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Notes to consolidated financial statements (audited)
International Business Machines Corporation and Subsidiary Companies
T. Rental expense and lease commitments (audited)
Rental expense from continuing operations, including amounts charged to inventories and fixed assets, and excluding amounts previously reserved, was $1,345 million in 2005, $1,442 million in 2004 and $1,419 million in 2003. Rental expense in agreements with rent holidays and scheduled rent increases is recorded on a straight-line basis over the lease term. Contingent rentals are included in the determination of rental expense as accruable. The table below depicts gross minimum rental commitments from continuing operations under noncancelable leases, amounts related to vacant space associated with infrastructure reductions and restructuring actions taken through 1993, and in 1999, 2002 and 2005 (previously reserved), sublease income commitments and capital lease commitments. These amounts reflect activities primarily related to office space, as well as manufacturing equipment.
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| (Dollars in millions) |
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2006 |
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2007 |
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2008 |
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2009 |
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2010 |
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Beyond 2010 |
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| Operating lease commitments: |
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| Gross minimum rental commitments (including Vacant space below) |
$ |
1,331 |
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$ |
1,116 |
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$ |
950 |
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$ |
781 |
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$ |
588 |
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$ |
1,014 |
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| Vacant space |
$ |
79 |
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$ |
86 |
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$ |
43 |
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$ |
20 |
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$ |
14 |
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$ |
22 |
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| Sublease income commitments |
$ |
(94 |
) |
$ |
(65 |
) |
$ |
(50 |
) |
$ |
(35 |
) |
$ |
(27 |
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$ |
(28 |
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| Capital lease commitments |
$ |
104 |
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$ |
81 |
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$ |
74 |
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$ |
71 |
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$ |
70 |
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$ |
52 |
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