IBM 2011 Annual Report Download - page 111

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Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies 109
The table below provides a roll forward of the current and noncurrent liabilities associated with these special actions. The current liabilities
presented in the table are included in other accrued expenses and liabilities in the Consolidated Statement of Financial Position.
(in millions)
Liability
as of
January 1,
2011 Payments
Other
Adjustments*
Liability
as of
December 31,
2011
Current
Workforce $ 45 $(46) $ 34 $ 33
Space 8 (8) 4 4
Total current $ 53 $(53) $ 38 $ 38
Noncurrent
Workforce $395 $ 0 $(51) $344
Space 4 0 (1) 3
Total noncurrent $399 $ 0 $(52) $347
* The other adjustments column in the table above principally includes the reclassification of noncurrent to current, foreign currency translation adjustments and interest accretion.
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 passes away. 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 2014.
The company employs extensive internal environmental protection
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 $262 million at
December 31, 2011 and 2010, respectively. Estimated environmental
costs are not expected to materially affect the consolidated 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.
As of December 31, 2011, the company was unable to estimate
the range of settlement dates and the related probabilities for certain
asbestos remediation AROs. These conditional AROs are primarily
related to the encapsulated structural fireproofing that is not subject
to abatement unless the buildings are demolished and non-
encapsulated asbestos that the company would remediate only if it
performed major renovations of certain existing buildings. Because
these conditional obligations have indeterminate settlement dates,
the company could not develop a reasonable estimate of their fair
values. The company will continue to assess its ability to estimate
fair values at each future reporting date. The related liability will be
recognized once sufficient additional information becomes available.
The total amounts accrued for ARO liabilities, including amounts
classified as current in the Consolidated Statement of Financial
Position were $187 million and $176 million at December 31, 2011
and 2010, respectively.