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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in millions, except per-share data and unless otherwise indicated)
be bankruptcy remote and have received opinions to that
effect from outside legal counsel. As a result, the
transferred receivables are not available to satisfy any of
our other obligations. The final funding date for the U.S.
facility is December 2010. There have been no new
borrowings under the Loan Agreement since December
2005.
We also had similar secured funding arrangements
with GE in the U.K. and Canada. In July 2007 and
December 2007, we repaid the outstanding loans under
those arrangements of £293 million (U.S. $593) and Cdn.
$41 million (U.S. $41) in the U.K. and Canada, respectively.
France Secured Borrowings: In October 2007, our
secured warehouse financing facility in France matured
and we repaid the outstanding borrowings of €331 million
(U.S. $469) under this program with proceeds from an
unsecured bank bridge loan due March 31, 2008.
DLL Secured Borrowings: In July 2007, we purchased
De Lage Landen’s (“DLL”) 51% ownership interest in our
lease financing joint venture in the Netherlands for $25
including accumulated dividends of $9. In connection with
the purchase, the secured borrowings to DLL of $153 were
repaid and the related finance receivables are no longer
encumbered. To fund the purchase and repayment we
borrowed $161 of unsecured bank debt due July 1, 2008.
The following table shows finance receivables and related secured debt as of December 31, 2007 and 2006.
Although the finance receivables are consolidated assets they are generally not available to satisfy our other obligations:
December 31, 2007 December 31, 2006
(in millions)
Finance
Receivables,
Net Secured Debt
Finance
Receivables,
Net Secured Debt
GE – U.S. ............................................................. $ 377 $275 $ 941 $ 782
GE – U.K. ............................................................ – – 669 609
GE – Canada ......................................................... – – 115 88
Merrill Lynch – France ................................................. – – 501 419
DLL – Netherlands .................................................... – – 197 161
Total encumbered finance receivables, net ................... $ 377 $275 $2,423 $2,059
Unencumbered finance receivables, net ........................ 7,671 5,421
Total finance receivables, net(1) ....................................... $8,048 $7,844
(1) Includes (i) billed portion of finance receivables, net, (ii) finance receivables, net and (iii) finance receivables due after
one year, net as included in the Consolidated Balance Sheets as of December 31, 2007 and 2006.
Accounts Receivable Sales Arrangement: We have a
facility in Europe that enables us to sell, on an on-going
basis, certain accounts receivables without recourse to a
third-party. During 2007 and 2006, we sold approximately
$326 and $23, respectively, of accounts receivables under
this facility. Fees associated with the 2007 sales were $2.
Of the amounts sold, $170 remained uncollected by the
third-party as of December 31, 2007.
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