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Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
112
Credit Quality Indicators
The company’s credit quality indicators, which are based on
rating agency data, publicly available information and information
provided by customers, are reviewed periodically based on the
relative level of risk. The resulting indicators are a numerical rating
system that maps to Standard & Poor’s Ratings Services credit
ratings as shown below. The company uses information provided
by Standard & Poor’s, where available, as one of many inputs in
its determination of customer credit rating.
The tables present the gross recorded investment for each
class of receivables, by credit quality indicator, at December31,
2014 and 2013. Receivables with a credit quality indicator ranging
from AAA to BBB- are considered investment grade. All others are
considered non-investment grade. The credit quality indicators do
not reflect mitigation actions that the company may take to transfer
credit risk to third parties.
Lease Receivables
($ in millions)
At December 31, 2014:
Major
Markets
Growth
Markets
Credit rating
AAA – AA- $ 563 $ 46
A+ – A- 1,384 178
BBB+ – BBB- 1,704 900
BB+ – BB 1,154 272
BB- – B+ 470 286
B – B- 372 176
CCC+ – D 55 85
Total $5,702 $1,943
Loan Receivables
($ in millions)
At December 31, 2014:
Major
Markets
Growth
Markets
Credit rating
AAA – AA- $ 993 $ 110
A+ – A- 2,438 425
BBB+ – BBB- 3,003 2,148
BB+ – BB 2,034 649
BB- – B+ 827 683
B – B- 655 420
CCC+ – D 98 203
Total $10,049 $4,639
At December31, 2014, the industries which made up Global
Financing’s receivables portfolio consisted of: Financial (40per-
cent), Manufacturing (14percent), Government (13percent),
Services (9percent), Retail (8percent), Communications (6per-
cent), Healthcare (5percent) and Other (5percent).
Lease Receivables
($ in millions)
At December 31, 2013:
Major
Markets
Growth
Markets
Credit rating
AAA – AA- $ 743 $ 68
A+ – A- 1,513 168
BBB+ – BBB- 2,111 957
BB+ – BB 1,393 350
BB- – B+ 595 368
B – B- 365 214
CCC+ – D 76 74
Total $6,796 $2,200
Loan Receivables
($ in millions)
At December 31, 2013:
Major
Markets
Growth
Markets
Credit rating
AAA – AA- $ 1,151 $ 125
A+ – A- 2,344 307
BBB+ – BBB- 3,271 1,745
BB+ – BB 2,158 638
BB- – B+ 922 672
B – B- 565 391
CCC+ – D 118 134
Total $10,529 $4,012
At December31, 2013, the industries which made up Global
Financing’s receivables portfolio consisted of: Financial (39per-
cent), Government (14percent), Manufacturing (14percent), Retail
(8percent), Services (8percent), Healthcare (6percent), Com-
munications (6percent) and Other (4percent).