IBM 2015 Annual Report Download - page 116

Notes to Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
114
NOTEK.
OTHER LIABILITIES
($ inmillions)
At December 31: 2015 2014
Income tax reserves $3,150 $3,146
Excess 401(k) Plus Plan 1,445 1,658
Disability benefi ts 590 675
Derivative liabilities 22 31
Special restructuring actions 362 431
Workforce reductions 407 469
Deferred taxes 253 129**
Other taxes payable 89 17
Environmental accruals 270 240
Warranty accruals 83 91
Asset retirement obligations 134 136
Acquisition related 200 50
Divestiture related* 575 1,124
Other 519 536
Total $8,099 $8,733 **
* Primarily related to the divestiture of the Microelectronics business.
** Reclassified to reflect adoption of the FASB guidance on deferred taxes in
consolidated financial statements. Refer to noteB, “Accounting Changes,” for
additional information.
In response to changing business needs, the company periodi-
cally takes workforce reduction actions to improve productivity,
cost competitiveness and to rebalance skills. The noncurrent
contractually obligated future payments associated with these
activities are reflected in the workforce reductions caption in the
previous table.
In addition, the company executed certain special restructur-
ing-related actions prior to 2006. The previous table provides the
noncurrent liabilities associated with these special actions. Current
liabilities are included in other accrued expenses and liabilities in
the Consolidated Statement of Financial Position and were imma-
terial at December31, 2015.
The noncurrent liabilities are workforce accruals related to ter-
minated 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 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 recov-
eries, were $283million and $254million at December31, 2015
and 2014, 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 remedi-
ation regulations.
As of December31, 2015, the company was unable to esti-
mate 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 settle-
ment 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 State-
ment of Financial Position were $166million and $180million at
December31, 2015 and 2014, 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
965,728,725 shares were outstanding at December31, 2015 and
150,000,000 shares of preferred stock with a $.01 per share par
value, none of which were outstanding at December31, 2015.
Stock Repurchases
The Board of Directors authorizes the company to repurchase IBM
common stock. The company repurchased 30,338,647 common
shares at a cost of $4,701 million, 71,504,867 common shares at a
cost of $13,395 million and 73,121,942 common shares at a cost
of $13,993 million in 2015, 2014 and 2013, 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, 2015, $5,563 million of Board common stock repur-
chase authorization was available. The company plans to purchase
shares on the open market or in private transactions from time to
time, depending on market conditions.