IBM 2012 Annual Report Download - page 111

110 Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
110
Accumulated Other Comprehensive Income/(Loss) (net of tax)
($ in millions)
Net Unrealized
Gains/(Losses)
on Cash Flow
Hedges
Foreign
Currency
Translation
Adjustments*
Net Change
Retirement-
Related
Benefit
Plans
Net Unrealized
Gains/(Losses)
on Available-
For-Sale
Securities
Accumulated
Other
Comprehensive
Income/(Loss)
December 31, 2009 $(481) $1,836 $(20,297) $ 113 $(18,830)
Other comprehensive income before reclassifications 251 643 (1,684) 51 (739)
Amount reclassified from accumulated other comprehensive income 134 0 692 0 826
Total change for the period 385 643 (992) 51 87
December 31, 2010 (96) 2,478 (21,289) 164 (18,743)
Other comprehensive income before reclassifications (162) (711) (3,581) (7) (4,461)
Amount reclassified from accumulated other comprehensive income 329 0 1,133 (143) 1,319
Total change for the period 167 (711) (2,448) (150) (3,142)
December 31, 2011 71 1,767 (23,737) 13 (21,885)
Other comprehensive income before reclassifications 5 (34) (5,164) 16 (5,177)
Amount reclassified from accumulated other comprehensive income (167) 0 1,495 (25) 1,303
Total change for the period (161) (34) (3,669) (9) (3,874)
December 31, 2012 $ (90) $1,733 $(27,406) $ 4 $(25,759)
* Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax.
Note M.
Contingencies and Commitments
Contingencies
As a company with a substantial employee population and with
clients in more than 170 countries, IBM is involved, either as plaintiff
or defendant, in a variety of ongoing claims, demands, suits, inves-
tigations, tax matters and proceedings that arise from time to time
in the ordinary course of its business. The company is a leader in
the information technology industry and, as such, has been and will
continue to be subject to claims challenging its IP rights and associ-
ated products and offerings, including claims of copyright and patent
infringement and violations of trade secrets and other IP rights. In
addition, the company enforces its own IP against infringement,
through license negotiations, lawsuits or otherwise. Also, as is typical
for companies of IBM’s scope and scale, the company is party to
actions and proceedings in various jurisdictions involving a wide
range of labor and employment issues (including matters related to
contested employment decisions, country-specific labor and
employment laws, and the company’s pension, retirement and other
benefit plans), as well as actions with respect to contracts, product
liability, securities, foreign operations, competition law and environ-
mental matters. These actions may be commenced by a number of
different parties, including competitors, clients, current or former
employees, government and regulatory agencies, stockholders and
representatives of the locations in which the company does busi-
ness. Some of the actions to which the company is party may involve
particularly complex technical issues, and some actions may raise
novel questions under the laws of the various jurisdictions in which
these matters arise.
The company records a provision with respect to a claim, suit,
investigation or proceeding when it is probable that a liability has
been incurred and the amount of the loss can be reasonably esti-
mated. Any recorded liabilities, including any changes to such
liabilities for the years ended December 31, 2012, 2011 and 2010
were not material to the Consolidated Financial Statements.
In accordance with the relevant accounting guidance, the com-
pany provides disclosures of matters for which the likelihood of
material loss is at least reasonably possible. In addition, the com-
pany also discloses matters based on its consideration of other
matters and qualitative factors, including the experience of other
companies in the industry, and investor, customer and employee
relations considerations.
With respect to certain of the claims, suits, investigations and
proceedings discussed herein, the company believes at this time
that the likelihood of any material loss is remote, given, for example,
the procedural status, court rulings, and/or the strength of the com-
pany’s defenses in those matters. With respect to the remaining
claims, suits, investigations and proceedings discussed in this note,
the company is unable to provide estimates of reasonably possible
losses or range of losses, including losses in excess of amounts
accrued, if any, for the following reasons. Claims, suits, investigations
and proceedings are inherently uncertain, and it is not possible to
predict the ultimate outcome of these matters. It is the company’s
experience that damage amounts claimed in litigation against it are
unreliable and unrelated to possible outcomes, and as such are not
meaningful indicators of the company’s potential liability. Further, the
company is unable to provide such an estimate due to a number of
other factors with respect to these claims, suits, investigations and
proceedings, including considerations of the procedural status of