International Business Machines

Let’s Create
2024 Annual Report


IBM 2024 Annual Report
1
Arvind Krishna
Chairman, President and Chief Executive Officer
Dear IBM Investor:
In 2024, IBM made significant 
progress in becoming a higher growth, 
higher margin business. We made this 
progress by combining technology 
innovation and consulting expertise 
to drive growth, improve productivity, 
and enhance operational efficiency -- 
for our clients, and our own company. 
Our strategy continues to build upon the two technological 
foundations of AI and hybrid cloud, which clients need to 
unlock the full value of their data. We have made a series of 
investments to accelerate the delivery of that value to our 
clients, from transforming the way we work to reorienting our 
portfolio around powerful, AI-based solutions. 
As this report demonstrates, these investments are paying 
off, delivering meaningful returns for our shareholders, 
clients, and partners. Today, IBM is a software-led, fully 
integrated platform company, built to grow sustainably. This 
is the ROI of IBM.
2024 Performance
For the year, IBM generated $62.8 billion in revenue, up 3% 
at constant currency, and $12.7 billion in free cash flow — an 
increase of $1.5 billion year-over-year. Our generative AI 
book of business now stands at more than $5 billion since 
inception. This revenue growth and cash generation enabled 
us to make significant investments in the business and deliver 
value to our shareholders. In 2024, we allocated more than $7 
billion to research and development, closed 11 acquisitions 
to enhance our capabilities, and returned more than $6 billion 

Infrastructure
Consulting
Software
2
to shareholders through dividends. IBM expanded operating 
gross profit margin by 130 basis points in 2024, driven by a 
focus on high-value offerings and productivity initiatives. 
Software revenue grew 9% at constant currency, reflecting 
strong demand for our advanced capabilities in hybrid cloud, 
data and AI, automation, transaction processing, and security. 
Red Hat performed well as clients embraced its open hybrid 
cloud platform. 
Consulting revenue increased 1% at constant currency, 
demonstrating our clients’ continued need for expertise in AI 
deployment, digital transformation, and cloud modernization, 
despite a dynamic market environment.
Infrastructure revenue declined 3% at constant currency, in 
line with product cycle expectations. IBM z16 is now the most 
successful mainframe program in our history, highlighting its 
enduring value to clients.
Technology innovation and consulting expertise
IBM’s mission to help businesses leverage technology 
to scale and grow profitably is more critical than ever. 
Technology is now the key to sustainable growth and business 
transformation.
At the core of these transformations is artificial intelligence. 
Our clients have moved beyond experimentation and are now 
looking to scale AI in their businesses and generate return 
from their investments. To achieve that return, they need 
access to effective, affordable, and efficient enterprise AI. 
IBM has established an early leadership position in this 
regard, building a portfolio of enterprise AI offerings focused 
on generating ROI through productivity improvements and 
automation. IBM watsonx provides a robust portfolio of 
AI products for developing AI apps, managing data, and 
governing the entire lifecycle of AI models. AI assistants 
manage key tasks, including customer service and writing 
code. We are developing pre-built AI agents that deliver 
multitask reasoning for specific business domains. And our 
Granite family of fit-for-purpose AI models, when tuned with 
proprietary data, can deliver enterprise-grade generative AI 
with up to 90% improved cost efficiency. Granite allows clients 
to bring their own data into the models, and can be trained on 
that data in weeks, not months.
Deploying AI at scale across an enterprise requires seamless 
access to the data that feeds it. In this way, hybrid cloud 
is an essential ingredient for maximizing the return of AI 
investments. That is why 75% of AI deployments are expected 
to use containers by 2027, and demand for our hybrid cloud 
solutions remains strong. 
Already, more than 90% of Fortune 500 companies are using 
IBM’s hybrid cloud products and solutions. And last year, 
we launched two new offerings to give clients a consistent, 
open-source foundation for AI: Red Hat Enterprise Linux AI 
and OpenShift AI. Together, our AI and hybrid cloud platforms 
bring together the data, models, governance and monitoring 
capabilities needed to automate workflows and drive 
productivity. And they create a flywheel of growth for IBM, 
with each offering pulling through demand for the others. 

IBM 2024 Annual Report
3
A driving force behind this flywheel of growth is IBM 
Consulting, which fuels approximately 80% of our AI bookings. 
IBM is the only technology company with a consulting 
business at scale, which is a unique differentiator, especially 
when it comes to helping clients deploy AI. Our 160,000 
consultants apply their data, AI and hybrid cloud expertise 
to guide business transformation for our clients. In 2024, we 
augmented that expertise with a new platform called IBM 
Consulting Advantage. By equipping our consultants with role 
and domain-specific AI assistants, agents, and applications, 
IBM Consulting Advantage enables deeper insights, faster 
time-to-value, and improved efficiency compared to 
traditional consultancy approaches.
Supporting this work is a powerful combination of processing 
and storage infrastructure built to handle data-intensive 
workloads with security and reliability. In 2024, we announced 
architecture details for the Telum II processor and the Spyre 
AI Accelerator, designed for next-generation IBM Z mainframe 
systems that power generative AI at scale. And our storage 
business continued to grow as a premier data management 
platform for hybrid cloud and enterprise AI, while also helping 
to prevent cyber-attacks.
In addition to these offerings, we continue to remix our 
portfolio through strategic acquisitions – such as Neural 
Magic, StreamSets and webMethods – to bolster our software-
based AI and hybrid cloud capabilities. 
Our go-to-market approach
Over the last five years, we have improved the way IBM goes to 
market, embracing a broad ecosystem of partners, developing 
experiential and technical sales methods, and adopting our own 
technology first, before we deploy it with clients. 
We are also pioneering the model of a software-led, integrated 
enterprise that is driving value for our clients and growth for 
IBM. At the end of 2024, software represented approximately 
45% of IBM’s total revenue. These solutions, in turn, 
generated demand for our full suite of integrated offerings: 
approximately 80% of IBM’s revenue is generated by clients 
that buy across all three of our business segments (Software, 
Consulting, and Infrastructure).
Increasingly, clients come to IBM through a thriving partner 
ecosystem, which has been essential in helping our clients 
capitalize on the massive growth and transformation 
opportunities presented by hybrid cloud and AI. We recognize 
that no single company can provide all the technology and 
skill needed to drive digital transformation. So, we have 
strengthened our strategic partnerships with key industry 
leaders like AWS, Microsoft, Salesforce, SAP, Palo Alto 
Networks, and Oracle. These partnerships serve our clients 
better and create a multiplier effect for IBM. 
Additionally, IBM has adopted a “client zero” philosophy, 
meaning we benefit from the same technology solutions 
we offer to our clients. In particular, we have aggressively 
adopted AI-powered automation to drive productivity. For 
example, 94% of IBM’s basic HR queries are now answered 
by an AI assistant. Our contract drafting process is now 80% 
faster. Overall, we have delivered approximately $3.5 billion in 
productivity savings since the beginning of 2023. These efforts 
are not just about efficiency. They are the engine of innovation 
and growth that allows us to invest in our business and serve 
our clients better. 
A new era of innovation
The mission of IBM Research has always been to invent 
what’s next in computing – creating solutions that meet the 
needs of our clients, thereby defining the future of information 
technology. Today, Research is driving powerful innovations 
across hardware, software, hybrid cloud, AI, and quantum 
computing, all of which creates value for our clients and 
growth opportunities for our company.
For example, to better serve clients who told us that the 
large, unwieldy generative AI models on the market were 
too unreliable and expensive, IBM Research developed the 
open and trusted Granite family of models, released under 
the permissive Apache 2.0 license. The models deliver 
strong performance across many academic and enterprise 
benchmarks at a fraction of the cost. 
Quantum computing is another example of IBM Research’s 
leadership. We have deployed more than 70 quantum 
systems, with more than 250 organizations joining our 
IBM Quantum Network. We have also scaled the industry’s 
best-performing quantum software with Qiskit. In 2024, we 
introduced the IBM Quantum Heron processor, with reduced 
error rates, 16 times better performance, and a 25-fold 
increase in speed over previous systems. We expanded 
our IBM Quantum Data Center in Poughkeepsie, New York 
and opened the first IBM Quantum Data Center in Europe 

4
(Ehningen, Germany). We also announced a partnership with 
the State of Illinois to build the National Quantum Algorithm 
Center in Chicago and deploy a next-generation IBM Quantum 
System Two, supporting the future of quantum-centric 
supercomputing.
Going forward, IBM Research will continue to build and 
optimize computing architectures that allow enterprises to 
move and process data seamlessly between GPUs, CPUs, and 
QPUs, solving previously unsolvable problems for businesses 
and the world. 
The ROI of IBM
At IBM, we expect all investments to yield a return. That 
is evident in the increasing value we are delivering for our 
shareholders, clients, and employees.
For shareholders, we have delivered 29 consecutive years of 
dividend increases. And from 2022 through the end of 2024, 
we created greater than $100 billion in shareholder value and 
outperformed the S&P 500 by 58 points.
The returns we generate for clients are based on the value 
we deliver to them, and the trust they place in IBM. For 
example, NatWest Bank used a virtual agent built with 
watsonx to improve satisfaction in key areas of customer 
service by 150%. With the help of IBM Consulting, Cathay 
Pacific migrated more than 90 critical applications to the 
cloud with zero downtime, achieving a 70% faster time-to-
market, all while improving scalability and security. And 
Water Corporation modernized its computing infrastructure 
with a hybrid cloud model built around Red Hat, reducing 
operation costs by 40% and saving 1,500 hours of manual 
labor per year. 
For the IBMers around the world who invest their time and 
talent in serving our clients and partners, the return is evident 
in our culture. The vast majority of our workforce recommend 
IBM as a great place to work and say they are proud to be 
IBMers. That culture is fueled, in part, by IBM’s commitment 
to develop the skills our workforce requires to lead the next 
eras of technology. 
As we look ahead, we will continue to drive returns and deliver 
on our commitment to be the catalyst that makes the world 
work better. We extend this simple invitation for you to join us 
on this journey: Let’s Create.
Arvind Krishna  
Chairman, President and Chief Executive Officer
In an effort to provide additional and useful information regarding the company’s financial results and other financial information, as determined by generally 
accepted accounting principles (GAAP), this letter contains non-GAAP financial measures, including revenue growth rates adjusted for constant currency, free 
cash flow and operating gross profit margin. The rationale for management’s use of this non-GAAP information is included on page 6, 7 and 35 of the company’s 
2024 Annual Report, which is Exhibit 13 to the Form 10-K submitted with the SEC on February 25, 2025. For reconciliation of these non-GAAP financial measures 
to GAAP and other information, please refer to pages 16, 28 and 35 of the company’s 2024 Annual Report. For generative AI, book of business includes Software 
transactional revenue, SaaS Annual Contract Value and Consulting signings. For more information regarding generative AI book of business, refer to Exhibit 99.2 of 
the Form 8-K submitted with the SEC on January 29, 2025.

MANAGEMENT DISCUSSION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Overview
6
Basis & Policies
Forward-Looking and Cautionary Statements
7
A
Significant Accounting Policies
52
Management Discussion Snapshot
8
B
Accounting Changes
66
Description of Business
11
Performance & Operations
Year in Review
16
C
Revenue Recognition
67
Prior Year in Review
29
D
Segments
69
Other Information
33
E
Acquisitions & Divestitures
74
Looking Forward
33
F
Other (Income) and Expense 
78
Liquidity and Capital Resources
34
G
Taxes
79
Critical Accounting Estimates
37
H
Earnings Per Share
82
Currency Rate Fluctuations
39
Balance Sheet & Liquidity
Market Risk
40
I
Financial Assets & Liabilities
83
Financing
41
J
Inventory
84
K
Financing Receivables
84
Report of Management
43
L
Property, Plant & Equipment
87
Report of Independent Registered 
M Leases
87
Public Accounting Firm
44
N
Intangible Assets Including Goodwill
90
O
Borrowings
91
CONSOLIDATED FINANCIAL STATEMENTS
P
Other Liabilities
94
Income Statement
46
Q
Commitments & Contingencies
95
Comprehensive Income
47
R
Equity Activity
98
Balance Sheet
48
Risk Management, Compensation/Benefits & Other
Cash Flows
49
S
Derivative Financial Instruments
100
Equity
50
T
Stock-Based Compensation
105
U
Retirement-Related Benefits
108
V
Subsequent Events
121
Performance Graphs
122
Stockholder Information
123
Board of Directors and Senior Leadership
124
Report of Financials
International Business Machines Corporation and Subsidiary Companies
5

OVERVIEW
The financial section of the International Business Machines Corporation (IBM or “the company”) 2024 Annual Report includes the 
Management Discussion, the Consolidated Financial Statements and the Notes to Consolidated Financial Statements. This Overview 
is designed to provide the reader with some perspective regarding the information contained in the financial section.
Organization of Information
•
The Management Discussion is designed to provide readers with an overview of the business and a narrative on our financial 
results and certain factors that may affect our future prospects from the perspective of management. The “Management 
Discussion Snapshot” presents an overview of the key performance drivers in 2024.
•
Beginning with the “Year in Review,” the Management Discussion contains the results of operations for each reportable segment 
of the business, a discussion of our financial position and a discussion of cash flows as reflected in the Consolidated Statement of 
Cash Flows. “Prior Year in Review,” provides a summary of our reportable segment results and year-to-year comparisons 
between 2023 and 2022. These segment results have been recast to conform to our organizational structure and management 
system changes described below. Management Discussion also includes: “Looking Forward” and “Liquidity and Capital 
Resources,” the latter of which includes a description of management’s definition and use of free cash flow.
•
The Consolidated Financial Statements provide an overview of income and cash flow performance and financial position.
•
The Notes follow the Consolidated Financial Statements. Among other items, the Notes contain our accounting policies, revenue 
information, acquisitions and divestitures, certain commitments and contingencies and retirement-related plans information.
•
In the first quarter of 2024, we made changes to our organizational structure and management system to better align our 
portfolio to the market, increase transparency and improve segment comparability to peers. These changes did not impact our 
Consolidated Financial Statements, but did impact our reportable segments. The segments are reported on a comparable basis 
for all periods. In addition, due to the removal of certain components of segment profitability we also updated the title of our 
segment performance metric from pre-tax income from continuing operations to segment profit. Refer to note D, “Segments” for 
additional information on our reportable segments.
•
Over the past several years, we have taken actions to reduce the risk profile of our worldwide retirement-related plans, while at 
the same time increasing the funded status of the plans. In 2022 and 2024, non-participating single group annuity contracts 
were purchased from insurers which irrevocably transferred to the insurers certain defined benefit (“DB”) pension obligations 
and related plan assets. There were no changes to the amount of benefits payable to the participants and beneficiaries of the 
plans transferred. These pension transfers reduced our pension obligations and assets by approximately the same amount and 
were purchased using assets from their respective retirement plans with no additional funding contributions required from IBM. 
Each transaction resulted in the recognition of a one-time, non-operating, non-cash, pre-tax pension settlement charge 
(“pension settlement charge”) in the respective period of the pension transfer. In September 2022, the IBM Personal Pension 
Plan (“Qualified PPP”) irrevocably transferred to insurers approximately $16 billion of the Qualified PPP’s DB pension obligations 
and related plan assets, resulting in a pension settlement charge of $5.9 billion ($4.4 billion net of tax) in the third quarter of 
2022. In September 2024, the Qualified PPP irrevocably transferred to an insurer approximately $6 billion of the Qualified PPP’s 
DB pension obligations and related plan assets, resulting in a pension settlement charge of $2.7 billion ($2.0 billion net of tax) in 
the third quarter of 2024. In October 2024, IBM Canada LTD (“IBMC”) irrevocably transferred to insurers approximately $1.2 
billion of the IBMC IBM Retirement Plan DB pension obligations and related plan assets, resulting in a pension settlement charge 
of $0.4 billion in the fourth quarter of 2024. These pension settlement charges were primarily related to the accelerated 
recognition of accumulated actuarial losses of the plans and, given they were non-operating and non-cash, they did not impact 
our operating (non-GAAP) earnings or cash flow results. Refer to note U, “Retirement-Related Benefits,” for additional 
information.
•
The references to “adjusted for currency” or “at constant currency” in the Management Discussion do not include operational 
impacts that could result from fluctuations in foreign currency rates. When we refer to growth rates at constant currency or adjust 
such growth rates for currency, it is done so that certain financial results can be viewed without the impact of fluctuations in 
foreign currency exchange rates, thereby facilitating period-to-period comparisons of business performance. Financial results 
adjusted for currency are calculated by translating current period activity in local currency using the comparable prior-year 
period’s currency conversion rate. This approach is used for countries where the functional currency is the local currency. 
Generally, when the dollar either strengthens or weakens against other currencies, the growth at constant currency rates or 
adjusting for currency will be higher or lower than growth reported at actual exchange rates. Refer to “Currency Rate 
Fluctuations” for additional information.
•
Within the financial statements and tables in this Annual Report, certain columns and rows may not add due to the use of 
rounded numbers for disclosure purposes. Percentages presented are calculated from the underlying whole-dollar numbers. 
Certain prior-year amounts have been reclassified to conform to the change in current year presentation. This is annotated where 
applicable.
6
Management Discussion
International Business Machines Corporation and Subsidiary Companies

Operating (non-GAAP) Earnings 
In an effort to provide better transparency into the operational results of the business, supplementally, management separates 
business results into operating and non-operating categories. Operating earnings from continuing operations is a non-GAAP 
measure that excludes the effects of certain acquisition-related charges and intangible asset amortization, expense resulting from 
basis differences on equity method investments, retirement-related costs, certain impacts from the Kyndryl separation and their 
related tax impacts. Due to the unique, non-recurring nature of the enactment of the U.S. Tax Cuts and Jobs Act (U.S. tax reform), 
management characterizes the one-time provisional charge recorded in the fourth quarter of 2017 and adjustments to that charge 
as non-operating. Adjustments primarily include true-ups, accounting elections and any changes to regulations, laws or audit 
adjustments that affect the recorded one-time charge. Management characterized direct and incremental charges incurred related 
to the Kyndryl separation as non-operating given their unique and non-recurring nature. In 2022, these charges primarily related to 
any net gains or losses on the Kyndryl common stock and the related cash-settled swap with a third-party financial institution, 
which were recorded in other (income) and expense in the Consolidated Income Statement. As of November 2, 2022, the company 
no longer held an ownership interest in Kyndryl. For acquisitions, operating (non-GAAP) earnings exclude the amortization of 
purchased intangible assets and acquisition-related charges such as in-process research and development, transaction costs, 
applicable retention, restructuring and related expenses, tax charges related to acquisition integration and pre-closing charges, 
such as financing costs. These charges are excluded as they may be inconsistent in amount and timing from period to period and are 
significantly impacted by the size, type and frequency of our acquisitions. Management has also characterized as non-operating 
expense, given its unique and temporary nature, the mark-to-market impact on the foreign exchange derivative contracts entered 
into prior to the acquisition of StreamSets and webMethods from Software AG, beginning in December 2023, to economically hedge 
the foreign currency exposure related to the purchase price of this acquisition. These derivative contracts expired by June 28, 2024. 
This impact was recorded in other (income) and expense in the Consolidated Income Statement and reflects the changes in fair 
value of these derivative contracts. All other spending for acquired businesses is included in both earnings from continuing 
operations and in operating (non-GAAP) earnings. For retirement-related costs, management characterizes certain items as 
operating and others as non-operating, consistent with GAAP. We include defined benefit plan and nonpension postretirement 
benefit plan service costs, multi-employer plan costs and the cost of defined contribution plans in operating earnings. Non-
operating retirement-related costs include defined benefit plan and nonpension postretirement benefit plan amortization of prior 
service costs, interest cost, expected return on plan assets, amortized actuarial gains/losses, the impacts of any plan curtailments/
settlements including the impact of the pension settlement charges of $3.1 billion ($2.4 billion net of tax) and $5.9 billion ($4.4 
billion net of tax) in 2024 and 2022, respectively. Refer to note U, “Retirement-Related Benefits,” for additional information. Non-
operating retirement-related costs are primarily related to changes in pension plan assets and liabilities which are tied to financial 
market performance, and we consider these costs to be outside of the operational performance of the business.
Overall, management believes that supplementally providing investors with a view of operating earnings as described above 
provides increased transparency and clarity into both the operational results of the business and the performance of our pension 
plans; improves visibility to management decisions and their impacts on operational performance; enables better comparison to 
peer companies; and allows us to provide a long-term strategic view of the business going forward. In addition, these non-GAAP 
measures provide a perspective consistent with areas of interest we routinely receive from investors and analysts. 
FORWARD-LOOKING AND CAUTIONARY STATEMENTS
Certain statements contained in this Annual Report may constitute forward-looking statements within the meaning of the Private 
Securities Litigation Reform Act of 1995. Any forward-looking statement in this Annual Report speaks only as of the date on which it 
is made; IBM assumes no obligation to update or revise any such statements except as required by law. Forward-looking 
statements are based on IBM’s current assumptions regarding future business and financial performance; these statements, by 
their nature, address matters that are uncertain to different degrees. Forward-looking statements involve a number of risks, 
uncertainties and other factors that could cause actual results to be materially different, as discussed more fully elsewhere in this 
Annual Report and in the company’s filings with the Securities and Exchange Commission (SEC), including IBM’s 2024 Form 10-K 
filed on February 25, 2025.
Management Discussion
International Business Machines Corporation and Subsidiary Companies
7

MANAGEMENT DISCUSSION SNAPSHOT
($ and shares in millions except per share amounts)
For year ended December 31:
2024 (2)
2023
Yr.-to-Yr. 
Percent/Margin 
Change
Revenue (1)
$ 
62,753 
$ 
61,860 
 1.4 %     
Gross profit margin
 
56.7 %
 
55.4 %
 
1.2 pts. 
Total expense and other (income)
$ 
29,754 
$ 
25,610 
 16.2 %     
Income from continuing operations before income taxes
$ 
5,797 
$ 
8,690 
 
(33.3) %     
Provision for/(benefit from) income taxes from continuing operations
$ 
(218) 
$ 
1,176 
 NM 
Income from continuing operations
$ 
6,015 
$ 
7,514 
 
(19.9) %     
Income from continuing operations margin
 
9.6 %
 
12.1 %
 
(2.6) pts.  
Income/(Loss) from discontinued operations, net of tax 
$ 
8 
$ 
(12) 
 NM 
Net income
$ 
6,023 
$ 
7,502 
 
(19.7) %     
Earnings per share from continuing operations–assuming dilution
$ 
6.42 
$ 
8.15 
 
(21.2) %     
Consolidated earnings per share–assuming dilution
$ 
6.43 
$ 
8.14 
 
(21.0) %     
Weighted-average shares outstanding–assuming dilution
$ 
937.2 
$ 
922.1 
 1.6 %     
Assets (3)
$ 137,175 
$ 135,241 
 1.4 %     
Liabilities (3)
$ 109,783 
$ 112,628 
 
(2.5) %     
Equity (3)
$ 
27,393 
$ 
22,613 
 21.1 %     
(1) Year-to-year revenue growth of 3 percent adjusted for currency.
(2) 2024 includes the impact of pension settlement charges of $3.1 billion ($2.4 billion net of tax) resulting in an impact of ($2.57) to diluted earnings per 
share from continuing operations and an impact of ($2.56) to consolidated diluted earnings per share. Refer to note U, “Retirement-Related Benefits,” 
for additional information.
(3) At December 31.
NM–Not meaningful
The following table provides the company’s operating (non-GAAP) earnings for 2024 and 2023. Refer to page 28 for additional 
information.
($ in millions except per share amounts)
For year ended December 31:
2024
2023
Yr.-to-Yr.
Percent Change
Net income as reported (1)
$ 
6,023 
$ 
7,502 
 
(19.7) %    
Income/(Loss) from discontinued operations, net of tax 
 
8 
 
(12) 
 NM 
Income from continuing operations (1)
$ 
6,015 
$ 
7,514 
 
(19.9) %    
Non-operating adjustments (net of tax)
Acquisition-related charges
 
1,456 
 
1,292 
 12.7 % 
Non-operating retirement-related costs/(income) (1)
 
2,668 
 
(30) 
 NM 
U.S. tax reform impacts
 
(455)  
95 
 NM 
Operating (non-GAAP) earnings
$ 
9,684 
$ 
8,870 
 9.2 % 
Diluted operating (non-GAAP) earnings per share
$ 
10.33 
$ 
9.62 
 7.4 % 
(1) 2024 includes the impact of pension settlement charges of $2.4 billion net of tax. Refer to note U, “Retirement-Related Benefits,” for additional 
information.
NM–Not meaningful
8
Management Discussion
International Business Machines Corporation and Subsidiary Companies

Macroeconomic Environment 
Our business portfolio underpinned by advanced technology and deep consulting expertise positions us uniquely to deliver end-to-
end business transformations. Our diversification across geographies, industries, clients and business mix and our recurring revenue 
base provides some stability in revenue, profit and cash generation. Clients and partners continue to leverage technology to allow 
businesses to scale, drive efficiencies and fuel sustainable and profitable growth. The economic headwinds driven by factors such 
as geopolitical tensions, interest rate volatility, supply chain vulnerabilities, demographic shifts and evolving cyber threats are 
leading clients to manage their discretionary spending, which has impacted certain areas of our Consulting business during 2024.
For the year ended December 31, 2024, movements in global currencies continued to impact our reported year-to-year revenue and 
profit. We execute hedging programs which defer, but do not eliminate, the impact of currency. The (gains)/losses from these 
hedging programs are reflected primarily in other (income) and expense. Refer to “Currency Rate Fluctuations,” for additional 
information. 
Financial Performance Summary                        
In 2024, we reported $62.8 billion in revenue, income from continuing operations of $6.0 billion, which includes the impact of the 
pension settlement charges of $3.1 billion ($2.4 billion net of tax), and operating (non-GAAP) earnings of $9.7 billion, which 
excludes the impact of the pension settlement charges. Refer to “Organization of Information,” for additional information. Diluted 
earnings per share from continuing operations was $6.42 as reported, including an impact of $2.57 from the pension settlement 
charges, and diluted earnings per share was $10.33 on an operating (non-GAAP) basis. We generated $13.4 billion in cash from 
operations and $12.7 billion in free cash flow, and returned $6.1 billion to shareholders in dividends. We are pleased with the 
progress we made in 2024, delivering revenue growth in our re-positioned business and strong cash flow generation. Our 2024 
performance demonstrates the success of our focused strategy, enhanced portfolio and sustainable revenue growth. We increased 
our investment in innovation and talent and completed eleven acquisitions in 2024, strengthening our hybrid cloud and AI 
capabilities, all while continuing to return value to shareholders through our dividend.
Total revenue grew 1.4 percent year to year as reported and 3 percent adjusted for currency compared to the prior year, led by our 
Software performance. Software revenue increased 8.3 percent as reported and 9.0 percent adjusted for currency, with strength 
across our portfolio. Hybrid Platform & Solutions increased 8.1 percent as reported and 8.7 percent adjusted for currency, reflecting 
growth across all lines of business with double-digit revenue growth in Red Hat and Automation. Transaction Processing increased 
8.7 percent as reported and 9.6 percent adjusted for currency, with growth in both recurring and transactional revenue. Consulting 
revenue decreased 0.9 percent as reported but grew 0.6 percent adjusted for currency, and continued to be impacted by a dynamic 
market environment as clients reprioritized spending. Infrastructure decreased 3.9 percent year to year as reported and 2.7 percent 
adjusted for currency, reflecting product cycle dynamics.
From a geographic perspective, Americas revenue decreased 1.3 percent year to year as reported (0.7 percent adjusted for 
currency). Europe/Middle East/Africa (EMEA) increased 5.1 percent as reported (4.7 percent adjusted for currency). Asia Pacific 
grew 3.0 percent as reported (7.9 percent adjusted for currency).
Gross margin of 56.7 percent increased 1.2 points year to year, with continued margin expansion driven by portfolio mix and 
ongoing productivity initiatives. Operating (non-GAAP) gross margin of 57.8 percent increased 1.3 points versus the prior year, due 
to the same dynamics.
Total expense and other (income) increased 16.2 percent in 2024 versus the prior year primarily driven by the pension settlement 
charges of $3.1 billion in 2024, higher spending reflecting our continued investment in portfolio innovation to drive our strategy and 
higher workforce rebalancing charges. This was partially offset by a gain from the sale of certain QRadar Software-as-a-Service 
(SaaS) assets, the gain on the divestiture of The Weather Company assets, the benefits from productivity and the actions taken to 
transform our operations, and the effects of currency. Total operating (non-GAAP) expense and other (income) increased 1.8 
percent year to year, driven primarily by the factors described above, excluding the pension settlement charges.
Pre-tax income from continuing operations was $5.8 billion in 2024 compared with $8.7 billion in the prior year and pre-tax margin 
was 9.2 percent, a decrease of 4.8 points versus 2023. The year-to-year performance was primarily driven by the pension 
settlement charges in 2024 partially offset by our gross margin expansion and the benefits from productivity and the actions taken 
to transform our operations which enabled investments to drive innovation. The continuing operations effective tax rate for 2024 
was (3.8) percent compared to 13.5 percent in 2023. The current-year effective tax rate was primarily driven by the tax impact of 
the pension settlement charges and the resolution of certain tax audit matters. Net income from continuing operations was $6.0 
billion in 2024 compared with $7.5 billion in the prior year and net income from continuing operations margin was 9.6 percent, a 
decrease of 2.6 points year to year. Operating (non-GAAP) pre-tax income from continuing operations of $11.2 billion increased 8.7 
percent year to year and the operating (non-GAAP) pre-tax margin from continuing operations increased 1.2 points to 17.9 percent. 
Our revenue growth, portfolio mix and productivity initiatives resulted in strong operating (non-GAAP) pre-tax income growth in 
2024 compared to the prior year. The operating (non-GAAP) effective tax rate for 2024 was 13.6 percent compared to 14.0 percent 
Management Discussion
International Business Machines Corporation and Subsidiary Companies
9

in 2023. Operating (non-GAAP) income from continuing operations of $9.7 billion increased 9.2 percent and the operating (non-
GAAP) income margin from continuing operations of 15.4 percent was up 1.1 points year to year. 
Diluted earnings per share from continuing operations, which included an impact of $2.57 from the pension settlement charges, was 
$6.42 in 2024 compared with $8.15 in 2023. Operating (non-GAAP) diluted earnings per share of $10.33 increased 7.4 percent 
versus 2023.
At December 31, 2024, the balance sheet remained strong with financial flexibility to support and invest in the business. Cash and 
cash equivalents, restricted cash and marketable securities at year end were $14.8 billion, an increase of $1.3 billion from 
December  31, 2023. During 2024, we invested $3.3 billion in acquisitions and returned $6.1 billion to shareholders through 
dividends. Total debt of $55.0 billion at December 31, 2024 decreased $1.6 billion driven by maturities partially offset by debt 
issuances. 
Total assets increased $1.9 billion ($5.2 billion adjusted for currency) from December 31, 2023 primarily driven by an increase in 
goodwill mainly related to the StreamSets and webMethods acquisition, and higher cash and cash equivalents. Total liabilities 
decreased $2.8 billion (increased $0.5 billion adjusted for currency) from December 31, 2023 primarily driven by a decrease in debt 
and postretirement benefit obligations partially offset by an increase in deferred income. Total equity of $27.4 billion increased $4.8 
billion from December 31, 2023, primarily driven by net income, common stock issuances and a decrease in accumulated other 
comprehensive loss; partially offset by dividends. 
During 2024, we generated $13.4 billion in cash from operating activities, compared to $13.9 billion in 2023. While cash provided 
by financing receivables declined year to year from business variability, we had performance-related improvements within net 
income driving an increase within cash from operating activities. Our free cash flow was $12.7 billion, an increase of $1.5 billion 
versus the prior year. Refer to page 35 for additional information on free cash flow. Net cash used in investing activities of $4.9 
billion decreased $2.1 billion compared to the prior year, mainly driven by a decrease in cash used in acquisitions, higher cash 
provided by divestitures and the proceeds from the sale of certain QRadar SaaS assets; partially offset by higher net purchases of 
marketable securities and other investments. Net cash used in financing activities of $7.1 billion increased $5.3 billion compared to 
2023, mainly due to a lower level of debt issuances and a higher level of maturities in the current year.
10
Management Discussion
International Business Machines Corporation and Subsidiary Companies

DESCRIPTION OF BUSINESS
Please refer to IBM’s Annual Report on Form 10-K filed with the SEC on February 25, 2025, for Item 1A. entitled “Risk Factors.”
IBM is addressing the hybrid cloud and AI opportunity with a platform-centric approach, focused on providing client value through a 
combination of technology and business expertise. We provide integrated solutions and products that leverage: data, information 
technology, deep expertise in industries and business processes, with trust and security and a broad ecosystem of partners and 
alliances. Our hybrid cloud platform and AI technology and services capabilities support clients’ digital transformations and help 
them engage with their customers and employees in new ways. These solutions draw from an industry-leading portfolio of 
capabilities in software, consulting services and a deep incumbency in mission-critical systems, all bolstered by one of the world’s 
leading research organizations.
IBM Strategy                
Over the past 5 years, IBM has shifted to higher growth areas, with approximately 75 percent of our business mix in Software and 
Consulting. Our strategic focus is hybrid cloud and artificial intelligence (AI), today’s most transformative technologies. As clients 
drive business growth using their existing technology and investing in new ones, they seek flexibility across distributed technology 
environments and the need to realize value from AI. We have shaped our business to focus on those client needs.
Our strategy aligns with the needs of our clients 
Companies are increasingly deploying technology workloads across environments where the business runs, with over 90 percent of 
executives reporting moving to hybrid cloud architectures (IBM IBV). As organizations continue to face innovation challenges, 
including increased technical complexity, rapidly growing costs, and scarcity of expertise, AI is an opportunity to unlock unrealized 
value. However, AI brings similar challenges, including costs of AI models, complexity of AI solutions and its governance, and 
expertise gaps in integrating AI solutions into business workflows.
To solve these innovation challenges, leading organizations are embracing a hybrid ‘by design’ platform approach. It allows them to 
take advantage of hybrid multi-cloud by minimizing cost and complexity which simplifies innovation and operations. IBM Consulting 
has quantified the value of a hybrid by design approach and shown it delivers over three times higher return on investment.
Companies continue to invest in AI and are looking for better approaches to drive enterprise AI adoption. AI is inherently hybrid as it 
needs to inference, govern, and manage across multiple environments. Conversely, AI simplifies the complexity of hybrid cloud 
environments through visibility, resource optimization, and automation across platforms and processes.
IBM is strategically positioned to help clients unlock their next chapter of technology-led business growth. It will be built across 
hybrid multi-cloud and leverage AI. With our portfolio of technology and consulting capabilities, we uniquely help deliver that 
growth. 
IBM’s differentiated portfolio value 
IBM Software makes technology that delivers innovation and productivity with capabilities to enable end-to-end enterprise use 
cases, client usage, consumption, and expansion. We deliver this value in four major areas: Transaction Processing, powering IBM Z 
to deliver unmatched scalability, security, availability and real-time fraud detection for our client’s mission-critical workloads; 
Automation, boosting application performance and optimizing costs across clients’ technology operations and reducing overall 
complexity; Data, accelerating productivity by infusing AI at scale into applications and business processes to drive decisions in 
real-time; Hybrid cloud platform (Red Hat), unifying on-prem, public and private clouds, and the edge to scale applications and AI 
models across environments. All capabilities support hybrid cloud deployment and have security and AI embedded throughout.
IBM Consulting provides strategy & technology and intelligent operations services to address clients’ most challenging business 
goals – including how to be more productive, accelerate growth, and drive innovation. We deliver domain expertise to drive client 
adoption through our offerings, leveraging hybrid cloud and AI technologies from IBM Software and with strategic partners including 
AWS, Microsoft, Oracle, SAP, and many others across the ecosystem. IBM Consulting brings speed and scale to innovative solutions 
that combine industry, domain, and hybrid cloud knowledge together with AI-powered assets, such as IBM Consulting Advantage, a 
first of its kind AI delivery platform designed to deliver solutions at scale and realize faster time to value, transforming how our 
consultants work.
IBM Infrastructure enables hybrid cloud environments for mission-critical transactions and AI workloads, while maintaining the 
highest security and availability. The business is anchored by IBM Z which excels at delivering transaction processing capability with 
an industry-first integrated on-chip AI accelerator designed for high-speed, latency-optimized inferencing to deliver unmatched 
throughput, availability, and security. Our distributed infrastructure offerings, Power, Storage, and Cloud, accelerate client’s digital 
transformations while our Infrastructure Support delivers lifecycle services enhanced with AI to optimize hybrid cloud 
environments.
Management Discussion
International Business Machines Corporation and Subsidiary Companies
11

In support for each business segment, our AI strategy focuses on four key differentiators to help address adoption and challenges: 
Open, Cost Efficient, Hybrid and Domain Expertise, which we deliver across our portfolio. We enable cheaper inferencing built for 
hybrid cloud architectures with our Red Hat AI portfolio. We provide small, open Granite models that deliver better performance at a 
fraction of the price. We embed domain expertise in our models, technologies, and consulting offerings to speed client adoption and 
value.
IBM Research continues to demonstrate the ability to transition research to market-ready solutions; reinventing how work gets 
done and building on its legacy of transforming innovation in computing into client-grade solutions. In 2024, we continued to 
innovate around hybrid cloud and AI which created new business opportunities for IBM, including Granite 3.0 models and 
InstructLab. In quantum computing, we continue to progress along our Quantum Development & Innovation Roadmap, including the 
release of the Heron quantum chip and launch of Qiskit 1.0 software development kit.
In addition to organic innovation, we accelerate our strategy and client value with inorganic investments. Areas of focus include 
hybrid cloud, data, and AI technology along with strategic consulting capabilities. In 2024 IBM closed multiple deals, the most 
material being the acquisition of assets from Software AG to bolster our automation, data and AI portfolios, and Neural Magic to fuel 
optimized generative AI innovation across hybrid cloud. Additionally, we announced our intention to acquire HashiCorp, adding 
advanced capabilities in hybrid multi-cloud infrastructure automation and orchestration.
Hybrid cloud and AI together have the power to unleash business productivity. IBM can bring hybrid cloud and AI to life for 
clients through our portfolio across the various business segments. Each of our business segments contribute to and benefit from 
the hybrid cloud and AI strategy. Clients realize greater value when complementary parts of the portfolio come together. For 
example, within Consulting, we have the world’s largest Red Hat practice differentiated with hybrid by design methodologies, with 
Consulting Advantage used to leverage AI across every stage of the project lifecycle. In IBM Z, watsonx code assistant for Z uses AI 
to accelerate modernization journeys, delivering more value to clients.
Collaborating to create value with clients and ecosystem partners 
Building our ecosystem is core to our overall strategy, focusing on helping clients transform their core operations and create new 
sources of competitive advantage through the application of AI and hybrid cloud technologies. Our approach to client engagement 
allows us to meet clients where they are. We bring our next-generation innovations and core platforms to a wide range of clients and 
partners through our signature THINK event tour and IBM TechXchange conference. The Partner Plus program makes it easy for 
partners to deepen technical expertise on IBM products, allowing clients more choice on who to partner with. Additionally, we 
continue to co-invest with our strategic partners – Adobe, AWS, Microsoft, Oracle, Palo Alto Networks, Salesforce, SAP, ServiceNow 
– to amplify joint impact for our clients by embedding IBM technology into core platforms that run their businesses.
We also bring product innovations to clients through use cases, our internal “client zero” productivity proof points, and technical 
experiences to demonstrate the value of our technology as a source of competitive advantage. For example, we have resolved 94 
percent of low-level HR inquiries with our AskHR assistant, built on watsonx, freeing up HR professionals to focus on more complex 
issues. We believe that being a client zero exemplar accelerates our product roadmap and commercial success in addition to 
delivering productivity to the business. 
Business Segments and Capabilities
IBM operates in more than 175 countries around the world. Our platform-centric hybrid cloud and AI strategy is executed through 
our operations and consists of four business segments: Software, Consulting, Infrastructure and Financing.
In the first quarter of 2025, we announced  changes  to the reported revenue categories within our Software and Consulting 
reportable segments effective January 1, 2025. These  changes  will not impact our Consolidated Financial Statements or our 
reportable segments. Refer to “Looking Forward,” for additional information.
Software
Software provides software solutions that address client needs for a hybrid cloud platform, data and AI, automation, and security on 
their journey to hybrid cloud. It includes all software, except operating system software reported in the Infrastructure segment.
12
Management Discussion
International Business Machines Corporation and Subsidiary Companies

Software comprises two business areas – Hybrid Platform & Solutions and Transaction Processing, which have the following 
capabilities:
Hybrid Platform & Solutions: includes software, infused with AI, to help clients operate, manage and optimize their IT resources and 
business processes within hybrid, multi-cloud environments. It includes the following:
Red Hat: provides enterprise open-source solutions, for hybrid, multi-cloud environments, which includes Red Hat Enterprise Linux 
(RHEL), OpenShift, our hybrid cloud platform, as well as Ansible.
Automation: optimizes processes from business workflows to IT operations with AI-powered automation. Automation includes 
software for business automation, IT automation, integration and application runtimes.
Data & AI: accelerates data-driven agendas by infusing AI throughout the enterprise, empowering intelligent decision making. The 
portfolio includes capabilities that simplify data consumption through data fabric with data management, optimize lifecycle 
management, and make better predictions through business analytics. Data & AI capabilities facilitate sustainable, resilient 
businesses and enable intelligent management of enterprise assets and supply chains with environmental intelligence.
Security: creates a risk-aware, secure business by gaining real-time threat insights, orchestrating actions and automating responses 
across all touchpoints, in line with a zero-trust security strategy. Security includes software for data security, identity and access 
management, and threat management.
Transaction Processing: supports clients’ mission-critical, on-premise workloads in industries such as banking, airlines and retail. 
This includes transaction processing software such as Customer Information Control System and storage software, as well as the 
analytics and integration software running on IBM operating systems such as DB2 and WebSphere running on z/OS.
Consulting
Consulting provides deep domain, technical, and industry expertise and market-leading capabilities in business transformation, 
technology implementation and managed services, including cloud managed and application services. Consulting designs, builds 
and operates technology and business processes based on open, hybrid cloud architectures leveraging the power of generative AI, 
with IBM technology and ecosystem partner technologies. Consulting uses its IBM Garage method and assets deployed through 
IBM Consulting Advantage to convene experts to co-create solutions with clients to accelerate their digital transformations through 
AI and automation.
Consulting comprises three business areas – Business Transformation, Technology Consulting and Application Operations, which 
have the following capabilities:
Business Transformation: provides strategy, process design, system implementation and operations services to improve and 
transform key experiences and business processes. These services deploy AI and automation in business processes to exploit the 
value of data and include an ecosystem of partners alongside IBM technology, including strategic partnerships with Adobe, Oracle, 
Salesforce and SAP, among others.
Technology Consulting: helps clients architect and implement solutions securely across cloud platforms, including Amazon, 
Microsoft, Palo Alto Networks, and IBM, and deploy strategies to transform the enterprise experience and enable innovation, 
including data transformation for AI with watsonx and application modernization for hybrid cloud with Red Hat OpenShift.
Application Operations: focuses on managing, optimizing, orchestrating, and securing custom application and ISV packages for 
clients. Services include application management, platform engineering, and security services across hybrid cloud environments. 
Infrastructure
Infrastructure provides trusted and secure solutions for hybrid cloud and is optimized for infusing AI into mission-critical 
transactions.
Infrastructure comprises two business areas – Hybrid Infrastructure and Infrastructure Support, which have the following 
capabilities:
Hybrid Infrastructure: provides clients with innovative infrastructure platforms to help meet the new requirements of hybrid multi-
cloud and enterprise AI workloads leveraging flexible and as-a-service consumption models. Hybrid Infrastructure includes IBM Z 
and Distributed Infrastructure.
Management Discussion
International Business Machines Corporation and Subsidiary Companies
13

IBM Z: the premier transaction processing platform with leading security, resilience and scale, highly optimized for mission-critical, 
high-volume transaction workloads and enabled for enterprise AI and hybrid cloud. It includes IBM Z and LinuxONE, with a range of 
high-performance systems designed to address enterprise computing capacity, security and performance needs, z/OS, a security-
rich, high-performance enterprise operating system, as well as Linux and other operating systems.
Distributed Infrastructure: includes Power, Storage and IBM Cloud Infrastructure-as-a-Service (IaaS). Power consists of high-
performance servers, designed and engineered for data intensive and AI-enabled workloads and optimized for hybrid cloud and 
Linux. The Storage portfolio consists of a broad range of storage hardware and software-defined offerings, including Z-attach and 
distributed flash, tape solutions, software-defined storage controllers, data protection software and network-attach storage. IBM 
Cloud IaaS is built on enterprise-grade hardware with leading security and compliance capabilities and offers flexible computing 
options across architectures to meet client workload needs.
Infrastructure Support: delivers comprehensive, proactive and AI-enabled maintenance and support services to maintain and
improve the availability and value of clients’ IT infrastructure (hardware and software) both on-premises and in the cloud including 
maintenance for IBM products and other technology products. 
Financing
Financing facilitates IBM clients’ acquisition of hardware, software and services through its financing solutions. The financing 
arrangements are predominantly for products or services that are critical to the end users’ business operations and support IBM’s 
hybrid cloud and AI strategy. Financing conducts a comprehensive credit evaluation of its clients prior to extending financing. As a 
captive financier, Financing has the benefit of both deep knowledge of its client base and a clear insight into the products and 
services financed. These factors allow the business to effectively manage two of the primary risks associated with financing, credit 
and residual value, while generating strong returns on equity.
Financing comprises the following two business areas – Client Financing and Commercial Financing:
Client Financing: lease, installment payment plan and loan financing to end-user clients for terms generally up to seven years. 
Assets financed are primarily new and used IBM hardware, software and services.
Commercial Financing: short-term working capital financing to business partners and distributors primarily of IBM products and 
services. The company has an existing agreement with a third-party investor to sell IBM short-term commercial financing 
receivables on a revolving basis. Refer to note K, “Financing Receivables,” for additional information.
Human Capital                    
Employees and Related Workforce
(In thousands)
For the year ended December 31:
2024
IBM/wholly owned subsidiaries
270.3
Less-than-wholly owned subsidiaries
8.9
Complementary (1)
14.2
(1) The complementary workforce is an approximation of equivalent full-time employees hired under temporary, part-time and limited-term employment 
arrangements to meet specific business needs in a flexible and cost-effective manner.
As a globally integrated enterprise, IBM operates in more than 175 countries. Our highly skilled global workforce is reflective of the 
work we do for clients in support of their digital transformations and mission-critical operations through our focus on hybrid cloud 
and AI. Our employees are among the world’s leading experts in hybrid cloud, AI, quantum computing, cybersecurity and industry-
specific solutions. We believe our success depends on the caliber of our talent and the engagement and inclusion of IBMers in the 
workplace.
Talent, Skills and Culture 
At IBM, we’re committed to attracting, developing and retaining top talent in a dynamic and competitive environment. Our employee 
value proposition offers a compelling combination of competitive compensation and exciting career opportunities in the 
development and delivery of innovative technologies that transform businesses worldwide. Our value proposition and talent 
strategy are designed to retain our talented professionals.
We are continuously transforming and developing our talent through a combination of learning and hiring. In 2024, we focused on 
adding skills in key areas such as consulting and technical expertise, while also scaling our capacity in strategically important 
markets. We’re committed to upskilling and reskilling our workforce, and our digital learning and career platforms are designed to 
provide employees with the resources they need to build strategic skills and advance their careers. We believe that sharing candid 
14
Management Discussion
International Business Machines Corporation and Subsidiary Companies

feedback is essential to helping our employees develop their skills and elevate their performance, which is critical to our ability to 
transform and evolve.
Employee engagement is a key indicator of employee well-being and dedication to our mission, purpose and values. We conduct an 
annual engagement survey to assess the health of our growth culture and employee sentiment. In 2024, over 200,000 employees 
globally participated in the survey, providing valuable insights that we are using to enhance the employee experience, transform our 
culture, and improve our interactions with clients and partners. For the fourth year in a row, more than eight out of ten employees 
who participated in the survey responded that they felt engaged at work, a testament to our industry-leading talent practices. 
An inclusive workplace serves as a catalyst for heightened innovation, agility, and overall performance. This environment fuels 
business growth, sustainable business outcomes and differentiated value to our clients. This is evident in our ability to attract and 
retain some of the industry's most skilled and talented individuals. Our goal is to ensure individuals from all backgrounds feel a 
sense of belonging, nurture their talents and advance in their careers. We strive to help all employees build new capabilities, explore 
various career paths, and engage with mentors to progress in their professional journeys. Once again, our efforts have resulted in 
nearly nine out of ten of employees who participated in the engagement survey feeling empowered to be their authentic selves at 
work.
We are committed to pay equity and transparency, fostering an environment of equal pay for equal work regardless of gender, race, 
or other personal characteristics. Statistical pay equity assessments are conducted across all countries with IBM employees, 
reinforcing our dedication to our longstanding pay equity practice. 
Health, Safety and Well-Being
IBM demonstrates an unwavering commitment to fostering a culture of health, safety, and well-being for its employees. This 
commitment is reflected in our comprehensive Health & Safety Management System (HSMS), which is externally certified and aims 
to create a healthy and safe work environment, minimize work-related injuries and illnesses, and empower our workforce to take an 
active role in managing health and safety risks. 
Recognizing employees as our most valuable asset, we have seamlessly integrated well-being into every facet of our business 
operations. We believe that our employees perform best at work, at home and in the communities where they live and work when 
their well-being is supported. We believe in not taking a one-size-fits-all approach and strive to provide programs that are culturally 
relevant and inclusive to address the needs of a global employee population. We take a holistic approach to well-being, not only 
focusing on fundamental safety items but also addressing physical, mental and financial health. 
Access to well-being services and resources are offered through onsite activities and partnerships with external vendors, among 
other methods of delivery. IBMers worldwide have confidential, 24/7 access to critical mental health support through employee 
assistance programs and supplemental resources. Other programs include training for employees on resilience, ergonomics, and 
financial well-being.
In 2024, a resilience-building tool and a digital well-being solution were made available to all IBM employees worldwide. These 
resources offer a personalized approach to assist IBMers with making small changes – with big results. These resources foster 
healthier habits focused on physical, mental, and emotional well-being.
Management Discussion
International Business Machines Corporation and Subsidiary Companies
15

YEAR IN REVIEW
Results of Continuing Operations
Segment Details  
As discussed in the “Organization of Information” section, we made changes to our organizational structure and management 
system in the first quarter of 2024. With these changes, we revised our reportable segments and updated the title of our segment 
performance metric from pre-tax income from continuing operations to segment profit. Prior-year results have been recast to reflect 
the January 2024 segment changes as described in note D, “Segments.”
The table below presents each reportable segment’s revenue and gross margin results, followed by an analysis of the 2024 versus 
2023 reportable segment results. The segment details below are presented under our historical reported revenue categories. Refer 
to “Looking Forward” for changes to the revenue categories reported within our Software and Consulting reportable segments 
effective in the first quarter of 2025. These changes will not impact our Consolidated Financial Statements or our reportable 
segments.
($ in millions)
For the year ended December 31:
2024
2023 (1)
Yr.-to-Yr. 
Percent/
Margin 
Change
Yr.-to-Yr.
Percent Change
Adjusted for
Currency
Revenue
Software
$ 
27,085 
$ 
25,011 
 8.3 % 
 9.0 %
Gross margin
 83.7 %
 82.9 %
 0.8 pts.
Consulting
 
20,692 
 
20,884 
 (0.9) %   
 0.6 %
Gross margin
 27.0 %
 26.8 %
 0.3 pts.
Infrastructure
 
14,020 
 
14,593 
 (3.9) %   
 (2.7) %
Gross margin
 55.8 %
 56.1 %
 (0.3) pts.
Financing
 
713 
 
741 
 (3.7) %   
 (2.5) %
Gross margin
 47.9 %
 48.1 %
 (0.3) pts.
Other
 
243 
 
632 
 (61.6) %   
 (61.7) %
Gross margin
 (352.8) %
 (87.4) %
 (265.3) pts.
Total revenue
$ 
62,753 
$ 
61,860 
 1.4 % 
 2.5 %
Total gross profit
$ 
35,551 
$ 
34,300 
 3.6 % 
Total gross margin
 56.7 %
 55.4 %
 1.2 pts.
Non-operating adjustments
Amortization of acquired intangible assets
 
724 
 
631 
 14.6 % 
Operating (non-GAAP) gross profit
$ 
36,275 
$ 
34,931 
 3.8 % 
Operating (non-GAAP) gross margin
 57.8 %
 56.5 %
 1.3 pts.
(1) Recast to reflect January 2024 segment changes.
Software
($ in millions)
For the year ended December 31:
2024
2023 (1)
Yr.-to-Yr. 
Percent 
Change 
Yr.-to-Yr. 
Percent Change 
Adjusted for 
Currency
Software revenue
$ 
27,085 
$ 
25,011 
 8.3 %
 9.0 %
Hybrid Platform & Solutions
$ 
18,808 
$ 
17,396 
 8.1 %
 8.7 %
Red Hat
 11.4 
 12.0 
Automation
 14.2 
 14.8 
Data & AI
 1.6 
 2.2 
Security
 0.8 
 1.5 
Transaction Processing
 
8,277 
 
7,615 
 8.7 
 9.6 
(1) Recast to reflect January 2024 segment changes.
16
Management Discussion
International Business Machines Corporation and Subsidiary Companies

Software revenue of $27,085 million increased 8.3 percent as reported (9.0 percent adjusted for currency) in 2024 compared to the 
prior year, reflecting growth across all lines of business with double-digit growth in Red Hat and Automation and high single-digit 
growth in Transaction Processing. This revenue performance reflects the investments we have been making in Software, both 
organically and through acquisitions. Our investments in generative AI are contributing to growth, as we had strong demand for our 
generative AI products such as watsonx, Concert and our AI assistants. We also launched new products in the fourth quarter of 
2024 including our next generation of watsonx Code Assistant and Guardium Quantum Safe. In 2024, we also had increased 
revenue contribution from acquisitions compared to the prior year, including Apptio and StreamSets and webMethods. In addition, 
we had solid growth in our recurring revenue and double-digit growth in our transactional software revenue in 2024, as we 
accelerated growth through innovation across our Software portfolio.
Hybrid Platform & Solutions revenue of $18,808 million increased 8.1 percent as reported (8.7 percent adjusted for currency) in 
2024 compared to the prior year. Within Hybrid Platform & Solutions, Red Hat revenue increased 11.4 percent as reported (12.0 
percent adjusted for currency), which reflects the continued demand for our hybrid cloud solutions as clients are prioritizing 
application modernization on OpenShift containers and Ansible automation to optimize their IT spending and reduce operational 
complexity. In 2024, we had double-digit revenue growth in OpenShift and Ansible, and high single-digit revenue growth in RHEL. 
The growth in OpenShift revenue reflects increased volume in OpenShift Virtualization engagements, and we exited 2024 with 
OpenShift annual recurring revenue of $1.4 billion. Automation revenue increased 14.2 percent as reported (14.8 percent adjusted 
for currency), driven by our SaaS subscription offerings such as AIOps and Management, which includes the higher revenue 
contribution from Apptio. Data & AI revenue increased 1.6 percent as reported (2.2 percent adjusted for currency), with strong 
growth in Data Fabric and our AI assistant for Customer Care, driven by client demand for our watsonx platform offerings, and 
strength in asset and supply chain management software which helps clients run sustainable operations. Security revenue 
increased 0.8 percent as reported (1.5 percent adjusted for currency), with revenue growth in data security and identity and access 
management, partially offset by a revenue decline in security threat management.
Across Hybrid Platform & Solutions, our annual recurring revenue (ARR) was $15.3 billion exiting 2024, growing at a double-digit 
rate compared to the prior year. ARR is a key performance metric management uses to assess the health and growth trajectory of 
our Hybrid Platform & Solutions business within the Software segment. The metric was updated in the first quarter of 2024 to 
reflect the organizational changes described in the “Organization of Information” section above, and to simplify the calculation. ARR 
is calculated by using the current quarter’s recurring revenue and then multiplying that value by four. This value includes the 
following consumption models: (1) software subscription agreements, including committed term licenses, (2) as-a-service 
arrangements such as SaaS and PaaS, and (3) maintenance and support contracts. ARR should be viewed independently of revenue 
as this performance metric and its inputs may not represent revenue that will be recognized in future periods.
Transaction Processing revenue of $8,277 million increased 8.7 percent as reported (9.6 percent adjusted for currency) in 2024
compared to the prior year. The performance in 2024 is the result of the combination of clients' growing capacity demands, solid 
renewal rates, and increased contribution from our generative AI products, including watsonx code assistant for Z. This growth 
reflects the innovation and value of our transaction processing software, which helps our clients manage their most mission-critical 
workloads. 
($ in millions)
For the year ended December 31:
2024
2023 (1)
Yr.-to-Yr.
Percent/
Margin
Change
Software
Gross profit
$ 
22,658 
$ 
20,721 
 9.3 % 
Gross profit margin
 83.7 %
 82.9 %
 0.8 pts. 
Segment profit
$ 
8,684 
$ 
7,499 
 15.8 % 
Segment profit margin
 32.1 %
 30.0 %
 2.1 pts. 
(1) Recast to reflect January 2024 segment changes.
Software gross profit margin of 83.7 percent in 2024 increased 0.8 points compared to the prior year. Segment profit of $8,684 
million increased 15.8 percent and pre-tax margin of 32.1 percent increased 2.1 points compared to the prior year. The year-to-year 
increases in segment profit and profit margin reflect our operating leverage driven by our revenue performance and the benefits of 
the productivity actions taken in 2024; partially offset by key investments across our software portfolio.
Management Discussion
International Business Machines Corporation and Subsidiary Companies
17

Consulting
($ in millions)
For the year ended December 31:
2024
2023 (1)
Yr.-to-Yr.
Percent
Change 
Yr.-to-Yr.
Percent Change
Adjusted for
Currency
Consulting revenue
$ 
20,692 
$ 
20,884 
 (0.9) %
 0.6 %
Business Transformation
$ 
9,347 
$ 
9,179 
 1.8 %
 3.2 %
Technology Consulting
 
3,653 
 
3,775 
 (3.2) 
 (1.5) 
Application Operations
 
7,692 
 
7,930 
 (3.0) 
 (1.5) 
(1) Recast to reflect January 2024 segment changes.
Consulting revenue of $20,692 million decreased 0.9 percent as reported, but increased 0.6 percent adjusted for currency in 2024
compared to the prior year. We had year-to-year revenue growth in Business Transformation, while revenue declined in Technology 
Consulting and Application Operations in 2024. During 2024, we operated in a dynamic macroeconomic environment following our 
strong performance in 2023, as clients reprioritized their IT spend toward digital transformation and AI initiatives for cost 
optimization and operational efficiency. We continued to focus on rapidly evolving our offerings and enhancing investments in skills 
and capabilities to align with these priorities. Our ability to address client demands contributed to Consulting signings growth in 
2024 compared to the prior year. Our generative AI offerings contributed to this signings growth, as clients recognized the value we 
bring in accelerating their digital transformations through our extensive industry and enterprise AI expertise. Our Red Hat consulting 
practice grew at a double-digit rate in 2024, with revenue contribution across Consulting and ended the year with total revenue of 
approximately $3 billion. In addition, Consulting revenue and signings generated through our strategic partnerships continued to 
grow, contributing double-digit revenue growth year to year. We are actively investing to enhance our skills and capabilities to 
address our clients’ top priorities, including our fourth-quarter 2024 acquisition of Accelalpha, a global Oracle services provider.
Business Transformation revenue of $9,347 million increased 1.8 percent as reported (3.2 percent adjusted for currency) compared 
to the prior year, driven by revenue growth in transformation projects for finance, supply chain, and data.
Technology Consulting revenue of $3,653 million decreased 3.2 percent as reported (1.5 percent adjusted for currency), driven by a 
decline in client spending on application development; partially offset by revenue growth in cloud-based application modernization 
projects.
Application Operations revenue of $7,692 million decreased 3.0 percent as reported (1.5 percent adjusted for currency), as clients 
reprioritized spending away from on-premise customized services.
($ in millions)
For the year ended December 31:
2024
2023 (1)
Yr.-to-Yr.
Percent/
Margin
Change
Consulting
Gross profit
$ 
5,589 
$ 
5,588 
 0.0 %    
Gross profit margin
 27.0 %
 26.8 %
 0.3 pts. 
Segment profit
$ 
2,054 
$ 
2,130 
 (3.6) %    
Segment profit margin
 9.9 %
 10.2 %
 (0.3) pts. 
(1) Recast to reflect January 2024 segment changes.
Consulting gross profit margin increased 0.3 points to 27.0 percent compared to the prior year. Segment profit of $2,054 million
decreased 3.6 percent and segment profit margin decreased 0.3 points to 9.9 percent compared to the prior year. The segment 
profit and profit margin performance reflects the investment in skills and capabilities we have made to meet the priorities of our 
clients, partially offset by the benefits from the productivity actions we took in 2024.
18
Management Discussion
International Business Machines Corporation and Subsidiary Companies

Consulting Signings and Book-to-Bill
($ in millions)
For the year ended December 31:
2024
2023 (1)
Yr.-to-Yr.
Percent
Change
Yr.-to-Yr.
Percent Change
Adjusted for
Currency
Total Consulting signings
$ 
25,103 
$ 
24,305 
 3.3 %
 4.7 %
(1) Recast to reflect January 2024 segment changes.
Consulting signings grew 3.3 percent as reported (4.7 percent adjusted for currency) in 2024, driven by our strong performance in 
signings in the fourth quarter of 2024. This performance reflects our ability to address client demands and the contribution of our 
generative AI solutions that help clients accelerate their digital transformations. Our book-to-bill ratio over the trailing twelve 
months was 1.21. Book-to-bill represents the ratio of IBM Consulting signings to its revenue over the same period and is a useful 
indicator of the demand for our business over time. 
Signings are management’s initial estimate of the value of a client’s commitment under a services contract within IBM Consulting. 
There are no third-party standards or requirements governing the calculation of signings. The calculation used by management 
involves estimates and judgments to gauge the extent of a client’s commitment, including the type and duration of the agreement 
and the presence of termination charges or wind-down costs.
Contract extensions and increases in scope are treated as signings only to the extent of the incremental new value. Total signings 
can vary over time due to a variety of factors including, but not limited to, the timing of signing a small number of larger contracts. 
Signings associated with an acquisition will be recognized on a prospective basis.
Management believes the estimated values of signings disclosed provide an indication of our forward-looking revenue. Signings are 
used to monitor the performance of the business and viewed as useful information for management and shareholders. The 
conversion of signings into revenue may vary based on the types of services and solutions, contract duration, customer decisions, 
and other factors, which may include, but are not limited to, the macroeconomic environment.
Infrastructure
($ in millions)
For the year ended December 31:
2024
2023
Yr.-to-Yr.
Percent
Change 
Yr.-to-Yr.
Percent Change
Adjusted for
Currency
Infrastructure revenue
$ 
14,020 
$ 
14,593 
 (3.9) %
 (2.7) %
Hybrid Infrastructure
$ 
8,913 
$ 
9,215 
 (3.3) %
 (2.3) %
IBM Z
 (10.0) 
 (8.9) 
Distributed Infrastructure
 1.6 
 2.6 
Infrastructure Support
 
5,107 
 
5,377 
 (5.0) 
 (3.4) 
Infrastructure revenue of $14,020 million decreased 3.9 percent as reported (2.7 percent adjusted for currency) as compared to the 
prior year, reflecting product cycle dynamics within Hybrid Infrastructure and Infrastructure Support.
Hybrid Infrastructure revenue of $8,913 million decreased 3.3 percent as reported (2.3 percent adjusted for currency) as compared 
to the prior year. Within Hybrid Infrastructure, IBM Z revenue decreased 10.0 percent as reported (8.9 percent adjusted for 
currency) on a year-to-year basis. At the end of 2024, z16 was in its eleventh quarter of availability, and the combination of 
resiliency, reliability, and security of this platform continues to resonate with clients. The total revenue performance from the z16 
program has outpaced prior Z cycles, and program-to-date installed MIPS have increased more than 30 percent as clients’ capacity 
needs continued to grow. IBM Z remains an enduring platform for mission-critical workloads, driving hardware adoption as well as 
related software, storage and services. Distributed Infrastructure revenue increased 1.6 percent as reported (2.6 percent adjusted 
for currency), driven primarily by double-digit growth in Storage systems, partially offset by a decline in cloud platform revenue. 
Storage revenue performance was driven by growth in high-end storage tied to the z16 platform and solutions tailored to protect, 
manage and access data for generative AI. In the fourth quarter of 2024, we introduced new innovation within Storage designed to 
give clients the ability to scale storage capacity to meet the growing data demands to support the next generation of AI workloads 
and projects.
Infrastructure Support revenue of $5,107 million decreased 5.0 percent as reported (3.4 percent adjusted for currency), driven by 
volume declines in support of non-IBM equipment and IBM product cycle dynamics.
Management Discussion
International Business Machines Corporation and Subsidiary Companies
19

($ in millions)
For the year ended December 31:
2024
2023 (1)
Yr.-to-Yr.
Percent/
Margin
Change 
Infrastructure
Gross profit
$ 
7,819 
$ 
8,187 
 (4.5) %     
Gross profit margin
 55.8 %
 56.1 %
 (0.3) pts.  
Segment profit
$ 
2,450 
$ 
2,828 
 (13.4) %     
Segment profit margin
 17.5 %
 19.4 %
 (1.9) pts.  
(1) Recast to reflect January 2024 segment changes.
Infrastructure gross profit margin decreased 0.3 points to 55.8 percent in 2024 compared to the prior year, reflecting product cycle 
dynamics within both Hybrid Infrastructure and Infrastructure Support. Segment profit of $2,450 million decreased 13.4 percent
and segment profit margin decreased 1.9 points to 17.5 percent primarily driven by product cycle dynamics and the investments in 
innovation we continued to make across IBM Z, Power and Storage systems in support of our clients’ increasing demand for 
capacity, reliability and security, and the integration of generative AI across their enterprises. The impact to segment profit from 
these increased investments was partially offset by a year-to-year increase in intellectual property and custom development 
income in 2024.
Financing
Refer to pages 41 through 42 for a discussion of Financing’s segment results.
Geographic Revenue
In addition to the revenue presentation by reportable segment, we also measure revenue performance on a geographic basis.
($ in millions)
For the year ended December 31:
2024
2023
Yr.-to-Yr.
Percent
Change
Yr.-to-Yr.
Percent Change
Adjusted for
Currency
Total revenue
$ 
62,753 
$ 
61,860 
 1.4 %
 2.5 %
Americas
$ 
31,266 
$ 
31,666 
 (1.3) %
 (0.7) %
Europe/Middle East/Africa
 
19,429 
 
18,492 
 5.1 
 4.7 
Asia Pacific
 
12,058 
 
11,702 
 3.0 
 7.9 
Geographic revenue performance for 2024 as compared to 2023:
Americas revenue decreased 1.3 percent as reported and 0.7 percent adjusted for currency. The U.S. decreased 0.5 percent. 
Canada decreased 4.5 percent as reported and 2.9 percent adjusted for currency. Latin America decreased 3.5 percent as reported, 
but was flat adjusted for currency. Within Latin America, Brazil revenue decreased 9.4 percent as reported and 5.0 percent adjusted 
for currency.
EMEA revenue increased 5.1 percent as reported and 4.7 percent adjusted for currency. Germany increased 14.5 percent as 
reported and 15.1 percent adjusted for currency. The UK increased 4.3 percent as reported and 1.8 percent adjusted for currency. 
Italy increased 3.5 percent as reported and 3.9 percent adjusted for currency. France was flat both as reported and adjusted for 
currency. 
Asia Pacific revenue increased 3.0 percent as reported and 7.9 percent adjusted for currency. Japan revenue increased 7.6 percent
as reported and 16.2 percent adjusted for currency. China decreased 7.2 percent as reported and 6.1 percent adjusted for currency. 
Australia decreased 3.6 percent as reported and 2.6 percent adjusted for currency. India decreased 1.5 percent as reported, but 
was flat adjusted for currency.
20
Management Discussion
International Business Machines Corporation and Subsidiary Companies

Total Expense and Other (Income)
($ in millions)
For the year ended December 31:
2024
2023
Yr.-to-Yr.
Percent/
Margin
Change
Total expense and other (income) (1) 
$ 
29,754 
$ 
25,610 
 16.2 %    
Non-operating adjustments
Amortization of acquired intangible assets
 
(1,107) 
 
(996) 
 11.1 
Acquisition-related charges 
 
(122) 
 
(33) 
 271.1 
Non-operating retirement-related (costs)/income (1)
 
(3,457) 
 
39 
 NM 
Operating (non-GAAP) expense and other (income)
$ 
25,068 
$ 
24,620 
 1.8 % 
Total expense-to-revenue ratio
 47.4 % 
 41.4 % 
6.0 pts.
Operating (non-GAAP) expense-to-revenue ratio
 39.9 % 
 39.8 % 
0.1 pts.
(1) 2024 includes the impact of pension settlement charges of $3.1 billion. Refer to note U, “Retirement-Related Benefits,” for additional information. 
NM–Not meaningful 
Our expense dynamics in 2024 reflect our continued investment to execute our hybrid cloud and AI strategy. We remain focused on 
our productivity initiatives as we digitally transform our business processes and scale AI within IBM. This includes simplifying our 
application and infrastructure environments, aligning our teams by workflow and enabling a higher value-add workforce through 
automation and AI-driven efficiencies. These productivity initiatives allowed for continued investments to drive innovation in our 
portfolio. 
Total expense and other (income) increased 16.2 percent in 2024 versus the prior year primarily driven by the pension settlement 
charges of $3.1 billion in 2024, higher spending reflecting our continued investment in portfolio innovation to drive our strategy and 
higher workforce rebalancing charges; partially offset by the benefits from productivity and the actions taken to transform our 
operations, higher gains from divestitures, and the effects of currency.
Total operating (non-GAAP) expense and other (income) increased 1.8 percent year to year, driven primarily by the factors 
described above, excluding the pension settlement charges.
For additional information regarding total expense and other (income) for both expense presentations, refer to the following 
analyses by category.
Selling, General and Administrative Expense
($ in millions)
For the year ended December 31:
2024
2023
Yr.-to-Yr.
Percent
Change
Selling, general and administrative expense
Selling, general and administrative–other
$ 
16,047 
$ 
15,706 
 2.2 % 
Advertising and promotional expense
 
1,173 
 
1,237 
 (5.2) 
Workforce rebalancing charges
 
696 
 
438 
 58.8 
Amortization of acquired intangible assets
 
1,105 
 
995 
 11.0 
Stock-based compensation 
 
690 
 
616 
 12.0 
Provision for/(benefit from) expected credit loss expense 
 
(21) 
 
10 
 NM 
Total selling, general and administrative expense
$ 
19,688 
$ 
19,003 
 3.6 % 
Non-operating adjustments 
Amortization of acquired intangible assets
 
(1,105) 
 
(995) 
 11.0 
Acquisition-related charges 
 
(55) 
 
(44) 
 23.8 
Operating (non-GAAP) selling, general and administrative expense
$ 
18,529 
$ 
17,964 
 3.1 % 
NM–Not meaningful
Management Discussion
International Business Machines Corporation and Subsidiary Companies
21

Total selling, general and administrative (SG&A) expense increased 3.6 percent in 2024 versus 2023, driven primarily by the 
following factors:
•
Higher net spending (3 points), including expenses of acquired businesses (1 point), as a result of our continued investment to 
drive our hybrid cloud and AI strategy; partially offset by benefits from productivity and the actions taken to transform our 
operations; and
•
Higher workforce rebalancing charges (1 point) to address stranded costs and accelerate our productivity initiatives; partially 
offset by
•
The effects of currency (1 point).
Operating (non-GAAP) SG&A expense increased 3.1 percent year to year primarily driven by the same factors. 
Expected credit loss was a benefit of $21 million in 2024 as compared to a provision of $10 million in 2023. The year-to-year 
change was primarily driven by lower specific reserve requirements in the current year. Refer to “Receivables and Allowances” 
section on page 25 for additional information.
Research, Development and Engineering Expense
($ in millions)
For the year ended December 31:
2024
2023
Yr.-to-Yr.
Percent
Change
Total research, development and engineering
$ 
7,479 
$ 
6,775 
 10.4 % 
Research, development and engineering (RD&E) expense increased 10.4 percent in 2024 versus 2023, primarily driven by 
investments to drive innovation in AI, hybrid cloud and quantum, as well as in Infrastructure ahead of our next IBM Z cycle in 2025.
Intellectual Property and Custom Development Income
($ in millions)
For the year ended December 31:
2024
2023
Yr.-to-Yr.
Percent
Change
Intellectual property income (1) (2) 
$ 
329 
$ 
374 
 (12.1) % 
Custom development income
 
667 
 
485 
 37.5 
Total
$ 
996 
$ 
860 
 15.9 % 
(1) Includes licensing, royalty-based fees and sales.
(2) Prior-year amounts have been reclassified to conform to the change in 2024 presentation.
Total Intellectual Property and Custom Development Income increased 15.9 percent in 2024 compared to 2023. The increase was 
primarily driven by joint development and licensing agreements with a Japanese consortium to leverage our intellectual property 
and expertise on advanced semiconductors.
The timing and amount of licensing, sales or other transfers of IP may vary significantly from period to period depending upon the 
timing of licensing agreements, economic conditions, industry consolidation and the timing of new patents and know-how 
development.
22
Management Discussion
International Business Machines Corporation and Subsidiary Companies

Other (Income) and Expense
($ in millions)
For the year ended December 31:
2024
2023
Yr.-to-Yr.
Percent 
Change
Other (income) and expense
(Gains)/losses on foreign currency transactions
$ 
(458) 
$ 
116 
 NM 
(Gains)/losses on derivative instruments (1)
 
515 
 
(17) 
 NM 
Interest income
 
(747) 
 
(670) 
 11.4 % 
Net (gains)/losses from securities and investment assets
 
(20) 
 
(39) 
 (49.4) 
Retirement-related costs/(income) 
 
3,457 
 
(39) 
 NM 
Other 
 
(877) 
 
(266) 
 230.3 
Total other (income) and expense
$ 
1,871 
$ 
(914) 
 NM 
Non-operating adjustments 
Amortization of acquired intangible assets
 
(2) 
 
(1) 
 144.6 
Acquisition-related charges (1)
 
(68) 
 
11 
 NM 
Non-operating retirement-related costs/(income) 
 
(3,457) 
 
39 
 NM 
Operating (non-GAAP) other (income) and expense
$ 
(1,656) 
$ 
(866) 
 91.3 % 
(1) 2024 and 2023 include the impact of a $68 million loss and $12 million gain, respectively, recognized on foreign exchange derivative contracts 
entered into by the company prior to the acquisition of StreamSets and webMethods from Software AG. Refer to note S, “Derivative Financial 
Instruments,” for additional information.
NM–Not meaningful
Total other (income) and expense was $1,871 million of expense in 2024 compared to income of $914 million in 2023. The year-to-
year change was primarily driven by:
•
Non-operating retirement-related cost of $3,457 million in the current-year period versus $39 million of income in the prior-year 
period primarily driven by the impact of the pension settlement charges of $3,113 million in 2024 and an increase in recognized 
actuarial losses due to the change in amortization period of the Qualified PPP, effective January 1, 2024. Refer to note U, 
“Retirement-Related Benefits,” for additional information; and 
•
Lower gains on land/building dispositions ($126 million) included in “Other”; partially offset by
•
A gain of $349 million from the sale of certain QRadar SaaS assets in 2024, included in “Other”. Refer to note E, “Acquisitions & 
Divestitures,” for additional information; and 
•
Higher gains on divestitures ($206 million) primarily driven by the divestiture of The Weather Company assets ($243 million), 
included in “Other”. Refer to note E, “Acquisitions & Divestitures,” for additional information; and
•
Higher gains on sales of intangibles ($87 million) included in “Other”; and
•
Higher interest income ($77 million) primarily driven by a higher average cash balance in the current year.
Operating (non-GAAP) other (income) and expense was income of $1,656 million in 2024 and increased $790 million compared to 
the prior year. The year-to-year change was primarily driven by the gain recognized from the sale of certain QRadar SaaS assets in 
the current year, higher gains on divestitures and sales of intangibles and higher interest income.
Interest Expense
($ in millions)
For the year ended December 31:
2024
2023
Yr.-to-Yr. 
Percent 
Change
Total interest expense 
$ 
1,712 
$ 
1,607 
      6.5 % 
Interest expense of $1,712 million in 2024 increased $105 million compared to 2023. Interest expense is presented in cost of 
financing in the Consolidated Income Statement only if the related external borrowings are to support the Financing external 
business. Overall interest expense (excluding capitalized interest) in 2024 was $2,048 million, an increase of $108 million year to 
year primarily driven by higher average interest rates.
Management Discussion
International Business Machines Corporation and Subsidiary Companies
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When determining the allowances, financing receivables are evaluated either on an individual or a collective basis. For the 
company’s policy on determining allowances for credit losses, refer to note A, “Significant Accounting Policies.”
Past Due Financing Receivables
The company summarizes information about the amortized cost basis for client financing receivables, including amortized cost aged 
over 90 days and still accruing, billed invoices aged over 90 days and still accruing, and amortized cost not accruing.
($ in millions)
At December 31, 2024:
Total 
Amortized 
Cost
Amortized 
Cost 
> 90 Days (1)
Amortized 
Cost 
> 90 Days and 
Accruing (1)
Billed 
Invoices 
> 90 Days and 
Accruing
Amortized 
Cost 
Not 
Accruing (2)
Americas
$ 
5,861 
$ 
66 
$ 
7 
$ 
1 
$ 
62 
EMEA
 
3,128 
 
29 
 
1 
 
0 
 
28 
Asia Pacific
 
1,429 
 
8 
 
0 
 
0 
 
7 
Total client financing receivables
$ 
10,418 
$ 
103 
$ 
8 
$ 
1 
$ 
97 
($ in millions)
At December 31, 2023:
Total 
Amortized 
Cost
Amortized 
Cost 
> 90 Days (1)
Amortized 
Cost 
> 90 Days and 
Accruing (1)
Billed 
Invoices 
> 90 Days and 
Accruing
Amortized 
Cost 
Not 
Accruing (2)
Americas
$ 
6,488 
$ 
111 
$ 
40 
$ 
6 
$ 
71 
EMEA
 
3,007 
 
31 
 
1 
 
1 
 
31 
Asia Pacific
 
1,368 
 
9 
 
1 
 
0 
 
8 
Total client financing receivables
$ 
10,863 
$ 
151 
$ 
43 
$ 
7 
$ 
110 
(1) At a contract level, which includes total billed and unbilled amounts for financing receivables aged greater than 90 days.
(2) Of the amortized cost not accruing, there was a related allowance of $94 million and $106 million at December 31, 2024 and 2023, respectively. 
Financing income recognized on these receivables was immaterial for the years ended December 31, 2024 and 2023.
Credit Quality Indicators
The company’s credit quality indicators, which are based on rating agency data, publicly available information and information 
provided by customers, are reviewed periodically based on the relative level of risk. The resulting indicators are a numerical rating 
system that maps to Moody’s Investors Service credit ratings as shown below. The company uses information provided by Moody’s, 
where available, as one of many inputs in its determination of customer credit ratings. The credit quality of the customer is 
evaluated based on these indicators and is assigned the same risk rating whether the receivable is a lease or a loan.
The following tables present the amortized cost basis for client financing receivables by credit quality indicator at December 31, 
2024 and 2023, respectively. Receivables with a credit quality indicator ranging from Aaa to Baa3 are considered investment grade. 
All others are considered non-investment grade. The credit quality indicators reflect mitigating credit enhancement actions taken by 
customers which reduce the risk to IBM. Gross write-offs by vintage year at December 31, 2024 were not material.
($ in millions)
Americas
EMEA
Asia Pacific
At December 31, 2024:
Aaa - Baa3
Ba1 - C
Aaa - Baa3
Ba1 - C
Aaa - Baa3
Ba1 - C
Vintage year
2024
$ 
2,080 
$ 
621 
$ 
1,145 
$ 
514 
$ 
616 
$ 
77 
2023
 
1,372 
 
310 
 
341 
 
258 
 
285 
 
19 
2022
 
950 
 
113 
 
408 
 
194 
 
254 
 
26 
2021
 
233 
 
24 
 
125 
 
27 
 
69 
 
5 
2020
 
43 
 
17 
 
29 
 
15 
 
36 
 
8 
2019 and prior
 
53 
 
44 
 
37 
 
35 
 
26 
 
7 
Total
$ 
4,732 
$ 
1,129 
$ 
2,085 
$ 
1,043 
$ 
1,287 
$ 
142 
86
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies

($ in millions)
Americas
EMEA
Asia Pacific
At December 31, 2023:
Aaa - Baa3
Ba1 - C
Aaa - Baa3
Ba1 - C
Aaa - Baa3
Ba1 - C
Vintage year
2023
$ 
2,292 
$ 
1,028 
$ 
750 
$ 
520 
$ 
501 
$ 
70 
2022
 
1,645 
 
268 
 
687 
 
374 
 
386 
 
42 
2021
 
655 
 
85 
 
284 
 
83 
 
110 
 
40 
2020
 
205 
 
79 
 
106 
 
60 
 
97 
 
22 
2019
 
104 
 
23 
 
58 
 
38 
 
40 
 
8 
2018 and prior
 
55 
 
50 
 
16 
 
30 
 
39 
 
12 
Total
$ 
4,955 
$ 
1,533 
$ 
1,901 
$ 
1,106 
$ 
1,174 
$ 
195 
Modifications
The company did not have any significant modifications due to clients experiencing financial difficulty for the years ended 
December 31, 2024 and 2023. 
NOTE L. PROPERTY, PLANT & EQUIPMENT
($ in millions)
At December 31:
2024
2023
Land and land improvements
$ 
179 
$ 
182 
Buildings and building and leasehold improvements
 
4,825 
 
5,333 
Information technology equipment
 
8,895 
 
9,223 
Production, engineering, office and other equipment
 
3,792 
 
3,385 
Total—gross
 
17,691 
 
18,122 
Less: Accumulated depreciation
 
11,959 
 
12,621 
Total—net
$ 
5,731 
$ 
5,501 
 NOTE M. LEASES      
          
Accounting for Leases as a Lessee
The following table presents the various components of lease costs.
($ in millions)
For the year ended December 31:
2024
2023
2022
Finance lease cost
$ 
229 
$ 
114 
$ 
67 
Operating lease cost 
 
1,018 
 
1,013 
 
1,050 
Short-term lease cost
 
9 
 
9 
 
7 
Variable lease cost
 
321 
 
331 
 
262 
Sublease income
 
(39) 
 
(61) 
 
(72) 
Total lease cost
$ 
1,537 
$ 
1,406 
$ 
1,315 
The company recorded net gains on sale and leaseback transactions of $17 million, $145 million and $41 million for the years 
ended December 31, 2024, 2023 and 2022, respectively.
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
87

The following table presents supplemental information relating to the cash flows arising from lease transactions. Cash payments 
related to variable lease costs and short-term leases are not included in the measurement of operating and finance lease liabilities, 
and, as such, are excluded from the amounts below.
($ in millions)
For the year ended December 31:
2024
2023
2022
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows from finance leases
$ 
43 
$ 
16 
$ 
9 
Financing cash outflows from finance leases
 
189 
 
75 
 
55 
Operating cash outflows from operating leases
 
961 
 
961 
 
1,020 
ROU assets obtained in exchange for new finance lease liabilities 
 
698 
 
355 
 
196 
ROU assets obtained in exchange for new operating lease liabilities 
 
988 
 
1,220 
 
705 
The following table presents the weighted-average lease term and discount rate for finance and operating leases.
At December 31:
2024
2023
Finance leases
Weighted-average remaining lease term (in years)
6.0
5.1
Weighted-average discount rate
 5.03 % 
 4.62 % 
Operating leases
Weighted-average remaining lease term (in years)
6.4
6.2
Weighted-average discount rate
 4.91 % 
 4.46 % 
The following table presents a maturity analysis of expected undiscounted cash flows for operating and finance leases on an annual 
basis for the next five years and thereafter.
($ in millions)
2025
2026
2027
2028
2029
Thereafter
Imputed 
Interest (1)
Total (2)
Finance leases
$ 
246 
$ 
210 
$ 
194 
$ 
168 
$ 
155 
$ 
202 
$ 
(174) 
$ 1,000 
Operating leases 
 
906 
 
787 
 
630 
 
447 
 
318 
 
938 
 
(603) 
 
3,422 
(1) Imputed interest represents the difference between undiscounted cash flows and discounted cash flows.
(2) The company entered into lease agreements, primarily related to operating leases, for certain facilities and equipment with payments totaling 
approximately $496 million that have not yet commenced as of December 31, 2024, and therefore are not included in this table.
The following table presents information on the company’s finance leases recognized in the Consolidated Balance Sheet.
($ in millions)
At December 31:
2024
2023
ROU assets—Property, plant and equipment
$ 
984 
$ 
481 
Lease liabilities
Short-term debt
 
198 
 
121 
Long-term debt
 
803 
 
379 
88
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies

Accounting for Leases as a Lessor
The following table presents amounts included in the Consolidated Income Statement related to lessor activity.
($ in millions)
For the year ended December 31:
2024
2023
2022
Lease income—sales-type and direct financing leases
Sales-type lease selling price
$ 
865 
$ 
1,280 
$ 
1,636 
Less: Carrying value of underlying assets (1)
 
(176) 
 
(245) 
 
(385) 
Gross profit
 
689 
 
1,034 
 
1,251 
Interest income on lease receivables
 
268 
 
242 
 
200 
Total sales-type and direct financing lease income
 
958 
 
1,276 
 
1,451 
Lease income—operating leases
 
60 
 
93 
 
116 
Variable lease income
 
68 
 
68 
 
87 
Total lease income
$ 
1,085 
$ 
1,437 
$ 
1,653 
(1) Excludes unguaranteed residual value.
Sales-Type and Direct Financing Leases
At December 31, 2024 and 2023, the unguaranteed residual values of sales-type and direct financing leases were $479 million and 
$458 million, respectively. Refer to note K, “Financing Receivables,” for additional information on the company’s net investment in 
leases.
For the years ended December 31, 2024 and 2023, impairment of residual values was immaterial.
The following table presents a maturity analysis of the lease payments due to IBM on sales-type and direct financing leases over the 
next five years and thereafter, as well as a reconciliation of the undiscounted cash flows to the financing receivables recognized in 
the Consolidated Balance Sheet at December 31, 2024.
($ in millions)
Total
2025
$ 
1,552 
2026
 
963 
2027
 
584 
2028
 
244 
2029
 
60 
Thereafter
 
3 
Total undiscounted cash flows
$ 
3,406 
Present value of lease payments (recognized as financing receivables) (1)
 
3,062 
Difference between undiscounted cash flows and discounted cash flows
$ 
344 
(1) The present value of the lease payments will not equal the financing receivables balances in the Consolidated Balance Sheet due to certain items, 
including IDCs, allowance for credit losses and residual values, which are included in the financing receivable balance, but are not included in the 
future lease payments.
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
89

NOTE N. INTANGIBLE ASSETS INCLUDING GOODWILL
Intangible Assets
The following table presents the company’s intangible asset balances by major asset class.
($ in millions)
At December 31, 2024:
Gross Carrying 
Amount
Accumulated 
Amortization
Net Carrying 
Amount (1)
Intangible asset class
Capitalized software
$ 
1,282 
$ 
(492) $ 
790 
Client relationships
 
9,704 
 
(4,387)  
5,317 
Completed technology
 
6,297 
 
(3,164)  
3,132 
Patents/trademarks
 
1,826 
 
(519)  
1,307 
Other (2)
 
138 
 
(24)  
114 
Total
$ 
19,247 
$ 
(8,587) $ 
10,660 
($ in millions)
At December 31, 2023:
Gross Carrying 
Amount
Accumulated 
Amortization
Net Carrying 
Amount (1)
Intangible asset class
Capitalized software
$ 
1,636 
$ 
(762) $ 
874 
Client relationships
 
9,053 
 
(3,500)  
5,553 
Completed technology
 
5,713 
 
(2,510)  
3,203 
Patents/trademarks
 
1,821 
 
(436)  
1,385 
Other (2)
 
41 
 
(20)  
22 
Total
$ 
18,265 
$ 
(7,229) $ 
11,036 
(1) Amounts as of December 31, 2024 and December 31, 2023 include a decrease in the net intangible asset balance of $126 million and an increase in 
the net intangible asset balance of $50 million, respectively, due to foreign currency translation.
(2) Other intangibles are primarily acquired proprietary and nonproprietary technology licenses, data, business processes, methodologies and systems.
There was no impairment of intangible assets recorded in 2024 and 2023. The net carrying amount of intangible assets decreased
$376 million during the year ended December 31, 2024, primarily due to intangible asset amortization, partially offset by additions 
of acquired intangibles from business combinations of $1,627 million, driven by the acquisition of StreamSets and webMethods in 
the third quarter of 2024, and additions of capitalized software. The aggregate intangible amortization expense was $2,499 million
and $2,287 million for the years ended December 31, 2024 and 2023, respectively. In addition, in 2024 and 2023, respectively, the 
company retired $923 million and $1,505 million of fully amortized intangible assets, impacting both the gross carrying amount and 
accumulated amortization by this amount. 
The future amortization expense relating to intangible assets currently recorded in the Consolidated Balance Sheet is estimated to 
be the following at December 31, 2024:
($ in millions)
Capitalized 
Software
Acquired 
Intangibles
Total
2025
$ 
427 
$ 
1,939 
$ 
2,365 
2026
 
260 
 
1,902 
 
2,162 
2027
 
103 
 
1,881 
 
1,984 
2028
 
0 
 
1,582 
 
1,582 
2029
 
0 
 
936 
 
936 
Thereafter
 
— 
 
1,631 
 
1,631 
90
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies

Goodwill
The changes in the goodwill balances by reportable segment for the years ended December 31, 2024 and 2023 are as follows:
($ in millions)
Segment
Balance at 
January 1, 2024
Goodwill 
Additions
Purchase 
Price 
Adjustments (1)
 Divestitures
Foreign 
Currency 
Translation 
and Other 
Adjustments (2)
Balance at 
December 31, 2024
Software
$ 
46,447 
$ 
1,511 
$ 
(51) 
$ 
— 
$ 
(770) 
$ 
47,136 
Consulting
 
8,883 
 
469 
 
(3) 
 
(1) 
 
(142) 
 
9,206 
Infrastructure
 
4,384 
 
8 
 
(1) 
 
— 
 
(28) 
 
4,363 
Other (3)
 
464 
 
— 
 
— 
 
(464) 
 
— 
 
— 
Total
$ 
60,178 
$ 
1,987 
$ 
(55) 
$ 
(465) 
$ 
(940) 
$ 
60,706 
($ in millions)
Segment
Balance at 
January 1, 2023
Goodwill 
Additions
Purchase 
Price 
Adjustments
Divestitures
Foreign 
Currency 
Translation 
and Other 
Adjustments (2)
Balance at 
December 31, 2023
Software (4)
$ 
42,712 
$ 
3,538 
$ 
(17) 
$ 
— 
$ 
214 
$ 
46,447 
Consulting (4)
 
8,409 
 
403 
 
2 
 
— 
 
69 
 
8,883 
Infrastructure
 
4,363 
 
12 
 
— 
 
— 
 
8 
 
4,384 
Other (4)
 
464 
 
— 
 
— 
 
— 
 
— 
 
464 
Total
$ 
55,949 
$ 
3,953 
$ 
(15) 
$ 
— 
$ 
291 
$ 
60,178 
(1) Includes measurement period adjustments related to business combinations that closed in the current and prior year.
(2) Primarily driven by foreign currency translation.
(3) In the first quarter of 2024, the company derecognized goodwill related to the divestiture of The Weather Company assets. Refer to note E, 
“Acquisitions & Divestitures,” for additional information.
(4) Recast to reflect January 2024 segment changes. Refer to note D, “Segments,” for additional information.
There were no goodwill impairment losses recorded during 2024 or 2023, and the company has no accumulated impairment losses. 
Purchase price adjustments recorded in 2024 and 2023 were related to acquisitions that were still subject to the measurement 
period that ends at the earlier of 12 months from the acquisition date or when information becomes available. Net purchase price 
adjustments recorded in 2024 and 2023 were not material.
NOTE O. BORROWINGS
Short-Term Debt
The company’s total short-term debt at December  31, 2024 and December  31, 2023 was $5,089 million and $6,426 million, 
respectively, and primarily consisted of current maturities of long-term debt detailed in “Long-Term Debt” below.
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
91

Long-Term Debt
Pre-Swap Borrowing
($ in millions)
At December 31:
Maturities
2024
2023
U.S. dollar debt (weighted-average interest rate at December 31, 2024): (1)
3.3%
2024
$ 
— 
$ 
5,003 
5.1%
2025
 
1,601 
 
1,601 
3.7%
2026
 
5,800 
 
5,201 
3.3%
2027
 
4,119 
 
3,619 
5.0%
2028
 
1,313 
 
1,313 
3.6%
2029
 
3,750 
 
3,250 
2.0%
2030
 
1,350 
 
1,350 
4.8%
2031
 
500 
 
— 
4.4%
2032
 
1,850 
 
1,850 
4.8%
2033
 
750 
 
750 
4.9%
2034
 
1,000 
 
— 
8.0%
2038
 
83 
 
83 
4.5%
2039
 
2,745 
 
2,745 
2.9%
2040
 
650 
 
650 
4.0%
2042
 
1,107 
 
1,107 
5.3%
2044
 
1,000 
 
— 
7.0%
2045
 
27 
 
27 
4.7%
2046
 
650 
 
650 
4.3%
2049
 
3,000 
 
3,000 
3.0%
2050
 
750 
 
750 
4.2%
2052
 
1,400 
 
1,400 
5.1%
2053
 
650 
 
650 
5.3%
2054
 
1,400 
 
— 
7.1%
2096
 
316 
 
316 
$ 35,813 
$ 35,317 
Euro debt (weighted-average interest rate at December 31, 2024): (1)
1.1%
2024
 
— 
 
829 
1.6%
2025
 
3,106 
 
3,315 
2.3%
2027
 
2,071 
 
2,210 
0.7%
2028
 
1,863 
 
1,989 
1.5%
2029
 
1,035 
 
1,105 
0.9%
2030
 
1,035 
 
1,105 
2.7%
2031
 
2,588 
 
2,762 
0.7%
2032
 
1,656 
 
1,768 
1.3%
2034
 
1,035 
 
1,105 
3.8%
2035
 
1,035 
 
1,105 
1.2%
2040
 
880 
 
939 
4.0%
2043
 
1,035 
 
1,105 
$ 17,340 
$ 19,335 
Other currencies (weighted-average interest rate at December 31, 2024): (1)
Pound sterling (4.9%)
2038
$ 
939 
$ 
955 
Japanese yen (0.7%)
2026–2028
 
808 
 
1,251 
Other (13.8%)
2025–2027
 
212 
 
241 
$ 55,111 
$ 57,099 
Finance lease obligations (5.0% weighted-average interest rate at December 31, 2024)
2025–2034
 
1,000 
 
499 
$ 56,112 
$ 57,598 
Less: net unamortized discount
 
824 
 
838 
Less: net unamortized debt issuance costs
 
168 
 
154 
Add: fair value adjustment (2)
 
(176) 
 
(60) 
$ 54,943 
$ 56,546 
Less: current maturities
 
5,059 
 
6,425 
Total
$ 49,884 
$ 50,121 
(1) Includes notes, debentures, bank loans and secured borrowings.
(2) The portion of the company’s fixed-rate debt obligations that is hedged is reflected in the Consolidated Balance Sheet as an amount equal to the sum 
of the debt’s carrying value and a fair value adjustment representing changes in the fair value of the hedged debt obligations attributable to 
movements in benchmark interest rates.
92
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies

The company’s indenture governing its debt securities and its various credit facilities each contain significant covenants which 
obligate the company to promptly pay principal and interest, limit the aggregate amount of secured indebtedness and sale and 
leaseback transactions to 10 percent of the company’s consolidated net tangible assets, and restrict the company’s ability to merge 
or consolidate unless certain conditions are met. The credit facilities also include a covenant on the company’s consolidated net 
interest expense ratio, which cannot be less than 2.20 to 1.0, as well as a cross default provision with respect to other defaulted 
indebtedness of at least $500 million.
The company is in compliance with all of its debt covenants and provides periodic certifications to its lenders. The failure to comply 
with its debt covenants could constitute an event of default with respect to the debt to which such provisions apply. If certain 
events of default were to occur, the principal and interest on the debt to which such event of default applied would become 
immediately due and payable.
In the first quarter of 2023, the company issued $0.7 billion of Japanese yen floating-rate syndicated bank loans with a maturity of 
5 years; $4.6 billion of Euro fixed-rate notes in tranches with maturities ranging from 4 to 20 years and coupons ranging from 3.375
to 4 percent; $0.9 billion of Pound sterling fixed-rate notes with a maturity of 15 years and a coupon of 4.875 percent; and $3.25 
billion of U.S. dollar fixed-rate notes in tranches with maturities ranging from 3 to 30 years and coupons ranging from 4.5 to 5.1 
percent.
In the first quarter of 2024, IBM International Capital Pte. Ltd (IIC), a wholly owned finance subsidiary of the company, issued $5.5 
billion of U.S. dollar fixed rate notes (IIC Notes) in tranches with maturities ranging from 2 to 30 years and coupons ranging from 4.6
to 5.3 percent. IIC is a 100 percent owned finance subsidiary of IBM, as described by the SEC in Rule 13-01(a)(4)(vi) of Regulation 
S-X, the primary purpose of which is to borrow money to be made available for the benefit of IBM and its affiliates. The IIC Notes are 
fully and unconditionally guaranteed by IBM, and no other subsidiary of IBM guarantees the IIC Notes.
Post-Swap Borrowing (Long-Term Debt, Including Current Portion)
($ in millions)
2024
2023
At December 31:
Amount
Weighted-Average 
Interest Rate
Amount
Weighted-Average 
Interest Rate
Fixed-rate debt
$ 
47,712 
 3.3 %
$ 
48,803 
 3.0 %
Floating-rate debt (1)
 
7,231 
 5.6 %
 
7,743 
 6.1 %
Total
$ 
54,943 
$ 
56,546 
(1) Includes $6,725 million in both 2024 and 2023, of notional interest-rate swaps that effectively convert fixed-rate long-term debt into floating-rate 
debt. Refer to note S, “Derivative Financial Instruments,” for additional information.
Pre-swap annual contractual obligations of long-term debt outstanding at December 31, 2024, are as follows:
($ in millions)
Total
2025
$ 
5,047 
2026
 
6,302 
2027
 
6,357 
2028
 
3,863 
2029
 
4,926 
Thereafter
 
29,616 
Total
$ 
56,112 
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
93

Interest on Debt
($ in millions)
For the year ended December 31:
2024
2023
2022
Cost of financing
$ 
336 
$ 
334 
$ 
346 
Interest expense
 
1,712 
 
1,607 
 
1,216 
Interest capitalized
 
12 
 
9 
 
5 
Total interest paid and accrued
$ 
2,060 
$ 
1,949 
$ 
1,566 
Refer to the related discussion in note D, “Segments,” for interest expense of the Financing segment. Refer to note S, “Derivative 
Financial Instruments,” for a discussion of the use of foreign currency denominated debt designated as a hedge of net investment, 
as well as a discussion of the use of currency and interest-rate swaps in the company’s debt risk management program.
Lines of Credit
On June 17, 2024, the company amended its existing $2.5 billion Three-Year Credit Agreement and $7.5 billion Five-Year Credit 
Agreement (the Credit Agreements) to extend the maturity dates to June 20, 2027 and June 22, 2029, respectively. The Credit 
Agreements permit the company and its subsidiary borrowers to borrow up to $10 billion on a revolving basis. The total expense 
recorded by the company related to these agreements was $8 million, $8 million and $11 million in 2024, 2023 and 2022, 
respectively. Subject to certain conditions stated in the Credit Agreements, the borrower may borrow, prepay and re-borrow 
amounts under the Credit Agreements at any time during the term of such agreements. Funds borrowed may be used for the general 
corporate purposes of the borrower.
Interest rates on borrowings under the Credit Agreements will be based on prevailing market interest rates, as further described in 
the Credit Agreements. The Credit Agreements contain customary representations and warranties, covenants, events of default, and 
indemnification provisions. The company believes that circumstances that might give rise to breach of these covenants or an event 
of default, as specified in the Credit Agreements, are remote. As of December 31, 2024, there were no borrowings by the company 
under the Credit Agreements.
The company also has other committed lines of credit in some of the geographies which are not significant in the aggregate. Interest 
rates and other terms of borrowing under these lines of credit vary from country to country, depending on local market conditions. 
As of December 31, 2024, there were no material borrowings by the company under these credit facilities.
NOTE P. OTHER LIABILITIES
($ in millions) 
At December 31:
2024
2023
Income tax reserves 
$ 
6,865 
$ 
6,916 
Deferred taxes
 
815 
 
1,146 
Excess Savings Plan
 
1,445 
 
1,437 
Disability benefits
 
274 
 
308 
Derivative liabilities
 
463 
 
299 
Workforce reductions
 
445 
 
526 
Environmental accruals
 
204 
 
206 
Other
 
536 
 
639 
Total
$ 
11,048 
$ 
11,475 
In response to changing business needs, the company periodically takes workforce reduction actions to improve productivity, cost 
competitiveness and to rebalance skills. The noncurrent future payments associated with these activities are reflected in the 
workforce reductions caption in the previous table. The noncurrent liabilities are workforce accruals primarily related to terminated 
employees who are no longer working for the company and who were granted annual payments to supplement their incomes in 
certain countries. Depending on the individual country’s legal requirements, these required payments will continue until the former 
employee begins receiving pension benefits or passes away. The total amounts accrued for workforce reductions, including 
amounts classified as other accrued expenses and liabilities in the Consolidated Balance Sheet, were $665 million and $725 million
at December 31, 2024 and 2023, respectively. 
The company employs extensive internal environmental protection programs that primarily are preventive in nature. The company 
also participates in environmental assessments and cleanups at a number of locations, including operating facilities, previously 
owned facilities and Superfund sites. The company’s maximum exposure for all environmental liabilities cannot be estimated and no 
amounts have been recorded for non-ARO environmental liabilities that are not probable or estimable. The total amounts accrued 
94
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies

for non-ARO environmental liabilities, including amounts classified as current in the Consolidated Balance Sheet, that do not reflect 
actual or anticipated insurance recoveries, were $247 million and $244 million at December  31, 2024 and 2023, respectively. 
Estimated environmental costs are not expected to materially affect the consolidated financial position or consolidated results of 
the company’s operations in future periods. However, estimates of future costs are subject to change due to protracted cleanup 
periods, changing environmental remediation regulations and changes in assumptions.
As of December 31, 2024, the company was unable to estimate the range of settlement dates and the related probabilities for 
certain asbestos remediation AROs. These conditional AROs are primarily related to the encapsulated structural fireproofing that is 
not subject to abatement unless the buildings are demolished and non-encapsulated asbestos that the company would remediate 
only if it performed major renovations of certain existing buildings. Because these conditional obligations have indeterminate 
settlement dates, the company could not develop a reasonable estimate of their fair values. The company will continue to assess its 
ability to estimate fair values at each future reporting date. The related liability will be recognized once sufficient additional 
information becomes available. The total amounts accrued for ARO liabilities, including amounts classified as current in the 
Consolidated Balance Sheet, were $80 million and $113 million at December 31, 2024 and 2023, respectively.
NOTE Q. COMMITMENTS & CONTINGENCIES
Commitments
The company’s extended lines of credit to third-party entities include unused amounts of $1.6 billion and $1.4 billion at 
December  31, 2024 and 2023, respectively. A portion of these amounts was available to the company’s business partners to 
support their working capital needs. In addition, the company has committed to provide future financing to its clients in connection 
with client purchase agreements for $2.2 billion and $1.9 billion at December  31, 2024 and 2023, respectively. The company 
collectively evaluates the allowance for these arrangements using a provision methodology consistent with the portfolio of the 
commitments. Refer to note A, “Significant Accounting Policies,” for additional information. The allowance for these commitments is 
recorded in other liabilities in the Consolidated Balance Sheet and was not material at December 31, 2024 and 2023.
The company has applied the guidance requiring a guarantor to disclose certain types of guarantees, even if the likelihood of 
requiring the guarantor’s performance is remote. The following is a description of arrangements in which the company is the 
guarantor.
The company is a party to a variety of agreements pursuant to which it may be obligated to indemnify the other party with respect to 
certain matters. Typically, these obligations arise in the context of contracts entered into by the company, under which the company 
customarily agrees to hold the party harmless against losses arising from a breach of representations and covenants related to such 
matters as title to the assets sold, certain intellectual property rights, specified environmental matters, third-party performance of 
nonfinancial contractual obligations and certain income taxes. In each of these circumstances, payment by the company is 
conditioned on the other party making a claim pursuant to the procedures specified in the particular contract, the procedures of 
which typically allow the company to challenge the other party’s claims. While indemnification provisions typically do not include a 
contractual maximum on the company’s payment, the company’s obligations under these agreements may be limited in terms of 
time and/or nature of claim, and in some instances, the company may have recourse against third parties for certain payments made 
by the company.
It is not possible to predict the maximum potential amount of future payments under these or similar agreements due to the 
conditional nature of the company’s obligations and the unique facts and circumstances involved in each particular agreement. 
Historically, payments made by the company under these agreements have not had a material effect on the company’s business, 
financial condition or results of operations. 
In addition, the company guarantees certain loans and financial commitments. The maximum potential future payment under these 
financial guarantees and the fair value of these guarantees recognized in the Consolidated Balance Sheet at December 31, 2024 and 
2023 was not material.
Changes in the company’s warranty liability for standard warranties, which are included in other accrued expenses and liabilities 
and other liabilities in the Consolidated Balance Sheet, and for extended warranty contracts, which are included in deferred income 
in the Consolidated Balance Sheet, are presented in the following tables.
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
95

Standard Warranty Liability
($ in millions)
2024
2023
Balance at January 1
$ 
65 
$ 
79 
Current period accruals
 
82 
 
84 
Accrual adjustments to reflect experience
 
9 
 
(14) 
Charges incurred
 
(81) 
 
(83) 
Balance at December 31
$ 
76 
$ 
65 
Extended Warranty Liability (Deferred Income)
($ in millions)
2024
2023
Balance at January 1
$ 
184 
$ 
272 
Revenue deferred for new extended warranty contracts
 
23 
 
70 
Amortization of deferred revenue
 
(113) 
 
(158) 
Other (1)
 
(6) 
 
0 
Balance at December 31
$ 
88 
$ 
184 
Current portion
$ 
61 
$ 
110 
Noncurrent portion
$ 
27 
$ 
74 
(1) Other consists primarily of foreign currency translation adjustments.
The decrease in extended warranty liability is primarily due to the company’s shift to alternative maintenance and support offerings 
without a warranty element.
Contingencies
As a company with a substantial employee population and with clients in more than 175 countries, IBM is involved, either as 
plaintiff or defendant, in a variety of ongoing claims, demands, suits, investigations, tax matters and proceedings that arise from 
time to time in the ordinary course of its business. The company is a leader in the information technology industry and, as such, has 
been and will continue to be subject to claims challenging its IP rights and associated products and offerings, including claims of 
copyright and patent infringement and violations of trade secrets and other IP rights. In addition, the company enforces its own IP 
against infringement, through license negotiations, lawsuits or otherwise. Further, given the rapidly evolving external landscape of 
cybersecurity, AI, privacy and data protection laws, regulations and threat actors, the company and its clients have been and will 
continue to be subject to actions or proceedings in various jurisdictions. Also, as is typical for companies of IBM’s scope and scale, 
the company is party to actions and proceedings in various jurisdictions involving a wide range of labor and employment issues 
(including matters related to contested employment decisions, country-specific labor and employment laws, and the company’s 
pension, retirement and other benefit plans), as well as actions with respect to contracts, product liability, cybersecurity, data 
privacy, securities, foreign operations, competition law and environmental matters. These actions may be commenced by a number 
of different parties, including competitors, clients, current or former employees, government and regulatory agencies, stockholders 
and representatives of the locations in which the company does business. Some of the actions to which the company is party may 
involve particularly complex technical issues, and some actions may raise novel questions under the laws of the various jurisdictions 
in which these matters arise.
The company records a provision with respect to a claim, suit, investigation or proceeding when it is probable that a liability has 
been incurred and the amount of the loss can be reasonably estimated. Any recorded liabilities, including any changes to such 
liabilities for the years ended December 31, 2024, 2023 and 2022 were not material to the Consolidated Financial Statements.
In accordance with the relevant accounting guidance, the company provides disclosures of matters for which the likelihood of 
material loss is at least reasonably possible. In addition, the company also discloses matters based on its consideration of other 
matters and qualitative factors, including the experience of other companies in the industry, and investor, customer and employee 
relations considerations.
With respect to certain of the claims, suits, investigations and proceedings discussed herein, the company believes at this time that 
the likelihood of any material loss is remote, given, for example, the procedural status, court rulings, and/or the strength of the 
company’s defenses in those matters. With respect to the remaining claims, suits, investigations and proceedings discussed in this 
note, except as specifically discussed herein, the company is unable to provide estimates of reasonably possible losses or range of 
losses, including losses in excess of amounts accrued, if any, for the following reasons. Claims, suits, investigations and proceedings 
96
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies

are inherently uncertain, and it is not possible to predict the ultimate outcome of these matters. It is the company’s experience that 
damage amounts claimed in litigation against it are unreliable and unrelated to possible outcomes, and as such are not meaningful 
indicators of the company’s potential liability. Further, the company is unable to provide such an estimate due to a number of other 
factors with respect to these claims, suits, investigations and proceedings, including considerations of the procedural status of the 
matter in question, the presence of complex or novel legal theories, and/or the ongoing discovery and development of information 
important to the matters. The company reviews claims, suits, investigations and proceedings at least quarterly, and decisions are 
made with respect to recording or adjusting provisions and disclosing reasonably possible losses or range of losses (individually or 
in the aggregate), to reflect the impact and status of settlement discussions, discovery, procedural and substantive rulings, reviews 
by counsel and other information pertinent to a particular matter.
Whether any losses, damages or remedies finally determined in any claim, suit, investigation or proceeding could reasonably have a 
material effect on the company’s business, financial condition, results of operations or cash flows will depend on a number of 
variables, including: the timing and amount of such losses or damages; the structure and type of any such remedies; the significance 
of the impact any such losses, damages or remedies may have in the Consolidated Financial Statements; and the unique facts and 
circumstances of the particular matter that may give rise to additional factors. While the company will continue to defend itself 
vigorously, it is possible that the company’s business, financial condition, results of operations or cash flows could be affected in 
any particular period by the resolution of one or more of these matters.
The following is a summary of the more significant legal matters involving the company.
On June 8, 2021, IBM sued GlobalFoundries U.S. Inc. (GF) in New York State Supreme Court for claims including fraud and breach 
of contract relating to a long-term strategic relationship between IBM and GF for researching, developing, and manufacturing 
advanced semiconductor chips for IBM. GF walked away from its obligations and IBM sued to recover amounts paid to GF, and other 
compensatory and punitive damages, totaling more than $1.5 billion. On September 14, 2021, the court ruled on GF’s motion to 
dismiss. On April 7, 2022, the Appellate Division unanimously reversed the lower court’s dismissal of IBM’s fraud claim. In 
December 2024, the parties settled the lawsuit, with no material financial impact to IBM, and in January 2025, the lawsuit was 
discontinued with prejudice.
On June 2, 2022, a putative class action lawsuit was filed in the United States District Court for the Southern District of New York 
alleging that the IBM Pension Plan miscalculated certain joint and survivor annuity pension benefits by using outdated actuarial 
tables in violation of the Employee Retirement Income Security Act of 1974. IBM, the Plan Administrator Committee, and the IBM 
Pension Plan are named as defendants. On April 4, 2024, the court dismissed the lawsuit with prejudice. On May 3, 2024, the 
plaintiffs appealed.
As disclosed in the Kyndryl Form 10 and subsequent Kyndryl public filings, in 2017, BMC Software, Inc. (BMC) filed suit against IBM 
in the United States District Court for the Southern District of Texas in a dispute involving IBM’s former managed infrastructure 
services business. On May 30, 2022, the trial court awarded BMC $718 million in direct damages and $718 million in punitive 
damages, plus interest and fees. On April 30, 2024, the United States Court of Appeals for the Fifth Circuit reversed and rendered 
the district court’s judgment in IBM’s favor. IBM does not believe it has any material exposure relating to this litigation. No material 
liability or related indemnification asset has been recorded by IBM.
The company is party to, or otherwise involved in, proceedings brought by U.S. federal or state environmental agencies under the 
Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), known as “Superfund,” or laws similar to 
CERCLA. Such statutes require potentially responsible parties to participate in remediation activities regardless of fault or 
ownership of sites. The company is also conducting environmental investigations, assessments or remediations at or in the vicinity 
of several current or former operating sites globally pursuant to permits, administrative orders or agreements with country, state or 
local environmental agencies, and is involved in lawsuits and claims concerning certain current or former operating sites.
The company is also subject to ongoing tax examinations and governmental assessments in various jurisdictions. Along with many 
other U.S. companies doing business in Brazil, the company is involved in various challenges with Brazilian tax authorities regarding 
non-income tax assessments and non-income tax litigation matters. The total potential amount related to all these matters for all 
applicable years is approximately $300 million. The company believes it will prevail on these matters and that this amount is not a 
meaningful indicator of liability.
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
97

NOTE R. EQUITY ACTIVITY
The authorized capital stock of IBM consists of (i) 4,687,500,000 shares of common stock with a $0.20 per share par value, of 
which 926,290,070 shares were outstanding at December 31, 2024, and (ii) 150,000,000 shares of preferred stock with a $0.01
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, 2024. 
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, 2024, $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: 12,253,153 shares in 2024, 9,794,240 shares in 2023, and 8,539,072 shares in 2022. The company issued 
2,454,155 treasury shares in 2024, 2,080,983 treasury shares in 2023, and 2,512,300 treasury shares in 2022, 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, 3,430,885 common shares at a cost of $651 million, 
2,953,554 common shares at a cost of $402 million, and 3,027,994 common shares at a cost of $407 million in 2024, 2023 and 
2022, respectively, were remitted by employees to the company in order to satisfy minimum statutory tax withholding 
requirements. These amounts are included in the treasury stock balance in the Consolidated Balance Sheet and the Consolidated 
Statement of Equity.
Reclassifications and Taxes Related to Items of Other Comprehensive Income
($ in millions)
For the year ended  December 31, 2024:
Before Tax 
Amount
Tax (Expense)/ 
Benefit
Net of Tax 
Amount
Other comprehensive income/(loss)
Foreign currency translation adjustments
$ 
301 
$ 
(324) 
$ 
(23) 
Net changes related to available-for-sale securities
Unrealized gains/(losses) arising during the period
$ 
2 
$ 
0 
$ 
1 
Reclassification of (gains)/losses to other (income) and expense
 
— 
 
— 
 
— 
Total net changes related to available-for-sale securities
$ 
2 
$ 
0 
$ 
1 
Unrealized gains/(losses) on cash flow hedges
Unrealized gains/(losses) arising during the period
$ 
389 
$ 
(113) 
$ 
276 
Reclassification of (gains)/losses to:
Cost of services
 
(22) 
 
6 
 
(16) 
Cost of sales
 
(40) 
 
13 
 
(27) 
Cost of financing
 
6 
 
(2) 
 
5 
SG&A expense
 
(16) 
 
5 
 
(11) 
Other (income) and expense
 
125 
 
(32) 
 
94 
Interest expense
 
31 
 
(8) 
 
24 
Total unrealized gains/(losses) on cash flow hedges
$ 
474 
$ 
(130) 
$ 
343 
Retirement-related benefit plans (1)
Prior service costs/(credits)
$ 
(56) 
$ 
11 
$ 
(45) 
Net (losses)/gains arising during the period
 
70 
 
(65) 
 
6 
Curtailments and settlements
 
3,159 
 
(719) 
 
2,441 
Amortization of prior service (credits)/costs
 
(7) 
 
2 
 
(5) 
Amortization of net (gains)/losses
 
975 
 
(201) 
 
775 
Total retirement-related benefit plans
$ 
4,142 
$ 
(971) 
$ 
3,171 
Other comprehensive income/(loss)
$ 
4,919 
$ 
(1,426) 
$ 
3,492 
(1) These AOCI components are included in the computation of net periodic pension cost and include the impact of pension settlement charges of $3.1 
billion ($2.4 billion net of tax). Refer to note U, “Retirement-Related Benefits,” for additional information.
98
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies

($ in millions)
For the year ended  December 31, 2023:
Before Tax 
Amount
Tax (Expense)/ 
Benefit
Net of Tax 
Amount
Other comprehensive income/(loss)
Foreign currency translation adjustments
$ 
3 
$ 
100 
$ 
103 
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
$ 
207 
$ 
(63) 
$ 
144 
Reclassification of (gains)/losses to:
Cost of services
 
5 
 
(1) 
 
5 
Cost of sales
 
(22) 
 
8 
 
(14) 
Cost of financing
 
14 
 
(3) 
 
10 
SG&A expense
 
(12) 
 
4 
 
(8) 
Other (income) and expense
 
(209) 
 
53 
 
(157) 
Interest expense
 
66 
 
(17) 
 
49 
Total unrealized gains/(losses) on cash flow hedges
$ 
47 
$ 
(19) 
$ 
28 
Retirement-related benefit plans (1)
Prior service costs/(credits)
$ 
2 
$ 
0 
$ 
2 
Net (losses)/gains arising during the period
 
(3,115) 
 
536 
 
(2,579) 
Curtailments and settlements
 
5 
 
(1) 
 
4 
Amortization of prior service (credits)/costs
 
(9) 
 
3 
 
(6) 
Amortization of net (gains)/losses
 
515 
 
(88) 
 
427 
Total retirement-related benefit plans
$ 
(2,602) 
$ 
450 
$ 
(2,152) 
Other comprehensive income/(loss)
$ 
(2,552) 
$ 
531 
$ 
(2,021) 
(1) These AOCI components are included in the computation of net periodic pension cost. Refer to note U, “Retirement-Related Benefits,” for additional 
information.
Accumulated Other Comprehensive Income/(Loss) (net of tax)
($ in millions)
For the year ended  December 31, 2022:
Before Tax 
Amount
Tax (Expense)/ 
Benefit
Net of Tax 
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 (1)
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 
(1) These AOCI components are included in the computation of net periodic pension cost and include the impact of a pension settlement charge of $5.9 
billion ($4.4 billion net of tax). Refer to note U, “Retirement-Related Benefits,” for additional information.
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
99

($ in millions)
Net Unrealized 
Gains/(Losses) 
on Cash Flow 
Hedges
Foreign 
Currency 
Translation 
Adjustments (1)
Net Change 
Retirement-
Related 
Benefit 
Plans
Net Unrealized 
Gains/(Losses) 
on Available-
For-Sale 
Securities
Accumulated 
Other 
Comprehensive 
Income/(Loss)
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 (2)
 
(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) 
Other comprehensive income before 
reclassifications
 
144 
 
103 
 
(2,577) 
 
0 
 
(2,331) 
Amount reclassified from accumulated 
other comprehensive income
 
(115) 
 
— 
 
425 
 
— 
 
310 
Total change for the period
 
28 
 
103 
 
(2,152) 
 
0 
 
(2,021) 
December 31, 2023
 
(106) 
 
(3,488) 
 
(15,165) 
 
(1) 
 
(18,761) 
Other comprehensive income before 
reclassifications
 
276 
 
(23) 
 
(39) 
 
1 
 
215 
Amount reclassified from accumulated 
other comprehensive income (3)
 
67 
 
— 
 
3,210 
 
— 
 
3,278 
Total change for the period
 
343 
 
(23) 
 
3,171 
 
1 
 
3,492 
December 31, 2024
$ 
237 
$ 
(3,512) 
$ 
(11,994) 
$ 
0 
$ 
(15,269) 
(1) Foreign currency translation adjustments are presented gross except for any associated hedges which are presented net of tax.
(2) Net change in retirement-related benefit plans includes the impact of a pension settlement charge of $5.9 billion ($4.4 billion net of tax). Refer to note 
U, “Retirement-Related Benefits,” for additional information. 
(3) Net change in retirement-related benefit plans includes the impact of pension settlement charges of $3.1 billion ($2.4 billion net of tax). Refer to note 
U, “Retirement-Related Benefits,” for additional information.
NOTE S. DERIVATIVE FINANCIAL INSTRUMENTS
The company operates in multiple functional currencies and is a significant lender and borrower in the global markets. In the normal 
course of business, the company is exposed to the impact of interest rate changes and foreign currency fluctuations, and to a lesser 
extent equity risk. The company limits these risks by following established risk management policies and procedures, including the 
use of derivatives, and, where cost effective, financing with debt in the currencies in which assets are denominated. For interest rate 
exposures, derivatives are used to better align rate movements between the interest rates associated with the company’s lease and 
other financial assets and the interest rates associated with its financing debt. Derivatives are also used to manage the related cost 
of debt. For foreign currency exposures, derivatives are used to better manage the cash flow volatility arising from foreign exchange 
rate fluctuations.
In the Consolidated Balance Sheet, the company does not offset derivative assets against liabilities in master netting arrangements 
nor does it offset receivables or payables recognized upon payment or receipt of cash collateral against the fair values of the related 
derivative instruments. The amount recognized in other accounts receivable for the right to reclaim cash collateral was $29 million
and $11 million at December 31, 2024 and 2023, respectively. The amount recognized in accounts payable for the obligation to 
return cash collateral was $3 million and $7 million at December 31, 2024 and 2023, respectively. The company restricts the use of 
cash collateral received to rehypothecation, and therefore reports it in restricted cash in the Consolidated Balance Sheet. The 
amount rehypothecated was $3 million and $7 million at December 31, 2024 and 2023, respectively. Additionally, if derivative 
exposures covered by a qualifying master netting agreement had been netted in the Consolidated Balance Sheet at December 31, 
2024 and 2023, the total derivative asset and liability positions each would have been reduced by $352 million and $235 million, 
respectively.
As discussed in note E, “Acquisitions & Divestitures,” the company completed the acquisition of StreamSets and webMethods from 
Software AG on July 1, 2024. Prior to the acquisition, beginning in December 2023, the company entered into foreign currency 
derivative contracts which were accounted for as non-hedge derivatives and expired by June 28, 2024. For the years ended 
December 31, 2024 and 2023, the company recorded a realized loss of $68 million and an unrealized gain of $12  million, 
respectively, in other (income) and expense in the Consolidated Income Statement. At December 31, 2023, the fair value of the call 
options was $62 million, and was included in prepaid expenses and other current assets in the Consolidated Balance Sheet. There 
were no associated derivatives outstanding at December 31, 2024.  
In 2021, the company completed the separation of its managed infrastructure services unit into a new public company, Kyndryl. 
During 2022, the company fully disposed of its previously retained interest in Kyndryl common stock pursuant to exchange 
100
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies

agreements with a third-party financial institution and entered into a cash-settled swap that maintained IBM’s continued economic 
exposure in those shares. For the year ended December 31, 2022, IBM recognized a total realized loss of $351 million, including 
$267 million on the disposition of shares and $83 million on the settlement of the swap in other (income) and expense in the 
Consolidated Income Statement. 
In its hedging programs, the company may use forward contracts, futures contracts, interest-rate swaps, cross-currency swaps, 
equity swaps and options depending upon the underlying exposure. The company is not a party to leveraged derivative instruments.
A brief description of the major hedging programs, categorized by underlying risk, follows.
Interest Rate Risk
Fixed and Variable Rate Borrowings
The company issues debt in the global capital markets to fund its operations and financing business. Access to cost-effective 
financing can result in interest rate mismatches with the underlying assets. To manage these mismatches and to reduce overall 
interest cost, the company may use interest-rate swaps to convert specific fixed-rate debt issuances into variable-rate debt (i.e., fair 
value hedges) and to convert specific variable-rate debt issuances into fixed-rate debt (i.e., cash flow hedges). At both December 
31, 2024 and 2023, the total notional amount of the company’s interest-rate swaps was $6.7 billion. The weighted-average 
remaining maturity of these instruments at December 31, 2024 and 2023 was approximately 4.5 years and 5.5 years, respectively. 
These interest-rate contracts were accounted for as fair value hedges. The company did not have any cash flow hedges relating to 
this program outstanding at December 31, 2024 and 2023.
Forecasted Debt Issuance
The company is exposed to interest rate volatility on future debt issuances. To manage this risk, the company may use instruments 
such as forward starting interest-rate swaps to lock in the rate on the interest payments related to the forecasted debt issuances. 
There were no instruments outstanding at December 31, 2024 and 2023.
In connection with cash flow hedges of forecasted interest payments related to the company’s borrowings, there were unrealized 
net losses (before taxes) of $106 million and $121 million at December 31, 2024 and 2023, respectively, deferred in AOCI. The 
company estimates that $14 million of the deferred net losses (before taxes) on derivatives in AOCI at December 31, 2024 will be 
reclassified to net income within the next 12 months, providing an offsetting economic impact against the underlying interest 
payments.
Foreign Exchange Risk
Long-Term Investments in Foreign Subsidiaries (Net Investment)
A large portion of the company’s foreign currency denominated debt portfolio is designated as a hedge of net investment in major 
foreign subsidiaries to reduce the volatility in stockholders’ equity caused by changes in foreign currency exchange rates in the 
subsidiaries’ functional currency with respect to the U.S. dollar. At December 31, 2024 and 2023, the carrying value of debt 
designated as hedging instruments was $14.0 billion and $15.9 billion, respectively. The company also uses foreign currency 
derivatives, which may include forward contracts, long-term cross-currency swaps and options, for this risk management purpose. 
In the third quarter of 2024, the company entered into long-term cross-currency swaps designated as hedge of net investment 
instruments that the company also relates to its underlying U.S. dollar denominated debt. The notional value of these long-term 
cross-currency swaps at December 31, 2024 was $2.2 billion. Cash flows associated with interim net interest settlements of these 
swaps are reported in cash flows from operating activities in the Consolidated Statement of Cash Flows. For the year ended 
December 31, 2024, interim net interest cash settlements were not material. There were no associated derivatives at December 31, 
2023. At December 31, 2024 and 2023, the total notional amount of derivative instruments designated as net investment hedges 
was $6.2 billion and $4.9 billion, respectively. At December 31, 2024 and 2023, the weighted-average remaining maturity of these 
instruments was approximately 0.8 years and 0.1 years, respectively.
Anticipated Royalties and Cost Transactions
The company’s operations generate significant nonfunctional currency, third-party vendor payments and intercompany payments 
for royalties and goods and services among the company’s non-U.S. subsidiaries and with the company. In anticipation of these 
foreign currency cash flows and in view of the volatility of the currency markets, the company selectively employs foreign exchange 
forward contracts to manage its currency risk. These forward contracts are accounted for as cash flow hedges. At December 31, 
2024, the maximum remaining length of time over which the company has hedged its exposure to the variability in future cash flows 
is approximately two years. At December 31, 2024 and 2023, the total notional amount of forward contracts designated as cash 
flow hedges of forecasted royalty and cost transactions was $9.7 billion and $9.2 billion, respectively. At both December 31, 2024 
and 2023, the weighted-average remaining maturity of these instruments was approximately 0.6 years.
At December 31, 2024 and 2023, in connection with cash flow hedges of anticipated royalties and cost transactions, there were 
unrealized net gains (before taxes) of $415 million and $40 million, respectively, deferred in AOCI. The company estimates that 
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
101

$363 million of the deferred net gains (before taxes) on derivatives in AOCI at December 31, 2024 will be reclassified to net income 
within the next 12 months, providing an offsetting economic impact against the underlying anticipated transactions.
Foreign Currency Denominated Borrowings
The company is exposed to exchange rate volatility on foreign currency denominated debt. To manage this risk, the company may 
employ forward contracts or cross-currency swaps to convert the principal, or principal and interest payments of foreign currency 
denominated debt to debt denominated in the functional currency of the borrowing entity. These derivatives are accounted for as 
cash flow hedges.
At December 31, 2024, the maximum length of time remaining over which the company has hedged its exposure was approximately 
six years. At December 31, 2024 and 2023, the total notional amount of derivative instruments designated as cash flow hedges of 
foreign currency denominated debt was $5.0 billion and $5.2 billion, respectively. 
At December 31, 2024 and 2023, in connection with the cross-currency swaps terminated in August 2023, there were unrealized 
net losses (before taxes) of $46 million and $68 million, respectively, deferred in AOCI, of which $15 million of the deferred net 
losses (before taxes) is estimated to be reclassified to net income within the next 12 months.
At December 31, 2024 and 2023, in connection with forward contracts, there were unrealized net gains (before taxes) of $84 
million and $23 million, respectively, deferred in AOCI. Approximately $54 million of losses (before taxes) related to the initial 
forward points excluded from the assessment of hedge effectiveness is expected to be amortized to other (income) and expenses 
within the next 12 months. 
Subsidiary Cash and Foreign Currency Asset/Liability Management
The company uses its Global Treasury Centers to manage the cash of its subsidiaries. These centers principally use currency swaps 
to convert cash flows in a cost-effective manner. In addition, the company uses foreign exchange forward contracts to economically 
hedge, on a net basis, the foreign currency exposure of a portion of the company’s nonfunctional currency assets and liabilities. The 
terms of these forward and swap contracts are generally less than one year. The changes in the fair values of these contracts and of 
the underlying hedged exposures are generally offsetting and are recorded in other (income) and expense in the Consolidated 
Income Statement. At December 31, 2024 and 2023, the total notional amount of derivative instruments in economic hedges of 
foreign currency exposure was $7.4 billion and $6.7 billion, respectively.
Equity Risk Management
The company is exposed to market price changes in certain broad market indices and in the company’s own stock primarily related 
to certain obligations to employees. Changes in the overall value of these employee compensation obligations are recorded in SG&A 
expense in the Consolidated Income Statement. Although not designated as accounting hedges, the company utilizes derivatives, 
including equity swaps and futures, to economically hedge the exposures related to its employee compensation obligations. The 
derivatives are linked to the total return on certain broad market indices or the total return on the company’s common stock, and 
are recorded at fair value with gains or losses also reported in SG&A expense in the Consolidated Income Statement. At December 
31, 2024 and 2023, the total notional amount of derivative instruments in economic hedges of these compensation obligations was 
$1.5 billion and $1.2 billion, respectively.
Cumulative Basis Adjustments for Fair Value Hedges
At December 31, 2024 and 2023, the following amounts were recorded in the Consolidated Balance Sheet related to cumulative 
basis adjustments for fair value hedges:
($ in millions)
At December 31:
2024
2023
Short-term debt
Carrying amount of the hedged item
$ 
(13) 
$ 
(1) 
Cumulative hedging adjustments included in the carrying amount—assets/(liabilities)
 
(13) 
 
(1) 
Long-term debt
Carrying amount of the hedged item
 
(6,497) 
 
(6,629) 
Cumulative hedging adjustments included in the carrying amount—assets/(liabilities) (1)
190
61
(1) Includes ($155) million and ($200) million of hedging adjustments on discontinued hedging relationships at December 31, 2024 and 2023, 
respectively.
102
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies

The Effect of Derivative Instruments in the Consolidated Income Statement
The total amounts of income and expense line items presented in the Consolidated Income Statement in which the effects of fair 
value hedges, cash flow hedges, net investment hedges and derivatives not designated as hedging instruments are recorded and the 
total effect of hedge activity on these income and expense line items are as follows:
($ in millions)
Total
Gains/(Losses) of 
Total Hedge Activity
For the year ended December 31:
2024
2023
2022
2024
2023
2022
Cost of services
$ 
20,529 
$ 
21,051 
$ 
21,062 
$ 
22 
$ 
(5) 
$ 
24 
Cost of sales
 
6,303 
 
6,127 
 
6,374 
 
40 
 
22 
 
99 
Cost of financing
 
369 
 
382 
 
406 
 
(10) 
 
(11) 
 
2 
SG&A expense
 
19,688 
 
19,003 
 
18,609 
 
151 
 
165 
 
(211) 
Other (income) and expense
 
1,871 
 
(914) 
 
5,803 
 
(515) 
 
17 
 
(225) 
Interest expense
 
1,712 
 
1,607 
 
1,216 
 
(51) 
 
(54) 
 
6 
($ in millions)
Gain/(Loss) Recognized in Consolidated Income Statement
Consolidated
Income Statement
Line Item
Recognized on
Derivatives
Attributable to Risk
Being Hedged (1)
For the year ended December 31:
2024
2023
2022
2024
2023
2022
Derivative instruments in fair value hedges (2)
Interest rate contracts
Cost of financing
$ 
(41) $ 
(17) $ 
(73) $ 
19 
$ 
(2) $ 
85 
Interest expense
 
(208)  
(83)  
(257)  
97 
 
(11)  
299 
Derivative instruments not designated as 
hedging instruments
Foreign exchange contracts
Other (income) 
and expense
 
(390)  
(192)  
(492) 
N/A 
N/A
N/A
Equity contracts
SG&A expense
 
135 
 
153 
 
(249) 
N/A 
N/A
N/A
Other (income) 
and expense
 
— 
 
— 
 
(83) 
N/A 
N/A
N/A
Total
$ (504) $ (140) $ (1,153) $ 116 
$ 
(13) $ 384 
(1) The amount includes basis adjustments to the carrying value of the hedged item recorded during the period and amortization of basis adjustments 
recorded on de-designated hedging relationships during the period.
(2) The amount includes changes in clean fair values of the derivative instruments in fair value hedging relationships and the periodic accrual for coupon 
payments required under these derivative contracts.
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
103

($ in millions)
Gain/(Loss) Recognized in Consolidated Income Statement and Other Comprehensive Income
For the year ended 
Recognized in OCI 
Consolidated
Income Statement
Line Item
Reclassified
from AOCI
Amounts Excluded from
Effectiveness Testing (1)
December 31:
2024
2023
2022
2024
2023
2022
2024
2023
2022
Derivative instruments 
in cash flow hedges
Interest rate contracts
$ 
— 
$ 
— 
$ 
— 
Cost of financing
$ 
(2) $ 
(3) $ 
(4) $ 
— 
$ 
— 
$ 
— 
Interest expense
 
(13)  
(15)  
(14)  
— 
 
— 
 
— 
Foreign exchange 
contracts
Cost of services
 
22 
 
(5)  
24 
 
— 
 
— 
 
— 
Amount included in 
the assessment of 
effectiveness
 
405 
 
213 
 
241 
Cost of sales
 
40 
 
22 
 
99 
 
— 
 
— 
 
— 
Amount excluded from 
the assessment of 
effectiveness
 
(16)  
(6)  
— 
Cost of financing
 
(4)  
(11)  
(21)  
— 
 
— 
 
— 
SG&A expense
 
16 
 
12 
 
38 
 
— 
 
— 
 
— 
Other (income) and 
expense
 
(48)  239 
 349 
 
(77)  
(29)  
— 
Interest expense
 
(19)  
(51)  
(72)  
— 
 
— 
 
— 
Instruments in net 
investment hedges (2)
Foreign exchange 
contracts
Cost of financing
 
— 
 
— 
 
— 
 
18 
 
22 
 
14 
Amount included in 
the assessment of 
effectiveness
 1,354 
 (397)  1,613 
Interest expense
 
— 
 
— 
 
— 
 
91 
 105 
 
50 
Amount excluded from 
the assessment of 
effectiveness
 
4 
 
— 
 
— 
Total
$ 1,747 $ (190) $ 1,854 
$ 
(7) $ 189 
$ 400 
$ 32 
$ 98 
$ 64 
(1) Amounts excluded from effectiveness testing for both net investment hedges and cash flow hedges of foreign currency debt are amortized to net 
income on a straight-line basis over the life of the relevant hedging instrument.
(2) Instruments in net investment hedges include derivative and non-derivative instruments with the amounts recognized in OCI providing an offset to the 
translation of foreign subsidiaries.
N/A–Not applicable
For the years ended December 31, 2024 and 2023, there were no material gains or losses associated with an underlying exposure 
that did not or was not expected to occur (for cash flow hedges); nor are there any anticipated in the normal course of business.
104
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies

NOTE T. STOCK-BASED COMPENSATION
The following table presents total stock-based compensation cost included in income from continuing operations.
($ in millions)
For the year ended December 31:
2024
2023
2022
Cost
$ 
223 
$ 
190 
$ 
164 
SG&A expense
 
690 
 
616 
 
566 
RD&E expense
 
398 
 
328 
 
258 
Pre-tax stock-based compensation cost
 
1,311 
 
1,133 
 
987 
Income tax benefits
 
(469) 
 
(290) 
 
(249) 
Net stock-based compensation cost
$ 
842 
$ 
843 
$ 
738 
The company’s total unrecognized compensation cost related to non-vested awards at December 31, 2024 was $1.9 billion and is 
expected to be recognized over a weighted-average period of approximately 2.5 years.
Capitalized stock-based compensation cost was not material at December 31, 2024, 2023 and 2022.
Incentive Awards
Stock-based incentive awards are provided to employees under the terms of the company’s long-term performance plans (the 
Plans). The Plans are administered by the Executive Compensation and Management Resources Committee of the Board of 
Directors. Awards available under the Plans principally include restricted stock units, performance share units, stock options or any 
combination thereof.
There were 293 million shares originally authorized to be awarded under the company’s existing Plans and 66 million shares 
granted under previous plans that, if and when those awards were cancelled, could be reissued under the existing Plans. At 
December 31, 2024, 40 million unused shares were available to be granted.
Stock Awards
Stock awards for the periods presented were made in the form of Restricted Stock Units (RSUs), including Retention Restricted 
Stock Units (RRSUs), or Performance Share Units (PSUs).
The following table summarizes RSU and PSU activity under the Plans during the years ended December 31, 2024, 2023 and 2022.
RSUs
PSUs
Weighted-Average 
Grant Price
Number of Units
Weighted-Average 
Grant Price
Number of Units (1)
Balance at January 1, 2022
$ 
116 
19,038,480
$ 
118 
3,728,857
Awards granted
 
112 
11,447,966
 
110 
1,237,019
Awards released
 
114 
(7,013,530)
 
114 
(679,601)
Awards canceled/forfeited/performance adjusted (2)
 
116 
(2,420,002)
 
116 
(720,197)
Balance at December 31, 2022
$ 
115 
21,052,914
$ 
117 
3,566,078
Awards granted
 
118 
10,915,958
 
117 
1,295,937
Awards released
 
114 
(7,383,980)
 
113 
(840,111)
Awards canceled/forfeited/performance adjusted (2)
 
115 
(1,527,249)
 
114 
(548,865)
Balance at December 31, 2023
$ 
116 
23,057,643
$ 
118 
3,473,039
Awards granted
 
176 
8,220,339
 
165 
1,110,929
Awards released
 
117 
(8,532,751)
 
126 
(963,249)
Awards canceled/forfeited/performance adjusted (2)
 
123 
(1,681,686)
 
131 
(319,169)
Balance at December 31, 2024
$ 
139 
21,063,545
$ 
130 
3,301,550
(1) The balances at December 31 for each period presented represent the number of shares expected to be issued based on achievement of grant date 
performance targets. The actual number of shares issued will depend on final performance against specified targets over the vesting period.
(2) Includes adjustments of (196,544), (404,655) and (362,247) for PSUs in 2024, 2023 and 2022, respectively, because final performance metrics were 
above or below specified targets.
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
105

The total fair value of RSUs and PSUs granted and vested during the years ended December 31, 2024, 2023 and 2022 were as 
follows:
($ in millions)
For the year ended December 31:
2024
2023
2022
RSUs
Granted
$ 
1,449 
$ 
1,293 
$ 
1,288 
Vested
 
994 
 
845 
 
801 
PSUs
Granted
$ 
183 
$ 
151 
$ 
136 
Vested
 
121 
 
95 
 
77 
In connection with vesting and release of RSUs and PSUs, the tax benefits realized by the company for the years ended 
December 31, 2024, 2023 and 2022 were $413 million, $256 million and $249 million, respectively.
Stock Options
Stock options are awards which allow the employee to purchase shares of the company’s stock at a fixed price. Stock options are 
granted at an exercise price equal to the company’s average high and low stock price on the date of grant. These awards generally 
vest in four equal increments on the first four anniversaries of the grant date and have a contractual term of 10 years. The company 
estimates the fair value of stock options at the date of grant using a Black-Scholes valuation model. Key inputs and assumptions 
used to estimate the fair value of stock options include the grant price of the award, the expected option term, volatility of the 
company’s stock, the risk-free rate and the company’s dividend yield. For the stock options granted for the years ended 
December 31, 2024, 2023 and 2022, the expected option term was determined from historical exercise patterns, volatility was 
based on an analysis of the company’s historical stock prices over the expected option term, the risk-free rate was obtained from 
the U.S. Treasury yield curve in effect at the time of grant and the dividend yield was based on the company’s expectation of paying 
dividends in the foreseeable future. Estimates of fair value are not intended to predict actual future events or the value ultimately 
realized by employees who receive equity awards, and subsequent events are not indicative of the reasonableness of the original 
estimates of fair value made by the company. Stock options are primarily granted by the company as part of its executive 
compensation programs. 
The weighted-average fair value of stock options granted for the years ended December 31, 2024, 2023 and 2022 was $40.09, 
$22.75 and $14.29, respectively. The fair value was estimated based on the following weighted-average assumptions:
For the year ended December 31:
2024
2023
2022
Expected term (in years)
6.3
6.3
6.3
Expected volatility
 26.2% 
 26.0% 
 25.5% 
Risk-free rate
 4.4% 
 4.2% 
 2.0% 
Dividend yield
 3.7% 
 5.0% 
 5.3% 
106
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies

The following table summarizes option activity under the Plans during the years ended December 31, 2024, 2023 and 2022.
Weighted-Average 
Exercise Price
Number of Shares 
Under Option
Balance at January 1, 2022
$ 
135 
1,549,732
Options granted
 
125 
5,044,353
Options exercised
 
— 
—
Options forfeited/cancelled/expired
 
125 
(319,560)
Balance at December 31, 2022
$ 
128 
6,274,525
Options granted
 
133 
4,574,756
Options exercised
 
125 
(408,045)
Options forfeited/cancelled/expired
 
129 
(584,674)
Balance at December 31, 2023
$ 
130 
9,856,562
Options granted
 
181 
3,156,770
Options exercised
 
133 
(2,384,273)
Options forfeited/cancelled/expired
 
143 
(623,663)
Balance at December 31, 2024
$ 
145 
10,005,396
Vested and exercisable at December 31, 2024
$ 
128 
2,029,748
The weighted-average remaining contractual term and the aggregate intrinsic value of stock options outstanding was 8.1 years and 
$750 million, respectively, at December 31, 2024. The weighted-average remaining contractual term and the aggregate intrinsic 
value of stock options vested and exercisable was 7.5 years and $186 million, respectively, at December 31, 2024.
Exercises of Stock Options 
The total intrinsic value of options exercised for the years ended December 31, 2024 and 2023 was $138 million and $10 million, 
respectively. No stock options were exercised for the year ended December 31, 2022 because the company did not grant stock 
options during the year ended December 31, 2021. The total cash received from employees as a result of stock option exercises for 
the years ended December 31, 2024 and 2023 was approximately $317 million and $51 million, respectively, and was included 
within proceeds from issuance of shares within cash from financing activities in the Consolidated Statement of Cash Flows. In 
connection with these exercises, the tax benefits realized by the company for the year ended December 31, 2024 was $34 million. 
The tax benefits realized during 2023 were immaterial. The company settles employees stock option exercises primarily with newly 
issued common shares and, occasionally, with treasury shares. Total treasury shares held at December 31, 2024 and 2023 were 
1,353 million and 1,352 million shares, respectively. 
Acquisitions
In connection with various acquisition transactions, there were 0.2 million stock options outstanding at December 31, 2024, as a 
result of the company’s conversion of stock-based awards previously granted by acquired entities. The weighted-average exercise 
price of these stock options was $23 per share. No stock awards were outstanding at December 31, 2024. 
IBM Employees Stock Purchase Plan
Effective April 1, 2022, the company increased the discount for eligible participants to purchase shares of IBM common stock under 
its Employees Stock Purchase Plan (ESPP) from 5 percent to 15 percent off the average market price on the date of purchase. Since 
this change, the ESPP has been considered compensatory under the accounting requirements for stock-based compensation. The 
ESPP enables eligible participants to purchase shares of IBM common stock through payroll deductions of up to 10 percent of 
eligible compensation. Eligible compensation includes any compensation received by the employee during the year. The ESPP 
provides for semi-annual offering periods during which shares may be purchased and continues as long as shares remain available 
under the ESPP, unless terminated earlier at the discretion of the Board of Directors. Individual ESPP participants are restricted 
from purchasing more than $25,000 of common stock in one calendar year or 1,000 shares in an offering period.
Employees purchased approximately 2.6 million, 3.1 million and 2.4 million shares under the ESPP during the years ended 
December 31, 2024, 2023 and 2022, respectively. For the years ended December 31, 2024, 2023 and 2022, the average market 
price of shares purchased was $161, $117 and $114 per share, respectively, and the total stock-based compensation cost was 
$75 million, $64 million and $43 million, respectively. Cash dividends declared and paid by the company on its common stock also 
include cash dividends on the company stock purchased through the ESPP. Dividends are paid on full and fractional shares and can 
be reinvested. The company stock purchased through the ESPP is considered outstanding and is included in the weighted-average 
outstanding shares for purposes of computing basic and diluted earnings per share.
Approximately 8.7 million shares were available for purchase under the ESPP at December 31, 2024.
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
107

NOTE U. RETIREMENT-RELATED BENEFITS
Description of Plans
IBM sponsors the following retirement-related plans/benefits:
Plan
Eligibility
Funding
Benefit Calculation
Other
U.S. Defined Benefit 
(DB) Pension Plans
IBM Personal Pension 
Plan (Qualified PPP) 
which includes the 
Retirement Benefit 
Account (“RBA”) as of 
January 1, 2024
U.S. regular, full-time 
and part-time 
employees hired prior 
to January 1, 2005
RBA - U.S. regular, full-
time, and part time 
employees with at 
least one year of 
service on or after 
January 1, 2024
Any company 
contributions, required 
or voluntary, are to an 
irrevocable trust fund, 
held for the sole 
benefit of participants 
and beneficiaries
Vary based on the 
participant:
Based on average 
earnings, years of 
service, and age 
Cash balance formula 
based on percentage of 
employees’ annual 
salary, as well as an 
interest crediting rate 
(includes RBA as of 
January 1, 2024) 
Excluding RBA, benefit 
accruals ceased 
December 31, 2007
Certain defined benefit 
pension obligations 
and related plan assets 
were transferred in 
2022 and 2024, as 
described under “IBM 
Retirement Plan 
Changes,” below
Excess Personal 
Pension Plan (“Excess 
PPP”)
U.S. regular, full-time 
and part-time 
employees hired prior 
to January 1, 2005
Unfunded, provides 
benefits in excess of 
IRS limitations for 
qualified plans
Benefit accruals 
ceased December 31, 
2007
Supplemental 
Executive Retention 
Plan (“Retention Plan”)
Eligible U.S. executives
Unfunded
Based on average 
earnings, years of 
service and age
U.S. Defined 
Contribution (DC) 
Plans
401(k) Plan (1)
U.S. regular, full-time 
and part-time 
employees
All plan participant 
contributions are made 
in cash and invested in 
accordance with 
participants’ 
investment elections
Employees can save up 
to 80% of eligible pay, 
subject to the Internal 
Revenue Code (IRC) 
annual contribution 
limit 
All amounts in the plan 
are 100% vested
Excess Savings Plan (1)
U.S. employees whose 
eligible compensation 
is expected to exceed 
IRS compensation limit 
for qualified plans
Unfunded, non-
qualified amounts 
deferred are record-
keeping (notional) 
accounts and are not 
held in trust for the 
participants, but may 
be invested in 
accordance with 
participants’ 
investment elections 
(under the 401(k) Plan 
options)
Company matches 
contributions on 
eligible compensation 
deferred and on 
compensation earned 
in excess of the IRC 
pay limit 
Amounts deferred into 
the Plan, including 
company contributions, 
are recorded as 
liabilities
U.S. Nonpension 
Postretirement 
Benefit Plan
Nonpension 
Postretirement Plan 
(IBM Benefits Plan for 
Retired Employees) 
Medical and dental 
benefits for eligible 
U.S. retirees and 
eligible dependents, as 
well as life insurance 
for eligible U.S. retirees
Company contributes 
to irrevocable trust 
fund, held for the sole 
benefit of participants 
and beneficiaries
Varies based on plan 
design formulas and 
eligibility requirements
Since January 1, 2004, 
new hires are not 
eligible for these 
benefits
Non-U.S. Plans
DB or DC
Eligible regular 
employees in certain 
non-U.S. subsidiaries 
or branches
Company deposits 
funds under various 
fiduciary-type 
arrangements, 
purchases annuities 
under group contracts 
or provides reserves for 
these plans
Based either on years 
of service and the 
employee’s 
compensation 
(generally during a 
fixed number of years 
immediately before 
retirement) or on 
annual credits
In certain countries, 
benefit accruals have 
ceased and/or have 
been closed to new 
hires as of various 
dates
Certain defined benefit 
pension obligations 
and related plan assets 
were transferred in 
2024, as described 
under “IBM Retirement 
Plan Changes,” below
Nonpension 
Postretirement Plan
Medical and dental 
benefits for eligible 
non-U.S. retirees and 
eligible dependents, as 
well as life insurance 
for certain eligible non-
U.S. retirees
Primarily unfunded 
except for a few select 
countries where the 
company contributes to 
irrevocable trust funds 
held for the sole 
benefit of participants 
and beneficiaries
Varies based on plan 
design formulas and 
eligibility requirements 
by country
Most non-U.S. retirees 
are covered by local 
government sponsored 
and administered 
programs
(1) Effective January 1, 2024, the 401(k) Plus Plan was renamed to the 401(k) Plan and the Excess 401(k) Plus Plan was renamed to the Excess Savings 
Plan. Refer to the section below entitled “IBM Retirement Plan Changes,” for additional information.
108
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies

Plan Financial Information
Summary of Financial Information
The following table presents a summary of the total retirement-related benefits net periodic (income)/cost recorded in the 
Consolidated Income Statement.
($ in millions)
U.S. Plans
Non-U.S. Plans
Total
For the year ended December 31:
2024
2023
2022
2024
2023
2022
2024
2023
2022
Total defined benefit pension plans 
(income)/cost (1)
$ 3,265 
$ (329) $ 5,857 
$ 652 
$ 359 
$ 836 
$ 3,918 
$ 
30 
$ 6,693 
Total defined contribution plans cost (2)
$ 
57 
$ 615 
$ 555 
$ 383 
$ 376 
$ 369 
$ 440 
$ 991 
$ 924 
Nonpension postretirement benefit 
plans cost
$ 
79 
$ 
92 
$ 
85 
$ 
41 
$ 
36 
$ 
30 
$ 120 
$ 128 
$ 115 
Total retirement-related benefits net 
periodic cost (1)
$ 3,402 
$ 378 
$ 6,497 
$ 1,077 
$ 771 
$ 1,235 
$ 4,478 
$ 1,149 
$ 7,732 
(1) In 2024, U.S. and Non-U.S. Plans include the impact of pension settlement charges of $2.7 billion and $0.4 billion, respectively, and the increase in 
total defined benefit pension plans (income)/cost due to the RBA that was effective January 1, 2024. In 2022, U.S. Plans includes the impact of a 
pension settlement charge of $5.9 billion. Refer to the section below entitled “IBM Retirement Plan Changes,” for additional information.
(2) Decrease in 2024 U.S. Plans total defined contributions plans cost is due to the introduction of the RBA that was effective January 1, 2024. Refer to the 
section below entitled “IBM Retirement Plan Changes,” for additional information.
The following table presents a summary of the total PBO for defined benefit pension plans, APBO for nonpension postretirement 
benefit plans, fair value of plan assets and the associated funded status recorded in the Consolidated Balance Sheet.
($ in millions)
Benefit Obligations
Fair Value of Plan Assets
Funded Status (1)
At December 31:
2024
2023
2024
2023
2024
2023
U.S. Plans
Overfunded plans
Qualified PPP (2)
$ 12,941 
$ 19,854 
$ 17,591 
$ 24,437 
$ 4,651 
$ 4,584 
Underfunded plans
Nonqualified defined benefit pension plans (3)
 
1,278 
 
1,382 
 
— 
 
— 
 
(1,278) 
 
(1,382) 
Nonpension postretirement benefit plan
 
2,257 
 
2,233 
 
6 
 
10 
 
(2,251) 
 
(2,224) 
Total underfunded U.S. plans
$ 3,535 
$ 3,615 
$ 
6 
$ 
10 
$ (3,529) 
$ (3,605) 
Non-U.S. Plans
Overfunded plans
Qualified defined benefit pension plans (4) (5)
$ 13,568 
$ 16,515 
$ 16,410 
$ 19,438 
$ 2,842 
$ 2,923 
Nonpension postretirement benefit plans
 
— 
 
— 
 
— 
 
— 
 
— 
 
— 
Total overfunded non-U.S. plans
$ 13,568 
$ 16,515 
$ 16,410 
$ 19,438 
$ 2,842 
$ 2,923 
Underfunded plans
Qualified defined benefit pension plans (4)
$ 10,482 
$ 11,946 
$ 8,795 
$ 9,621 
$ (1,688) 
$ (2,325) 
Nonqualified defined benefit pension plans (4)
 
4,440 
 
5,018 
 
— 
 
— 
 
(4,440) 
 
(5,018) 
Nonpension postretirement benefit plans
 
507 
 
586 
 
14 
 
23 
 
(493) 
 
(564) 
Total underfunded non-U.S. plans
$ 15,429 
$ 17,550 
$ 8,809 
$ 9,643 
$ (6,620) 
$ (7,907) 
Total overfunded plans
$ 26,509 
$ 36,369 
$ 34,001 
$ 43,875 
$ 7,492 
$ 7,506 
Total underfunded plans
$ 18,964 
$ 21,165 
$ 8,815 
$ 9,653 
$ (10,149) 
$ (11,512) 
(1) Funded status is recognized in the Consolidated Balance Sheet as follows: Asset amounts as prepaid pension assets; (Liability) amounts as 
compensation and benefits (current liability) and retirement and nonpension postretirement benefit obligations (noncurrent liability).
(2) Year-to-year reduction in Benefit Obligations and Fair Value of Plan Assets includes the transfer of approximately $6 billion of pension benefit 
obligations and assets to Prudential Insurance Company of America. Refer to the section below entitled “IBM Retirement Plan Changes,” for additional 
information.
(3) Excess PPP and Retention Plan.
(4) Non-U.S. qualified plans represent plans funded outside of the U.S. Non-U.S. nonqualified plans are unfunded. 
(5) Year-to-year reduction in Benefit Obligations and Fair Value of Plan Assets includes the transfer of $1.2 billion of pension benefit obligations and 
assets to RBC Life Insurance Company and Brookfield Annuity Company. Refer to the section below entitled “IBM Retirement Plan Changes,” for 
additional information.
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
109

At December 31, 2024, the company’s qualified defined benefit pension plans worldwide were 116 percent funded compared to the 
benefit obligations, with the Qualified PPP 136 percent funded.
Defined Benefit Pension and Nonpension Postretirement Benefit Plan Financial Information
The following tables through page 113 represent financial information for the company’s retirement-related benefit plans, excluding 
defined contribution plans. The defined benefit pension plans under U.S. Plans consist of the Qualified PPP, the Excess PPP and the 
Retention Plan. The defined benefit pension plans and the nonpension postretirement benefit plans under non-U.S. Plans consist of 
all plans sponsored by the company’s subsidiaries. The nonpension postretirement benefit plan under U.S. Plan consists of only the 
U.S. Nonpension Postretirement Benefit Plan.
The following tables present the components of net periodic (income)/cost of the retirement-related benefit plans recognized in the 
Consolidated Income Statement, excluding defined contribution plans.
($ in millions)
Defined Benefit Pension Plans
U.S. Plans
Non-U.S. Plans
For the year ended December 31:
2024
2023
2022
2024
2023
2022
Service cost (1)
$ 
394 
$ 
— 
$ 
— 
$ 
170 
$ 
177 
$ 
237 
Interest cost (2)
 
911 
 
1,090 
 
1,129 
 
1,077 
 
1,170 
 
493 
Expected return on plan assets (2)
 
(1,253) 
 
(1,529) 
 
(1,729) 
 
(1,546) 
 
(1,440) 
 
(1,016) 
Amortization of prior service costs/(credits) (2)
 
— 
 
0 
 
8 
 
22 
 
20 
 
14 
Recognized actuarial losses (2)
 
452 
 
109 
 
527 
 
516 
 
400 
 
1,031 
Curtailments and settlements (2) (3)
 
2,761 
 
— 
 
5,923 
 
398 
 
7 
 
47 
Multi-employer plans
 
— 
 
— 
 
— 
 
13 
 
13 
 
15 
Other costs/(credits) (2)
 
— 
 
— 
 
— 
 
3 
 
13 
 
15 
Total net periodic (income)/cost (3)
$ 3,265 
$ 
(329) 
$ 5,857 
$ 
652 
$ 
359 
$ 
836 
($ in millions)
Nonpension Postretirement Benefit Plans
U.S. Plan
Non-U.S. Plans
For the year ended December 31:
2024
2023
2022
2024
2023
2022
Service cost
$ 
2 
$ 
4 
$ 
5 
$ 
2 
$ 
2 
$ 
3 
Interest cost (2)
 
106 
 
117 
 
85 
 
41 
 
39 
 
24 
Expected return on plan assets (2)
 
— 
 
— 
 
— 
 
(1) 
 
(2) 
 
(2) 
Amortization of prior service costs/(credits) (2)
 
(29) 
 
(29) 
 
(10) 
 
0 
 
0 
 
0 
Recognized actuarial losses (2)
 
— 
 
— 
 
5 
(1)
 
(1) 
 
4 
Curtailments and settlements (2)
 
— 
 
— 
 
— 
 
0 
 
(2) 
 
0 
Other costs/(credits) (2)
 
— 
 
— 
 
— 
 
0 
 
0 
 
0 
Total net periodic cost
$ 
79 
$ 
92 
$ 
85 
$ 
41 
$ 
36 
$ 
30 
(1) Increase in U.S. Plans Service Cost in 2024 is due to the RBA that was effective January 1, 2024. Refer to the section below entitled “IBM Retirement 
Plan Changes,” for additional information.
(2) These components of net periodic pension costs are included in other (income) and expense in the Consolidated Income Statement.
(3) In 2024, U.S. and Non-U.S. Plans include the impact of pension settlement charges of $2.7 billion and $0.4 billion, respectively. In 2022, U.S. Plans 
includes the impact of a pension settlement charge of $5.9 billion. Refer to the section below entitled “IBM Retirement Plan Changes,” for additional 
information.
110
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies

IBM Retirement Plan Changes 
In September 2022, the Qualified PPP irrevocably transferred to The Prudential Insurance Company of America and Metropolitan 
Life Insurance Company approximately $16 billion of the Qualified PPP’s defined benefit pension obligations and related plan 
assets, thereby reducing the company’s pension obligations and assets by the same amount. 
Upon issuance of the group annuity contracts, the Qualified PPP’s benefit obligations and administration for approximately 100,000 
of the company’s retirees and beneficiaries were transferred to The Prudential Insurance Company of America and Metropolitan Life 
Insurance Company. Under the group annuity contracts, The Prudential Insurance Company of America and Metropolitan Life 
Insurance Company have made an irrevocable commitment, and are solely responsible, to pay 50 percent of the pension benefits of 
the company's retirees and beneficiaries due on and after January 1, 2023. The transaction resulted in no changes to the amount of 
benefits payable to the company’s retirees and beneficiaries. The company recognized a one-time, non-cash, pre-tax pension 
settlement charge of $5.9 billion ($4.4 billion net of tax) in the third quarter of 2022 primarily related to the accelerated recognition 
of actuarial losses included within AOCI in the Consolidated Statement of Equity.
In September 2022, the company amended its U.S. Nonpension Postretirement Plan to transition coverage for Medicare-eligible 
participants to a new IBM-sponsored group Medicare Advantage program administered by UnitedHealthcare, as of January 1, 2023. 
The changes were intended to provide an enhanced member experience, better value and more comprehensive benefits to IBM 
participants. This change resulted in a decrease in nonpension postretirement benefit obligations and a corresponding decrease in 
AOCI in 2022.
Effective January  1, 2024, IBM changed how it provides certain retirement-related benefits in the U.S. IBM is providing a new 
benefit to most U.S. employees under its existing Qualified PPP called the Retirement Benefit Account (RBA). This is in place of any 
IBM contributions to the U.S. employees’ 401(k) Plus accounts. IBM U.S. regular full-time and part-time employees with at least 
one year of service will participate in the RBA. Each eligible employee’s RBA will be credited monthly with an amount equal to five 
percent of their eligible pay with no employee contribution required. Under the RBA, eligible employees will earn six percent interest 
through 2026 and starting in 2027, will earn interest equal to the 10-year U.S. Treasury Yield, subject to a three percent minimum 
per year through 2033. Eligible employees also received a salary increase effective January 1, 2024 for the difference between the 
IBM 401(k) Plus contribution percent they were previously entitled to receive and the five percent RBA pay credit. Since the RBA is a 
component of the Qualified PPP, it is funded by the trust for the Qualified PPP along with all other benefits in the Qualified PPP. At 
December 31, 2024, the Qualified PPP was 136 percent funded with assets exceeding liabilities by $4.7 billion.
As a result of this change, inactive pension plan participants no longer represent substantially all of the participants in the Qualified 
PPP. As required by U.S. GAAP, as of January 1, 2024, the amortization period of unrecognized actuarial losses changed from the 
average remaining life expectancy of inactive plan participants to the average remaining service period of active plan participants. 
Amortization expense for the year ended December 31, 2024 was approximately $0.5 billion, primarily driven by the change in 
amortization period. There was no impact to funded status, retiree benefit payments or funding requirements of the Qualified PPP 
due to the change in amortization period.
In September 2024, the Qualified PPP irrevocably transferred to The Prudential Insurance Company of America approximately $6 
billion of the Qualified PPP’s defined benefit pension obligations and related plan assets, thereby reducing the company’s pension 
obligations and assets by the same amount. After the transaction, the Qualified PPP remained in an overfunded position. 
Upon issuance of the group annuity contract, the Qualified PPP’s benefit obligations and administration for approximately 32,000 of 
the company’s Plan participants and beneficiaries were transferred to The Prudential Insurance Company of America. Under the 
group annuity contract, The Prudential Insurance Company of America has made an irrevocable commitment, and will be solely 
responsible, to pay the benefits payable to the participants and beneficiaries. The transaction resulted in no changes to the amount 
of benefits payable to the Plan participants and beneficiaries. The company recognized a one-time, non-cash, pre-tax pension 
settlement charge of $2.7 billion ($2.0 billion net of tax) in the third quarter of 2024 primarily related to the accelerated recognition 
of actuarial losses included within AOCI in the Consolidated Statement of Equity. As a result of this transaction, the company was 
required to remeasure the benefit obligation and plan assets of the Qualified PPP. The remeasurement reflected the use of the 
discount rate and actual return on plan assets as of August 31, 2024, applying the practical expedient to remeasure plan assets and 
obligations as of the nearest calendar month-end date. 
In October 2024, IBM Canada Ltd. (“IBMC”) purchased two separate nonparticipating single premium group annuity contracts from 
RBC Life Insurance Company and Brookfield Annuity Company that transferred approximately $1.2 billion of the IBMC IBM 
Retirement Plan defined benefit pension obligations to them for approximately 6,000 Plan participants and beneficiaries. It was 
funded directly by the assets of the IBMC IBM Retirement Plan and required no cash contribution from IBM. There were no changes 
to the amount of benefits payable to the Plan participants and beneficiaries. As a result of the transaction, the company recognized 
a one time, non-cash, pre-tax, pension settlement charge of $0.4 billion in the fourth quarter of 2024. 
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
111

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The following table presents the net funded status recognized in the Consolidated Balance Sheet.
($ in millions)
Defined Benefit Pension Plans
Nonpension Postretirement Benefit Plans
U.S. Plans
Non-U.S. Plans
U.S. Plan
Non-U.S. Plans 
At December 31:
2024
2023
2024
2023
2024
2023
2024
2023
Prepaid pension assets
$ 4,651 
$ 4,584 
$ 2,842 
$ 2,923 
$ 
0 
$ 
0 
$ 
0 
$ 
0 
Current liabilities—compensation 
and benefits
 
(117) 
 
(119) 
 
(362) 
 
(366) 
 
(218) 
 
(202) 
 
(20) 
 
(17) 
Noncurrent liabilities—retirement 
and nonpension postretirement 
benefit obligations
 (1,160) 
 (1,262) 
 (5,766) 
 (6,977) 
 (2,033) 
 (2,022) 
 
(473) 
 
(547) 
Funded status—net
$ 3,373 
$ 3,202 
$ (3,286) 
$ (4,420) 
$ (2,251) 
$ (2,224) 
$ (493) 
$ (564) 
The following table presents the pre-tax net loss, prior service costs/(credits) and transition (assets)/liabilities recognized in OCI 
and the changes in the pre-tax net loss, prior service costs/(credits) and transition (assets)/liabilities recognized in AOCI for the 
retirement-related benefit plans.
($ in millions)
Defined Benefit Pension Plans
Nonpension Postretirement Benefit Plans
U.S. Plans
Non-U.S. Plans
U.S. Plan
Non-U.S. Plans 
2024
2023
2024
2023
2024
2023
2024
2023
Net loss at January 1
$ 9,467 
$ 8,617 
$ 12,937 
$ 11,219 
$ 
73 
$ 
94 
$ 123 
$ 
86 
Current period loss/(gain)
 
(101)  
959 
 
(73)  
2,125 
 
115 
 
(20)  
0 
 
34 
Curtailments and settlements (1)
 (2,761)  
— 
 
(398)  
(7)  
— 
 
— 
 
0 
 
2 
Amortization of net loss included in net 
periodic (income)/cost (2)
 
(452)  
(109)  
(516)  
(400)  
— 
 
— 
 
1 
 
1 
Net loss at December 31
$ 6,153 
$ 9,467 
$ 11,950 
$ 12,937 
$ 188 
$ 
73 
$ 125 
$ 123 
Prior service costs/(credits) at January 1
$ 
0 
$ 
0 
$ 
309 
$ 
330 
$ (350) $ (379) $ 
(1) $ 
0 
Current period prior service costs/(credits)
 
— 
 
— 
 
56 
 
(1)  
— 
 
— 
 
0 
 
(1) 
Curtailments, settlements and other
 
— 
 
— 
 
— 
 
— 
 
— 
 
— 
 
— 
 
— 
Amortization of prior service (costs)/credits 
included in net periodic (income)/cost
 
0 
 
0 
 
(22)  
(20)  
29 
 
29 
 
0 
 
0 
Prior service costs/(credits) at December 31
$ 
0 
$ 
0 
$ 
342 
$ 
309 
$ (321) $ (350) $ 
(1) $ 
(1) 
Transition (assets)/liabilities at January 1
$ 
— 
$ 
— 
$ 
0 
$ 
0 
$ 
— 
$ 
— 
$ 
0 
$ 
0 
Transition (assets)/liabilities at December 31
$ 
— 
$ 
— 
$ 
0 
$ 
0 
$ 
— 
$ 
— 
$ 
0 
$ 
0 
Total loss recognized in accumulated other 
comprehensive income/(loss) (3)
$ 6,153 
$ 9,467 
$ 12,293 
$ 13,245 
$ (133) $ (276) $ 124 
$ 122 
(1) In 2024, the amount related to U.S. Defined Benefit Pension Plans includes the impact of a pension settlement charge of $2.7 billion, and the amount 
related to Non-U.S. Defined Benefit Pension Plans includes the impact of a pension settlement charge of $0.4 billion. Refer to the section above 
entitled “IBM Retirement Plan Changes,” for additional information.
(2) Increase in U.S. Plans Amortization of net loss included in net periodic (income)/cost in 2024 is due to the RBA that was effective January 1, 2024. 
Refer to the section above entitled “IBM Retirement Plan Changes,” for additional information.
(3) Refer to note R, “Equity Activity,” for the total change in AOCI, and the Consolidated Statement of Comprehensive Income for the components of net 
periodic (income)/cost, including the related tax effects, recognized in OCI for the retirement-related benefit plans.
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
113

Assumptions Used to Determine Plan Financial Information
Underlying both the measurement of benefit obligations and net periodic (income)/cost are actuarial valuations. These valuations 
use participant-specific information such as salary, age and years of service, as well as certain assumptions, the most significant of 
which include estimates of discount rates, expected return on plan assets, rate of compensation increases, interest crediting rates 
and mortality rates. The company evaluates these assumptions, at a minimum, annually, and makes changes as necessary.
The following tables present the assumptions used to measure the net periodic (income)/cost and the year-end benefit obligations 
for retirement-related benefit plans.
Defined Benefit Pension Plans 
U.S. Plans
Non-U.S. Plans 
2024
2023
2022
2024
2023
2022
Weighted-average assumptions used to measure net periodic 
(income)/cost for the year ended December 31
Discount rate (1) (2) (3)
 5.00 % 
 5.30 % 
 3.30 % 
 3.37 % 
 3.80 % 
 1.26 % 
Expected long-term returns on plan assets (1) (2) (3)
 5.08 % 
 5.50 % 
 4.33 % 
 4.89 % 
 4.44 % 
 2.97 % 
Rate of compensation increase (4)
 5.00 % 
 N/A 
 N/A 
 4.18 % 
 4.00 % 
 3.02 % 
Interest crediting rate (1) (3)
 3.80 % 
 4.40 % 
 2.07 % 
 0.28 % 
 0.34 % 
 0.26 % 
Weighted-average assumptions used to measure benefit 
obligations at December 31
Discount rate
 5.50 % 
 5.00 % 
 5.30 % 
 3.61 % 
 3.36 % 
 3.80 % 
Rate of compensation increase
 4.00 % 
 5.00 % 
 N/A 
 4.04 % 
 4.18 % 
 4.00 % 
Interest crediting rate
 4.30 % 
 3.80 % 
 4.40 % 
 0.32 % 
 0.28 % 
 0.34 % 
(1) The Qualified PPP discount rate, expected long-term return on plan assets and interest crediting rate of 5.00 percent, 5.00 percent, and 3.80 percent, 
respectively, for the period January 1, 2024 through August 31, 2024, changed to 5.00 percent, 5.25 percent and 3.80 percent, respectively, for the 
period September 1, 2024 through December 31, 2024 due to remeasurement of the plan as a result of the changes described in the section above 
entitled “IBM Retirement Plan Changes.”
(2) The Non-U.S. Plan discount rate and expected long-term return on plan assets of 4.60 percent, and 5.50 percent, respectively, for the period January 
1, 2024 through October 29, 2024, changed to 4.70 percent and 4.50 percent respectively, for the period October 30, 2024 through December 31, 
2024 due to remeasurement of the IBMC IBM Retirement Plan as a result of the changes described in the section above entitled “IBM Retirement Plan 
Changes.”
(3) The Qualified PPP discount rate, expected long-term return on plan assets and interest crediting rate of 2.60 percent, 4.00 percent and 1.10 percent, 
respectively, for the period January 1, 2022 through August 31, 2022, changed to 4.70 percent, 5.00 percent and 4.00 percent, respectively, for the 
period September 1, 2022 through December 31, 2022 due to remeasurement of the plan as a result of the changes described in the section above 
entitled “IBM Retirement Plan Changes.”
(4) The rate of compensation increase in 2024 is due to the RBA that was effective January 1, 2024. Refer to the section above entitled “IBM Retirement 
Plan Changes,” for additional information.
N/A–Not applicable
Nonpension Postretirement Benefit Plans 
U.S. Plan
Non-U.S. Plans 
2024
2023
2022
2024
2023
2022
Weighted-average assumptions used to measure net periodic 
cost for the year ended December 31
Discount rate (1)
 5.00 % 
 5.30 % 
 3.05 % 
 7.66 % 
 7.25 %
 5.35 %
Expected long-term returns on plan assets
 N/A 
 N/A 
 N/A 
 8.12 % 
 8.05 %
 6.64 %
Interest crediting rate (1)
 3.80 % 
 4.40 % 
 2.16 % 
 N/A 
 N/A 
 N/A 
Weighted-average assumptions used to measure benefit 
obligations at December 31
Discount rate
 5.30 % 
 5.00 % 
 5.30 % 
 8.21 % 
 7.66 %
 7.25 %
Interest crediting rate
 4.30 % 
 3.80 % 
 4.40 % 
 N/A 
 N/A 
 N/A 
(1) The U.S. Nonpension Postretirement Plan discount rate and interest crediting rate of 2.30 percent and 1.10 percent, respectively, for the period 
January 1, 2022 through July 31, 2022, changed to 4.10 percent and 3.65 percent, respectively, for the period August 1, 2022 through December 31, 
2022 due to remeasurement of the plan as a result of the changes described in the section above entitled “IBM Retirement Plan Changes.”
N/A–Not applicable
114
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies

Item
Description of Assumptions
Discount Rate
Changes in discount rate assumptions impact net periodic (income)/cost and the PBO.
For the U.S. and certain non-U.S. countries, a portfolio of high-quality corporate bonds is used to construct 
a yield curve. Cash flows from the company’s expected benefit obligation payments are matched to the 
yield curve to derive the discount rates.
In other non-U.S. countries where the markets for high-quality long-term bonds are not as well developed, 
a portfolio of long-term government bonds is used as a base, and a credit spread is added to simulate 
corporate bond yields at these maturities in the jurisdiction of each plan. This is the benchmark for 
developing the respective discount rates.
Expected Long-
Term Returns on 
Plan Assets
Represents the expected long-term returns on plan assets based on the calculated market-related value of 
plan assets and considers long-term expectations for future returns and the investment policies and 
strategies discussed on page 116. These rates of return are developed and tested for reasonableness 
against historical returns by the company. 
The use of expected returns may result in pension income that is greater or less than the actual return of 
those plan assets in a given year. Over time, however, the expected long-term returns are designed to 
approximate the actual long-term returns, and therefore result in a pattern of income or loss recognition that 
more closely matches the pattern of the services provided by the employees.
The difference between actual and expected returns is recognized as a component of net loss or gain in 
AOCI, which is amortized as a component of net periodic (income)/cost over the service lives or life 
expectancy of the plan participants, depending on the plan, provided such amounts exceed certain 
thresholds provided by accounting standards. The market-related value of plan assets recognizes changes 
in the fair value of plan assets systematically over a five-year period in the expected return on plan assets 
line in net periodic (income)/cost.
The projected long-term rate of return on plan assets for 2025 is 5.50 percent for U.S. and 4.86 percent for 
non-U.S. DB Plans.
Rate of 
Compensation 
Increases and 
Mortality 
Assumptions
Compensation rate increases are determined based on the company’s long-term plans for such increases.
Mortality assumptions are based on life expectancy and death rates for different types of participants and 
are periodically updated based on actual experience.
Interest Crediting 
Rate
Benefits for participants in Cash Balance Plans are calculated using a cash balance formula. An assumption 
underlying this formula is an interest crediting rate, which impacts both net periodic (income)/cost and the 
PBO. This provides the basis for projecting the expected interest rate that plan participants will earn on the 
benefits that they are expected to receive in the following year.
Healthcare Cost 
Trend Rate
For nonpension postretirement benefit plans, the company determines healthcare cost trend rates based 
on medical cost inflation expectations in each market and IBM’s plan characteristics. The healthcare cost 
trend rate is an important consideration when setting future expectations for plan costs or benefit 
obligations, taking into account the terms of the plan which limit the company’s future obligations to the 
participants.
The company’s U.S. healthcare cost trend rate assumption for 2025 is 6.47 percent and is expected to 
decrease to 4.50 percent over approximately 14 years.
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
115

Plan Assets
Retirement-related benefit plan assets are recognized and measured at fair value. Because of the inherent uncertainty of valuations, 
these fair value measurements may not necessarily reflect the amounts the company could realize in current market transactions.
Investment Policies and Strategies
The investment objectives of the Qualified PPP portfolio are designed to generate returns that will enable the plan to meet its future 
obligations. The precise amount for which these obligations will be settled depends on future events, including the retirement dates 
and life expectancy of the plan participants. The obligations are estimated using actuarial assumptions, based on the current 
economic environment and other pertinent factors described above. The Qualified PPP portfolio’s investment strategy balances the 
requirement to generate returns, using assets with higher expected returns such as equity securities, with the need to control risk in 
the portfolio with less volatile assets, such as fixed-income securities. Risks include, among others, inflation, volatility in equity 
values and changes in interest rates that could cause the plan to become underfunded, thereby increasing its dependence on 
contributions from the company. To mitigate any potential concentration risk, careful consideration is given to balancing the 
portfolio among industry sectors, companies and geographies, taking into account interest rate sensitivity, dependence on 
economic growth, currency and other factors that affect investment returns. In 2024, the company changed its investment, 
strategy, modifying asset allocation, primarily by increasing return-seeking assets and reducing debt securities. The change was 
designed to improve expected returns for the plan given that the plan began accruing new liabilities in the form of Retirement 
Benefit Accounts. The Qualified PPP portfolio’s target allocation is 11 percent equity securities, 70 percent fixed-income securities, 
3 percent real estate and 16 percent other investments.
The assets are managed by professional investment firms and investment professionals who are employees of the company. They 
are bound by investment mandates determined by the company’s management and are measured against specific benchmarks. 
Among these managers, consideration is given, but not limited to, balancing security concentration, issuer concentration, 
investment style and reliance on particular active and passive investment strategies.
Market liquidity risks are tightly controlled, with $1,465 million of the Qualified PPP portfolio as of December 31, 2024 invested in 
private market assets consisting of private equities, private real estate investments and private infrastructure equity, which are less 
liquid than publicly traded securities and primarily measured at net asset value (NAV). In addition, the Qualified PPP portfolio had 
$843 million in commitments for future investments in private markets to be made over a number of years. These commitments are 
expected to be funded from plan assets.
Derivatives are used as an effective means to achieve investment objectives and/or as a component of the plan’s risk management 
strategy. The primary reasons for the use of derivatives are fixed income management, including duration, interest rate 
management and credit exposure, cash equitization and to manage currency strategies.
The non-U.S. Plans investment objectives are similar to those described previously, subject to local regulations. The weighted-
average target allocation for the non-U.S. plans is 16 percent equity securities, 63 percent fixed-income securities, 3 percent real 
estate, 13 percent insurance contracts and 5 percent other investments, which is consistent with the allocation decisions made by 
the company’s management. In some countries, a higher percentage allocation to fixed income is required to manage solvency and 
funding risks. In others, the responsibility for managing the investments typically lies with a board that may include up to 50 percent 
of members elected by employees and retirees. This can result in slight differences compared with the strategies previously 
described. The percentage of non-U.S. plans investment in assets that are less liquid is consistent with the U.S. plan. The use of 
derivatives is also consistent with the U.S. plan and mainly for currency hedging, interest rate risk management, credit exposure and 
alternative investment strategies.
The company’s nonpension postretirement benefit plans are underfunded or unfunded. For some plans, the company maintains a 
nominal, highly liquid trust fund balance to ensure timely benefit payments.
116
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies

Defined Benefit Pension Plan Assets
The following table presents the company’s defined benefit pension plans’ asset classes and their associated fair value at 
December  31, 2024. The U.S. Plan consists of the Qualified PPP and the non-U.S. Plans consist of all plans sponsored by the 
company’s subsidiaries.
($ in millions)
U.S. Plan
Non-U.S. Plans
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Equity
Equity securities (1)
$ 
655 
$ 
— 
$ 
7 
$ 
661 
$ 
67 
$ 
1 
$ 
— 
$ 
68 
Equity mutual funds (2)
 
183 
 
— 
 
— 
 
183 
 
— 
 
— 
 
— 
 
— 
Fixed income
Government and related (3)
 
— 
 
7,010 
 
— 
 
7,010 
 
110 
 
6,807 
 
— 
 
6,917 
Corporate bonds (4)
 
— 
 
3,663 
 
186 
 
3,849 
 
7 
 
2,550 
 
— 
 
2,557 
Mortgage and asset-backed securities
 
— 
 
141 
 
— 
 
141 
 
— 
 
4 
 
— 
 
4 
Fixed income mutual funds (5)
 
240 
 
— 
 
— 
 
240 
 
— 
 
— 
 
— 
 
— 
Insurance contracts (6)
 
— 
 
— 
 
— 
 
— 
 
— 
 
3,332 
 
— 
 
3,332 
Cash and short-term investments (7)
 
670 
 
(24)  
— 
 
646 
 
170 
 
277 
 
— 
 
447 
Private equity
 
— 
 
— 
 
— 
 
— 
 
— 
 
— 
 
— 
 
— 
Real estate
 
— 
 
— 
 
— 
 
— 
 
— 
 
— 
 
3 
 
3 
Derivatives (8)
 
— 
 
8 
 
— 
 
8 
 
39 
 
58 
 
— 
 
97 
Other mutual funds (9)
 
— 
 
— 
 
— 
 
— 
 
20 
 
— 
 
— 
 
20 
Subtotal
 1,747 
 10,799 
 
193 
 12,739 
 
413 
 13,029 
 
3 
 13,444 
Investments measured at net asset 
value using the NAV practical 
expedient (10)
 
— 
 
— 
 
— 
 
4,852 
 
— 
 
— 
 
— 
 11,807 
Other (11)
 
— 
 
— 
 
— 
 
0 
 
— 
 
— 
 
— 
 
(47) 
Fair value of plan assets
$ 1,747 
$ 10,799 
$ 
193 
$ 17,591 
$ 
413 
$ 13,029 
$ 
3 
$ 25,205 
(1)
Represents U.S. and international securities. The U.S. Plan includes IBM common stock of $1 million. Non-U.S. Plans include IBM common stock of 
$1 million.
(2)
Invests in predominantly equity securities.
(3)
Includes debt issued by national, state and local governments and agencies.
(4)
The U.S. Plans include IBM corporate bonds of $4 million. Non-U.S. Plans include IBM corporate bonds of $4 million.
(5)
Invests predominantly in fixed-income securities.
(6)
Primarily represents insurance policy contracts (Buy-In) in certain non-U.S. plans.
(7)
Includes cash, cash equivalents and short-term marketable securities.
(8)
Includes interest-rate derivatives, forwards, exchange-traded and other over-the-counter derivatives.
(9)
Invests in both equity and fixed-income securities.
(10) Investments measured at fair value using the net asset value (NAV) per share (or its equivalent) as a practical expedient, including commingled 
funds, hedge funds, private equity and real estate partnerships.
(11) Represents net unsettled transactions, relating primarily to purchases and sales of plan assets.
The U.S. nonpension postretirement benefit plan assets of $6 million were invested primarily in cash equivalents, categorized as 
Level 1 in the fair value hierarchy. The non-U.S. nonpension postretirement benefit plan assets of $14 million, primarily in Brazil, 
and, to a lesser extent, in Mexico and South Africa, were invested primarily in government and related fixed-income securities and 
corporate bonds, categorized as Level 2 in the fair value hierarchy.
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
117

The following table presents the company’s defined benefit pension plans’ asset classes and their associated fair value at 
December  31, 2023. The U.S. Plan consists of the Qualified PPP and the non-U.S. Plans consist of all plans sponsored by the 
company’s subsidiaries.
($ in millions)
U.S. Plan
Non-U.S. Plans
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Equity
Equity securities (1)
$ 
631 
$ 
— 
$ 
— 
$ 
631 
$ 
243 
$ 
— 
$ 
— 
$ 
243 
Equity mutual funds (2)
 
155 
 
— 
 
— 
 
155 
 
5 
 
— 
 
— 
 
5 
Fixed income
Government and related (3)
 
— 
 
9,861 
 
— 
 
9,861 
 
— 
 
7,700 
 
— 
 
7,700 
Corporate bonds (4)
 
— 
 
7,074 
 
709 
 
7,783 
 
— 
 
2,691 
 
— 
 
2,691 
Mortgage and asset-backed securities
 
— 
 
178 
 
— 
 
178 
 
— 
 
9 
 
— 
 
9 
Fixed income mutual funds (5)
 
251 
 
— 
 
— 
 
251 
 
— 
 
— 
 
75 
 
75 
Insurance contracts (6)
 
— 
 
— 
 
— 
 
— 
 
— 
 
3,774 
 
— 
 
3,774 
Cash and short-term investments (7)
 
495 
 
119 
 
— 
 
614 
 
264 
 
315 
 
— 
 
579 
Private equity
 
— 
 
— 
 
13 
 
13 
 
— 
 
— 
 
— 
 
— 
Real estate
 
— 
 
— 
 
— 
 
— 
 
— 
 
— 
 
4 
 
4 
Derivatives (8)
 
— 
 
— 
 
— 
 
— 
 
51 
 
258 
 
— 
 
309 
Other mutual funds (9)
 
— 
 
— 
 
— 
 
— 
 
20 
 
— 
 
— 
 
20 
Subtotal
 1,532 
 17,231 
 
722 
 19,485 
 
584 
 14,747 
 
78 
 15,409 
Investments measured at net asset 
value using the NAV practical 
expedient (10)
 
— 
 
— 
 
— 
 
4,952 
 
— 
 
— 
 
— 
 13,709 
Other (11)
 
— 
 
— 
 
— 
 
0 
 
— 
 
— 
 
— 
 
(59) 
Fair value of plan assets
$ 1,532 
$ 17,231 
$ 
722 
$ 24,437 
$ 
584 
$ 14,747 
$ 
78 
$ 29,059 
(1)
Represents U.S. and international securities. The U.S. Plan includes IBM common stock of $1 million. Non-U.S. Plans include IBM common stock of 
$2 million.
(2)
Invests in predominantly equity securities.
(3)
Includes debt issued by national, state and local governments and agencies.
(4)
The U.S. Plans include IBM corporate bonds of $16 million. Non-U.S. Plans include IBM corporate bonds of $5 million.
(5)
Invests in predominantly fixed-income securities.
(6)
Primarily represents insurance policy contracts (Buy-In) in certain non-U.S. plans.
(7)
Includes cash, cash equivalents and short-term marketable securities.
(8)
Includes interest-rate derivatives, forwards, exchange-traded and other over-the-counter derivatives.
(9)
Invests in both equity and fixed-income securities.
(10) Investments measured at fair value using the net asset value (NAV) per share (or its equivalent) as a practical expedient, including commingled 
funds, hedge funds, private equity and real estate partnerships.
(11) Represents net unsettled transactions, relating primarily to purchases and sales of plan assets.
The U.S. nonpension postretirement benefit plan assets of $10 million were invested in cash equivalents, categorized as Level 1 in 
the fair value hierarchy. The non-U.S. nonpension postretirement benefit plan assets of $23 million, primarily in Brazil, and, to a 
lesser extent, in Mexico and South Africa, were invested primarily in government and related fixed-income securities and corporate 
bonds, categorized as Level 2 in the fair value hierarchy.
The following tables present the reconciliation of the beginning and ending balances of Level 3 assets for the years ended 
December 31, 2024 and 2023 for the U.S. Plan.
($ in millions)
Equity 
Securities
Corporate 
Bonds
Private 
 Equity
Total
Balance at January 1, 2024
$ 
— 
$ 
709 
$ 
13 
$ 
722 
Return on assets held at end of year
 
(2) 
 
4 
 
— 
 
2 
Return on assets sold during the year
 
0 
 
16 
 
— 
 
16 
Purchases, sales and settlements, net
 
2 
 
(545) 
 
(10) 
 
(554) 
Transfers, net
 
7 
 
1 
 
(2) 
 
6 
Balance at December 31, 2024
$ 
7 
$ 
186 
$ 
— 
$ 
193 
118
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies

($ in millions)
Corporate 
Bonds
Private 
 Equity
Total
Balance at January 1, 2023
$ 
721 
$ 
421 
$ 
1,142 
Return on assets held at end of year
 
(18) 
 
(5) 
 
(23) 
Return on assets sold during the year
 
10 
 
0 
 
10 
Purchases, sales and settlements, net
 
(5) 
 
(404) 
 
(409) 
Transfers, net
 
2 
 
— 
 
2 
Balance at December 31, 2023
$ 
709 
$ 
13 
$ 
722 
The following tables present the reconciliation of the beginning and ending balances of Level 3 assets for the years ended 
December 31, 2024 and 2023 for the non-U.S. Plans.
($ in millions)
Fixed Income 
Mutual Funds
Real Estate
Total
Balance at January 1, 2024
$ 
75 
$ 
4 
$ 
78 
Return on assets held at end of year
 
— 
 
— 
 
— 
Return on assets sold during the year
 
5 
 
— 
 
5 
Purchases, sales and settlements, net
 
(77) 
 
— 
 
(77) 
Transfers, net
 
— 
 
0 
 
0 
Foreign exchange impact
 
(3) 
 
(1) 
 
(4) 
Balance at December 31, 2024
$ 
— 
$ 
3 
$ 
3 
($ in millions)
Fixed Income 
Mutual Funds
Real Estate
Total
Balance at January 1, 2023
$ 
9 
$ 
145 
$ 
155 
Return on assets held at end of year
 
1 
 
(66) 
 
(65) 
Return on assets sold during the year
 
— 
 
56 
 
56 
Purchases, sales and settlements, net
 
63 
 
(137) 
 
(74) 
Transfers, net
 
— 
 
0 
 
0 
Foreign exchange impact
 
2 
 
5 
 
7 
Balance at December 31, 2023
$ 
75 
$ 
4 
$ 
78 
Valuation Techniques
The following is a description of the valuation techniques used to measure plan assets at fair value. There were no changes in 
valuation techniques during 2024 and 2023.
Equity securities are valued at the closing price reported on the stock exchange on which the individual securities are traded. IBM 
common stock is valued at the closing price reported on the New York Stock Exchange. Mutual funds are typically valued based on 
quoted market prices. These assets are generally classified as Level 1.
The fair value of fixed-income securities is typically estimated using pricing models, quoted prices of securities with similar 
characteristics or discounted cash flows and are generally classified as Level 2. If available, they are valued using the closing price 
reported on the major market on which the individual securities are traded.
Cash includes money market accounts that are valued at their cost plus interest on a daily basis, which approximates fair value. 
Short-term investments represent securities with original maturities of one year or less. These assets are classified as Level 1 or 
Level 2.
Real estate valuations require significant judgment due to the absence of quoted market prices, the inherent lack of liquidity and the 
long-term nature of such assets. These assets are initially valued at cost and are reviewed periodically utilizing available and 
relevant market data, including appraisals, to determine if the carrying value of these assets should be adjusted. These assets are 
classified as Level 3.
Exchange-traded derivatives are valued at the closing price reported on the exchange on which the individual securities are traded, 
while forward contracts are valued using a mid-close price. Over-the-counter derivatives are typically valued using pricing models. 
The models require a variety of inputs, including, for example, yield curves, credit curves, measures of volatility and foreign 
exchange rates. These assets are classified as Level 1 or Level 2 depending on availability of quoted market prices.
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
119

Certain investments are measured at fair value using the net asset value (NAV) per share (or its equivalent) as a practical expedient. 
These investments, which include commingled funds, hedge funds, private equity and real estate partnerships, are typically valued 
using the NAV provided by the administrator of the fund and reviewed by the company. The NAV is based on the value of the 
underlying assets owned by the fund, minus liabilities and divided by the number of shares or units outstanding.
Contributions and Direct Benefit Payments
It is the company’s general practice to fund amounts for pensions sufficient to meet the minimum requirements set forth in 
applicable employee benefits laws and local tax laws. From time to time, the company contributes additional amounts as it deems 
appropriate.
The following table presents the contributions made to the non-U.S. DB plans, nonpension postretirement benefit plans, multi-
employer plans, DC plans and direct benefit payments for 2024 and 2023. The cash contributions to the multi-employer plans 
represent the annual cost included in the net periodic (income)/cost recognized in the Consolidated Income Statement. The 
company’s participation in multi-employer plans has no material impact on the company’s financial statements.
($ in millions)
For the years ended December 31:
2024
2023
Non-U.S. DB plans
$ 
67 
$ 
57 
Nonpension postretirement benefit plans
 
194 
 
233 
Multi-employer plans
 
13 
 
13 
DC plans (1)
 
440 
 
991 
Direct benefit payments
 
578 
 
552 
Total
$ 
1,291 
$ 
1,847 
(1) Decrease in DC plans is primarily due to the introduction of the RBA that was effective January 1, 2024. Refer to the section above entitled “IBM 
Retirement Plan Changes,” for additional information.
In 2024 and 2023, $194 million and $256 million, respectively, of contributions to the non-U.S. DB plans and U.S. nonpension 
postretirement benefit plans were made in U.S. Treasury securities. Additionally, in 2024 and 2023, contributions of $741 million
and $682 million, respectively, were made to the Active Medical Trust in U.S. Treasury securities. Contributions made with U.S. 
Treasury securities are considered a non-cash transaction.
Defined Benefit Pension Plans
In 2025, the company is not legally required to make any contributions to the U.S. defined benefit pension plans. However, 
depending on market conditions, or other factors, the company may elect to make discretionary contributions to the Qualified PPP 
during the year.
In 2025, the company estimates contributions to its non-U.S. defined benefit and multi-employer plans to be approximately $100 
million, the largest of which will be contributed to defined benefit pension plans in Japan and India. This amount generally 
represents legally mandated minimum contributions.
Financial market performance in 2025 could increase the legally mandated minimum contribution in certain countries which require 
monthly or daily remeasurement of the funded status. The company could also elect to contribute more than the legally mandated 
amount based on market conditions or other factors.
Expected Benefit Payments
Defined Benefit Pension Plan Expected Payments
The following table presents the total expected benefit payments to defined benefit pension plan participants subsequent to the 
retirement plan changes, as described in ‘IBM Retirement Plan Changes’ section above. These payments have been estimated 
based on the same assumptions used to measure the plans’ PBO at December  31, 2024 and include benefits attributable to 
estimated future compensation increases, where applicable.
($ in millions)
Qualified
U.S. Plan
Payments
Nonqualified
U.S. Plans
Payments
Qualified
Non-U.S. Plans
Payments
Nonqualified
Non-U.S. Plans
Payments
Total Expected
Benefit
Payments
2025
$ 
1,136 $ 
121 $ 
1,833 $ 
248 $ 
3,338 
2026
 
1,178  
119  
1,760  
224  
3,282 
2027
 
1,214  
116  
1,749  
221  
3,300 
2028
 
1,202  
114  
1,710  
217  
3,243 
2029
 
1,186  
111  
1,705  
218  
3,221 
2030-2034
 
5,671  
507  
8,049  
1,016  
15,243 
120
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies

The 2025 expected benefit payments to defined benefit pension plan participants not covered by the respective plan assets 
(underfunded plans) represent a component of compensation and benefits, within current liabilities, in the Consolidated Balance 
Sheet.
Nonpension Postretirement Benefit Plan Expected Payments
The following table presents the total expected benefit payments to nonpension postretirement benefit plan participants. These 
payments have been estimated based on the same assumptions used to measure the plans’ APBO at December 31, 2024.
($ in millions)
U.S. Plan
Payments
Qualified
Non-U.S. Plans
Payments
Nonqualified
Non-U.S. Plans
Payments
Total Expected
Benefit
Payments
2025
$ 
230 $ 
16 $ 
26 $ 
272 
2026
 
237  
17  
27  
280 
2027
 
249  
18  
27  
293 
2028
 
253  
18  
27  
299 
2029
 
246  
19  
28  
293 
2030-2034
 
1,090  
107  
153  
1,350 
The 2025 expected benefit payments to nonpension postretirement benefit plan participants not covered by the respective plan 
assets represent a component of compensation and benefits, within current liabilities, in the Consolidated Balance Sheet.
Other Plan Information
The following table presents information for defined benefit pension plans with accumulated benefit obligations (ABO) in excess of 
plan assets. For a more detailed presentation of the funded status of the company’s defined benefit pension plans, refer to the table 
on page 112.
($ in millions)
2024
2023
At December 31:
Benefit
Obligation
Plan
Assets
Benefit
Obligation
Plan
Assets
Plans with PBO in excess of plan assets
$ 
16,216 $ 
8,811 
$ 
18,345 $ 
9,621 
Plans with ABO in excess of plan assets
 
16,194  
8,789 
 
18,029  
9,604 
Plans with plan assets in excess of PBO
 
26,493  
33,985 
 
36,369  
43,875 
The following table presents information for the nonpension postretirement benefit plan with APBO in excess of plan assets. For a 
more detailed presentation of the funded status of the company’s nonpension postretirement benefit plans, refer to the table on 
page 112.
($ in millions)
2024
2023
At December 31:
Benefit
Obligation
Plan
Assets
Benefit
Obligation
Plan
Assets
Plans with APBO in excess of plan assets
$ 
2,764 $ 
20 
$ 
2,820 $ 
32 
Plans with plan assets in excess of APBO
 
—  
— 
 
—  
— 
NOTE V. SUBSEQUENT EVENTS             
On January 28, 2025, the company announced that the Board of Directors approved a quarterly dividend of $1.67 per common 
share. The dividend is payable March 10, 2025 to stockholders of record on February 10, 2025.
On February 10, 2025, the company issued $3.6 billion of Euro fixed-rate notes in tranches with maturities ranging from 5 to 20 
years and coupons ranging from 2.9 to 3.8 percent; and $4.75 billion of U.S. dollar fixed-rate notes in tranches with maturities 
ranging from 3 to 30 years and coupons ranging from 4.65 to 5.7 percent.
Notes to the Consolidated Financial Statements
International Business Machines Corporation and Subsidiary Companies
121

COMPARISON OF ONE-, THREE- AND FIVE-YEAR CUMULATIVE TOTAL RETURN FOR IBM, S&P 500 STOCK INDEX AND S&P 
INFORMATION TECHNOLOGY INDEX 
The following graphs compare the one-, three- and five-year cumulative total returns for IBM common stock with the comparable 
cumulative returns of certain Standard & Poor’s (S&P) indices. Due to the fact that IBM is a company included in the S&P 500 Stock 
Index, the SEC’s rules require the use of that index for the required five-year graph. Under those rules, the second index used for 
comparison may be a published industry or line-of-business index. The S&P Information Technology Index is such an index. IBM is 
also included in this index.
The graph assumes $100 invested on December 31 (of the initial year shown in the graph) in IBM common stock and $100 invested 
on the same date in each of the S&P indices. The comparisons assume that all dividends are reinvested. On November 3, 2021, we 
completed the separation of Kyndryl. IBM stockholders received one share of common stock in Kyndryl for every five shares of IBM 
common stock held at the close of business on October 25, 2021, the record date for the distribution. The effect of the Kyndryl 
transaction is reflected in the five-year graph in the cumulative total return as reinvested dividends.
122
Performance Graphs
International Business Machines Corporation and Subsidiary Companies
One-Year  
           Three-Year
Five-Year
80
160
140
120
100
12/23
6/24
9/24
3/24
12/24
0
100
250
50
150
200
12/21
12/22
12/24
12/23
0
100
350
50
150
200
250
300
12/19
12/20
12/22
12/21
12/24
12/23
One-Year
(U.S. Dollar)
12/2023
3/2024
6/2024
9/2024
12/2024
—
International Business Machines
$ 100.00 
$ 117.81 
$ 107.77 
$ 138.96 
$ 139.27 
• • • •
S & P 500
$ 100.00 
$ 110.56 
$ 115.29 
$ 122.08 
$ 125.02 
-  -  -  -
S & P Information Technology
$ 100.00 
$ 112.69 
$ 128.24 
$ 130.31 
$ 136.61 
Three-Year
(U.S. Dollar)
2021
2022
2023
2024
International Business Machines
$ 100.00 
$ 110.70 
$ 134.92 
$ 187.91 
• • • •
S & P 500
$ 100.00 
$ 81.89 
$ 103.42 
$ 129.29 
-  -  -  -
S & P Information Technology
$ 100.00 
$ 71.81 
$ 113.34 
$ 154.83 
Five-Year
(U.S. Dollar)
2019
2020
2021
2022
2023
2024
International Business Machines
$ 100.00 
$ 99.04 
$ 115.88 
$ 128.29 
$ 156.35 
$ 217.76 
• • • •
S & P 500
$ 100.00 
$ 118.40 
$ 152.39 
$ 124.79 
$ 157.59 
$ 197.02 
-  -  -  -
S & P Information Technology
$ 100.00 
$ 143.89 
$ 193.58 
$ 139.00 
$ 219.40 
$ 299.72 
—
—

IBM Stockholder Services    
Stockholders with questions about their accounts should contact:
Computershare Trust Company, N.A., P.O. Box 43078, Providence, Rhode Island 02940-3078, (888) IBM-6700.
Investors residing outside the United States, Canada and Puerto Rico should call (781) 575-2727.
Stockholders can also reach Computershare Trust Company, N.A. via e-mail at: ibm@computershare.com
Hearing-impaired stockholders with access to a telecommunications device (TDD) can communicate directly with Computershare 
Trust Company, N.A., by calling (800) 490-1493. Stockholders residing outside the United States, Canada and Puerto Rico should 
call (781) 575-2694.
IBM on the Internet
Topics featured in this Annual Report can be found online at www.ibm.com. Financial results, news on IBM products, services and 
other activities can also be found at that website.
IBM files reports with the Securities and Exchange Commission (SEC), including the annual report on Form 10-K, quarterly reports 
on Form 10-Q, current reports on Form 8-K and any other filings required by the SEC.
IBM’s website (www.ibm.com/investor) contains a significant amount of information about IBM, including the company’s annual 
report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports filed or 
furnished pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934 as soon as reasonably practicable after such 
material is electronically filed with or furnished to the SEC. These materials are available free of charge on or through IBM’s website.
The SEC maintains a website (www.sec.gov) that contains reports, proxy and information statements, and other information 
regarding issuers that file electronically with the SEC.
Computershare Investment Plan (CIP)
The Computershare Investment Plan brochure outlines a number of services provided for IBM stockholders and potential IBM 
investors, including the reinvestment of dividends, direct purchase and the deposit of IBM stock certificates for safekeeping. The 
brochure is available at www.computershare.com/ibmcip or by calling (888) IBM-6700. Investors residing outside the United 
States, Canada and Puerto Rico should call (781) 575-2727.
Investors with other requests may write to: IBM Stockholder Relations, New Orchard Road, M/D 325, Armonk, New York 10504.
IBM Stock
IBM common stock is listed on the New York Stock Exchange and the NYSE Chicago under the symbol “IBM”.
Stockholder Communications
Stockholders can get quarterly financial results and voting results from the Annual Meeting by calling (914) 499-7777, by sending 
an e-mail to infoibm@us.ibm.com, or by writing to IBM Stockholder Relations, New Orchard Road, M/D 325, Armonk, New York 
10504.
Annual Meeting
The IBM Annual Meeting of Stockholders will be held on Tuesday, April 29, 2025, at 1 p.m. (ET).
Literature for IBM Stockholders
The literature mentioned below on IBM is available without charge from:
Computershare Trust Company, N.A., P.O. Box 43078, Providence, Rhode Island 02940-3078, (888) IBM-6700.
Investors residing outside the United States, Canada and Puerto Rico should call (781) 575-2727.
The company’s annual report on Form 10-K and the quarterly reports on Form 10-Q provide additional information on IBM’s 
business. The 10-K report is released by the end of February; 10-Q reports are released by the end of April, July and October. 
IBM believes that corporate responsibility drives long-term value not just in our business, but also for IBM stakeholders. Our 2023 
Impact Report is available online at https://www.ibm.com/impact. 
General Information
Stockholders of record can receive account information and answers to frequently asked questions regarding stockholder accounts 
online at www.ibm.com/investor. Stockholders of record can also consent to receive future IBM Annual Reports and Proxy 
Statements online through this site.
For answers to general questions about IBM from within the continental United States, call (800) IBM-4YOU. From outside the 
United States, Canada and Puerto Rico, call (914) 499-1900.
Stockholder Information
International Business Machines Corporation and Subsidiary Companies
123

Board of Directors and Senior Leadership 
International Business Machines Corporation and Subsidiary Companies
Marianne C. Brown
Former Chief Operating Officer
Global Financial Solutions, Fidelity National 
Information Services, Inc.  
Thomas Buberl
Chief Executive Officer
AXA S.A. 
David N. Farr 
Retired Chairman and
Chief Executive Officer
Emerson Electric Co. 
Alex Gorsky 
Former Chairman and
Chief Executive Officer
Johnson & Johnson 
Michelle J. Howard 
Retired Admiral 
United States Navy 
Arvind Krishna
Chairman, President and 
Chief Executive Officer
IBM 
Andrew N. Liveris 
Retired Chairman and 
Chief Executive Officer 
The Dow Chemical Company 
Frederick William McNabb III
Retired Chairman and 
Chief Executive Officer 
The Vanguard Group, Inc. 
Michael Miebach
Chief Executive Officer
Mastercard Incorporated
Martha E. Pollack 
President Emerita
Cornell University 
Peter R. Voser 
Retired Chief Executive Officer
Royal Dutch Shell plc
Chairman 
ABB Ltd. 
Frederick H. Waddell
Retired Chairman and
Chief Executive Officer
Northern Trust Corporation
Alfred W. Zollar 
Former Executive Advisor
Siris Capital Group, LLC
Jonathan H. Adashek
Senior Vice President
Marketing and Communications 
Mohamad Ali 
Senior Vice President
IBM Consulting
Kelly C. Chambliss
Senior Vice President 
IBM Consulting, Americas
Gary D. Cohn
Vice Chairman
Jane P. Edwards
Vice President
Assistant General Counsel and Secretary 
Nicolás Fehring
Vice President and Controller
Darío Gil
Senior Vice President and Director
IBM Research
James J. Kavanaugh 
Senior Vice President and 
Chief Financial Officer
Arvind Krishna
Chairman, President and 
Chief Executive Officer
IBM
Nickle J. LaMoreaux
Senior Vice President and  
Chief Human Resources Officer 
Ric Lewis
Senior Vice President
IBM Infrastructure
Dinesh Nirmal
Senior Vice President, Products
IBM Software
Anne E. Robinson
Senior Vice President and
Chief Legal Officer
Alex Stern
Senior Vice President
Strategy and Mergers & Acquisitions
Robert D. Thomas
Senior Vice President 
IBM Software and 
Chief Commercial Officer
Brien Wierzchowski
Vice President and Treasurer
Joanne Wright
Senior Vice President
Transformation and Operations
Kareem Yusuf
Senior Vice President
Product Management and Growth
IBM Software
BOARD OF DIRECTORS
SENIOR LEADERSHIP
124

International Business Machines Corporation 
New Orchard Road 
Armonk, New York 10504 
914-499-1900
Db2, IBM, IBM Cloud, IBM Cloud Pak, IBM Garage, IBM Q 
Network, IBM Quantum, IBM Z, Instana, Nordcloud, Octo, 
IBM Partner Plus, Power, Randori, 7Summits, Taos, TruQua, 
Turbonomic, Waeg, watsonx, WebSphere, z15, z/OS and z 
Systems are trademarks of International Business Machines 
Corporation or its wholly owned subsidiaries. Kyndryl is a 
trademark of Kyndryl, Inc. Azure and Microsoft Edge are 
trademarks of Microsoft. The registered trademark Linux is 
used pursuant to a sublicense from the Linux Foundation, 
the exclusive licensee of Linus Torvalds, owner of the mark 
on a worldwide basis. Red Hat, Ansible, OpenShift and 
StackRox are trademarks of Red Hat, Inc. or its subsidiaries 
in the United States and other countries. UNIX is a registered 
trademark of The Open Group in the United States and other 
countries. Other company, product and service names may be 
trademarks or service marks of others.
The IBM Annual Report is printed on papers harvested to 
sustainable standards.
Printed in U.S.A. COL03002-USEN-21