IBM 2005 Annual Report Download - page 76
Download and view the complete annual report
Please find page 76 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
_75
Thefollowingtableprovidesaroll-forwardofthecurrentandnon-currentliabilitiesassociatedwiththesespecialactions.Thecurrent
liabilitiespresentedinthetableareincludedinOtheraccruedexpensesandliabilitiesintheConsolidatedStatementofFinancialPosition.
(Dollarsinmillions)
LIABILITY ADDITIONS— LIABILITY
ASOF 2NDQTR. OTHER ASOF
DEC. 31,2004 2005ACTIONS PAYMENTS ADJUSTMENTS* DEC. 31,2005
Current:
Workforce $«139 $«1,335 $«(1,137) $««124 $«461
Space 86 59 (159) 76 62
Other 9 — (2) (1) 6
TotalCurrent $«234 $«1,394 «$«(1,298) $««199 $«529
Non-current
Workforce $«543 $««««239 $«««««««— $«(285) $«497
Space 244 82 — (90) 236
TotalNon-current $«787 $««««321 $«««««««— $«(375) $«733
* The Other Adjustmentscolumninthetableaboveprincipallyincludesthereclassificationofnon-currenttocurrentandforeigncurrencytranslationadjustments.Inaddition,
duringtheyearendedDecember31,2005,netadjustmentswererecordedtodecreasepreviouslyrecordedliabilitiesforchangesintheestimatedcostofemployeetermi-
nationsandvacantspaceforthe2002actions($2million),thesecond-quarter2005actions($34million)andtheactionstakenpriorto1999($5million),offsetbyincreases
inpreviouslyrecordedliabilitiesfortheHDD-relatedrestructuringin2002($1 million).Ofthe$40millionofnetreductionsrecordedduringtheyearendedDecember31,
2005,$28millionwasincludedin SG&A expense,$7millionwasrecordedOther(income)andexpense,offsetbychargesof$1 millionincludedinDiscontinuedOperations
(fortheHDD-relatedrestructuringactions)intheConsolidatedStatementofEarnings.Theremaining$6millionofnetreductionswererecordedtoGoodwillduringtheyear
endedDecember31,2005forchangestoestimatedvacantspaceassociatedwiththe2002actions.
Theworkforceaccrualsprimarilyrelatetothecompany’sGlobal
Services business. The remaining liability relates to terminated
employees who are no longer working for the company, who
weregrantedannual payments tosupplementtheirincomes in
certain countries. Depending on the individual country’s legal
requirements,theserequiredpaymentswillcontinueuntilthefor-
mer employee begins receiving pension benefits or dies.
IncludedintheDecember31,2005workforceaccrualsaboveis
$48 million associated with the HDD divestiture discussed in
note A,“SignificantAccountingPolicies,” onpage 54.Thespace
accrualsareforongoingobligationstopayrentforvacantspace
thatcouldnotbesubletorspacethatwassubletatrateslower
thanthecommittedleasearrangement.Thelengthoftheseobli-
gationsvariesbyleasewiththelongestextendingthrough2019.
Otheraccrualsareprimarilytheremainingliabilities(otherthan
workforceorspace)associatedwiththe HDDdivestiture.
The company employs extensive internal environmental
protectionprogramsthatprimarilyarepreventiveinnature.The
company also participates in environmental assessments and
cleanupsatanumberoflocations,includingoperatingfacilities,
previouslyownedfacilitiesandSuperfundsites. Ourmaximum
exposure for all environmental liabilities cannot be estimated
andnoamountshavebeenrecordedfornon-AROenvironmental
liabilitiesthatarenotprobableorestimable.Thetotalamounts
accrued for non-ARO environmental liabilities, including
amountsclassifiedascurrentintheConsolidatedStatementof
FinancialPosition,thatdonotreflectactualoranticipatedinsur-
ance recoveries, were $254 million and $246 million at
December31,2005and2004,respectively.Estimatedenviron-
mentalcosts are not expectedto materially affecttheconsoli-
datedfinancialpositionorconsolidatedresultsofthecompany’s
operationsinfutureperiods.However,estimatesoffuturecosts
are subject to change due to protracted cleanup periods and
changingenvironmentalremediationregulations.
N.Stockholders’ EquityActivity
The authorized capital stock of IBM consists of 4,687,500,000
sharesofcommonstock,$.20parvalue,ofwhich 1,573,979,761
shareswereoutstandingatDecember31,2005and150,000,000
shares of preferred stock, $.01 par value, none of which were
outstandingatDecember31,2005.
StockRepurchases
Fromtimetotime,theBoardofDirectorsauthorizesthecompany
to repurchase IBM common stock. The company repurchased
90,237,800 commonsharesatacostof$7,671 million, 78,562,974
commonsharesatacostof$7,275 millionand49,994,514 com-
monsharesatacostof$4,403 millionin2005,2004 and2003,
respectively. The companyissued 2,594,786 treasury sharesin
2005, 2,840,648 treasurysharesin2004 and 2,120,293 treasury
shares in 2003, as a result of exercises of stock options by
employeesofcertainrecentlyacquiredbusinessesandbynon-
U.S.employees.AtDecember31,2005,$5,015 millionofBoard-
authorizedrepurchases wasstillavailable.Thecompanyplansto
purchase shares on the open market or in private transactions
fromtimetotime,dependingonmarketconditions.Inconnection
withtheissuanceofstockaspartofthecompany’sstock-based
compensationplans, 606,697 commonsharesatacost of $52
million, 422,338 common shares at a cost of $38 million and
291,921 commonsharesat a costof$24 millionin2005, 2004
and2003,respectively,wereremittedbyemployeestothecom-
pany in order to satisfy minimum statutory tax withholding
requirements.SuchamountsareincludedintheTreasurystock
balanceintheConsolidatedStatementofFinancialPositionand
theConsolidatedStatementofStockholders’ Equity.