Two reporting changes have been implemented beginning January 1, 2009, and will be included in IBM's reported results starting with the first quarter earnings report in mid-April. IBM is providing relevant historical information to allow comparability to prior period results.
In June 2008, the FASB issued FSP EITF 03-6-1, “Determining Whether Instruments granted in Share-Based Payment Transactions Are Participating Securities,” which became effective in 2009 via retrospective application. Under the FSP, unvested stock-based compensation awards receiving non-forfeitable dividends are participating securities and are now required to be included in basic shares outstanding. The diluted effect is also reduced, but the net impact is increased diluted shares outstanding. (For additional detail please see IBM Annual Report 2008, Note B. Accounting Changes, page 76)
The implementation of the FSP has decreased diluted EPS by $0.04 and $0.03 for the years ended December 31, 2008 and December 31, 2007, respectively. (Schedule 1) As IBM reports earnings for 2009 and beyond, this revised share count and EPS will provide the basis for comparability.
On September 12, 2008, IBM announced changes to be made to the presentation of Global Services Signings and Backlog in the first quarter of 2009. Beginning in the first quarter of 2009, IBM will focus its metrics for signings and backlog using actual currency rates. https://www.ibm.com/investor/ircorner/article/signings.wss.
To provide Investors with historical perspective, IBM is now providing Backlog at actual currency rates for 2008 and 2007. (Schedule 2) [The underlying business dynamics are unchanged from the backlog previously reported at rates that approximate constant currency.]