Equity Activity

12 Months Ended

Dec. 31, 2014

Equity Activity

Equity Activity

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 990,523,759 shares were outstanding at December 31, 2014 and 150,000,000 shares of preferred stock with a $.01 per share par value, none of which were outstanding at December 31, 2014.

Stock Repurchases

The Board of Directors authorizes the company to repurchase IBM common stock. The company repurchased 71,504,867 common shares at a cost of $13,395 million, 73,121,942 common shares at a cost of $13,993 million and 61,246,371 common shares at a cost of $12,008 million in 2014, 2013 and 2012, 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, 2014, $6,264 million of Board common stock repurchase 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.

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: 7,687,026 shares in 2014, 9,961,389 shares in 2013, and 15,091,320 shares in 2012. The company issued 1,264,232 treasury shares in 2014, 1,849,883 treasury shares in 2013 and 2,746,169 treasury shares in 2012, 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, 1,313,569 common shares at a cost of $236 million, 1,666,069 common shares at a cost of $336 million, and 2,406,007 common shares at a cost of $468 million in 2014, 2013 and 2012, 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)
				Before Tax		Tax (Expense)/		Net of Tax
For the year ended December 31, 2014:				Amount		Benefit		Amount
Other comprehensive income/(loss)
	Foreign currency translation adjustments			$	(1,636)	$	(438)	$	(2,074)
	Net changes related to available-for-sale securities
		Unrealized gains/(losses) arising during the period		$	(29)	$	11	$	(18)
		Reclassification of (gains)/losses to other (income) and expense			5		(2)		3
		Subsequent changes in previously impaired securities arising during
			the period		0		0		0
	Total net changes related to available-for-sale securities			$	(24)	$	9	$	(15)
	Unrealized gains/(losses) on cash flow hedges
		Unrealized gains/(losses) arising during the period		$	958	$	(341)	$	618
		Reclassification of (gains)/losses to:
			Cost of sales		15		(7)		9
			SG&A expense		(15)		6		(9)
			Other (income) and expense		(98)		38		(60)
			Interest expense		1		0		0
	Total unrealized gains/(losses) on cash flow hedges			$	861	$	(304)	$	557
	Retirement-related benefit plans(1)
		Prior service costs/(credits)		$	1	$	0	$	1
		Net (losses)/gains arising during the period			(9,799)		3,433		(6,366)
		Curtailments and settlements			24		(7)		17
		Amortization of prior service (credits)/costs			(114)		41		(73)
		Amortization of net (gains)/losses			2,531		(852)		1,678
	Total retirement-related benefit plans			$	(7,357)	$	2,615	$	(4,742)
Other comprehensive income/(loss)				$	(8,156)	$	1,883	$	(6,274)
(1)		These AOCI components are included in the computation of net periodic pension cost. (See note S, "Retirement-Related Benefits," on
		pages 131 to 145 for additional information.)

($ in millions)
				Before Tax		Tax (Expense)/		Net of Tax
For the year ended December 31, 2013:				Amount		Benefit		Amount
Other comprehensive income/(loss)
	Foreign currency translation adjustments			$	(1,335)	$	(66)	$	(1,401)
	Net changes related to available-for-sale securities
		Unrealized gains/(losses) arising during the period		$	(4)	$	2	$	(3)
		Reclassification of (gains)/losses to other (income) and expense			(8)		2		(5)
		Subsequent changes in previously impaired securities arising during
			the period		4		(1)		3
	Total net changes related to available-for-sale securities			$	(8)	$	3	$	(5)
	Unrealized gains/(losses) on cash flow hedges
		Unrealized gains/(losses) arising during the period		$	43	$	(15)	$	28
		Reclassification of (gains)/losses to:
			Cost of sales		34		(14)		21
			SG&A expense		(39)		14		(25)
			Other (income) and expense		(162)		62		(99)
			Interest expense		0		0		0
	Total unrealized gains/(losses) on cash flow hedges			$	(123)	$	47	$	(76)
	Retirement-related benefit plans(1)
		Prior service costs/(credits)			16	$	0	$	16
		Net (losses)/gains arising during the period		$	5,369		(1,974)		3,395
		Curtailments and settlements			(3)		1		(2)
		Amortization of prior service (credits)/costs			(114)		40		(75)
		Amortization of net (gains)/losses			3,499		(1,195)		2,304
	Total retirement-related benefit plans			$	8,767	$	(3,128)	$	5,639
Other comprehensive income/(loss)				$	7,301	$	(3,144)	$	4,157
(1)		These AOCI components are included in the computation of net periodic pension cost. (See note S, "Retirement-Related Benefits," on
		pages 131 to 145 for additional information.)

($ in millions)
				Before Tax		Tax (Expense)/		Net of Tax
For the year ended December 31, 2012:				Amount		Benefit		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)
		Prior service costs/(credits)		$	—	$	—	$	—
		Net (losses)/gains arising during the period			(7,489)	$	2,327	$	(5,162)
		Curtailments and settlements			(2)		0		(2)
		Amortization of prior service (credits)/costs			(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 131 to 145 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, 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)
Other comprehensive income before
	reclassifications		28		(1,401)		3,409		0		2,036
Amount reclassified from accumulated
	other comprehensive income		(103)		0		2,229		(5)		2,121
Total change for the period			(76)		(1,401)		5,639		(5)		4,157
December 31, 2013			(165)		332		(21,767)		(1)		(21,602)
Other comprehensive income before
	reclassifications		618		(2,074)		(6,348)		(18)		(7,822)
Amount reclassified from accumulated
	other comprehensive income		(60)		0		1,605		3		1,548
Total change for the period			557		(2,074)		(4,742)		(15)		(6,274)
December 31, 2014		$	392	$	(1,742)	$	(26,509)	$	(15)	$	(27,875)
* Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax.