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”. |
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