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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
International Business Machines Corporation and Subsidiary Companies
74
ibm annual report 2004
In addition, the company rebalanced both its workforce and its leased space resources primarily in response to the decline in corporate spending on technology services in 2001
and 2002. The following table summarizes the significant components of these actions:
(Dollars in millions)
Liability Liability Liability Liability
Recorded in as of as of as of
Pre-Tax Write-off 2nd Qtr. Other Dec. 31, Other Dec. 31, Other Dec. 31,
Charges of Assets 2002 Payments Adjustments+2002 Payments Adjustments+2003 Payments Adjustments+2004
Microelectronics:
Machinery/equipment: $««««423 $«323 (a)
Current*$««««««67 (b) $«««38 $«13 $«««42 $«««39 $«13 $«««16 $«16 $«««2 $«««««2
Non-current** 33 (b) — (16) 17 — (15) 2 — ««(2) —
Non-cancelable purchase commitments: 60
Current*35 (c) 15 42424151515——
Non-current** 25 (c) — (12) 13 — (13) — — — —
Employee terminations: 45
Current*44 (d) 35 (8) 1 1—————
Non-current** 1(d) —— 1—— 1—— 1
Vacant space: 11
Current*5(e) 115533333
Non-current** 6(e) — (1) 5 — (2) 3 — (3) —
Sale of Endicott facility*223 221 (f) 2(f ) 3 11 10 6 (3) 1 1 — —
Sale of certain operations*63 53 (g) 10 (g) 9— 1 1—————
Global Services and other:
Employee terminations: 722
Current*671 (h) 505 (23) 143 109 (2) 32 27 26 31
Non-current** 51 (h) — 27 78 — (3) 75 — (13) 62
Vacant space: 180 29 (i)
Current*57 (i) 29 16 44 72 71 43 32 21 32
Non-current** 94 (i) — (8) 86 — (55) 31 — (3) 28
Total $«1,727 $«626 $«1,101 $«635 $«««4 $«470 $«257 $«««9 $«222 $«94 $«31 $«159
*Recorded in Accounts payable and accruals in the Consolidated Statement of Financial Position.
** Recorded in Other liabilities in the Consolidated Statement of Financial Position.
+Principally represents currency translation adjustments and reclassification of non-current to current. In addition, net adjustments of $1 million, $(26) million and $(40) million were recorded in SG&A expense in 2004, 2003 and the fourth quarter
of 2002, respectively, to adjust previously recorded liabilities and $14 million, $4 million, and $10 million were recorded in Other (income) and expense to increase previously recorded liabilities in 2004, 2003 and the fourth quarter of 2002,
respectively. These adjustments, along with adjustments of $(7) million and $(19) million recorded in SG&A expense in 2003 and the fourth quarter of 2002, respectively, as well as $(2) million and $9 million recorded in Other (income) and
expense for assets previously written off, were for differences between the estimated and actual proceeds on the disposition of certain assets and changes in the estimated cost of employee terminations and vacant space accruals for the years
ended December 31, 2003 and 2002, respectively. No such adjustments were made in 2004.