IBM 2006 Annual Report Download - page 90

N. STOCKHOLDERS’ EQUITY ACTIVITY
The authorized capital stock of IBM consists of 4,687,500,000
shares of common stock, $.20 par value, of which 1,506,482,612
shares were outstanding at December 31, 2006 and 150,000,000 shares
of preferred stock, $.01 par value, none of which were outstanding at
December 31, 2006.
STOCK REPURCHASES
From time to time, the Board of Directors authorizes the company
to repurchase IBM common stock. The company repurchased
97,564,462 common shares at a cost of $8,022 million, 90,237,800
common shares at a cost of $7,671 million and 78,562,974 common
shares at a cost of $7,275 million in 2006, 2005 and 2004, respectively.
The company issued 3,489,803 treasury shares in 2006, 2,594,786
treasury shares in 2005 and 2,840,648 treasury shares in 2004, as a
result of exercises of stock options by employees of certain recently
acquired businesses and by non-U.S. employees. At December 31, 2006,
$4,993 million of Board authorized repurchases was still available.
The company plans to purchase shares on the open market or in pri-
vate transactions from time to time, depending on market conditions.
In connection with the issuance of stock as part of the company’s
stock-based compensation plans, 633,769 common shares at a cost of
$52 million, 606,697 common shares at a cost of $52 million and
422,338 common shares at a cost of $38 million in 2006, 2005 and
2004, respectively, were remitted by employees to the company in
order to satisfy minimum statutory tax withholding requirements.
Such amounts are included in the Treasury stock balance in the
Consolidated Statement of Financial Position and the Consolidated
Statement of Stockholders’ Equity.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
INTERNATIONAL BUSINESS MACHINES CORPORATION AND SUBSIDIARY COMPANIES
88 2006 Annual Report
ACCUMULATED GAINS AND (LOSSES) NOT AFFECTING RETAINED EARNINGS (NET OF TAX)
(Dollars in millions)
RETIREMENT-RELATED BENEFIT PLANS*
NET PRIOR SERVICE NET ACCUMULATED
UNREALIZED FOREIGN MINIMUM COSTS, NET GAINS/ UNREALIZED GAINS/(LOSSES)
GAINS/(LOSSES) CURRENCY PENSION (LOSSES) AND GAINS ON NOT AFFECTING
ON CASH FLOW TRANSLATION LIABILITY TRANSITION ASSETS/ MARKETABLE RETAINED
HEDGE DERIVATIVES ADJUSTMENTS** ADJUSTMENTS* (OBLIGATIONS)* SECURITIES EARNINGS
December 31, 2004 $() $ , $(,) $ — $  $(,)
Change for period  (,)  —  
December 31, 2005  , (,) —  (,)
Change for period () , , —  ,
Adoption of SFAS No. 158 — — , (,) — (,)
December 31, 2006 $() $ , $ — $(,) $ $(,)
* 2006 activity relates to adoption of SFAS No. 158, see note V, “Retirement-Related Benefits,” on pages 100 to 111 for additional information.
** Foreign currency translation adjustments are presented gross with associated hedges shown net of tax.
NET CHANGE IN UNREALIZED GAINS ON MARKETABLE SECURITIES (NET OF TAX)
(Dollars in millions)
FOR THE PERIOD ENDED DECEMBER 31: 2006 2005
Net unrealized gains arising during the period $ $
Less: Net gains included in net income for the period * *
Net change in unrealized gains on marketable securities $ $
* Includes writedowns of $2.9 million and $0.6 million in 2006 and 2005, respectively.
Consolidated Statements ......................................................... 
Notes .....................................................................................
A-G ......................................................................................... 62
H-M ......................................................................................... 
N-S .......................................................................................... 
N. Stockholders’ Equity Activity .......................................... 
O. Contingencies and Commitments ................................... 
P. Taxes ................................................................................ 
Q. Research, Development and Engineering ...................... 
R. 2005 Actions .................................................................... 
S. Earnings Per Share of Common Stock ............................. 
T-X .......................................................................................... 
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