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International Business Machines Corp. – ‘10-K’ for 12/31/23

On:  Monday, 2/26/24, at 6:41am ET   ·   For:  12/31/23   ·   Accession #:  51143-24-12   ·   File #:  1-02360

Previous ‘10-K’:  ‘10-K’ on 2/28/23 for 12/31/22   ·   Latest ‘10-K’:  This Filing   ·   51 References:   

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  As Of               Filer                 Filing    For·On·As Docs:Size

 2/26/24  Int’l Business Machines Corp.     10-K       12/31/23  199:77M

Annual Report   —   Form 10-K   —   SEA’34

Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Annual Report                                       HTML   1.13M 
 2: EX-4.1      Instrument Defining the Rights of Security Holders  HTML    336K 
 3: EX-10.1     Material Contract                                   HTML     49K 
 4: EX-10.2     Material Contract                                   HTML    222K 
 5: EX-13       Annual or Quarterly Report to Security Holders      HTML   4.60M 
 6: EX-21       Subsidiaries List                                   HTML    103K 
 7: EX-23.1     Consent of Expert or Counsel                        HTML     50K 
 8: EX-24.1     Power of Attorney                                   HTML     81K 
 9: EX-24.2     Power of Attorney                                   HTML     49K 
14: EX-97       Clawback Policy re: Recovery of Erroneously         HTML     55K 
                Awarded Compensation                                             
10: EX-31.1     Certification -- §302 - SOA'02                      HTML     53K 
11: EX-31.2     Certification -- §302 - SOA'02                      HTML     54K 
12: EX-32.1     Certification -- §906 - SOA'02                      HTML     51K 
13: EX-32.2     Certification -- §906 - SOA'02                      HTML     51K 
20: R1          Cover                                               HTML    194K 
21: R2          Audit Information                                   HTML     55K 
22: R3          Consolidated Income Statement                       HTML    168K 
23: R4          Consolidated Statement of Comprehensive Income      HTML    120K 
24: R5          Consolidated Balance Sheet                          HTML    209K 
25: R6          Consolidated Balance Sheet (Parenthetical)          HTML     67K 
26: R7          Consolidated Statement of Cash Flows                HTML    155K 
27: R8          Consolidated Statement of Cash Flows                HTML     53K 
                (Parenthetical)                                                  
28: R9          Consolidated Statement of Equity                    HTML    112K 
29: R10         Consolidated Statement of Equity (Parenthetical)    HTML     58K 
30: R11         Significant Accounting Policies                     HTML    159K 
31: R12         Accounting Changes                                  HTML     69K 
32: R13         Revenue Recognition                                 HTML    121K 
33: R14         Segments                                            HTML    240K 
34: R15         Acquisitions & Divestitures                         HTML    209K 
35: R16         Other (Income) and Expense                          HTML     69K 
36: R17         Research, Development & Engineering                 HTML     53K 
37: R18         Taxes                                               HTML    171K 
38: R19         Earnings Per Share                                  HTML     92K 
39: R20         Financial Assets & Liabilities                      HTML     93K 
40: R21         Inventory                                           HTML     57K 
41: R22         Financing Receivables                               HTML    264K 
42: R23         Property, Plant & Equipment                         HTML     62K 
43: R24         Leases                                              HTML    484K 
44: R25         Intangible Assets Including Goodwill                HTML    140K 
45: R26         Borrowings                                          HTML    164K 
46: R27         Other Liabilities                                   HTML     68K 
47: R28         Commitments & Contingencies                         HTML     87K 
48: R29         Equity Activity                                     HTML    227K 
49: R30         Derivative Financial Instruments                    HTML    192K 
50: R31         Stock-Based Compensation                            HTML    139K 
51: R32         Retirement-Related Benefits                         HTML    785K 
52: R33         Subsequent Events                                   HTML     52K 
53: R34         Schedule Ii Valuation and Qualifying Accounts and   HTML    101K 
                Reserves                                                         
54: R35         Significant Accounting Policies (Policies)          HTML    303K 
55: R36         Revenue Recognition (Tables)                        HTML    122K 
56: R37         Segments (Tables)                                   HTML    240K 
57: R38         Acquisitions & Divestitures (Tables)                HTML    195K 
58: R39         Other (Income) and Expense (Tables)                 HTML     68K 
59: R40         Taxes (Tables)                                      HTML    169K 
60: R41         Earnings Per Share (Tables)                         HTML     91K 
61: R42         Financial Assets & Liabilities (Tables)             HTML     90K 
62: R43         Inventory (Tables)                                  HTML     58K 
63: R44         Financing Receivables (Tables)                      HTML    267K 
64: R45         Property, Plant & Equipment (Tables)                HTML     62K 
65: R46         Leases (Tables)                                     HTML    147K 
66: R47         Intangible Assets Including Goodwill (Tables)       HTML    146K 
67: R48         Borrowings (Tables)                                 HTML    162K 
68: R49         Other Liabilities (Tables)                          HTML     65K 
69: R50         Commitments & Contingencies (Tables)                HTML     72K 
70: R51         Equity Activity (Tables)                            HTML    222K 
71: R52         Derivative Financial Instruments (Tables)           HTML    178K 
72: R53         Stock-Based Compensation (Tables)                   HTML    172K 
73: R54         Retirement-Related Benefits (Tables)                HTML    790K 
74: R55         Significant Accounting Policies - Basis of          HTML    103K 
                Presentation and Principles of Consolidation                     
                (Details)                                                        
75: R56         Significant Accounting Policies - Billing and       HTML     53K 
                Financing Components (Details)                                   
76: R57         Significant Accounting Policies - Revenue           HTML     83K 
                Recognition for Major Categories of Revenue                      
                (Details)                                                        
77: R58         Significant Accounting Policies - Software Costs    HTML     58K 
                (Details)                                                        
78: R59         Significant Accounting Policies - Incremental       HTML     51K 
                Costs of Obtaining a Contract (Details)                          
79: R60         Significant Accounting Policies - Product           HTML     54K 
                Warranties (Details)                                             
80: R61         Significant Accounting Policies - Advertising and   HTML     51K 
                Promotional Expense (Details)                                    
81: R62         Significant Accounting Policies - Government        HTML     54K 
                Assistance (Details)                                             
82: R63         Significant Accounting Policies - Depreciation and  HTML     76K 
                Amortization (Details)                                           
83: R64         Significant Accounting Policies - Stock-Based       HTML     66K 
                Compensation (Details)                                           
84: R65         Significant Accounting Policies - Fair Value        HTML     51K 
                Measurement (Details)                                            
85: R66         Significant Accounting Policies - Transfers of      HTML     53K 
                Financial Assets (Details)                                       
86: R67         Significant Accounting Policies - Financing         HTML     61K 
                Receivables (Details)                                            
87: R68         Significant Accounting Policies - Supplier          HTML     61K 
                Financing (Details)                                              
88: R69         Significant Accounting Policies - Leases (Details)  HTML     66K 
89: R70         Significant Accounting Policies - Common Stock      HTML     51K 
                (Details)                                                        
90: R71         Revenue Recognition - Disaggregation of Revenue by  HTML     93K 
                Major Products and Service Offerings (Details)                   
91: R72         Revenue Recognition - Disaggregation of Revenue by  HTML     66K 
                Geography (Details)                                              
92: R73         Revenue Recognition - Remaining Performance         HTML     67K 
                Obligations (Details)                                            
93: R74         Revenue Recognition - Performance Obligations       HTML     51K 
                Satisfied or Partially Satisfied in Prior Periods                
                (Details)                                                        
94: R75         Revenue Recognition - Reconciliation of Contract    HTML     63K 
                Balances (Details)                                               
95: R76         Revenue Recognition - Trade Allowance for Credit    HTML     59K 
                Losses (Details)                                                 
96: R77         Revenue Recognition - Deferred Contract Costs       HTML     64K 
                (Details)                                                        
97: R78         Segments - Results of Continuing Operations         HTML     86K 
                (Details)                                                        
98: R79         Segments - Revenue Reconciliation (Details)         HTML     66K 
99: R80         Segments - Pre-Tax Income Reconciliation (Details)  HTML     74K 
100: R81         Segments - Assets and Other Items (Details)         HTML     85K  
101: R82         Segments - Asset Reconciliation (Details)           HTML     86K  
102: R83         Segments - Geographic Information (Details)         HTML     79K  
103: R84         Segments - Revenue by Product or Service (Details)  HTML     85K  
104: R85         Acquisitions & Divestitures - Acquisitions          HTML    138K  
                Narrative (Details)                                              
105: R86         Acquisitions & Divestitures - Purchase Price        HTML    154K  
                Allocation (Details)                                             
106: R87         Acquisitions & Divestitures - Divestitures          HTML    137K  
                Narrative (Details)                                              
107: R88         Acquisitions & Divestitures - Major categories of   HTML     77K  
                income (Details)                                                 
108: R89         Acquisitions & Divestitures - Cash flows (Details)  HTML     58K  
109: R90         Other (Income) and Expenses (Details)               HTML     70K  
110: R91         Research, Development & Engineering (Details)       HTML     59K  
111: R92         Taxes - Income before Income Taxes (Details)        HTML     59K  
112: R93         Taxes - Provision by Geographic Operations          HTML     58K  
                (Details)                                                        
113: R94         Taxes - Provision by Taxing Jurisdiction (Details)  HTML     91K  
114: R95         Taxes - Tax Rate Reconciliation (Details)           HTML     74K  
115: R96         Taxes - Tax Rate Reconciliation Narrative           HTML     51K  
                (Details)                                                        
116: R97         Taxes - Deferred Taxes (Details)                    HTML    107K  
117: R98         Taxes - Carryforwards (Details)                     HTML     60K  
118: R99         Taxes - Unrecognized Tax Benefits Reconciliation    HTML     65K  
                (Details)                                                        
119: R100        Taxes - Unrecognized Tax Benefits Narrative         HTML     63K  
                (Details)                                                        
120: R101        Taxes - Income Tax Assessments (Details)            HTML     59K  
121: R102        Taxes - Undistributed Foreign Earnings (Details)    HTML     54K  
122: R103        Earnings Per Share (Details)                        HTML    132K  
123: R104        Earnings Per Share - Antidilutive Stock Options     HTML     54K  
                (Details)                                                        
124: R105        Financial Assets & Liabilities - Fair Value         HTML    109K  
                Measurements (Details)                                           
125: R106        Financial Assets & Liabilities - Not Measured at    HTML     53K  
                Fair Value (Details)                                             
126: R107        Inventory (Details)                                 HTML     57K  
127: R108        Financing Receivables - Payment Terms (Details)     HTML     60K  
128: R109        Financing Receivables - Components of Financing     HTML    119K  
                Receivables (Details)                                            
129: R110        Financing Receivables - Transfer of Financing       HTML     68K  
                Assets (Details)                                                 
130: R111        Financing Receivables - By Portfolio Segment        HTML     83K  
                (Details)                                                        
131: R112        Financing Receivables - Past Due (Details)          HTML     77K  
132: R113        Financing Receivables - Credit Quality Year of      HTML     88K  
                Origination (Details)                                            
133: R114        Property, Plant & Equipment (Details)               HTML     67K  
134: R115        Leases - Components of Lease Costs (Details)        HTML     65K  
135: R116        Leases - Cash Flow From Lease Transactions          HTML     61K  
                (Details)                                                        
136: R117        Leases - Weighted-average Lease Terms and Discount  HTML     60K  
                Rates (Details)                                                  
137: R118        Leases - Maturity Analysis of Undiscounted Cash     HTML     87K  
                Out Flows (Details)                                              
138: R119        Leases - ROU Assets and Lease Liabilities           HTML     57K  
                (Details)                                                        
139: R120        Leases - Lease Amounts Included in Consolidated     HTML     67K  
                Income Statement (Details)                                       
140: R121        Leases - Maturity Analysis of Lease Payments Due    HTML     74K  
                on Sales-type and Direct Financing Leases                        
                (Details)                                                        
141: R122        Intangible Assets Including Goodwill - Intangible   HTML     73K  
                Assets by Class (Details)                                        
142: R123        Intangible Assets Including Goodwill - Narrative    HTML     65K  
                (Details)                                                        
143: R124        Intangible Assets Including Goodwill - Future       HTML     70K  
                Amortization (Details)                                           
144: R125        Intangible Assets Including Goodwill - Goodwill by  HTML     77K  
                Segment (Details)                                                
145: R126        Borrowings - Short-Term Debt (Details)              HTML     52K  
146: R127        Borrowings - Long-Term Debt, Components (Details)   HTML    166K  
147: R128        Borrowings - Long-Term Debt, Covenants (Details)    HTML     63K  
148: R129        Borrowings - Long-Term Debt, Debt Issued (Details)  HTML     71K  
149: R130        Borrowings - Post-Swap Borrowing (Details)          HTML     70K  
150: R131        Borrowings - Pre-Swap Obligations (Details)         HTML     69K  
151: R132        Borrowings - Interest on Debt (Details)             HTML     60K  
152: R133        Borrowings - Lines of Credit (Details)              HTML     66K  
153: R134        Other Liabilities - Components (Details)            HTML     69K  
154: R135        Other Liabilities - Workforce Reduction and         HTML     59K  
                Environmental Liabilities (Details)                              
155: R136        Commitments & Contingencies - Extensions of Credit  HTML     55K  
                (Details)                                                        
156: R137        Commitments & Contingencies - Standard Warranty     HTML     59K  
                Liability (Details)                                              
157: R138        Commitments & Contingencies - Extended Warranty     HTML     64K  
                Liability (Details)                                              
158: R139        Commitments & Contingencies - Contingencies         HTML     66K  
                (Details)                                                        
159: R140        Equity Activity - Stock Repurchases and Other       HTML     86K  
                Transactions (Details)                                           
160: R141        Equity Activity - Reclassifications and Taxes       HTML    170K  
                (Details)                                                        
161: R142        Equity Activity - AOCI Rollforward (Details)        HTML    111K  
162: R143        Derivative Financial Instruments - Offsetting       HTML     83K  
                (Details)                                                        
163: R144        Derivative Financial Instruments - Kyndryl-Related  HTML     59K  
                Transactions (Details)                                           
164: R145        Derivative Financial Instruments - Hedging          HTML     95K  
                Programs (Details)                                               
165: R146        Derivative Financial Instruments - Cumulative       HTML     62K  
                Basis Adjustments for Fair Value Hedges (Details)                
166: R147        Derivative Financial Instruments - Effect of Hedge  HTML     86K  
                Activity on Income and Expense (Details)                         
167: R148        Derivative Financial Instruments - Gains and        HTML    113K  
                Losses (Details)                                                 
168: R149        Stock-Based Compensation - Cost (Details)           HTML     68K  
169: R150        Stock-Based Compensation - Incentive Awards         HTML     65K  
                (Details)                                                        
170: R151        Stock-Based Compensation - RSU and PSU Activity     HTML     92K  
                (Details)                                                        
171: R152        Stock-Based Compensation - RSUs and PSUs, Other     HTML     70K  
                Disclosures (Details)                                            
172: R153        Stock-Based Compensation - Stock Options (Details)  HTML     84K  
173: R154        Stock-Based Compensation - Weighted Average         HTML     59K  
                Assumptions (Details)                                            
174: R155        Stock-Based Compensation - Stock Options Activity   HTML     77K  
                (Details)                                                        
175: R156        Stock-Based Compensation - Acquisitions (Details)   HTML     62K  
176: R157        Stock-Based Compensation - ESPP (Details)           HTML     79K  
177: R158        Retirement-Related Benefits - Defined Benefit       HTML     78K  
                Plans (Details)                                                  
178: R159        Retirement-Related Benefits - All Retirement Plans  HTML     74K  
                Cost (Details)                                                   
179: R160        Retirement-Related Benefits - PBO, APBO, FV of      HTML    101K  
                Plan Assets, Funded Status (Details)                             
180: R161        Retirement-Related Benefits - Net Periodic Cost     HTML    101K  
                (Details)                                                        
181: R162        Retirement-Related Benefits - U.S. Retirement Plan  HTML    104K  
                Changes (Details)                                                
182: R163        Retirement-Related Benefits - Change in Benefit     HTML    138K  
                Obligation and Plan Assets (Details)                             
183: R164        Retirement-Related Benefits - Net Funded Status     HTML     74K  
                (Details)                                                        
184: R165        Retirement-Related Benefits - OCI and AOCI          HTML    115K  
                (Details)                                                        
185: R166        Retirement-Related Benefits - Assumptions           HTML    131K  
                (Details)                                                        
186: R167        Retirement-Related Benefits - Investment Strategy   HTML     80K  
                (Details)                                                        
187: R168        Retirement-Related Benefits - Plan Assets           HTML    224K  
                (Details)                                                        
188: R169        Retirement-Related Benefits - Level 3               HTML     90K  
                Reconciliation (Details)                                         
189: R170        Retirement-Related Benefits - Contributions and     HTML     67K  
                Direct Benefit Payments (Details)                                
190: R171        Retirement-Related Benefits - Contributions,        HTML     57K  
                Defined Benefit Pension Plans (Details)                          
191: R172        Retirement-Related Benefits - Expected Benefit      HTML     88K  
                Payments (Details)                                               
192: R173        Retirement-Related Benefits - ABO and APBO in       HTML     77K  
                Excess of Plan Assets (Details)                                  
193: R174        Subsequent Events (Details)                         HTML     66K  
194: R175        Schedule Ii Valuation and Qualifying Accounts and   HTML     72K  
                Reserves (Details)                                               
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‘10-K’   —   Annual Report

Document Table of Contents

Page (sequential)   (alphabetic) Top
 
11st Page  –  Filing Submission
"Table of Contents
"Part I
"Item 1. Business
"Item 1A. Risk Factors
"Item 1B. Unresolved Staff Comments
"Tem 1C. Cybersecurity
"Item 2. Properties
"Item 3. Legal Proceedings
"Item 4. Mine Safety Disclosures
"Part Ii
"Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
"Item 6. [Reserved
"Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
"Item 7A. Quantitative and Qualitative Disclosures About Market Risk
"Item 8. Financial Statements and Supplementary Data
"Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
"Item 9A. Controls and Procedures
"Item 9B. Other Information
"Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
"Part Iii
"Item 10. Directors, Executive Officers and Corporate Governance
"Item 11. Executive Compensation
"Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
"Item 13. Certain Relationships and Related Transactions, and Director Independence
"Item 14. Principal Accounting Fees and Services
"Part Iv
"Item 15. Exhibits, Financial Statement Schedules
"Item 16. Form 10-K Summary
"Signatures
"Report of Independent Registered Public Accounting Firm on Financial Statement Schedule
"Schedule Ii
"Valuation and Qualifying Accounts and Reserves for the years ended December 31, 2023, 2022, and 2021

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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM  i 10-K
 i ANNUAL REPORT
pursuant to  i Section 13 or 15 (d) of the
Securities Exchange Act of 1934
FOR THE YEAR ENDED  i  i DECEMBER 31, 2023 / 
 i 1-2360
(Commission file number)
 i INTERNATIONAL BUSINESS MACHINES CORPORATION
(Exact name of registrant as specified in its charter)
 i New York
(State of Incorporation)
 i 13-0871985
(IRS Employer Identification Number)
 i One New Orchard Road
 i Armonk,  i New York
(Address of principal executive offices)
 i 10504
(Zip Code)
 i 914- i 499-1900
(Registrant’s telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol
Name of each exchange on which registered
 i  i Capital stock, par value $.20 per share /  i  i IBM /  i New York Stock Exchange
NYSE Chicago
 i 1.125% Notes due 2024 i IBM 24A i New York Stock Exchange
 i 2.875% Notes due 2025 i IBM 25A i New York Stock Exchange
 i 0.950% Notes due 2025 i IBM 25B i New York Stock Exchange
 i 0.875% Notes due 2025 i IBM 25C i New York Stock Exchange
 i 0.300% Notes due 2026 i IBM 26B i New York Stock Exchange
 i 1.250% Notes due 2027 i IBM 27B i New York Stock Exchange
 i 3.375% Notes due 2027 i IBM 27F i New York Stock Exchange
 i 0.300% Notes due 2028 i IBM 28B i New York Stock Exchange
 i 1.750% Notes due 2028 i IBM 28A i New York Stock Exchange
 i 1.500% Notes due 2029 i IBM 29 i New York Stock Exchange
 i 0.875% Notes due 2030 i IBM 30A i New York Stock Exchange
 i 1.750% Notes due 2031 i IBM 31 i New York Stock Exchange
 i 3.625% Notes due 2031 i IBM 31B i New York Stock Exchange
 i 0.650% Notes due 2032 i IBM 32A i New York Stock Exchange
 i 1.250% Notes due 2034 i IBM 34 i New York Stock Exchange
 i 3.750% Notes due 2035 i IBM 35 i New York Stock Exchange
 i 4.875% Notes due 2038 i IBM 38 i New York Stock Exchange
 i 1.200% Notes due 2040 i IBM 40 i New York Stock Exchange
 i 4.000% Notes due 2043 i IBM 43 i New York Stock Exchange
 i 7.00% Debentures due 2025 i IBM 25 i New York Stock Exchange
 i 6.22% Debentures due 2027 i IBM 27 i New York Stock Exchange
 i 6.50% Debentures due 2028 i IBM 28 i New York Stock Exchange
 i 5.875% Debentures due 2032 i IBM 32D i New York Stock Exchange
 i 7.00% Debentures due 2045 i IBM 45 i New York Stock Exchange
 i 7.125% Debentures due 2096 i IBM 96 i New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None.
Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act.  i Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐  i No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  i Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  i Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
 i Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company  i 
Emerging growth company  i 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  i 
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. i 
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).☐
Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes  i  No ☒
The aggregate market value of the voting stock held by non-affiliates of the registrant as of the last business day of the registrant’s most recently completed second fiscal quarter was $ i 121.9 billion.
The registrant had  i 916,744,848 shares of common stock outstanding at February 9, 2024.
Documents incorporated by reference:
 i 
Portions of IBM’s Annual Report to Stockholders for the year ended December 31, 2023 are incorporated by reference into Parts I, II and IV of this Form 10-K.
Portions of IBM’s definitive Proxy Statement to be filed with the Securities and Exchange Commission and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 30, 2024 are incorporated by reference into Part III of this Form 10-K.


Table of Contents
Table of Contents

S-1
i

Table of Contents
PART I
Item 1. Business:
International Business Machines Corporation (IBM or the company) was incorporated in the State of New York on June 16, 1911, as the Computing-Tabulating-Recording Co. (C-T-R), a consolidation of the Computing Scale Co. of America, the Tabulating Machine Co. and The International Time Recording Co. of New York. Since that time, IBM has focused on the intersection of business insight and technological innovation, and its operations and aims have been international in nature. This was signaled 100 years ago, in 1924, when C-T-R changed its name to International Business Machines Corporation. And it continues today—we create sustained value for clients by helping them leverage the power of hybrid cloud and artificial intelligence (AI). Our hybrid cloud platform and AI technology support clients’ digital transformations and helps them reimagine critical workflows, at scale, and modernize applications to increase agility, drive innovation and create operational efficiencies. Our offerings draw from leading IBM capabilities in software, consulting services capability to deliver business outcomes, and deep incumbency in mission-critical infrastructure, all bolstered by one of the world’s leading research organizations.
The following information is included in IBM’s 2023 Annual Report to Stockholders and is incorporated by reference:
IBM Strategy—pages 11 to 13.
Business Segments and Capabilities—pages 13 to 15.
Human Capital—pages 15 to 16.
Strategic Partnerships
We proactively partner with a broad variety of companies including hyperscalers, service providers, global system integrators, and software and hardware vendors. We work alongside our partners to deliver end-to-end solutions that address our clients’ complex business challenges while accelerating growth. Our strategic partners include: Adobe, Amazon Web Services (AWS), Microsoft, Oracle, Salesforce, Samsung Electronics and SAP, among others.
Companies with which we have strategic partnerships in some areas may be competitors in other areas.
Competition
IBM is a globally integrated enterprise that participates in a highly competitive environment. Our competitors vary by industry segment, and range from large multinational enterprises to smaller, more narrowly focused entities. Across our business segments, we recognize hundreds of competitors worldwide and as we execute our hybrid cloud and AI strategy, we are regularly exposed to new competitors.
Our principal methods of competition are: technology innovation; performance; price; quality; brand; our breadth of capabilities, products and services; talent; client relationships and trust; the ability to deliver business value to clients; and service and support. In order to maintain leadership, we optimize our portfolio with organic and inorganic innovations and effective resource allocation. These investments not only drive current performance but will extend our innovation leadership into the future.
Our breadth and depth of expertise enables us to take different technologies and bring them together to solve the most pressing business issues of our clients. We differentiate from other providers by bringing together incumbency with enterprises, deep expertise in technology, industries and business processes, a broad go-to-market reach including an ecosystem of partners and alliances, and a strong focus on innovation. All of these attributes position IBM for accelerated growth now and prepare us for the next set of business opportunities, such as quantum computing.
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Overall, the company is the leader or among the leaders in each of our business segments. A summary of the competitive environment for each business segment is included below:
Software:
The depth, breadth, and innovation of our software offerings, coupled with our global reach, deep industry expertise and research capabilities help differentiate our offerings from our competitors. Our hybrid cloud and AI platforms allow clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The principal competitors in this segment include: Alphabet (Google), Amazon, BMC, Broadcom, Informatica, Microsoft, Oracle, Palo Alto Networks, Salesforce, SAP and Splunk. We also compete with smaller, niche competitors in specific geographic regions or product segments.
Consulting:
Consulting focuses on integrating skills on strategy, experience, technology and operations by domain and industry. Consulting competes in a dynamic market including consulting, systems integration, application development, application management and business process outsourcing services. Our broad-based competitors include: Accenture, Capgemini, India-based service providers, management consulting firms, the consulting practices of public accounting firms, engineering service providers, and many companies that primarily focus on local markets or niche service areas.
Infrastructure:
IBM is well positioned in the growing hybrid cloud infrastructure market, providing on-premises and cloud-based server and storage solutions. We gain advantage and differentiation through investments in higher-value capabilities, including security, scalability, and reliability, designed especially for mission-critical and regulated workloads. In addition, we offer a portfolio of life-cycle services for hybrid cloud infrastructure deployment. Our principal competitors include: Dell Technologies, Hewlett-Packard Enterprise (HPE), Intel, NetApp and Pure Storage as well as original device manufacturers (ODMs) who provide systems that are re-branded. Further, cloud service providers are leveraging innovation in technology and service delivery to compete with traditional providers and to offer additional routes to market for server and storage systems.
Financing:
Financing provides client and commercial financing, facilitating IBM clients’ acquisition of hardware, software and services. Financing’s ability to manage credit and residual value risk generates a competitive advantage for the company. The key competitive factors include: interest rates charged, IT product experience, client service, contract flexibility, ease of doing business, global capabilities and residual values. In client and commercial financing, Financing primarily competes with non-captive financing entities and financial institutions.
Forward-looking and Cautionary Statements
Certain statements contained in this Form 10-K may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 (“Reform Act”). Forward-looking statements are based on the company’s current assumptions regarding future business and financial performance. These statements by their nature address matters that are uncertain to different degrees. The company may also make forward-looking statements in other reports filed with the Securities and Exchange Commission (“SEC”), in materials delivered to stockholders and in press releases. In addition, the company’s representatives may from time to time make oral forward-looking statements. Forward-looking statements provide current expectations of future events based on certain assumptions and include any statement that does not directly relate to any historical or current fact. Words such as “anticipates,” “believes,” “expects,” “estimates,” “intends,” “plans,” “projects,” and similar expressions, may identify such forward-looking statements. Any forward-looking statement in this Form 10-K speaks only as of the date on which it is made. Except as required by law, the company assumes no obligation to update or revise any forward-looking statements. In accordance with the Reform Act, set forth under Item 1A. “Risk Factors” on pages 3 to 9 are cautionary statements that accompany those forward-looking statements. Readers should carefully review such cautionary statements as they identify certain important factors that could cause actual results to differ materially from those in the forward-looking statements and from historical trends. Those cautionary statements are not exclusive and are in addition to other factors discussed elsewhere in this Form 10-K, in the company’s filings with the SEC or in materials incorporated therein by reference.
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The following information is included in IBM’s 2023 Annual Report to Stockholders and is incorporated herein by reference:
Segment information and revenue by classes of similar products or services—pages 66 to 70.
Financial information regarding environmental activities—page 94.
The number of persons employed by the registrant—page 15.
The management discussion overview—pages 8 to 10.
Website information and company reporting—page 123.
Information About Our Executive Officers (at February 26, 2024):
AgeOfficer since
Arvind Krishna, Chairman of the Board and Chief Executive Officer (1)
612020
Michelle H. Browdy, Senior Vice President, Legal and Regulatory Affairs, and General Counsel592015
Gary D. Cohn, Vice Chairman 632021
Nicolas A. Fehring, Vice President and Controller452023
James J. Kavanaugh, Senior Vice President and Chief Financial Officer, Finance and Operations572008
Nickle J. LaMoreaux, Senior Vice President and Chief Human Resources Officer442020
Robert D. Thomas, Senior Vice President, Software and Chief Commercial Officer
49
2023
(1)    Member of the Board of Directors.
All executive officers are elected by the Board of Directors annually as provided in the Company’s By-laws. Each executive officer named above, with the exception of Gary D. Cohn, has been an executive of IBM or its subsidiaries during the past five years. Mr. Cohn previously served as Assistant to the President for Economic Policy and Director of the National Economic Council from January 2017 until April 2018. Before serving in the White House, Mr. Cohn was President and Chief Operating Officer of The Goldman Sachs Group, Inc. from 2006-2016.

Item 1A. Risk Factors:
Risks Related to Our Business
Downturn in Economic Environment and Client Spending Budgets Could Impact the Company’s Business: If overall demand for IBM’s products and solutions decreases, whether due to general economic conditions, or a shift in client buying patterns, the company’s revenue and profit could be impacted.
Failure of Innovation Initiatives Could Impact the Long-Term Success of the Company: IBM has moved into areas, including those that incorporate or utilize hybrid cloud, AI (including generative AI), quantum and other disruptive technologies, in which it can differentiate itself through responsible innovation, by leveraging its investments in R&D and attracting a successful developer ecosystem. If IBM is unable to continue its cutting-edge innovation in a highly competitive and rapidly evolving environment or is unable to commercialize such innovations, expand and scale them with sufficient speed and versatility or is unable to attract a successful developer ecosystem, the company could fail in its ongoing efforts to maintain and increase its market share and its profit margins.
Damage to IBM’s Reputation Could Impact the Company’s Business: IBM has one of the strongest brand names in the world, and its brand and overall reputation could be negatively impacted by many factors, including if the company does not continue to be recognized for its industry leading technology and solutions and as a hybrid cloud and AI leader. IBM’s reputation is potentially susceptible to damage by events such as significant disputes with clients, product defects, internal control deficiencies, delivery failures, cybersecurity incidents, government investigations or legal proceedings or actions of current or former clients, directors, employees, competitors, vendors, alliance partners or joint venture partners. If the company’s brand image is tarnished by negative perceptions, its ability to attract and retain customers, talent and ecosystem partners could be impacted.
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Risks from Investing in Growth Opportunities Could Impact the Company’s Business: The company continues to invest significantly in key strategic areas to drive revenue growth and market share gains. Client adoption rates and viable economic models are less certain in the high-value, highly competitive, and rapidly-growing segments. Additionally, emerging business and delivery models may unfavorably impact demand and profitability for our other products or services. If the company does not adequately and timely anticipate and respond to changes in customer and market preferences, competitive actions, disruptive technologies, emerging business models and ecosystems, the client demand for our products or services may decline or IBM’s costs may increase.
IBM’s Intellectual Property Portfolio May Not Prevent Competitive Offerings, and IBM May Not Be Able to Obtain Necessary Licenses: The company’s patents and other intellectual property may not prevent competitors from independently developing products and services similar to or duplicative to the company’s, nor can there be any assurance that the resources invested by the company to protect its intellectual property will be sufficient or that the company’s intellectual property portfolio will adequately deter misappropriation or improper use of the company’s technology. In addition, the company may be the target of aggressive and opportunistic enforcement of patents by third parties, including non-practicing entities. Also, there can be no assurances that IBM will be able to obtain from third parties the licenses it needs in the future. The company’s ability to protect its intellectual property could also be impacted by a lack of effective legal protections as well as changes to existing laws, legal principles and regulations governing intellectual property, including the ownership and protection of patents.
Certain of the company’s offerings incorporate or utilize open source and other third-party software licensed with limited or no warranties, indemnification, or other contractual protections for IBM. Further, if open source code that IBM utilizes is no longer maintained, developed or enhanced by the relevant community of independent open source software programmers, most of whom we do not employ, we may be unable to develop new technologies, adequately enhance our existing technologies or meet customer requirements for innovation, quality and price.
Risks to the Company from Acquisitions, Alliances and Dispositions Include Integration Challenges, Failure to Achieve Objectives, the Assumption of Liabilities and Higher Debt Levels: The company has made and expects to continue to make acquisitions, alliances and dispositions. Such transactions present significant challenges and risks and there can be no assurances that the company will manage such transactions successfully or that strategic opportunities will be available to the company on acceptable terms or at all. The related risks include the company failing to achieve strategic objectives, anticipated revenue improvements and cost savings, the failure to retain key strategic relationships of acquired companies, the failure to retain key personnel and the assumption of liabilities related to litigation or other legal proceedings involving the businesses in such transactions, as well as the failure to close planned transactions. Such transactions may require the company to secure financing and any significant disruption or turmoil in the capital markets could have an adverse effect on IBM’s ability to access the capital markets at favorable terms. From time to time, the company disposes or attempts to dispose of assets that are no longer central to its strategic objectives. Any such disposition or attempted disposition is subject to risks, including risks related to the terms and timing of such disposition, risks related to obtaining necessary governmental or regulatory approvals and risks related to retained liabilities not subject to the company’s control.
The Company’s Financial Results for Particular Periods Are Difficult to Predict: IBM’s revenues and profitability are affected by such factors as the introduction of new products and services, the ability to compete effectively in increasingly competitive marketplaces, the length of the sales cycles and the seasonality of technology purchases. In addition, certain of the company’s growth areas involve new products, new customers, new and evolving competitors, and new markets, all of which contribute to the difficulty of predicting the company’s financial results. The company’s financial results may also be impacted by the structure of products and services contracts and the nature of its customers’ businesses; for example, certain of the company’s services contracts with commercial customers in regulated industries are subject to periodic review by regulators with respect to controls and processes. Further, general economic conditions, including sudden shifts in regional or global economic activity may impact the company’s financial results in any particular period. As a result of the above-mentioned factors, the company’s financial results are difficult to predict. Historically, the company has had lower revenue in the first quarter than in the immediately preceding fourth quarter. In addition, the high volume of products typically ordered at the end of each quarter, especially at the end of the fourth quarter, make financial results for a given period difficult to predict.
Due to the Company’s Global Presence, Its Business and Operations Could Be Impacted by Local Legal, Economic, Political, Health and Other Conditions: The company is a globally integrated entity, operating in over 175 countries worldwide and deriving about sixty percent of its revenues from sales outside the United States. Changes in the laws or policies of the countries in which the company operates, or inadequate development or enforcement of such laws or policies, could affect the company’s business and the company’s overall results of operations. Further, the company may
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be impacted directly or indirectly by the development and enforcement of laws and regulations in the U.S. and globally that are specifically targeted at the technology industry. The company’s results of operations also could be affected by economic and political changes in those countries and by macroeconomic changes, including recessions, inflation, currency fluctuations between the U.S. dollar and non-U.S. currencies and adverse changes in trade relationships amongst those countries. Further, as the company expands its customer base and the scope of its offerings, both within the U.S. and globally, it may be impacted by additional regulatory or other risks, including, compliance with U.S. and foreign data privacy requirements, AI regulations, data localization requirements, labor relations laws, enforcement of IP protection laws, laws relating to anti-corruption, anti-competition regulations, and import, export and trade restrictions. Further, international trade disputes could create uncertainty. Tariffs and international trade sanctions resulting from these disputes could affect the company’s ability to move goods and services across borders, or could impose added costs to those activities. Measures taken to date by the company to mitigate these impacts could be made less effective should trade sanctions or tariffs change. In addition, any widespread outbreak of an illness, pandemic or other local or global health issue, natural disasters, climate change impacts, or uncertain political climates, international hostilities, or any terrorist activities, could adversely affect customer demand, the company’s operations and supply chain, and its ability to source and deliver products and services to its customers.
The Company May Not Meet Its Growth and Productivity Objectives: On an ongoing basis, IBM seeks to drive greater agility, productivity, flexibility and cost savings by continuously transforming with the use of automation, AI, agile processes and changes to the ways of working, while also enabling the scaling of resources, offerings and investments through the company’s globally integrated model across both emerging and more established markets. These various initiatives may not yield their intended gains in speed, quality, productivity and enablement of rapid scaling, which may impact the company’s competitiveness and its ability to meet its growth and productivity objectives.
Ineffective Internal Controls Could Impact the Company’s Business and Operating Results: The company’s internal control over financial reporting may not prevent or detect misstatements because of its inherent limitations, including the possibility of human error, failure or interruption of information technology systems, the circumvention or overriding of controls, or fraud. Even effective internal controls can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements. If the company fails to maintain the adequacy of its internal controls, including any failure to implement required new or improved controls, or if the company experiences difficulties in their implementation, the company’s business and operating results could be harmed and the company could fail to meet its financial reporting obligations.
The Company’s Use of Accounting Estimates Involves Judgment and Could Impact the Company’s Financial Results: The application of accounting principles generally accepted in the U.S. (GAAP) requires the company to make estimates and assumptions about certain items and future events that directly affect its reported financial condition. The company’s most critical accounting estimates are described in the Management Discussion in IBM’s 2023 Annual Report to Stockholders, under “Critical Accounting Estimates.” In addition, as discussed in note R, “Commitments & Contingencies,” in IBM’s 2023 Annual Report to Stockholders, the company makes certain estimates including decisions related to legal proceedings and reserves. These estimates and assumptions involve the use of judgment. As a result, actual financial results may differ.
The Company’s Goodwill or Amortizable Intangible Assets May Become Impaired: The company acquires other companies, including the intangible assets of those companies. The company may not realize all the economic benefit from those acquisitions, which could cause an impairment of goodwill or intangible assets. If our goodwill or net intangible assets become impaired, we may be required to record a charge to the Consolidated Income Statement.
The Company Depends on Skilled Employees and Could Be Impacted by a Shortage of Critical Skills: Much of the future success of the company depends on the continued service, availability and integrity of skilled employees, including technical, marketing and staff resources. Skilled and experienced personnel in the areas where the company competes are in high demand, and competition for their talents is intense. Changing demographics and labor work force trends may result in a shortage of or insufficient knowledge and skills. In addition, as global opportunities and industry demand shifts, realignment, training and scaling of skilled resources may not be sufficiently rapid or successful. Further, many of IBM’s key employees receive a total compensation package that includes equity awards. Any new regulations, volatility in the stock market and other factors could diminish the company’s use or the value of the company’s equity awards, putting the company at a competitive disadvantage.
The Company’s Business Could Be Impacted by Its Relationships with Critical Suppliers: IBM’s business employs a wide variety of components (hardware and software), supplies, services and raw materials from a substantial number of
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suppliers around the world. Certain of the company’s businesses rely on a single or a limited number of suppliers, including for server processor technology for certain semiconductors. Changes in the business condition (financial or otherwise) of these suppliers could subject the company to losses and affect its ability to bring products to market. Further, the failure of the company’s suppliers to deliver components, supplies, services and raw materials in sufficient quantities, in a timely or secure manner, and in compliance with all applicable laws and regulations could adversely affect the company’s business. In addition, any defective components, supplies or materials, or inadequate services received from suppliers could reduce the reliability of the company’s products and services and harm the company’s reputation.
Product and Service Quality Issues Could Impact the Company’s Business and Operating Results: The company has rigorous quality control standards and processes intended to prevent, detect and correct errors, malfunctions and other defects in its products and services. If errors, malfunctions, defects or disruptions in service are experienced by customers or in the company’s operations there could be negative consequences that could impact customers’ business operations and harm the company’s business’s operating results.
The Company Could Be Impacted by Its Business with Government Clients: The company’s customers include numerous governmental entities within and outside the U.S., including the U.S. Federal Government and state and local entities. Some of the company’s agreements with these customers may be subject to periodic funding approval. Funding reductions or delays could adversely impact public sector demand for our products and services. Also, some agreements may contain provisions allowing the customer to terminate without cause and providing for higher liability limits for certain losses. In addition, the company could be suspended or debarred as a governmental contractor and could incur civil and criminal fines and penalties, which could negatively impact the company’s results of operations, financial results and reputation.
The Company’s Reliance on Third-Party Distribution Channels and Ecosystems Could Impact Its Business: The company offers its products directly and through a variety of third-party distributors, resellers, independent software vendors, independent service providers, and other ecosystem partners. Changes in the business condition (financial or otherwise) of these ecosystem partners could subject the company to losses and affect its ability to bring its products to market. As the company moves into new areas, ecosystem partners may be unable to keep up with changes in technology and offerings, and the company may be unable to recruit and enable appropriate partners to achieve anticipated ecosystem growth objectives. In addition, the failure of ecosystem partners to comply with all applicable laws and regulations may prevent the company from working with them and could subject the company to losses and affect its ability to bring products to market.
Risks Related to Cybersecurity and Data Privacy
Cybersecurity and Privacy Considerations Could Impact the Company’s Business: There are numerous and evolving risks to cybersecurity and privacy, including risks originating from intentional acts of criminal hackers, hacktivists, nation states and competitors; from intentional and unintentional acts or omissions of customers, contractors, business partners, vendors, employees and other third parties; and from errors in processes or technologies, as well as the risks associated with an increase in the number of customers, contractors, business partners, vendors, employees and other third parties working remotely. Computer hackers and others routinely attack the security of technology products, services, systems and networks using a wide variety of methods, including ransomware or other malicious software and attempts to exploit vulnerabilities in hardware, software, and infrastructure. Attacks also include social engineering and cyber extortion to induce customers, contractors, business partners, vendors, employees and other third parties to disclose information, transfer funds, or unwittingly provide access to systems or data. The company is at risk of security breaches not only of our own products, services, systems and networks, but also those of customers, contractors, business partners, vendors, employees and other third parties, particularly as all parties increasingly digitize their operations. Cyber threats are continually evolving, including with the increased use of AI, making it difficult to defend against such threats and vulnerabilities that can persist undetected over extended periods of time.
The company’s products, services, systems and networks, including cloud-based systems and systems and technologies that the company maintains on behalf of its customers, are used in critical company, customer or third-party operations, and involve the storage, processing and transmission of sensitive data, including valuable intellectual property, other proprietary or confidential data, regulated data, and personal information of employees, customers and others. These products, services, systems and networks are also used by customers in heavily regulated industries, including those in the financial services, healthcare, critical infrastructure and government sectors.
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While the company continues to monitor for, identify, investigate, respond to and remediate a wide range of cybersecurity events, there have not been cybersecurity incidents or vulnerabilities that have had a material adverse effect on the company, though there is no assurance that there will not be cybersecurity incidents or vulnerabilities that will have a material adverse effect in the future.
The company regularly addresses cybersecurity attacks and vulnerabilities. Cybersecurity attacks or other security incidents, including industry-wide incidents such as MOVEit, have or could result in, for example, one or more of the following: unauthorized access to, disclosure, modification, misuse, loss, or destruction of company, customer, or other third-party data or systems; theft or import or export of sensitive, regulated, or confidential data including personal information and intellectual property, including key innovations in AI, quantum, or other disruptive technologies; the loss of access to critical data or systems through ransomware, crypto mining, destructive attacks or other means; and business delays, service or system disruptions or denials of service.
In the event of such actions, the company, its customers and other third parties could be exposed to liability, litigation, and regulatory or other government action, including debarment, as well as the loss of existing or potential customers, damage to brand and reputation, damage to our competitive position, and other financial loss. In addition, the cost and operational consequences of responding to cybersecurity incidents and implementing remediation measures could be significant. In the company’s industry, security vulnerabilities are increasingly discovered, publicized and exploited across a broad range of hardware, software or other infrastructure, elevating the risk of attacks and the potential cost of response and remediation for the company and its customers. In addition, the fast-paced, evolving, pervasive, and sophisticated nature of certain cyber threats and vulnerabilities, as well as the scale and complexity of the business and infrastructure, make it possible that certain threats or vulnerabilities will be undetected or unmitigated in time to prevent or minimize the impact of an attack on the company or its customers.
Cybersecurity risk to the company and its customers also depends on factors such as the actions, practices and investments of customers, contractors, business partners, vendors, the open source community and other third parties, including, for example, providing and implementing patches to address vulnerabilities. Cybersecurity attacks or other catastrophic events resulting in disruptions to or failures in power, information technology, communication systems or other critical infrastructure could result in interruptions or delays to company, customer, or other third-party operations or services, financial loss, injury or death to persons or property, potential liability, and damage to brand and reputation. Although the company continuously takes significant steps to mitigate cybersecurity risk across a range of functions, such measures can never eliminate the risk entirely or provide absolute security.
As a global enterprise, the regulatory environment with regard to cybersecurity, privacy, AI and data protection issues is increasingly complex and will continue to impact the company’s business, including through increased risk, increased costs, and expanded or otherwise altered compliance obligations, including with respect to the increased regulatory activity around the security of critical infrastructure, IoT devices, customer industries (e.g., financial services) and various customer and government supply chain security programs. As the reliance on data grows for the company and our clients, the potential impact of regulations on the company’s business, risks, and reputation will grow accordingly. The enactment and expansion of cybersecurity, AI, data protection and privacy laws, regulations and standards around the globe will continue to result in increased compliance costs, including due to an increased focus on international data transfer mechanisms and data location; increased cybersecurity requirements and reporting obligations; the lack of harmonization of such laws and regulations; the increase in associated litigation and enforcement activity by governments and private parties; the potential for damages, fines and penalties and debarment; and the potential regulation of new and emerging technologies. Any additional costs and penalties associated with increased compliance, enforcement, and risk reduction could make certain offerings less profitable or increase the difficulty of bringing certain offerings to market or maintaining certain offerings.
Risks Related to Laws and Regulations
The Company Could Incur Substantial Costs Related to Climate Change and Other Environmental Matters: IBM, like other companies, is subject to potential climate-related risks and costs such as those resulting from increased severe weather events, prolonged changes in temperature, new regulations affecting hardware products and data centers, carbon taxes, and increased environmental disclosures requested or required by clients, regulators and others. The company is also subject to various federal, state, local and foreign laws and regulations concerning the discharge of materials into the environment or otherwise related to environmental protection, including the U.S. Superfund law. The company could incur substantial costs, including cleanup costs, fines and civil or criminal sanctions, as well as third-party claims for property damage or personal injury, if it were to violate or become liable under environmental laws and regulations. We do not
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expect climate change or compliance with environmental laws and regulations focused on climate change to have a disproportionate effect on the company or its financial position, results of operations and competitive position.
Tax Matters Could Impact the Company’s Results of Operations and Financial Condition: The company is subject to income taxes in both the United States and numerous foreign jurisdictions. IBM’s provision for income taxes and cash tax liability in the future could be adversely affected by numerous factors including, but not limited to, income before taxes being lower than anticipated in countries with lower statutory tax rates and higher than anticipated in countries with higher statutory tax rates, changes in the valuation of deferred tax assets and liabilities, and changes in tax laws, regulations, accounting principles or interpretations thereof, which could adversely impact the company’s results of operations and financial condition in future periods. The Organization for Economic Cooperation and Development (OECD) is issuing guidelines that are different, in some respects, than long-standing international tax principles. As countries unilaterally amend their tax laws to adopt certain parts of the OECD guidelines, this may increase tax uncertainty and may adversely impact the company’s income taxes. Local country, state, provincial or municipal taxation may also be subject to review and potential override by regional, federal, national or similar forms of government. In addition, IBM is subject to the continuous examination of its income tax returns by the United States Internal Revenue Service (IRS) and other tax authorities around the world. The company regularly assesses the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of its provision for income taxes. There can be no assurance that the outcomes from these examinations will not have an adverse effect on the company’s provision for income taxes and cash tax liability.
The Company Is Subject to Legal Proceedings and Investigatory Risks: As a company with a substantial employee population and with clients in more than 175 countries, IBM is or may become involved as a party and/or may be subject to a variety of claims, demands, suits, investigations, tax matters and other proceedings that arise from time to time in the ordinary course of its business. The risks associated with such legal proceedings are described in more detail in note R, “Commitments & Contingencies,” in IBM’s 2023 Annual Report to Stockholders. The company believes it has adopted appropriate risk management and compliance programs. Legal and compliance risks, however, will continue to exist and additional legal proceedings and other contingencies, the outcome of which cannot be predicted with certainty, may arise from time to time.
Risks Related to Financing and Capital Markets Activities

The Company’s Results of Operations and Financial Condition Could Be Negatively Impacted by Its U.S. and non-U.S. Pension Plans: Adverse financial market conditions and volatility in the credit markets may have an unfavorable impact on the value of the company’s pension trust assets and its future estimated pension liabilities. As a result, the company’s financial results in any period could be negatively impacted. In addition, in a period of an extended financial market downturn, the company could be required to provide incremental pension plan funding with resulting liquidity risk which could negatively impact the company’s financial flexibility. Further, the company’s results could be negatively impacted by premiums for mandatory pension insolvency insurance coverage outside the United States. Premium increases could be significant due to the level of insolvencies of unrelated companies in the country at issue. IBM’s 2023 Annual Report to Stockholders includes information about potential impacts from pension funding and the use of certain assumptions regarding pension matters.

The Company Is Exposed to Currency and Financing Risks That Could Impact Its Revenue and Business: The company derives a significant percentage of its revenues and costs from its affiliates operating in local currency environments, and those results are affected by changes in the relative values of non-U.S. currencies and the U.S. dollar, as well as sudden shifts in regional or global economic activity. Further, inherent in the company’s financing business are risks related to the concentration of credit, client creditworthiness, interest rate and currency fluctuations on the associated debt and liabilities and the determination of residual values. The company employs a number of strategies to manage these risks, including the use of derivative financial instruments, which involve the risk of non-performance by the counterparty. In addition, there can be no assurance that the company’s efforts to manage its currency and financing risks will be successful.

The Company’s Financial Performance Could Be Impacted by Changes in Market Liquidity Conditions and by Customer Credit Risk on Receivables: The company’s financial performance is exposed to a wide variety of industry sector dynamics worldwide, including sudden shifts in regional or global economic activity. The company’s earnings and cash flows, as well as its access to funding, could be negatively impacted by changes in market liquidity conditions. IBM’s 2023 Annual Report to Stockholders includes information about the company’s liquidity position. The company’s client base includes many enterprises worldwide, from small and medium businesses to the world’s largest organizations and governments, with a significant portion of the company’s revenue coming from global clients across many sectors. Most of
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the company’s sales are on an open credit basis, and the company performs ongoing credit evaluations of its clients’ financial conditions. If the company becomes aware of information related to the creditworthiness of a major customer, or if future actual default rates on receivables in general differ from those currently anticipated, the company may have to adjust its allowance for credit losses, which could affect the company’s consolidated net income in the period the adjustments are made.

Risks Related to the Spin-Off of Kyndryl Holdings, Inc.

If the Kyndryl Holdings, Inc. Spin-off Fails to Qualify for Tax-free Treatment, It Could Result in Substantial Tax Liability for the Company and Its Stockholders: In connection with the spin-off of Kyndryl Holdings, Inc., the company obtained a private letter ruling from the IRS and an opinion from its tax advisor, in each case to the effect that, for U.S. federal income tax purposes, the spin-off will qualify as a tax-free reorganization under sections 368(a)(1)(D) and 355 of the Internal Revenue Code of 1986, as amended. The IRS private letter ruling and the opinion rely on certain facts, assumptions, representations and undertakings from Kyndryl Holdings, Inc. and the company regarding the past and future conduct of the companies’ respective businesses and other matters. If any of these facts, assumptions, representations, or undertakings are incorrect or not satisfied, the conclusions reached in the IRS private letter ruling and/or the opinion could be jeopardized. If the spin-off is determined to be taxable for U.S. federal income tax purposes, the company’s stockholders that are subject to U.S. federal income tax and the company could incur significant U.S. federal income tax liabilities.

Risks Related to Ownership of IBM Securities

Risk Factors Related to IBM Securities: The company and its subsidiaries issue debt securities in the worldwide capital markets from time to time, with a variety of different maturities and in different currencies. The value of the company’s debt securities fluctuates based on many factors, including the methods employed for calculating principal and interest, the maturity of the securities, the aggregate principal amount of securities outstanding, the redemption features for the securities, the level, direction and volatility of interest rates, changes in exchange rates, exchange controls, governmental and stock exchange regulations and other factors over which the company has little or no control. The company’s ability to pay interest and repay the principal for its debt securities is dependent upon its ability to manage its business operations, as well as the other risks described under this Item 1A. entitled “Risk Factors.” There can be no assurance that the company will be able to manage any of these risks successfully.

The company also issues its common stock from time to time in connection with various compensation plans, contributions to its pension plan and certain acquisitions. The market price of IBM common stock is subject to significant volatility, due to other factors described under this Item 1A. entitled “Risk Factors,” as well as economic and geopolitical conditions generally, trading volumes, speculation by the press or investment community about the company’s financial condition, and other factors, many of which are beyond the company’s control. Since the market price of IBM’s common stock fluctuates significantly, stockholders may not be able to sell the company’s stock at attractive prices.

In addition, changes by any rating agency to the company’s outlook or credit ratings can negatively impact the value and liquidity of both the company’s debt and equity securities. The company does not make a market in either its debt or equity securities and cannot provide any assurances with respect to the liquidity or value of such securities.

Item 1B. Unresolved Staff Comments:
Not applicable.

Item 1C. Cybersecurity:
Risk Management and Strategy
Cybersecurity is a critical part of risk management at IBM and is integrated with the company’s overall enterprise risk management framework. The Board of Directors and the Audit Committee of the Board are responsible for overseeing management’s execution of cybersecurity risk management and for assessing IBM’s approach to risk management. Senior management is responsible for assessing and managing IBM’s exposure to cybersecurity risks on an ongoing basis.
From an enterprise perspective, we implement a multi-faceted risk management approach based on the National Institute of Standards and Technology Cybersecurity Framework. We have established policies and procedures that provide
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the foundation upon which IBM’s infrastructure and data are managed. We regularly assess and adjust our technical controls and methods to identify and mitigate emerging cybersecurity risks. We use a layered approach with overlapping controls to defend against cybersecurity attacks and threats on IBM networks, end-user devices, servers, applications, data, and cloud solutions.
We draw heavily on our own commercial security solutions and services to manage and mitigate cybersecurity risks. IBM maintains a Security Operations Center (“SOC”) that monitors for threats to IBM’s networks and systems, utilizing threat intelligence provided by a range of sources, including the IBM Security X-Force Exchange platform, which maintains one of the largest compilations of threat intelligence in the world. We also rely on tools licensed from third party security vendors to monitor and manage cybersecurity risks. We periodically engage third parties to supplement and review our cybersecurity practices and provide relevant certifications.
We have a global incident response process, managed by IBM’s Computer Security Incident Response Team (“CSIRT”), that relies primarily on internal expertise to respond to cybersecurity threats and attacks. We utilize a combination of online training, educational tools, videos and other awareness initiatives to foster a culture of security awareness and responsibility among our workforce, including responsibility for reporting suspicious activity.
IBM has a third party supplier risk management program to oversee and identify risks from cybersecurity threats associated with its use of third party service providers and vendors. Risks are assessed and prioritized based, among other things, on the type of offering/engagement, supplier assessments, threat intelligence, and industry practices.
As discussed in greater detail in Item 1A., "Risk Factors," the company faces numerous and evolving cybersecurity threats, including risks originating from intentional acts of criminal hackers, hacktivists, nation states and competitors; from intentional and unintentional acts or omissions of customers, contractors, business partners, vendors, employees and other third parties; and from errors in processes or technologies, as well as the risks associated with an increase in the number of customers, contractors, business partners, vendors, employees and other third parties working remotely. While the company continues to monitor for, identify, investigate, respond to and remediate cybersecurity risks, including incidents and vulnerabilities, there have not been any that have had a material adverse effect on the company, though there is no assurance that there will not be cybersecurity risks that will have a material adverse effect in the future.
Governance
IBM’s Enterprise & Technology Security (“E&TS”) organization has oversight responsibility for the security of both IBM’s internal systems and external offerings and works across all of the organizations within the company to protect IBM, its brand, and its clients against cybersecurity risks. E&TS also addresses cybersecurity risks associated with third party suppliers. For these purposes, E&TS includes a dedicated Chief Information Security Officer (“CISO”) whose team is responsible for leading enterprise-wide information security strategy, policy, standards, architecture, and processes for IBM’s internal systems. The CISO manages the CSIRT. The CISO also manages the Product Security Incident Response Team (“PSIRT”), which focuses on product vulnerabilities potentially affecting the security of offerings sold to customers. IBM also has Business Information Security Officers (“BISO”) who coordinate with the Office of the CISO on security issues specific to particular business segments.
The CSIRT team, together with the Office of the Chief Information Officer (“CIO”), Cyber Legal, Corporate Security, and BISOs, engages in on-going reviews of incidents, threat intelligence, detections, and vulnerabilities, including to assess client and regulatory impact. Events of interest are promptly reported to the Senior Vice President (“SVP”) for Legal & Regulatory Affairs and General Counsel (“GC”) and the SVP overseeing cybersecurity (“SVP Sponsor”).
Incidents are delegated to an appropriate incident response team for assessment, investigation, and remediation. Depending on the nature of the matter, the incident response team may include individuals from E&TS, the Office of the CISO, the Office of the CIO, Cyber Legal, Business Units, the Chief Privacy Office, Human Resources, Procurement, Finance and Operations, and Corporate Security. The incident response teams advise and consult with the GC and the SVP Sponsor, as appropriate.
The Cybersecurity Advisory Committee (“CAC”) meets regularly and is responsible for overseeing management of the Company’s cybersecurity risk. The CAC is composed of, among others, SVPs from the major business units, the SVP Sponsor, and the GC. The CAC is responsible for, among other things, setting the Company’s governance structure for managing cybersecurity risk and reviewing noteworthy cybersecurity incidents and strategies to prevent recurrence. IBM management responsible for managing cybersecurity risk reflects a cross-section of functions from across the organization
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with significant experience in managing such risk as well as the technologies underlying these risks. They also hold leadership positions outside of IBM in the field of cybersecurity, serving on governing and advisory boards of public and private institutions at the forefront of issues related to cybersecurity, including technology development, cybersecurity policy, and national security.
The Board of Directors and the Audit Committee oversees the cyber governance process. Leadership from E&TS, including the CISO, make regular presentations to the Audit Committee and the full Board on identification, management, and remediation of cybersecurity risks, both internal and external, as well as threat intelligence, emerging global policies and regulations, cybersecurity technologies, and best practices. In addition, senior management provides briefings as needed to the Audit Committee Chair, the Audit Committee, and, as appropriate, the full Board, on cybersecurity issues and incidents of potential interest.

Item 2. Properties:
IBM’s corporate headquarters are located at an owned site in Armonk, New York. As of December 31, 2023, in aggregate, we owned or leased facilities for current use consisting of approximately 44 million square feet worldwide.
At December 31, 2023, IBM’s facilities in the U.S. had aggregate floor space of approximately 18 million square feet, of which approximately 9 million was owned and 9 million was leased. Outside the U.S., facilities totaled approximately 26 million square feet, of which 4 million was owned and 22 million was leased. This space is primarily used for sales and distribution, manufacturing and development, data processing services including the company’s cloud centers, research and other administrative and general support purposes. Our facilities are utilized for current operations of all business segments.
Continuous optimization, maintenance and upgrading of facilities are essential to maintain our technological leadership, improve productivity and meet customer demand. We believe that in all material respects our properties have been satisfactorily maintained, are in good condition and are suitable for our operations.

Item 3. Legal Proceedings:
Refer to note R, “Commitments & Contingencies,” on pages 95 to 97 of IBM’s 2023 Annual Report to Stockholders, which is incorporated herein by reference.

Item 4. Mine Safety Disclosures:
Not applicable.

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PART II
Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities:
Refer to page 123 of IBM’s 2023 Annual Report to Stockholders, which is incorporated herein by reference solely as it relates to this item.
IBM common stock is listed on the New York Stock Exchange and the NYSE Chicago under the symbol “IBM.” There were 378,481 common stockholders of record at February 9, 2024.
The following table provides information relating to the company’s repurchase of common stock for the fourth quarter of 2023.
Total Number
of Shares
Purchased
Average
Price Paid
per Share
Total Number
of Shares
Purchased
as Part of Publicly
Announced
Program
Approximate
Dollar Value
of Shares that
May Yet Be
Purchased
Under
the Program (1)
$— $2,007,611,768 
$— $2,007,611,768 
$— $2,007,611,768 
Total$— 
(1)    On October 30, 2018, the Board of Directors authorized $4.0 billion in funds for use in the company’s common stock repurchase program. The company stated that it would repurchase shares on the open market or in private transactions depending on market conditions. The common stock repurchase program does not have an expiration date. This table does not include shares tendered to satisfy the exercise price in connection with cashless exercises of employee stock options or shares tendered to satisfy tax withholding obligations in connection with employee equity awards. The company suspended its share repurchase program at the time of the Red Hat closing in 2019.
Item 6. [Reserved]

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations:
Refer to pages 6 through 40 of IBM’s 2023 Annual Report to Stockholders, which are incorporated herein by reference.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk:
Refer to the section titled “Market Risk” on pages 36 and 37 of IBM’s 2023 Annual Report to Stockholders, which is incorporated herein by reference.

Item 8. Financial Statements and Supplementary Data:
Refer to pages 44 through 121 of IBM’s 2023 Annual Report to Stockholders, which are incorporated herein by reference. Also refer to the Financial Statement Schedule on page S-1 of this Form 10-K.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure:
Not applicable.

Item 9A. Controls and Procedures:
The company’s management evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer, the effectiveness of the company’s disclosure controls and procedures as of the end of the period covered by this
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report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the company’s disclosure controls and procedures were effective as of the end of the period covered by this report.
Refer to “Report of Management” and “Report of Independent Registered Public Accounting Firm” on pages 41 through 44 of IBM’s 2023 Annual Report to Stockholders, which are incorporated herein by reference. There has been no change in the company’s internal control over financial reporting that occurred during the fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.

Item 9B. Other Information:
Not applicable.


Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections:
Not applicable.

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PART III
Item 10. Directors, Executive Officers and Corporate Governance:
Refer to the information under the captions “Election of Directors for a Term of One Year,” “Governance and the Board—Committees of the Board,” “Governance and the Board—Delinquent Section 16(a) Reports: None,” “Governance and the Board—Corporate Governance” and “Frequently Asked Questions—How do I submit an item of business for the 2025 Annual Meeting?” in IBM’s definitive Proxy Statement to be filed with the SEC and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 30, 2024, all of which information is incorporated herein by reference. Also refer to Item 1 of this Form 10-K under the caption “Information About Our Executive Officers (at February 26, 2024)” on page 3 for additional information on the company’s executive officers.

Item 11. Executive Compensation:
Refer to the information under the captions “2023 Summary Compensation Table and Related Narrative,” “2023 Summary Compensation Table,” “2023 Compensation Discussion and Analysis,” “2023 Grants of Plan-Based Awards Table,” “2023 Outstanding Equity Awards at Fiscal Year-End Table,” “2023 Option Exercises and Stock Vested Table,” “2023 Retention Plan Table,” “2023 Pension Benefits Narrative,” “2023 Pension Benefits Table,” “2023 Nonqualified Deferred Compensation Narrative,” “2023 Nonqualified Deferred Compensation Table,” “2023 Potential Payments Upon Termination Narrative,” “2023 Potential Payments Upon Termination Table,” “Governance and the Board—Compensation Committee Interlocks and Insider Participation: None,” “Compensation Program as It Relates to Risk,” “2023 Executive Compensation—Report of the Executive Compensation and Management Resources Committee of the Board of Directors,” “Pay Ratio, ” and "Pay Versus Performance" in IBM’s definitive Proxy Statement to be filed with the SEC and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 30, 2024, all of which information is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters:
Refer to the information under the captions “Ownership of Securities—Security Ownership of Certain Beneficial Owners” and “Ownership of Securities—Common Stock and Stock-based Holdings of Directors and Executive Officers” in IBM’s definitive Proxy Statement to be filed with the SEC and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 30, 2024, all of which information is incorporated herein by reference.

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EQUITY COMPENSATION PLAN INFORMATION
Plan Category
Number of securities
to be issued upon
exercise of
outstanding options,
warrants and rights (1)
(a)
 
Weighted-average
exercise price of
outstanding options,
warrants and rights (1)
(b)
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column (a))
(c)
Equity compensation plans approved by security holders
Options9,259,638$130.23 
RSUs21,624,285N/A
PSUs (2)
5,239,655N/A
Subtotal36,123,578$130.23 36,957,129
Equity compensation plans not approved by security holders
Options596,924$130.17 
RSUs1,433,358N/A
PSUs (2)
689,528N/A
DCEAP shares198,263N/A
Subtotal2,918,073$130.17 13,374,503
Total39,041,651$130.23 50,331,632
N/A is not applicable
RSUs = Restricted Stock Units, including Retention Restricted Stock Units
PSUs = Performance Share Units
DCEAP Shares = Promised Fee Shares under the DCEAP (refer to plan description below)
(1)In connection with 15 acquisition transactions, 356,373 additional share based awards, consisting of stock options, were outstanding at December 31, 2023 as a result of the Company’s assumption of awards granted by the acquired entities. The weighted-average exercise price of these awards was $24.43. The Company has not made, and will not make, any further grants or awards of equity securities under the plans of these acquired companies.
(2)The numbers included for PSUs in column (a) above reflect the maximum number payout. Assuming target number payout, the number of securities to be issued upon exercise of PSUs for equity compensation plans approved by security holders is 3,082,150 and for equity compensation plans not approved by security holders is 390,889. For additional information about PSUs, including payout calculations, refer to the information under 2023 Summary Compensation Table and Related Narrative in IBM’s definitive Proxy Statement to be filed with the SEC and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 30, 2024.
The material features of each equity compensation plan under which equity securities are authorized for issuance that was adopted without stockholder approval are described below:
2001 Long-Term Performance Plan (the “2001 Plan”)
The 2001 Plan has been used to fund awards for employees other than senior executives of the Company. Awards for senior executives of the Company have been and will continue to be funded from the stockholder-approved 1999 Long-Term Performance Plan (the “1999 Plan”); the 1999 Plan is also used to fund awards for employees other than senior executives, otherwise, the provisions of the 2001 Plan are identical to the 1999 Plan, including the type of awards that may be granted under the plan (stock options, restricted stock and unit awards and long-term performance incentive awards).
The 2001 Plan is administered by the Executive Compensation and Management Resources Committee of the Board of Directors (the “Committee”), and that Committee may delegate to officers of the company certain of its duties, powers and authority. Payment of awards may be made in the form of cash, stock or combinations thereof and may be deferred with Committee approval. Awards are not transferable or assignable except (i) by law, will or the laws of descent and distribution, (ii) as a result of the disability of the recipient, or (iii) with the approval of the Committee.
If the employment of a participant terminates, other than as a result of the death or disability of a participant, all unexercised, deferred and unpaid awards shall be canceled immediately, unless the award agreement provides otherwise. In
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the event of the death of a participant or in the event a participant is deemed by the company to be disabled and eligible for benefits under the terms of the IBM Long-Term Disability Plan (or any successor plan or similar plan of another employer), the participant’s estate, beneficiaries or representative, as the case may be, shall have the rights and duties of the participant under the applicable award agreement. In addition, unless the award agreement specifies otherwise, the Committee may cancel, rescind, suspend, withhold or otherwise limit or restrict any unexpired, unpaid, or deferred award at any time if the participant is not in compliance with all applicable provisions of the awards agreement and the 2001 Plan. In addition, awards may be cancelled if the participant engages in any conduct or act determined to be injurious, detrimental or prejudicial to any interest of the company.
PWCC Acquisition Long-Term Performance Plan (the “PWCC Plan”)
The PWCC Plan was adopted by the Board of Directors in connection with the company’s acquisition of PricewaterhouseCoopers Consulting (“PwCC”) from PricewaterhouseCoopers LLP, as announced on October 1, 2002. The PWCC Plan has been and will continue to be used solely to fund awards for employees of PwCC who have become employed by the company as a result of the acquisition. Awards for senior executives of the company will not be funded from the PWCC Plan. The terms and conditions of the PWCC Plan are substantively identical to the terms and conditions of the 2001 Plan, described above.
IBM Red Hat Acquisition Long-Term Performance Plan (the “Red Hat Plan”)
The Red Hat Plan was adopted by the Board of Directors in connection with the company’s acquisition of Red Hat, Inc. on July 9, 2019. The Red Hat Plan was used solely to fund awards for employees who were not employed by IBM immediately prior to the closing of the acquisition. Awards for senior executives of the company will not be funded from the Red Hat Plan. The terms and conditions of the Red Hat Plan are substantively identical to the terms and conditions of the 2001 Plan, described above.
Amended and Restated Deferred Compensation and Equity Award Plan (the “DCEAP”)
The DCEAP was adopted in 1993 and amended and restated effective January 1, 2014. Under the Amended and Restated DCEAP, non-management directors receive Promised Fee Shares in connection with deferred annual retainer payments. Each Promised Fee Share is equal in value to one share of the company’s common stock. Upon a director’s retirement or other completion of service as a director, amounts deferred into Promised Fee Shares are payable in either cash and/or shares of the company’s stock either as lump sum or installments pursuant to the director’s distribution election. For additional information about the DCEAP, refer to “Director Compensation” in IBM’s definitive Proxy Statement to be filed with the SEC and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 30, 2024.

Item 13. Certain Relationships and Related Transactions, and Director Independence:
Refer to the information under the captions “IBM Board of Directors,” “Governance and the Board—Committees of the Board,” “Governance and the Board—Certain Transactions and Relationships” and “Governance and the Board—Corporate Governance—Independent Board” in IBM’s definitive Proxy Statement to be filed with the SEC and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 30, 2024, all of which information is incorporated herein by reference.

Item 14. Principal Accounting Fees and Services:
Refer to the information under the captions “Report of the Audit Committee of the Board of Directors” and “Audit and Non-Audit Fees” in IBM’s definitive Proxy Statement to be filed with the SEC and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 30, 2024, all of which information is incorporated herein by reference.

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PART IV
Item 15. Exhibits, Financial Statement Schedules:
(a)The following documents are filed as part of this report:
1.Financial statements from IBM’s 2023 Annual Report to Stockholders, which are incorporated herein by reference:
Report of Independent Registered Public Accounting Firm PCAOB Firm ID  i 238 (pages 42 through 43).
Consolidated Income Statement for the years ended December 31, 2023, 2022 and 2021 (page 44).
Consolidated Statement of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021 (page 45).
Consolidated Balance Sheet at December 31, 2023 and 2022 (page 46).
Consolidated Statement of Cash Flows for the years ended December 31, 2023, 2022 and 2021 (page 47).
Consolidated Statement of Equity at December 31, 2023, 2022 and 2021 (pages 48 and 49).
Notes to Consolidated Financial Statements (pages 50 through 121).
2.Financial statement schedule required to be filed by Item 8 of this Form:
PageSchedule
Number
S-1II

All other schedules are omitted as the required matter is not present, the amounts are not significant or the information is shown in the Consolidated Financial Statements or the notes thereto.
3.Exhibits:
Reference
Number per
Item 601 of
Regulation S-K
Description of ExhibitsExhibit Number
in this
Form 10-K
(3)Certificate of Incorporation and By-laws
(4)Instruments defining the rights of security holders
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4.1
Material contracts
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Board of Directors compensatory plans, as described under the caption “Governance of the Board—Director Compensation” in IBM’s definitive Proxy Statement to be filed with the Securities and Exchange Commission and delivered to stockholders in connection with the Annual Meeting of Stockholders to be held April 30, 2024, are hereby incorporated by reference. (1)
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10.1
10.2
21

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(13)13
(21)21
(23)23.1
(24)24.1
24.2
(31)31.1
31.2
(32)32.1
32.2
(97)97
101.INSXBRL Instance Document – the instance document does not appear on the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCHXBRL Taxonomy Extension Schema Document
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101.CALXBRL Taxonomy Extension Calculation Linkbase Document
101.DEFXBRL Taxonomy Extension Definition Linkbase Document
101.LABXBRL Taxonomy Extension Label Linkbase Document
101.PREXBRL Taxonomy Extension Presentation Linkbase Document101
104Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document.104
(1)    Management contract or compensatory plan or arrangement.
(2)    The Performance Graphs, set forth on page 122 of IBM’s 2023 Annual Report to Stockholders, are deemed to be furnished but not filed.

Item 16. Form 10-K Summary:
None.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
INTERNATIONAL BUSINESS MACHINES
CORPORATION
(Registrant)
By:
Vice President and Controller
(Chief Accounting Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
SignatureTitleDate
Chairman of the Board
and Chief Executive Officer
Arvind Krishna
/s/ JAMES J. KAVANAUGH
Senior Vice President and Chief
Financial Officer, Finance and Operations
James J. Kavanaugh
/s/ NICOLÁS A. FEHRING
Vice President and Controller
(Chief Accounting Officer)
Nicolás A. Fehring


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2 of 2
Board of Directors

By:/s/ FRANK SEDLARCIK
Frank Sedlarcik
Marianne C. Brown
Director
Attorney-in-fact
Thomas Buberl
Director
David N. Farr Director
Alex Gorsky Director
Michelle J. Howard Director
Andrew N. LiverisDirector
F. William McNabb IIIDirector
Michael Miebach
Director
Martha E. PollackDirector
Joseph R. SwedishDirector
Peter R. Voser Director
Frederick H. Waddell Director
Alfred W. ZollarDirector


Table of Contents
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ON FINANCIAL STATEMENT SCHEDULE
To the Board of Directors and Stockholders of
International Business Machines Corporation:
Our audits of the consolidated financial statements referred to in our report dated February 26, 2024 appearing in the 2023 Annual Report to Stockholders of International Business Machines Corporation (which report and consolidated financial statements are incorporated by reference in this Annual Report on Form 10-K) also included an audit of the financial statement schedule listed in Item 15(a)(2) of this Form 10-K. In our opinion, this financial statement schedule presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements.
/s/ PricewaterhouseCoopers LLP
 i PricewaterhouseCoopers LLP
 i New York, New York
February 26, 2024


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 i 
SCHEDULE II
INTERNATIONAL BUSINESS MACHINES CORPORATION AND SUBSIDIARY COMPANIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
For the Years Ended December 31:
(Dollars in Millions)
DescriptionBalance at
Beginning of
Period
Additions/
(Deductions)
Write-offsForeign
Currency
and Other
Balance at
End of
Period
Allowance For Credit Losses
2023
–Current (1)
$ i 467 $ i 13  $( i 97)$ i 48 $ i 431 
–Noncurrent$ i 28 $( i 2)$ i   $ i 0 $ i 27 
2022
–Current (1)
$ i 418 $ i 59  $( i 55)$ i 45 $ i 467 
–Noncurrent$ i 25 $ i 6  $ i 0  $( i 2)$ i 28 
2021
–Current$ i 503 $( i 35)$( i 46)$( i 4)$ i 418 
–Noncurrent$ i 47 $( i 21)$ i 0 $( i 2)$ i 25 
Allowance For Inventory Losses
2023$ i 631 $ i 201 $( i 183)$ i 9  $ i 658 
2022$ i 633 $ i 162 $( i 148)$( i 15)$ i 631 
2021$ i 514 $ i 240 $( i 118)$( i 3)$ i 633 
Revenue Based Provisions
2023$ i 424 $ i 500 $( i 456)$ i 12  $ i 480 
2022$ i 435 $ i 620 $( i 629)$( i 2)$ i 424 
2021$ i 372 $ i 627 $( i 574)$ i 10  $ i 435 
(1) Other includes reserves related to discontinued operations.

Additions/(Deductions) to the allowances represent changes in estimates of unrecoverable amounts in receivables and inventory and are recorded to expense and cost accounts, respectively. Amounts are written-off when they are deemed unrecoverable by the company. Additions/(Deductions) to Revenue Based Provisions represent changes in estimated reductions to revenue, primarily as a result of revenue-related programs, including customer and business partner rebates. Write-offs for Revenue Based Provisions represent reductions in the provision due to amounts remitted to customers and business partners.
 / 
S-1

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘10-K’ Filing    Date    Other Filings
4/30/24
Filed on:2/26/248-K
2/9/24
For Period end:12/31/23
12/1/23
11/30/23
11/1/23
10/31/2310-Q
10/1/23
12/31/2210-K,  11-K,  4,  ARS,  SD
12/31/2110-K,  11-K,  3,  4,  SD
7/9/198-K,  8-K/A,  S-8
10/30/1810-Q
1/1/143
10/1/02
 List all Filings 


51 Previous Filings that this Filing References

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 2/02/24  Int’l Business Machines Corp.     8-K:1,8,9   1/29/24   22:2M                                     Toppan Merrill/FA
12/12/23  Int’l Business Machines Corp.     8-K:5,9    12/12/23   13:700K                                   Toppan Merrill/FA
 7/25/23  Int’l Business Machines Corp.     10-Q        6/30/23  115:28M
 6/16/23  Int’l Business Machines Corp.     8-K:1,2,9   6/15/23   13:492K                                   Toppan Merrill/FA
 2/28/23  Int’l Business Machines Corp.     10-K       12/31/22  212:52M                                    Toppan Merrill Bridge/FA
 2/03/23  Int’l Business Machines Corp.     8-K:9       1/30/23   23:1.5M                                   Toppan Merrill/FA
 7/26/22  Int’l Business Machines Corp.     8-K:9       7/20/22   17:858K                                   Toppan Merrill/FA
 7/01/22  Int’l Business Machines Corp.     8-K:1,2,9   6/30/22   13:2.3M                                   Cravath Swaine & … 01/FA
 2/22/22  Int’l Business Machines Corp.     10-K       12/31/21  213:52M                                    Toppan Merrill Bridge/FA
 2/08/22  Int’l Business Machines Corp.     8-K:9       2/02/22   19:1.3M                                   Toppan Merrill/FA
10/01/21  Int’l Business Machines Corp.     S-8        10/01/21    6:190K                                   Toppan Merrill/FA
 7/27/21  Int’l Business Machines Corp.     10-Q        6/30/21  112:23M                                    Toppan Merrill Bridge/FA
 6/25/21  Int’l Business Machines Corp.     8-K:1,2,9   6/22/21   13:2.2M                                   Cravath Swaine & … 01/FA
 4/27/21  Int’l Business Machines Corp.     10-Q        3/31/21  111:18M                                    Toppan Merrill Bridge/FA
 2/23/21  Int’l Business Machines Corp.     10-K       12/31/20  203:51M                                    Toppan Merrill Bridge/FA
12/18/20  Int’l Business Machines Corp.     S-8 POS    12/18/20    4:129K                                   Toppan Merrill/FA
 7/28/20  Int’l Business Machines Corp.     10-Q        6/30/20  118:25M                                    Toppan Merrill Bridge/FA
 5/06/20  Int’l Business Machines Corp.     8-K:9       4/30/20   16:849K                                   Cravath Swaine & … 01/FA
 4/28/20  Int’l Business Machines Corp.     10-Q        3/31/20  116:19M                                    Toppan Merrill Bridge/FA
 2/25/20  Int’l Business Machines Corp.     10-K       12/31/19  202:43M                                    Toppan Merrill Bridge/FA
 2/10/20  Int’l Business Machines Corp.     8-K:9       2/04/20   15:911K                                   Cravath Swaine & … 01/FA
10/29/19  Int’l Business Machines Corp.     10-Q®       9/30/19  125:30M                                    Toppan Merrill Bridge/FA
 7/30/19  Int’l Business Machines Corp.     10-Q        6/30/19  118:29M                                    Toppan Merrill Bridge/FA
 5/14/19  Int’l Business Machines Corp.     8-K:9       5/08/19   10:811K                                   Cravath Swaine & … 01/FA
 4/30/19  Int’l Business Machines Corp.     10-Q        3/31/19  117:18M                                    Toppan Merrill/FA
 1/30/19  Int’l Business Machines Corp.     8-K:9       1/24/19    6:616K                                   Cravath Swaine & … 01/FA
10/30/18  Int’l Business Machines Corp.     10-Q        9/30/18  120:23M                                    Toppan Merrill/FA
 2/27/18  Int’l Business Machines Corp.     10-K       12/31/17  179:36M                                    Toppan Merrill-FA
10/31/17  Int’l Business Machines Corp.     10-Q        9/30/17  103:21M                                    Toppan Merrill/FA
 5/22/17  Int’l Business Machines Corp.     8-K:9       5/16/17    4:290K                                   Cravath Swaine & … 01/FA
 2/28/17  Int’l Business Machines Corp.     10-K       12/31/16  182:35M                                    Toppan Merrill-FA
 1/26/17  Int’l Business Machines Corp.     8-K:9       1/24/17    6:331K                                   Cravath Swaine & … 01/FA
11/01/16  Int’l Business Machines Corp.     8-K:9      10/27/16    3:212K                                   Cravath Swaine & … 01/FA
 7/26/16  Int’l Business Machines Corp.     10-Q        6/30/16  101:20M                                    Toppan Merrill/FA
 3/04/16  Int’l Business Machines Corp.     8-K:9       2/29/16    5:328K                                   Cravath Swaine & … 01/FA
 2/23/16  Int’l Business Machines Corp.     10-K       12/31/15  154:38M                                    Toppan Merrill-FA
 2/18/16  Int’l Business Machines Corp.     8-K:9       2/16/16    7:376K                                   Cravath Swaine & … 01/FA
 2/24/15  Int’l Business Machines Corp.     10-K       12/31/14  154:46M                                    Toppan Merrill-FA
 2/25/14  Int’l Business Machines Corp.     10-K       12/31/13  143:40M                                    Toppan Merrill-FA
11/06/13  Int’l Business Machines Corp.     8-K:9      10/31/13    4:355K                                   Cravath Swaine & … 01/FA
 4/24/12  Int’l Business Machines Corp.     10-Q        3/31/12   77:21M                                    Toppan Merrill/FA
 4/28/09  Int’l Business Machines Corp.     10-Q        3/31/09    9:2.3M                                   Toppan Merrill/FA
 2/24/09  Int’l Business Machines Corp.     10-K       12/31/08   14:6.5M                                   Toppan Merrill-FA
10/30/07  Int’l Business Machines Corp.     10-Q        9/30/07   12:2.7M                                   Toppan Merrill/FA
 4/26/05  Int’l Business Machines Corp.     10-Q        3/31/05   11:2.8M                                   Toppan Merrill/FA
11/26/02  Int’l Business Machines Corp.     8-K:7      11/20/02    4:121K                                   Cravath Swaine & … 01/FA
 1/08/98  Int’l Business Machines Corp.     8-K:7       1/06/98    3:79K                                    Cravath Swaine & … 01/FA
 8/01/97  Int’l Business Machines Corp.     8-K:7       7/30/97    4:100K                                   Cravath Swaine & … 01/FA
12/06/96  Int’l Business Machines Corp.     8-K/A:7    12/03/96    2:23K                                    Cravath Swaine & … 01/FA
10/30/95  Int’l Business Machines Corp.     8-K:7      10/30/95    3:95K                                    Cravath Swaine & … 01/FA
 6/14/95  Int’l Business Machines Corp.     S-8         7/03/95    1:16K                                    Cravath Swaine & … 01/FA
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