IBM 2005 Annual Report Download - page 75
Download and view the complete annual report
Please find page 75 of the 2005 IBM annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53
-
54
-
55
-
56
-
57
-
58
-
59
-
60
-
61
-
62
-
63
-
64
-
65 -
66 -
67 -
68 -
69 -
70 -
71 -
72 -
73 -
74 -
75 -
76 -
77 -
78 -
79 -
80 -
81 -
82 -
83 -
84 -
85 -
86
-
87
-
88
-
89
-
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105
 |
 |
NotestoConsolidatedFinancialStatements
INTERNATIONALBUSINESSMACHINESCORPORATION ANDSUBSIDIARYCOMPANIES
74_ NotestoConsolidatedFinancialStatements
AccumulatedDerivativeGainsorLosses
AtDecember31,2005,inconnectionwithitscashflowhedges
of anticipated royalties and cost transactions, the company
recordedgainsof$271 million,netoftax,inAccumulatedgains
and (losses) not affecting retained earnings. Of that amount,
gainsofapproximately$237millionareexpectedtobereclassi-
fiedto net incomewithin the nextyear, providing an offsetting
economic impact against the underlying anticipated transac-
tions. At December 31, 2005, losses of approximately $33
million, net of tax, were recorded in Accumulated gains and
(losses)notaffectingretainedearningsinconnectionwithcash
flowhedgesofthecompany’sborrowings.
ThefollowingtablesummarizesactivityintheAccumulated
gainsand(losses)notaffectingretainedearningssectionofthe
Consolidated Statement of Stockholders’ Equity related to all
derivativesclassifiedascashflowhedges:
(Dollarsinmillions,netoftax)
DEBIT/(CREDIT)
December31,2002 $««363
Netlossesreclassifiedintoearnings
fromequityduring2003 (713)
Changesinfairvalueofderivativesin2003 804
December31,2003 454
Netlossesreclassifiedintoearningsfrom
equityduring2004 (463)
Changesinfairvalueofderivativesin2004 662
December31,2004 653
Netlossesreclassifiedintoearnings
fromequityduring2005 (104)
Changesinfairvalueofderivativesin2005 (787)
December31,2005 $«(238)
FortheyearsendingDecember31,2005,2004and2003,there
were no significant gains or losses recognized in earnings
representing hedge ineffectiveness or excluded from the
assessmentof hedge effectiveness(for fair valuehedgesand
cashflow hedges),orassociatedwithanunderlyingexposure
thatdidnotorwasnotexpectedtooccur(forcashflowhedges);
norarethereanyanticipatedinthenormalcourseofbusiness.
M.OtherLiabilities
(Dollarsinmillions)
ATDECEMBER31: 2005 2004
Deferred income $«2,437 $«2,222
Deferred taxes 1,616 1,770
Executivecompensationaccruals 1,023 1,163
Restructuringactions 733 787
Workforcereductions 434 562
Disabilitybenefits 420 357
Derivativesliabilities 314 434
Non-currentwarrantyaccruals 255 415
Environmentalaccruals 226 218
Other 836 890
Total $«8,294 $«8,818
Inresponsetochangingbusinessneeds,thecompanyperiodi-
callytakesworkforcerebalancingactionstoimproveproductivity
andcompetitiveposition.Thenon-currentcontractuallyobligated
futurepaymentsassociatedwith these activities arereflectedin
the Workforcereductions captioninthetableabove.
Inaddition,thecompanyexecuted certain special actions
asfollows: (1)thesecondquarterof2005(discussedinnote R,
“2005Actions,”onpages 80and81),(2)thesecond quarterof
2002 associated with the Microelectronics Division and rebal-
ancing of both the company’s workforce and leased space
resources, (3) the fourth quarter of 2002 associated with the
acquisition of the PricewaterhouseCoopers consulting busi-
ness,(4)the2002actionsassociatedwiththe HDD businessfor
reductionsinworkforce,manufacturingcapacityandspace,(5)
the actions taken in 1999, and (6) the actions that took place
priorto1994.