IBM 2006 Annual Report Download - page 84
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INTERNATIONAL BUSINESS MACHINES CORPORATION AND SUBSIDIARY COMPANIES
82 2006 Annual Report
LONG-TERM DEBT
Pre-Swap Borrowing
(Dollars in millions)
AT DECEMBER 31: MATURITIES 2006 2005
U.S. Dollars:
Debentures:
5.875% $ $
6.22%
6.5%
7.0%
7.0%
7.125%
7.5%
8.375%
3.43% convertible note*
Notes: 5.9% average – , ,
Medium-term note program: 4.7% average – , ,
Other: 3.8% average** – , ,
, ,
Other currencies (average interest rate at
December 31, 2006, in parentheses):
Euros (3.4%) – , ,
Japanese yen (1.8%) – ,
Canadian dollars (6.3%) –
Swiss francs (1.5%)
Other ( 5.4%) –
, ,
Less: Net unamortized discount
Add: SFAS No. 133 fair value adjustment+
, ,
Less: Current maturities , ,
Total $, $,
* As part of the company’s 2002 acquisition of PricewaterhouseCoopers’ Global Business Consulting and Technology Services Unit ( PwCC), the company issued convertible notes bearing
interest at a stated rate of 3.43 percent with a face value of approximately $328 million to certain of the acquired PwCC partners. The notes are convertible into 4,764,543 shares of
IBM common stock at the option of the holders at any time based on a fixed conversion price of $68.81 per share of the company’s common stock. As of December 31, 2006, a total of
2,053,267 shares had been issued under this provision.
** Includes $304 million and $318 million of debt collateralized by financing receivables at December 31, 2006 and 2005, respectively. See note J, “Securitization of Receivables,” on page
81 for further details.
+ In accordance with the requirements of SFAS No. 133, the portion of the company’s fixed rate debt obligations that is hedged is reflected in the Consolidated Statement of Financial
Position as an amount equal to the sum of the debt’s carrying value plus an SFAS No. 133 fair value adjustment representing changes in the fair value of the hedged debt obligations
attributable to movements in benchmark interest rates.
Consolidated Statements .........................................................
Notes .....................................................................................
A-G ......................................................................................... 62
H-M .........................................................................................
H. Investments and Sundry Assets ......................................
I. Intangible Assets Including Goodwill ...............................
J. Securitization of Receivables ...........................................
K. Borrowings .......................................................................
L. Derivatives and Hedging Transactions ............................
M. Other Liabilities ...............................................................
N-S ..........................................................................................
T-X ..........................................................................................
Black
MAC
390 CG10