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Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
108
Credit Quality Indicators
The company’s credit quality indicators, which are based on rating
agency data, publicly available information and information pro-
vided by customers, are reviewed periodically based on the relative
level of risk. The resulting indicators are a numerical rating system
that maps to Moody’s Investors Service credit ratings as shown
below. The company uses information provided by Moody’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,
2015 and 2014. Receivables with a credit quality indicator ranging
from Aaa to Baa3 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, 2015:
Major
Markets
Growth
Markets
Credit rating
Aaa – Aa3 $ 538 $ 39
A1 – A 3 1,324 162
Baa1 – Baa3 1,493 392
Ba1 – Ba2 1,214 352
Ba3 – B1 513 277
B2 – B3 403 215
Caa – D 33 87
Total $5,517 $1,524
Loan Receivables
($ inmillions)
At December 31, 2015:
Major
Markets
Growth
Markets
Credit rating
Aaa – Aa3 $ 949 $ 80
A1 – A 3 2,338 336
Baa1 – Baa3 2,635 813
Ba1 – Ba2 2,143 732
Ba3 – B1 905 576
B2 – B3 711 447
Caa – D 59 181
Total $9,739 $3,165
At December31, 2015, the industries which made up Global
Financing’s receivables portfolio consisted of: Financial (36per-
cent), Manufacturing (14percent), Government (11 percent),
Services (11percent), Retail (9percent), Communications (7per-
cent), Healthcare (6percent) and Other (6percent).
Lease Receivables
($ inmillions)
At December 31, 2014:
Major
Markets
Growth
Markets
Credit rating
Aaa – Aa3 $ 563 $ 46
A1 – A 3 1,384 178
Baa1 – Baa3 1,704 900
Ba1 – Ba2 1,154 272
Ba3 – B1 470 286
B2 – B3 372 176
Caa – D 55 85
Total $5,702 $1,943
Loan Receivables
($ inmillions)
At December 31, 2014:
Major
Markets
Growth
Markets
Credit rating
Aaa – Aa3 $ 993 $ 110
A1 – A 3 2,438 425
Baa1 – Baa3 3,003 2,148
Ba1 – Ba2 2,034 649
Ba3 – B1 827 683
B2 – B3 655 420
Caa – 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).