content_image/68606.jpg content_image/68607.jpg content_image/68608.jpg
##  NOTE 12. SALES OF RECEIVABLES – FINANCIAL SERVICES SECTOR 

## Servicing Portfolio 

We retain servicing rights for receivables sold in off-balance sheet securitization and whole-loan sale transactions. The servicing portfolio is summarized in the following table (in millions): 

<img src='content_image/68606.jpg'>

## Retained Interest 

Components of retained interest in securitized assets at December 31 include (in millions): 

<img src='content_image/68607.jpg'>

Most of the retained interest in sold wholesale receivables ($5.5 billion and $8 billion at December 31, 2004 and December 31, 2003, respectively) represents our undivided interest in wholesale receivables that are available to support the issuance of additional securities by a securitization SPE; the balance represents credit enhancements. 

Retained interests are recorded at fair value. For wholesale receivables, book value approximates fair value because of their short-term maturities. The fair value of subordinated and senior securities is estimated based on market prices. In determining the fair value of residual interest in securitization transactions, we discount the present value of the projected cash flows retained at various discount rates based on economic factors in individual countries. Investments in subordinated securities and restricted cash are senior to the residual interest in securitization transactions. 

## Investment and Other Income 

The following table summarizes the activity related to off-balance sheet sales of receivables reported in Revenues  for the years ended December 31 (in millions): 

<img src='content_image/68608.jpg'>

