IBM 2008 Annual Report Download - page 37

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Management Discussion
INTERNATIONAL BUSINESS MACHINES CORPORATION and Subsidiary Companies
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Partially offset by:
• The net impact of the purchases and sales of marketable securi-
ties and other investments resulted in an increase in cash of
$ million; and
• A decrease in net capital spending of $ million resulting from:
– a decrease of $ million primarily driven by lower spending by
Global Technology Services and Systems and Technology; and
– a decrease of $ million in capitalized software development
expenditures.
Net cash used in financing activities increased $, million com-
pared to  as a result of:
• An increase of $, million in cash used to retire debt, net of
cash proceeds, primarily driven by higher proceeds in  due to
the issuance of debt for the ASR and a decline in commercial
paper in ;
• Higher dividend payments of $ million; and
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A decrease of $ million in cash received due to lower other com-
mon stock transactions primarily due to stock option exercises;
Partially offset by:
• Lower common stock repurchases of $, million.
Within total debt, on a net basis, the company utilized $, million
in net cash to retire debt versus $, million in net cash proceeds
in . The net cash used to retire debt in  was comprised of:
$, million in cash payments to settle debt and net payments of
$, million in short-term borrowings, partially offset by $,
million of new debt issuances. See note K, “Borrowings,” on pages 
to  for a listing of the company’s debt securities.
NONCURRENT ASSETS AND LIABILITIES
($  )
At December : 2008 2007
Noncurrent assets $60,520 $67,254
Long-term debt $22,689 $23,039
Noncurrent liabilities (excluding debt)
$30,934 $24,612
The decrease in noncurrent assets of $, million compared to the
prior year-end balance was primarily driven by:
• A decrease of $, million in prepaid pension assets primarily
resulting from pension remeasurements;
• A decrease of $ million in plant, rental machines and other
property mainly due to currency impact ($ million) and lower
capital spending primarily in Global Technology Services; and
• A decrease of $ million in long-term financing receivables
mainly due to currency impact;
Partially offset by:
• An increase in deferred tax assets of $, million primarily due
to pension remeasurements; and
• An increase in goodwill of $, million (net of a $, million
negative currency impact) and an increase of $ million (net of
a $ million negative currency impact) in intangible assets-net
primarily driven by the Cognos and Telelogic acquisitions.
Long-term debt decreased $ million primarily due to reclasses to
short-term debt as certain instruments approached maturity; offset
by new debt issuances.
Other noncurrent liabilities, excluding debt, increased $, million
primarily driven by:
• An increase of $, million in retirement and nonpension
postretirement benefit obligations primarily driven by pension
remeasurement; and
• An increase in noncurrent tax reserves of $, million related
to unrecognized tax benefits;
Partially offset by:
• A decrease of $ million in noncurrent deferred tax liabilities
primarily due to pension remeasurement; and
• A decrease of $ million in restructuring liabilities mainly
driven by the reclass to current liabilities.
DEBT
The company’s funding requirements are continually monitored and
strategies are executed to manage the overall asset and liability profile.
($  )
At December : 2008 2007
Total company debt $33,926 $35,274
Total Global Financing segment debt:
$24,360 $24,532
Debt to support external clients 20,892 21,072
Debt to support internal clients 3,468 3,460