IBM 2008 Annual Report Download - page 88

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Notes to Consolidated Financial Statements
INTERNATIONAL BUSINESS MACHINES CORPORATION and Subsidiary Companies
Management Discussion ............................................................................................. 18
Consolidated Statements ............................................................................................ 60
Notes ............................................................................................................................... 66
A – E ........................................................................................................................66
F – J ........................................................................................................................86
F. INVENTORIES ..................................................................................................86
G. FINANCING RECEIVABLES ..............................................................................86
H. PLANT, RENTAL MACHINES AND OTHER PROPERTY ................................... 86
I. INVESTMENTS AND SUNDRY ASSETS ...........................................................87
J. INTANGIBLE ASSETS INCLUDING GOODWILL ...............................................87
K– Q .......................................................................................................................88
R – W ..................................................................................................................... 102
Proceeds from sales of debt securities and marketable equity
securities were approximately $ million and $ million at
December ,  and , respectively. The gross realized gains
and losses (before taxes) on these sales totaled $ million and
$ million, respectively in . The gross realized gains and losses
(before taxes) on these sales totaled $ million and $ million,
respectively, in .
The contractual maturities of substantially all available-for-sale
debt securities are due in less than one year at December , .
Note F.
Inventories
($  )
At December : 2008 2007
Finished goods $ 524 $ 668
Work in process and raw materials 2,176 1,996
TOTAL $2,701 $2,664
Note G.
Financing Receivables
($  )
At December : 2008 2007
Current:
Net investment in sales-type and
direct financing leases $ 4,226 $ 4,746
Commercial financing receivables 5,781 6,263
Client loan receivables 4,861 4,652
Installment payment receivables 608 629
TOTAL $15,477 $16,289
Noncurrent:
Net investment in sales-type and
direct financing leases $ 5,938 $ 6,085
Commercial financing receivables 94 113
Client loan receivables 4,718 4,931
Installment payment receivables 433 474
TOTAL $11,183 $11,603
Net investment in sales-type and direct financing leases is for leases
that relate principally to the company’s equipment and are for terms
ranging from two to seven years. Net investment in sales-type and
direct financing leases includes unguaranteed residual values of $
million and $ million at December ,  and , respectively,
and is reflected net of unearned income of $, million and $,
million and of allowance for uncollectible accounts receivable of
$ million and $ million at those dates, respectively. Scheduled
maturities of minimum lease payments outstanding at December ,
, expressed as a percentage of the total, are approximately: ,
 percent; ,  percent; ,  percent; ,  percent; and
 and beyond,  percent.
Commercial financing receivables relate primarily to inventory
and accounts receivable financing for dealers and remarketers of IBM
and non-IBM products. Payment terms for inventory and accounts
receivable financing generally range from  to  days.
Client loan receivables are loans that are provided by Global
Financing primarily to the company’s clients to finance the purchase
of the company’s software and services. Separate contractual relation-
ships on these financing arrangements are for terms ranging from
two to seven years. Each financing contract is priced independently
at competitive market rates. The company has a history of enforcing
the terms of these separate financing agreements.
The company utilizes certain of its financing receivables as col-
lateral for non-recourse borrowings. Financing receivables pledged
as collateral for borrowings were $ million and $ million at
December ,  and , respectively. These borrowings are
included in note K, “Borrowings,” on pages  to .
The company did not have any financing receivables held for sale
as of December ,  and .
Note H.
Plant, Rental Machines and
Other Property
($  )
At December : 2008 2007
Land and land improvements $ 729 $ 701
Buildings and building improvements
8,819 8,498
Plant, laboratory and office equipment
24,950 25,273
34,499 34,471
Less: Accumulated depreciation 22,178 21,625
Plant and other property — net 12,321 12,847
Rental machines 3,946 4,113
Less: Accumulated depreciation 1,962 1,878
Rental machines — net 1,984 2,235
TOTAL— NET $14,305 $15,081