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Equity Activity
12 Months Ended
Dec. 31, 2020
Equity Activity  
Equity Activity

NOTE S. 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 892,653,424 shares were outstanding at December 31, 2020, and 150,000,000 shares of preferred stock with a $.01 per share par value, none of which were outstanding at December 31, 2020.

Stock Repurchases

The Board of Directors authorizes the company to repurchase IBM common stock. The company suspended its share repurchase program effective with the close of the Red Hat acquisition on July 9, 2019 in order to focus on reducing debt related to the acquisition. The company repurchased 9,979,516 common shares at a cost of $1,331 million, and 32,949,233 common shares at a cost of $4,447 million in 2019 and 2018, 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, 2020, $2,008 million of Board common stock repurchase authorization was available.

Other Stock Transactions

The company issued the following shares of common stock as part of its stock-based compensation plans and employees stock purchase plan: 4,972,028 shares in 2020, 4,569,917 shares in 2019, and 3,998,245 shares in 2018. The company issued 2,934,907 treasury shares in 2020, 2,041,347 treasury shares in 2019 and 424,589 treasury shares in 2018, as a result of restricted stock unit releases and 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, 2,363,966 common shares at a cost of $302 million, 2,000,704 common shares at a cost of $272 million, and 1,173,416 common shares at a cost of $171 million in 2020, 2019 and 2018, 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 Balance Sheet and the Consolidated Statement of Equity.

Reclassifications and Taxes Related to Items of Other Comprehensive Income

($ in millions)

Before Tax

Tax (Expense)/

Net of Tax

For the year ended December 31, 2020:

    

Amount

    

Benefit

    

Amount

Other comprehensive income/(loss)

 

  

 

  

 

  

Foreign currency translation adjustments

$

(1,500)

$

535

$

(965)

Net changes related to available-for-sale securities

  

 

  

 

  

Unrealized gains/(losses) arising during the period

$

(1)

$

0

$

0

Reclassification of (gains)/losses to other (income) and expense

 

 

Total net changes related to available-for-sale securities

$

(1)

$

0

$

0

Unrealized gains/(losses) on cash flow hedges

  

 

  

 

  

Unrealized gains/(losses) arising during the period

$

(349)

$

89

$

(261)

Reclassification of (gains)/losses to:

  

 

  

 

  

Cost of services

(23)

 

6

 

(18)

Cost of sales

(2)

 

1

 

(2)

Cost of financing

27

 

(7)

 

20

SG&A expense

0

 

0

 

0

Other (income) and expense

(101)

 

25

 

(75)

Interest expense

78

 

(20)

 

58

Total unrealized gains/(losses) on cash flow hedges

$

(370)

$

94

$

(277)

Retirement-related benefit plans(1)

  

 

  

 

  

Prior service costs/(credits)

$

(37)

$

7

$

(29)

Net (losses)/gains arising during the period

(1,678)

295

(1,383)

Curtailments and settlements

52

 

(14)

 

38

Amortization of prior service (credits)/costs

13

 

(1)

 

12

Amortization of net (gains)/losses

2,314

 

(451)

 

1,863

Total retirement-related benefit plans

$

664

$

(163)

$

501

Other comprehensive income/(loss)

$

(1,206)

$

466

$

(740)

(1)These AOCI components are included in the computation of net periodic pension cost. Refer to note V, “Retirement-Related Benefits,” for additional information.

($ in millions)

Before Tax

Tax (Expense)/

Net of Tax

For the year ended December 31, 2019:

    

Amount

    

Benefit

    

Amount

Other comprehensive income/(loss)

 

  

 

  

 

  

Foreign currency translation adjustments

$

(39)

$

29

$

(10)

Net changes related to available-for-sale securities

Unrealized gains/(losses) arising during the period

$

1

$

0

$

1

Reclassification of (gains)/losses to other (income) and expense

Total net changes related to available-for-sale securities

$

1

$

0

$

1

Unrealized gains/(losses) on cash flow hedges

Unrealized gains/(losses) arising during the period

$

(689)

$

167

$

(522)

Reclassification of (gains)/losses to:

Cost of services

(68)

17

(50)

Cost of sales

(51)

15

(37)

Cost of financing

89

(22)

67

SG&A expense

(53)

14

(39)

Other (income) and expense

(39)

10

(29)

Interest expense

197

(50)

148

Total unrealized gains/(losses) on cash flow hedges

$

(614)

$

151

$

(463)

Retirement-related benefit plans(1)

Prior service costs/(credits)

$

(73)

$

10

$

(63)

Net (losses)/gains arising during the period

(120)

52

(68)

Curtailments and settlements

41

(12)

29

Amortization of prior service (credits)/costs

(9)

5

(4)

Amortization of net (gains)/losses

1,843

(371)

1,471

Total retirement-related benefit plans

$

1,681

$

(316)

$

1,365

Other comprehensive income/(loss)

$

1,029

$

(136)

$

893

(1)These AOCI components are included in the computation of net periodic pension cost. Refer to note V, “Retirement-Related Benefits,” for additional information.

($ in millions)

Before Tax

Tax (Expense)/

Net of Tax

For the year ended December 31, 2018:

    

Amount

    

Benefit

    

Amount

Other comprehensive income/(loss)

 

  

 

  

 

  

Foreign currency translation adjustments

$

(730)

$

(172)

$

(902)

Net changes related to available-for-sale securities

Unrealized gains/(losses) arising during the period

$

(2)

$

1

$

(1)

Reclassification of (gains)/losses to other (income) and expense

Total net changes related to available-for-sale securities

$

(2)

$

1

$

(1)

Unrealized gains/(losses) on cash flow hedges

Unrealized gains/(losses) arising during the period

$

(136)

$

43

$

(93)

Reclassification of (gains)/losses to:

Cost of services

(30)

8

(22)

Cost of sales

(8)

3

(5)

Cost of financing

75

(19)

56

SG&A expense

0

0

0

Other (income) and expense

341

(86)

255

Interest expense

71

(18)

53

Total unrealized gains/(losses) on cash flow hedges

$

313

$

(69)

$

244

Retirement-related benefit plans(1)

Prior service costs/(credits)

$

(182)

$

31

$

(151)

Net (losses)/gains arising during the period

(2,517)

576

(1,941)

Curtailments and settlements

11

(2)

9

Amortization of prior service (credits)/costs

(73)

5

(68)

Amortization of net (gains)/losses

2,966

(632)

2,334

Total retirement-related benefit plans

$

204

$

(21)

$

184

Other comprehensive income/(loss)

$

(215)

$

(262)

$

(476)

(1)These AOCI components are included in the computation of net periodic pension cost. Refer to note V, “Retirement-Related Benefits,” for additional information.

Accumulated Other Comprehensive Income/(Loss) (net of tax)

($ in millions)

Net Change

Net Unrealized

Net Unrealized

Foreign

Retirement-

Gains/(Losses)

Accumulated

Gains/(Losses)

Currency

Related

on Available-

Other

on Cash Flow

Translation

Benefit

For-Sale

Comprehensive

Hedges

    

Adjustments

*  

Plans

    

Securities

    

Income/(Loss)

December 31, 2017

$

35

$

(2,834)

$

(23,796)

$

3

$

(26,592)

Cumulative effect of a change in accounting principle**

5

46

(2,471)

(2)

(2,422)

Other comprehensive income before reclassifications

(93)

(902)

(2,092)

(1)

(3,089)

Amount reclassified from accumulated other comprehensive income

337

2,276

2,612

Total change for the period

244

(902)

184

(1)

(476)

December 31, 2018

284

(3,690)

(26,083)

0

(29,490)

Other comprehensive income before reclassifications

(522)

(10)

(131)

1

(663)

Amount reclassified from accumulated other comprehensive income

59

1,496

1,556

Total change for the period

(463)

(10)

1,365

1

893

December 31, 2019

(179)

(3,700)

(24,718)

0

(28,597)

Other comprehensive income before reclassifications

(261)

(965)

(1,412)

0

(2,638)

Amount reclassified from accumulated other comprehensive income

(16)

1,914

1,898

Total change for the period

$

(277)

$

(965)

$

501

$

0

$

(740)

December 31, 2020

$

(456)

$

(4,665)

$

(24,216)

$

0

$

(29,337)

*

Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax.

**

Reflects the adoption of FASB guidance. Refer to note B, “Accounting Changes”.