IBM 2008 Annual Report Download - page 98

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Notes to Consolidated Financial Statements
INTERNATIONAL BUSINESS MACHINES CORPORATION and Subsidiary Companies
Management Discussion ............................................................................................. 18
Consolidated Statements ............................................................................................ 60
Notes ............................................................................................................................... 66
A – E ........................................................................................................................66
F – J ........................................................................................................................86
K– Q .......................................................................................................................88
K. BORROWINGS ................................................................................................. 88
L. DERIVATIVES AND HEDGING TRANSACTIONS ................................................90
M. OTHER LIABILITIES ..........................................................................................94
N. STOCKHOLDERS’ EQUITY ACTIVITY ..............................................................95
O. CONTINGENCIES AND COMMITMENTS .........................................................97
P. TAXES ...............................................................................................................99
Q. RESEARCH, DEVELOPMENT AND ENGINEERING ......................................... 101
R –W ..................................................................................................................... 10 2
second settlement occurred on December , , resulting in a set-
tlement payment to the bank of $. million. The third settlement
occurred on March , , resulting in a settlement payment to the
company of $. million. The adjusted average price paid per share
during the ASR was $., resulting in a total purchase price of
$, million. The $ million difference was settled in cash. The
settlement amounts were paid in cash at the election of IIG in accor-
dance with the provisions of the ASR agreements and were recorded
as adjustments to stockholders’ equity in the Consolidated Statement
of Financial Position on the settlement dates.
The company issued ,, treasury shares in , ,,
treasury shares in  and ,, treasury shares in , as a
result of exercises of stock options by employees of certain recently
acquired businesses and by non-U.S. employees. At December , ,
$, million of Board authorized common stock repurchases was
still available. The company plans to purchase shares on the open
market or in private 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, ,, common
shares at a cost of $ million, ,, common shares at a cost of
$ million and , common shares at a cost of $ million in
,  and , respectively, were remitted by employees to the
company in order to satisfy minimum statutory tax withholding
requirements. These amounts are included in the treasury stock bal-
ance in the Consolidated Statement of Financial Position and the
Consolidated Statement of Stockholders’ Equity.
   ()     (  )
Net Unrealized Accumulated
Gains/(Losses) Foreign Currency Net Change Net Unrealized Gains/(Losses)
on Cash Flow Translation Retirement-related Gains/(Losses) on Not Affecting
($  ) Hedge Derivatives Adjustments* Benefit Plans Marketable Securities Retained Earnings
December 31, 2006 $(104) $ 2,929 $(11,846) $ 119 $ (8,901)
Change for period (123) 726 4,678 206 5,487
December 31, 2007 (227) 3,655 (7,168) 325 (3,414)
Change for period 301 (3,552) (14,856) (324) (18,431)
DECEMBER 31, 2008 $ 74 $ 103 $(22,025) $ 2 $(21,845)
* Foreign currency translation adjustments are presented gross with associated hedges shown net of tax.
    ()/    (  )
($  )
For the period ended December : 2008 2007*
Net unrealized (losses)/gains arising during the period $(224) $255
Less: Net gains included in net income for the period** 100 49
NET CHANGE IN UNREALIZED (LOSSES)/GAINS ON MARKETABLE SECURITIES $(324) $206
* Reclassified to conform with 2008 presentation.
** Includes writedowns of $3.0 million and $0.5 million in 2008 and 2007, respectively.