and net
credit losses were insignificant.
kBorrowings
Short-term debt
(dollars in millions)
at december 31: 2002 2001
Commercial paper $«1,302 $«««4,809
Short-term loans 1,013 1,564
Long-term debt — current maturities 3,716 4,815
Total $«6,031 $«11,188