IBM 2006 Annual Report Download - page 83
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Black
MAC
390 CG10
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INTERNATIONAL BUSINESS MACHINES CORPORATION AND SUBSIDIARY COMPANIES
81
J. SECURITIZATION OF RECEIVABLES
The company periodically sells receivables through the securitiza-
tion of trade receivables, loans and leases. 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.
On July 28, 2006, the company terminated its committed trade
receivables securitization facility. This facility was established in 2004
and provided the company with securitization capability up to $0.5
billion. The facility was put in place to provide backup liquidity acces-
sible on a three-day notice. During 2005, the company securitized
$6.3 million of trade receivables and retained the servicing responsi-
bilities for which it received a servicing fee. In 2005, both the pre-tax
loss on the sale of receivables and the servicing fees received were
insignificant. The facility was terminated in 2006 as the company
determined that it had sufficient liquidity and alternative funding
sources. No trade receivables were securitized in 2006 under this
facility prior to the closure, nor did the company have any amounts
outstanding under this facility at December 31, 2005.
The company utilizes certain of its financing receivables as col-
lateral for non-recourse borrowings. Financing receivables pledged as
collateral for borrowings were $304 million and $318 million at
December 31, 2006 and 2005, respectively. These borrowings are
included in note K, “Borrowings,” on page 82.
K. BORROWINGS
SHORT-TERM DEBT
(Dollars in millions)
AT DECEMBER 31: 2006 2005
Commercial paper $, $
Short-term loans , ,
Long-term debt—current maturities , ,
Total $, $,
The weighted-average interest rates for commercial paper at December
31, 2006 and 2005, were 5.3 percent and 4.3 percent, respectively. The
weighted-average interest rates for short-term loans were 3.0 percent
and 2.2 percent at December 31, 2006 and 2005, respectively.
GOODWILL
The changes in the carrying amount of goodwill, by reportable segment, for the year ended December 31, 2006, are as follows:
(Dollars in millions)
FOREIGN
BALANCE PURCHASE CURRENCY BALANCE
JANUARY 1, GOODWILL PRICE TRANSLATION DECEMBER 31,
SEGMENT 2006 ADDITIONS ADJUSTMENTS DIVESTITURES ADJUSTMENTS 2006
Global Business Services $, $ $ () $— $ $ ,
Global Technology Services , , () — ,
Systems and Technology Group — () — —
Software , , () — ,
Total $, $, $() $— $ $,