Notes to the Consolidated Financial Statements

(Dollars in millions, except per-share data and unless otherwise indicated)

Note 4 – Receivables, Net

Finance Receivables

Finance receivables result from installment arrangements and sales-type leases arising from the marketing of our equipment. These receivables are typically collateralized by a security interest in the underlying assets. Finance receivables, net at December 31, 2009 and 2008 were as follows:

		2009				2008
Gross receivables		$	8,427			$	8,718
Unearned income			(1,197	)			(1,273	)
Residual values			19				31
Allowance for doubtful accounts			(222	)			(198	)
Finance Receivables, Net		$	7,027			$	7,278
Less: Billed portion of finance receivables, net			(226	)			(254	)
Less: Current portion of finance receivables not billed, net			(2,396	)			(2,461	)
Finance Receivables Due After One Year, Net		$	4,405			$	4,563

Contractual maturities of our gross finance receivables as of December 31, 2009 were as follows (including those already billed of $226):

2010	2011	2012	2013	2014	Thereafter	Total
$3,191	$2,334	$1,622	$910	$327	$43	$8,427

Accounts Receivable Sales Arrangements

We have facilities in the U.S., Canada and several countries in Europe that enable us to sell, on an ongoing basis, certain accounts receivable without recourse to third parties. The accounts receivables sold are generally short-term trade receivables with a payment due date of less than 60 days. In some of the agreements we continue to service the sold receivables and hold beneficial interests. When applicable, a servicing liability is recorded for the estimated fair value of the servicing. Beneficial interests are included in the caption “Other current assets” in the accompanying Consolidated Balance Sheets and are recorded at estimated fair value. The amounts associated with the servicing liability and beneficial interests were not material at December 31, 2009 and 2008, respectively. Accounts receivables sales for the three years ended December 31, 2009 were as follows:

		2009				2008				2007
Accounts receivables sales		$	1,566			$	717			$	326
Fees associated with sales			13				4				2
Estimated impact of sales on operating cash flows			309				51				147