IBM 2012 Annual Report Download - page 108

Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
107
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 $171 million and
$187 million at December 31, 2012 and 2011, respectively.
Note L.
Equity Activity
The authorized capital stock of IBM consists of 4,687,500,000
shares of common stock with a $.20 per share par value, of which
1,117,367,676 shares were outstanding at December 31, 2012 and
150,000,000 shares of preferred stock with a $.01 per share par
value, none of which were outstanding at December 31, 2012.
Stock Repurchases
The Board of Directors authorizes the company to repurchase IBM
common stock. The company repurchased 61,246,371 common
shares at a cost of $12,008 million, 88,683,716 common shares at
a cost of $15,034 million and 117,721,650 common shares at a cost
of $15,419 million in 2012, 2011 and 2010, respectively. These
amounts reflect transactions executed through December 31 of
each year. Actual cash disbursements for repurchased shares may
differ due to varying settlement dates for these transactions. At
December 31, 2012, $8,652 million of Board common stock repur-
chase authorization 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.
Other Stock Transactions
The company issued the following shares of common stock as part
of its stock-based compensation plans and employees stock pur-
chase plan: 15,091,320 shares in 2012, 20,669,785 shares in 2011
and 34,783,386 shares in 2010.The company issued 2,746,169
treasury shares in 2012, 4,920,198 treasury shares in 2011 and
7,929,318 treasury shares in 2010, as a result of exercises of stock
options by employees of certain acquired businesses and by non-
U.S. employees. Also, as part of the company’s stock-based
compensation plans, 2,406,007 common shares at a cost of $468
million, 1,717,246 common shares at a cost of $289 million and
2,334,932 common shares at a cost of $297 million in 2012, 2011
and 2010, respectively, were remitted by employees to the company
in order to satisfy minimum statutory tax withholding requirements.
These amounts are included in the treasury stock balance in the
Consolidated Statement of Financial Position and the Consolidated
Statement of Changes in Equity.
Reclassifications and Taxes Related to Items of Other Comprehensive Income
($ in millions)
For the year ended December 31, 2012:
Before Tax
Amount
Tax (Expense)/
Benefit
Net of Tax
Amount
Other comprehensive income/(loss)
Foreign currency translation adjustments $ (44) $ 10 $ (34)
Net changes related to available-for-sale securities
Unrealized gains/(losses) arising during the period $ 8 $ (4) $ 4
Reclassification of (gains)/losses to other (income) and expense (42)17 (25)
Subsequent changes in previously impaired securities arising during the period 20 (8) 12
Total net changes related to available-for-sale securities $ (14) $ 5 $ (9)
Unrealized gains/(losses) on cash flow hedges
Unrealized gains/(losses) arising during the period $ 32 $ (27) $ 5
Reclassification of (gains)/losses to:
Cost of sales (7) (6) (13)
SG&A expense (16) 4 (12)
Other (income) and expense (237) 91 (146)
Interest expense 6 (3) 3
Total unrealized gains/(losses) on cash flow hedges $ (220) $ 59 $ (161)
Retirement-related benefit plans(1)
Net (losses)/gains arising during the period $(7,489) $2,327 $(5,162)
Curtailments and settlements (2) 0 (2)
Amortization of prior service (credits)/cost (148) 59 (89)
Amortization of net gains/(losses) 2,457 (874) 1,583
Total retirement-related benefit plans $(5,182) $1,513 $(3,669)
Other comprehensive income/(loss) $(5,460) $1,587 $(3,874)
(1) These AOCI components are included in the computation of net periodic pension cost. (See note S, “Retirement-Related Benefits,” on pages 120 to 134 for additional information.)