IBM 2008 Annual Report Download - page 97

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Notes to Consolidated Financial Statements
INTERNATIONAL BUSINESS MACHINES CORPORATION and Subsidiary Companies
The workforce accruals primarily relate to terminated employees
who are no longer working for the company who were granted
annual payments to supplement their incomes in certain countries.
Depending
on the individual country’s legal requirements, these
required payments
will continue until the former employee begins
receiving pension benefits or dies. Included in the December , 
workforce accruals above is $ million associated with the HDD
divestiture discussed in note A, “Significant Accounting Policies,” on
page . The space accruals are for ongoing obligations to pay rent
for vacant space that could not be sublet or space that was sublet at
rates lower than the committed lease arrangement. The length of
these obligations varies by lease with the longest extending through
. Other accruals are primarily the remaining liabilities (other
than workforce or space) associated with the HDD divestiture.
The company employs extensive internal environmental protec-
tion programs that primarily are preventive in nature. The company
also participates in environmental assessments and cleanups at a
number of locations, including operating facilities, previously owned
facilities and Superfund sites. The company’s maximum exposure for
all environmental liabilities cannot be estimated and no amounts
have been recorded for non-ARO environmental liabilities that are
not probable or estimable. The total amounts accrued for non-ARO
environmental liabilities, including amounts classified as current in
the Consolidated Statement of Financial Position, that do not reflect
actual or anticipated insurance recoveries, were $ million and
$ million at December ,  and , respectively. Estimated
environmental costs are not expected to materially affect the con-
solidated financial position or consolidated results of the company’s
operations in future periods. However, estimates of future costs are
subject to change due to protracted cleanup periods and changing
environmental remediation regulations.
Note N.
Stockholders’ Equity Activity
The authorized capital stock of IBM consists of ,,, shares
of common stock with a $. per share par value, of which ,,,
shares were outstanding at December ,  and ,, shares
of preferred stock with a $. per share par value, none of which were
outstanding at December , .
 
The Board of Directors authorizes the company to repurchase IBM
common stock. The company repurchased ,, common shares
at a cost of $, million, ,, common shares at a cost of
$, million and ,, common shares at a cost of $,
million in ,  and , respectively.
Included in the  repurchases highlighted above, in May ,
IBM International Group (IIG), a wholly owned foreign subsidiary
of the company, repurchased . million shares of common stock
for $. billion under accelerated share repurchase (ASR) agree-
ments with three banks.
Pursuant to the ASR agreements, executed on May , , IIG
paid an initial purchase price of $. per share for the repurchase.
The initial purchase price was subject to adjustment based on the
volume weighted-average price of IBM common stock over a settle-
ment period of three months for each of the banks. The adjustment
also reflected certain other amounts including the banks’ carrying
costs, compensation for ordinary dividends declared by the company
during the settlement period and interest benefits for receiving the
$. billion payment in advance of the anticipated purchases by
each bank of shares in the open market during the respective settle-
ment periods. The adjustment amount could be settled in cash,
registered shares or unregistered shares at IIG’s option. Under the
ASR agreements, IIG had a separate settlement with each of the
three banks. The first settlement occurred on September , ,
resulting in a settlement payment to the bank of $. million. The
Liability Liability
as of Other as of
($  ) Dec. 31, 2007 Payments Adjustments* Dec. 31, 2008
Current:
Workforce $130 $(127) $ 93 $ 95
Space 30 (55) 47 23
Other 7 — — 7
TOTAL CURRENT $167 $(182) $ 140 $125
Noncurrent:
Workforce $557 $ — $(104) $453
Space 74 — (50) 23
TOTAL NONCURRENT $631 $ — $(154) $476
* The other adjustments column in the table above principally includes the reclassification of noncurrent to current, foreign currency translation adjustments and interest accretion.