| Equity Activity |
NOTE S. EQUITY ACTIVITY The authorized capital stock of IBM consists of (i) 4,687,500,000 shares of common stock with a $.20 per share par value, of which 906,091,977 shares were outstanding at December 31, 2022, and (ii) 150,000,000 shares of preferred stock with a $.01 per share par value, whereby 75,000,000 shares have been designated as Series A Preferred Stock, of which 57,916,244 shares of Series A Preferred Stock were issued to a wholly owned subsidiary of the company but were not outstanding at December 31, 2022. The company does not intend to issue or transfer any shares of Series A Preferred Stock to any third parties. Stock Repurchases The Board of Directors authorizes the company to repurchase IBM common stock. The company suspended its share repurchase program at the time of the Red Hat acquisition in 2019. At December 31, 2022, $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: 8,539,072 shares in 2022, 5,608,845 shares in 2021, and 4,972,028 shares in 2020. The company issued 2,512,300 treasury shares in 2022, 2,093,243 treasury shares in 2021, and 2,934,907 treasury shares in 2020, 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, 3,027,994 common shares at a cost of $407 million, 2,286,912 common shares at a cost of $319 million, and 2,363,966 common shares at a cost of $302 million in 2022, 2021 and 2020, respectively, were remitted by employees to the company in order to satisfy minimum statutory tax withholding requirements. These amounts are included in the treasury stock balance in the Consolidated Balance Sheet and the Consolidated Statement of Equity. Reclassifications and Taxes Related to Items of Other Comprehensive Income | | | | | | | | | | ($ in millions) | | | | | | | | | | | | Before Tax | | Tax (Expense)/ | | Net of Tax | For the year ended December 31, 2022: | | Amount | | Benefit | | Amount | Other comprehensive income/(loss) | | | | | | | | | | Foreign currency translation adjustments | | $ | 176 | | $ | (406) | | $ | (229) | 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 | | $ | 241 | | $ | (64) | | $ | 178 | Reclassification of (gains)/losses to: | | | | | | | | | | Cost of services | | | (24) | | | 6 | | | (18) | Cost of sales | | | (99) | | | 28 | | | (70) | Cost of financing | | | 24 | | | (6) | | | 18 | SG&A expense | | | (38) | | | 11 | | | (28) | Other (income) and expense | | | (349) | | | 88 | | | (261) | Interest expense | | | 86 | | | (22) | | | 64 | Total unrealized gains/(losses) on cash flow hedges | | $ | (158) | | $ | 41 | | $ | (117) | Retirement-related benefit plans* | | | | | | | | | | Prior service costs/(credits) | | $ | 463 | | $ | (99) | | $ | 364 | Net (losses)/gains arising during the period | | | 878 | | | (183) | | | 695 | Curtailments and settlements | | | 5,970 | | | (1,490) | | | 4,480 | Amortization of prior service (credits)/costs | | | 12 | | | (3) | | | 9 | Amortization of net (gains)/losses | | | 1,596 | | | (304) | | | 1,293 | Total retirement-related benefit plans | | $ | 8,919 | | $ | (2,078) | | $ | 6,841 | Other comprehensive income/(loss) | | $ | 8,936 | | $ | (2,442) | | $ | 6,494 | | | | | | | | | | |
* | These AOCI components are included in the computation of net periodic pension cost and include the impact of a one-time, non-cash pension settlement charge of $5.9 billion ($4.4 billion net of tax). Refer to note V, “Retirement-Related Benefits,” for additional information. |
| | | | | | | | | | ($ in millions) | | | | | | | | | | | | Before Tax | | Tax (Expense)/ | | Net of Tax | For the year ended December 31, 2021: | | Amount | | Benefit | | Amount | Other comprehensive income/(loss) | | | | | | | | | | Foreign currency translation adjustments | | $ | 987 | | $ | (414) | | $ | 573 | Net changes related to available-for-sale securities | | | | | | | | | | Unrealized gains/(losses) arising during the period | | $ | 0 | | $ | 0 | | $ | 0 | Reclassification of (gains)/losses to other (income) and expense | | | — | | | — | | | — | Total net changes related to available-for-sale securities | | $ | 0 | | $ | 0 | | $ | 0 | Unrealized gains/(losses) on cash flow hedges | | | | | | | | | | Unrealized gains/(losses) arising during the period | | $ | 344 | | $ | (89) | | $ | 256 | Reclassification of (gains)/losses to: | | | | | | | | | | Cost of services | | | (43) | | | 11 | | | (32) | Cost of sales | | | 16 | | | (3) | | | 13 | Cost of financing | | | 22 | | | (6) | | | 17 | SG&A expense | | | 24 | | | (6) | | | 19 | Other (income) and expense | | | 157 | | | (40) | | | 118 | Interest expense | | | 65 | | | (16) | | | 49 | Total unrealized gains/(losses) on cash flow hedges | | $ | 587 | | $ | (149) | | $ | 438 | Retirement-related benefit plans* | | | | | | | | | | Prior service costs/(credits) | | $ | (51) | | $ | (1) | | $ | (52) | Net (losses)/gains arising during the period | | | 2,433 | | | (601) | | | 1,832 | Curtailments and settlements | | | 94 | | | (11) | | | 83 | Amortization of prior service (credits)/costs | | | 9 | | | 0 | | | 9 | Amortization of net (gains)/losses | | | 2,484 | | | (528) | | | 1,956 | Total retirement-related benefit plans | | $ | 4,969 | | $ | (1,140) | | $ | 3,828 | Other comprehensive income/(loss) | | $ | 6,542 | | $ | (1,703) | | $ | 4,839 | | | | | | | | | | |
* | 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, 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* | | | | | | | | | | 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) | | | | | | | | | | |
* | 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, 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) | Other comprehensive income before reclassifications | | 256 | | | 573 | | | 1,780 | | | 0 | | | 2,608 | Amount reclassified from accumulated other comprehensive income | | 183 | | | — | | | 2,049 | | | — | | | 2,231 | Separation of Kyndryl | | — | | | 730 | | | 534 | | | — | | | 1,264 | Total change for the period | | 438 | | | 1,303 | | | 4,362 | | | 0 | | | 6,103 | December 31, 2021 | | (18) | | | (3,362) | | | (19,854) | | | (1) | | | (23,234) | Other comprehensive income before reclassifications | | 178 | | | (229) | | | 1,059 | | | (1) | | | 1,007 | Amount reclassified from accumulated other comprehensive income | | (295) | | | — | | | 5,782 | ** | | — | | | 5,487 | Total change for the period | | (117) | | | (229) | | | 6,841 | | | (1) | | | 6,494 | December 31, 2022 | $ | (135) | | $ | (3,591) | | $ | (13,013) | | $ | (1) | | $ | (16,740) | | | | | | | | | | | | | | | |
* | Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax. |
** Includes the impact of a one-time, non-cash pension settlement charge of $5.9 billion ($4.4 billion net of tax). Refer to note V, “Retirement-Related Benefits,” for additional information.
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