IBM 2007 Annual Report Download - page 92

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90
Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
Management Discussion ..................................14
Consolidated Statements ..................................58
Notes ........................................................... 64
A-F ...................................................................64
G-M ............................................................ 84
G. Plant, Rental Machines and
Other Property ...........................................84
H. Investments and Sundry Assets ..................84
I. Intangible Assets Including Goodwill ........84
J. Borrowings ..................................................85
K. Derivatives and Hedging Transactions.. 88
L. Other Liabilities .................................... 91
M. Stockholders’ Equity Activity .....................92
N-S ...................................................................94
T-W ................................................................102
The following tables summarize the net fair value of the derivative instruments and the carrying value of foreign currency denominated
debt designated as a hedge of net investment at December 31, 2007 and 2006 (included in the Consolidated Statement of Financial Position).
($ in millions)
HEDGE DESIGNATION
NET NON-HEDGE/
AT DECEMBER 31, 2007 FAIR VALUE CASH FLOW INVESTMENT OTHER
Derivatives — net asset/(liability):
Debt risk management $167 $ 291 $ — $ 50
Long-term investments in foreign subsidiaries (“net investments”) — — (937) —
Anticipated royalties and cost transactions — (203) — —
Anticipated commodity purchase transactions — — — —
Subsidiary cash and foreign currency asset/liability management — — — (56)
Equity risk management — — — 30
Other derivatives — — — 6
Total derivatives 167(a) 88(b) (937)(c) 30(d)
Debt:
Long-term investments in foreign subsidiaries (“net investments”) — — (2,787)(e) —
Total $167 $ 88 $(3,724) $ 30
(a) Comprises assets of $181 million and liabilities of $14 million.
(b) Comprises assets of $526 million and liabilities of $438 million.
(c) Comprises liabilities of $937 million.
(d) Comprises assets of $90 million and liabilities of $60 million.
(e) Represents foreign currency denominated debt formally designated as a hedge of net investment.
($ in millions)
HEDGE DESIGNATION
NET NON-HEDGE/
AT DECEMBER 31, 2006 FAIR VALUE CASH FLOW INVESTMENT OTHER
Derivatives — net asset/(liability):
Debt risk management $(139) $110 $ — $(96)
Long-term investments in foreign subsidiaries (“net investments”) — — (165) —
Anticipated royalties and cost transactions — (84) — —
Anticipated commodity purchase transactions — (2) — —
Subsidiary cash and foreign currency asset/liability management — — — (14)
Equity risk management — — — 40
Other derivatives — — — 10
Total derivatives (139)(a) 24(b) (165)(c) (60)(d)
Debt:
Long-term investments in foreign subsidiaries (“net investments”) — — (2,529)(e) —
Total $(139) $ 24 $(2,694) $(60)
(a) Comprises assets of $1 million and liabilities of $140 million.
(b) Comprises assets of $293 million and liabilities of $269 million.
(c) Comprises assets of $42 million and liabilities of $207 million.
(d) Comprises assets of $74 million and liabilities of $134 million.
(e) Represents foreign currency denominated debt formally designated as a hedge of net investment.